Clean Water Act: Improved Resource Planning Would Help EPA Better Respond to Changing Needs and Fiscal Constraints
Released: 2005-08-02T00:00:00

Letter

Background

Through the National Pollutant Discharge Elimination System program, the Clean Water Act established the basic structure for regulating discharges of pollutants into the waters of the United States, including rivers, lakes, and streams. Under this program, EPA and EPA-authorized states issue and enforce permits to regulate pollution from specific entities, including, for example, industrial dischargers and municipal wastewater treatment facilities, known as “point sources.” In support of the permitting program, EPA and the states perform a number of important activities, such as monitoring water quality and setting limits on the amounts of specific pollutants that can be discharged into water bodies. The act also requires states to implement management programs for controlling pollution from diffuse or “nonpoint” sources, such as agricultural runoff.

To carry out its responsibilities for controlling point and nonpoint source pollution, EPA relies on the Office of Water, the Office of Enforcement and Compliance Assurance, and 10 regional offices, as well as states’ water pollution control agencies. As table 1 shows, since the Clean Water Act was amended in 1972, the scope of EPA and state responsibilities and the associated workload, has increased significantly.

Even as the overall workload has increased as a result of these changes, the states have been playing a greater role in carrying out required tasks. As shown in figure 1, since 1972, EPA has authorized 45 states to perform at least some of the permitting activities associated with controlling pollution from wastewater treatment and industrial facilities. As EPA authorizes states to take on more responsibilities, the agency’s workload shifts from direct implementation to oversight.

EPA’s Process for Budgeting and Allocating Resources Does Not Fully Consider the Current Workload in Terms of Strategic Goals or Specific Laws

EPA budgets and allocates resources incrementally, largely based on historical precedents, and thus its process does not reflect a bottom-up review of the nature or distribution of the current workload—either for specific environmental laws or the broader goals and objectives in the agency’s strategic plan. These historical precedents are drawn from workload models EPA had developed in the 1980s, but the distribution of EPA’s workload has changed over time as EPA has taken on new responsibilities under the Clean Water Act and other laws and the states gradually assumed a greater role in the day-to-day implementation of key aspects of this workload. Other factors, such as the introduction of new technologies and shifts in regional population, have also affected the amount, type, and distribution of EPA’s resource needs.

Nonetheless, in developing the amounts of its budget request and subsequent resource allocations, EPA officials use prior years’ allocations as a baseline and make adjustments to reflect (1) direction from the Office of Management and Budget and the Congress and (2) spending caps imposed by EPA’s Chief Financial Officer, such as ceilings on staff years and payroll. For example, guidance from the Office of Management and Budget sets overall parameters for the agency’s budget—generally a given percentage of the previous year’s budget. Once EPA receives its appropriation from the Congress, the agency’s operating plan—which is also based on historical precedent—guides the allocation of funding and staff years to the organizational units.

While acknowledging that their budgeting and resource allocation is not based on a bottom-up review, EPA officials said that the process is linked to the agency’s strategic goals and objectives. They told us that the annual budgeting and resource allocation process reflects changes in program and budget priorities, as determined by senior EPA managers, across the agency and within specific program offices. In particular, officials from both the Office of Water and Office of Enforcement and Compliance Assurance told us that they make strategic decisions in developing the agency’s budget—within and across agency goals and objectives—to reflect shifting priorities. For example, for fiscal year 2005, EPA asked for an additional $22 million for grants to state water pollution control agencies, including $17 million to address a need for more water quality monitoring. However, EPA officials acknowledged that shifts in funding and staff years, as a result of changing priorities, are generally marginal and that increases in priority areas are usually offset by decreases in areas of lower priority.

Within the existing system, EPA and state officials have some flexibility to realign resources based on actual workload but have not taken full advantage of such opportunities. For example: During each budget cycle, EPA’s regional offices have an opportunity to influence how the program offices allocate any increases or decreases in resources, as reflected in the agency’s operating plan. While, in theory, such changes could be directed to the regions based on their relative need, regional officials report that most changes are allocated based on historical precedent.

Under section 106 of the Clean Water Act, EPA must distribute grants to state water pollution control agencies based on the extent of the pollution problem in the respective states. In 1997 and 1998, an EPA- state work group developed a weighted distribution formula that considers various workload indicators, such as a state’s surface water area, groundwater use, water quality impairment, point and nonpoint pollution sources, and population of urbanized areas. The formula, currently in regulations, includes a funding “floor,” which stipulates that states must receive at least as much as they received in fiscal year 2000, unless funding goes down, with an annual adjustment for inflation and the current year’s appropriation. Consequently, as EPA regional officials pointed out, the allocations do not fully reflect relative workloads.

In 1995, EPA and the states established the National Environmental Performance Partnership System, which gave states greater flexibility to direct resources to their most pressing environmental problems by combining funds from multiple grants. In practice, however, officials in EPA’s regional offices and a state environmental organization report limited use of the funding flexibility. According to EPA officials, states have only used the program to move marginal amounts of money to target cross-cutting initiatives or other similar programs.

In terms of overall structure, EPA has organized its budget requests and allocated resources around its strategic plan, rather than specific environmental laws or programs. The strategic plan lays out broad agency goals and objectives, some of which encompass Clean Water Act responsibilities for controlling point and nonpoint source pollution. EPA’s current strategic plan includes these activities primarily under two goals: Clean and Safe Water (Goal 2) and Compliance and Environmental Stewardship (Goal 5). As table 2 indicates, however, the objectives and subobjectives within each goal can include activities under multiple environmental laws. Within the agency’s goal for Clean and Safe Water, for example, objectives for protecting water quality, protecting human health, and enhancing science and research address requirements under the Safe Drinking Water Act and other laws, in addition to those under the Clean Water Act.

According to officials from EPA’s Office of the Chief Financial Officer, Office of Enforcement and Compliance Assurance, and Office of Water, isolating the amount of resources dedicated to specific Clean Water Act programs and activities would be extremely difficult. The officials said that the budgeting and allocation structure aligns resources with goals and objectives that encompass multiple laws and programs and is not intended to provide statute-specific or program-specific breakdowns. The Office of Enforcement and Compliance Assurance, in particular, organizes its budget into program projects, such as compliance monitoring and civil enforcement, that cut across all environmental media.

Recognizing these difficulties, we asked budget officials within the Office of Enforcement and Compliance Assurance and Office of Water to estimate the funding and staff years allocated to EPA’s regional offices for controlling point and nonpoint source pollution under the Clean Water Act and to provide the amounts allotted to the states under two grant programs that support such activities at the state level. (See app. II for this information.)

EPA Has Made Some Progress in Improving Its Resource Planning, but Challenges Remain

To plan their resources most effectively, organizations must determine what they need to accomplish their work and develop a plan to meet those needs by obtaining staff and other resources. EPA has developed several initiatives that could improve the agency’s ability to plan its resources more strategically, including some efforts that focus on workforce planning and others that could provide key information needed to support a data-driven approach to budgeting and allocating resources. Beyond these initiatives, however, EPA faces larger challenges in adopting a more systematic process for budgeting and resource allocation: obtaining reliable data on key workload indicators and overcoming internal resistance to adopting such a process.

Effective Resource Planning Involves Identifying Staff and Other Resources Needed to Meet Performance Goals and Fulfill the Organization’s Mission

At its most basic level, effective resource planning involves identifying the specific activities and tasks that must be accomplished to achieve an organization’s objectives, determining the type and level of resources needed to carry out the work, and developing a strategy to obtain the needed resources. Realistically, because organizations rarely have access to unconstrained budgets, managers typically have to set priorities so that the most important tasks can be accomplished within available resources. Particularly in an environment of limited resources, the data that inform resource planning are useful in helping decision makers determine how best to absorb budget cuts. Because an organization’s employees often account for a significant share of its resources, workforce planning is a key component of any successful resource management strategy.

Studies by GAO and others have shown that successful organizations use strategic workforce planning to identify and fill the gaps between their current and future workforce needs in meeting organizational goals and fulfilling their overall mission. Strategic workforce planning encompasses a broad array of initiatives to attract, retain, develop, and motivate a top- quality workforce with the skills needed to meet performance goals. In 2003, for example, we reported that successful organizations have used strategic workforce planning as a tool to both identify current needs and anticipate and prepare for upcoming human capital issues, such as an aging workforce or changes in mission-critical skills, that could jeopardize the accomplishment of goals. More recently, we found that leading organizations go beyond a succession planning approach that focuses on simply replacing individuals and, instead, engage in broad, integrated efforts that focus on strengthening both current and future organizational capacity.

Our 2003 report said that an analysis of gaps in an organization’s workforce should identify how many employees have the skills and competencies needed to meet program goals and the number that are likely to remain with the agency over time, given expected losses due to retirement and other attrition. Similarly, the report found that a forward-looking analysis should identify the specific skills and competencies that will be needed to meet future goals. We concluded that workforce gap analyses can be useful in justifying budget requests by showing the link between the program goals and the staff resources needed to accomplish them.

In July 2001, we reported specifically on EPA and the extent to which the agency was using key management practices associated with successful human capital strategies, including strategic workforce planning. We also examined how EPA’s Office of Enforcement and Compliance Assurance deployed resources across the 10 regional offices to ensure consistent enforcement of federal environmental requirements. Among other things, we recommended that EPA develop a system for workforce allocation and deployment that is explicitly linked to the agency’s strategic and program planning efforts and that is based on systematic efforts of each major program office to accurately identify the size of its workforce, the deployment of staff geographically and organizationally, and the skills needed to support its strategic goals; design succession plans to maintain a sustained commitment and continuity of leadership within the agency; and target recruitment and hiring practices to fill the agency’s short- and long-term human capital needs and, specifically, to fill gaps identified through EPA’s workforce planning system and implement training with an explicit link to needed competencies.

Our recommendations to EPA’s Office of Enforcement and Compliance Assurance expanded on some of the same themes. For example, we recommended that the office develop a systematic method for deploying resources to address the agency’s enforcement workload, taking into account the workforce planning information needed to analyze the workload. According to our report, such information should include the level of resources currently being allocated to specific enforcement activities; the factors that determine the enforcement workload in each region; and the specific skills needed to address each region’s workload, along with the number of employees who possess such skills.

EPA Has Several Efforts Under Way to Improve Resource Planning

EPA has initiated several efforts that could improve the agency’s ability to strategically plan its workforce and other resources. While some of these efforts are not directly related to workforce planning, they could give the agency some of the information needed to support a systematic, data- driven method for budgeting and allocating resources.

Three initiatives within EPA focus specifically on workforce planning, including one by the Office of Enforcement and Compliance Assurance, which focused on civil enforcement activities and was completed in 2003, and two agencywide efforts that are still in the early stages of development. The agencywide efforts are being managed by EPA’s Office of Human Resources and the Office of the Chief Financial Officer. These three initiatives are as follows: Workforce Deployment Review for civil enforcement activities. In response to our July 2001 report, the Office of Enforcement and Compliance Assurance surveyed about 2,600 headquarters and regional employees engaged in civil enforcement activities to identify existing workforce skills and specific areas of programmatic expertise. EPA’s report on the survey, issued in October 2003, recommended, among other things, expanding the survey to include all of the office’s employees, periodically updating the information, and aligning training with national priorities. In addition, the report recognized that circumstances have changed since the 1980s, when EPA last used the workload models to establish a baseline. The report concluded that enforcement officials should reexamine the existing practice of adjusting staff levels based on historical precedent.

Strategic workforce planning process. In response to guidance from the Office of Management and Budget, EPA’s Office of Human Resources is currently working on a strategic workforce planning process to help EPA identify and address skill needs agencywide. Human Resource officials believe that EPA should be using detailed workforce plans to drive its budget requests and make informed decisions about how to make the best use of the resources it receives. The new planning process includes (1) analyzing the skills needed to achieve agency goals now and in the future, (2) assessing the skills possessed by the current workforce, (3) identifying any current or future gaps in critical skills, and (4) developing strategies to fill such gaps. During 2003, the Office of Human Resources piloted a computer-based tool designed to capture information on the skills possessed by EPA staff but abandoned the effort in response to complaints that the tool was overly complicated and did not provide helpful information. In 2004, the office’s workforce planning team reviewed the agency’s strategic plan and other relevant studies and interviewed key stakeholders inside and outside EPA to develop a strategic picture of the agency’s future work and workforce requirements. The team corroborated its findings with senior EPA executives, who provided their views on the work that the agency will be doing in the future and described the workforce in terms of the priority, mission-critical competencies, and occupations needed to support the work. As a result of this effort, EPA identified 18 priority occupations, 12 technical competencies, and 12 cross-occupational competencies that are essential for the agency to accomplish its future mission. In addition, based on projected retirements and other attrition, EPA identified potential gaps in critical areas. Currently, the office is examining any ongoing resource planning efforts by EPA regional and program offices before moving ahead with its own planning process.

Options for an agency approach to workforce assessment. EPA’s Office of the Chief Financial Officer formed a work group in the fall of 2004 to improve the agency’s tools for making decisions on distributing staffing resources. The work group is currently exploring options for how frequently to measure workload: doing a comprehensive assessment of all programs every 3 to 5 years or applying a screening tool to identify certain high-priority program areas for annual assessment.

Although EPA’s workforce planning initiatives address, to varying degrees, some of the recommended practices for managing human capital, its efforts could be more effective. For example, both the Office of Enforcement and Compliance Assurance and the Office of Human Resources attempted to determine the types of skills they possess without first identifying the skills most needed to accomplish the agency’s mission. As a result, these surveys may not necessarily capture the information EPA needs to comprehensively determine the skills gap. Although the Office of Human Resources followed up its skills survey by identifying priority occupations, needed competencies, and skill gaps for the agency as a whole, EPA characterized the effort as an assessment at the “20,000 foot” level. Human Resource officials acknowledged that the effort was not linked to a detailed analysis of workload and did not provide information on region- or program-specific workforce needs. To guide the office’s development of ground-level analyses, during the spring of 2005, the office surveyed program and regional offices to determine the nature of any localized workforce planning. In addition, although officials involved in the two agencywide initiatives (sponsored by the Office of Human Resources and the Office of the Chief Financial Officer) were aware of the parallel efforts, we found little evidence that the two offices were coordinating with each other to avoid duplication or the adoption of conflicting strategies. Both these efforts are still in the early stages; coordinating now would allow the agency to ensure that it is making the best use of its resources.

Two other initiatives within the Office of Water, while not directly related to resource planning, could provide relevant and useful information for a data-driven approach to budgeting and allocating resources. For example, beginning in December 1998, EPA and the states collaborated on a state resource analysis for water quality management to develop an estimate of the resources that states need to fully implement the Clean Water Act. The primary focus of the project was identifying the gap between states’ needs and available resources. To develop the estimates of the gap, EPA and the states created a detailed model of activities associated with implementing the Clean Water Act, the average time it takes to complete such activities, and the costs of performing them. The National Academy of Public Administration subsequently reviewed the model and determined that the underlying methodology was sound. In fact, the academy recommended that EPA and the states refine the model to support data-driven grant allocation decisions. According to EPA and representatives of state environmental organizations, however, the agency has not implemented the recommendation because of resource constraints and reluctance on the part of some states.

Another initiative by the Office of Water, called the Permitting for Environmental Results Strategy, also has potential to provide useful information for more effective resource planning. This effort began in 2003, prompted by circumstances that were making it increasingly difficult for EPA and the states to meet their responsibilities under the Clean Water Act. According to EPA, not only had the scope and complexity of the act expanded over time, but the states were facing an increasing number of lawsuits and petitions to withdraw their authorization to administer some Clean Water Act programs. As part of its effort to identify and resolve performance problems in individual states, EPA and the states have been developing profiles containing detailed data on the responsibilities, resources, and workload demands of each state and region—information that could be useful in any comprehensive and systematic resource planning method.

Challenges to Adopting a More Systematic Process for Allocating Resources Include Obtaining Reliable Workload Data and Overcoming Internal Resistance

Perhaps the most significant obstacle to developing a systematic, data- driven approach to resource allocation is ensuring that needed data on EPA’s workload are complete and reliable. While our particular interest was Clean Water Act activities for controlling point and nonpoint source pollution, evidence suggests that EPA would encounter similar reliability concerns if a systematic resource allocation process were to be organized around strategic goals and objectives, thus encompassing other program areas. Without comprehensive and reliable data on workload, EPA cannot accurately identify where agency resources, such as staff with particular skills, are most needed.

According to EPA officials, some of the key workload factors related to controlling point and nonpoint source pollution include the number of point source dischargers, the number of wet weather dischargers, and the quantity and quality of water in particular areas. However, for some of this information, the relevant databases, such as the Permit Compliance System, which contains information on discharging facilities, and the National Water Quality Inventory, which contains information on water quality, have been subject to criticism from several sources, including GAO. For example: Discrepancies between Permit Compliance System and state data. In 2001, the Environmental Council of the States reported that of 42 states surveyed, more than 80 percent found “significant and pervasive data discrepancies” between data tracked by state authorities and data contained in the Permit Compliance System. Even among states that reported using EPA’s database as their primary information system, 75 percent found errors in the data. Another problem is that the last system modernization effort was in 1982; as a result, the database does not contain information on more recently regulated entities, such as storm water dischargers and concentrated animal feeding operations. The database also lacks complete information on the point source dischargers it does track, particularly smaller facilities and states’ enforcement actions. Although at one time EPA linked states’ grant funding to the submission of facility data to the database, the agency discontinued the policy. In addition, EPA does not require complete information on minor facilities.

Lack of historical data in Permit Compliance System. EPA’s Permit Compliance System database does not provide sufficient information to evaluate trends in key workload indicators because the system overwrites older information whenever program officials enter new data on a facility. Thus, for example, EPA cannot generate trend data on the number of permits issued or renewed over a specified time period. After related criticism from EPA’s Inspector General, Office of Water officials told us that, in 1999, they began pulling data from the system at regular intervals to provide data on trends in the agency’s permitting backlog and the number of regulated facilities. At the same time, however, EPA began to clean up its inventory, eliminating data on facilities that were no longer in existence. Although the cleanup was necessary, it also affected the agency’s ability to develop reliable trend data. For these and other reasons, EPA identified the Permit Compliance System as an agency weakness beginning in 1999.

Data limitations in the National Water Quality Inventory. Data on the quality of the nation’s waters, which EPA compiles and presents in the National Water Quality Inventory, are also subject to important limitations. While the majority of states contributed data describing rivers and lakes, data on other types of water bodies were less comprehensive. For example, only nine states provided information on the status of their wetlands. In addition, states are only able to assess a portion of their waters every 2 years. For example, according to the 2000 report, states assessed 19 percent of the nation’s total river and stream miles and 43 percent of the total lake, pond, and reservoir acres. Furthermore, states do not report data consistently. In 2002, GAO found that variations in the approaches that states use to assess water quality causes inconsistencies in the listing of impaired waters. These inconsistencies also limit the ability to compare data from year to year.

While acknowledging that some data are missing from the Permit Compliance System, EPA officials told us that since 2001, they have worked with the states and regional offices to clean up the data and believe that their efforts have improved data quality. The officials also said that the system will be modernized into the Integrated Compliance Information System, which will be phased in beginning in 2006. According to information provided by EPA, the modernization effort will identify the data elements to be entered and maintained by the states and regions and will include additional data entry for minor facilities and special regulatory program areas, such as concentrated animal feeding operations, combined sewer overflows, and storm water. Regarding the National Water Quality Inventory, the Office of Water recently began advocating the use of standardized, probability-based, statistical surveys of state waters so that water quality information would be comparable both among states and from year to year.

We did not attempt to compile an exhaustive list of all factors that potentially affect EPA and state workload. Although the state water quality management resource analysis compiled a comprehensive list of activities performed in support of the Clean Water Act to serve as a basis for estimating the state resource needs, there is no similar analysis of workload indicators for EPA headquarters or regional offices. In addition to the factors discussed above, EPA officials and representatives of state environmental organizations identified other factors that directly or indirectly affect workload and thus could provide some indication of resource needs. Some factors were mentioned consistently by all or most of the officials we interviewed and other factors were cited less frequently. One of the challenges to improving data quality will be determining which of the workload indicators represent the most significant drivers of resource needs. Making this determination, however, would also help EPA prioritize efforts to improve data quality.

More complete data are available on some of the workload factors identified by EPA and representatives of state environmental organizations, including the number of states authorized to implement aspects of the permitting program, the number of major and minor facilities, water quantity, and population. While these data may not be adequate in all respects, we believe the data are sufficiently reliable to illustrate potential differences in the regional distribution of workload. Appendix III contains a series of figures displaying selected workload indicators.

Even with better workload data, EPA would find it difficult to implement a systematic, data-driven approach to resource allocation without staff support for such a process. Support may not be easily forthcoming. According to EPA officials in several offices and regions, staff are reluctant to accept a data-driven approach because of their experience in using workload models during the 1980s. At that time, each major program office used a model to allocate resources to the agency’s regional offices. When the models were initially developed, agency officials believed they were useful because EPA’s programs were rapidly expanding as the Congress passed new environmental laws. Over time, however, the expansion of EPA’s responsibilities leveled off, and its impact on the relative workload of regions was not as significant. The change in the rate of the workload expansion, combined with increasingly constrained federal resources during the late 1980s, meant that the workload models were only being used to allocate changes at the margins. The agency stopped using the models in the early 1990s because, according to officials, staff spent an unreasonable amount of time negotiating relatively minor changes in regional resources.

Officials at EPA headquarters and regional offices cited some of the same concerns when we asked about applying a more systematic approach to budgeting and allocating resources today. Officials in several offices maintained that such an approach would not be useful for the agency, in part because EPA would not obtain increased resources as a result. Because all programs have insufficient resources, officials explained, it would not necessarily be helpful to analyze where these resource gaps were largest. Some regional officials were more supportive of the use of workforce planning, particularly where officials believed the region was receiving fewer resources than it deserved relative to other regions. Regional officials also believed that this type of analysis would help them manage the resources they get and could provide information that could stave off additional funding cuts or reduce how frequently headquarters officials implement new requirements for the regions.

EPA Has Not Developed a Detailed Estimate of the Cost to Implement the Clean Water Act, As Required

Section 516(b)(1)(A) of the Clean Water Act requires EPA, in cooperation with the states, to make a detailed estimate of the cost of carrying out the provisions of the act. Such estimates must be reported to the Congress every 2 years. In response to our inquiries, EPA issued a letter on May 2, 2005, stating that the agency has been operating under the assumption that the requirement had expired as of December 1999. However, the letter acknowledged that the reporting requirement may have been reinstated. After studying the issue further, EPA issued a follow-up letter on May 16, 2005, which confirmed that the requirement had been reinstated and that the agency had been remiss in not producing reports due in 2003 and 2005. EPA’s letter was silent regarding the reports due in 1999 and prior years.

Even if EPA had been aware of the reporting requirement, it currently lacks the information needed to develop an estimate of the cost of carrying out the Clean Water Act. First, the process EPA uses to budget and allocate resources is built around available resources rather than an unconstrained budget. Second, EPA’s budget structure and cost accounting systems do not provide specific detail on how EPA staff spend their time in carrying out Clean Water Act enforcement responsibilities within the Office of Enforcement and Compliance Assurance, where the budget is organized around activities that cut across all environmental media. Finally, as already described, EPA lacks complete and reliable data on key aspects of its Clean Water Act workload, making it difficult to develop sound cost estimates. Having better information on specific workload activities would not only help improve EPA’s process for budgeting and allocating resources within its current budget structure, but it would also help EPA develop the cost estimates needed to comply with section 516(b)(1)(A).

Conclusions

Because EPA does not have a system in place to conduct periodic bottom- up assessments of the work that needs to be done, the distribution of the workload, or staff and other resource needs, the agency may be unable to respond effectively to changing needs and constrained resources. Despite some flexibility in budgeting and allocating resources, EPA cannot determine whether the amount and distribution of its resources are appropriate to effectively carry out its strategic goals and objectives or meet its responsibilities under the Clean Water Act and other environmental laws. Moreover, EPA does not have the information it needs to tailor reductions in staff or other resources in a manner that minimizes potential adverse impacts on its environmental programs.

Having complete and reliable data on the activities and tasks that must be accomplished—and how that work is distributed organizationally and geographically—will help EPA budget and allocate resources more effectively. In addition, such data will inform the agency’s workforce planning efforts and help ensure that the right people with the right skills are where they need to be to get the work done.

EPA is obligated to meet its reporting responsibilities under section 516(b)(1) of the Clean Water Act. Periodic bottom-up assessments of the workload and related resource needs would give EPA the tools it needs to develop this detailed estimate, as required.

Recommendations for Executive Action

We recommend that the Administrator, EPA, identify the key workload indicators that drive resource needs, ensure that relevant data are complete and reliable, and use the results to inform the agency’s budgeting and resource allocation.

Furthermore, to ensure that EPA is making the best use of resources dedicated to strategic workforce planning, we also recommend that EPA coordinate ongoing planning efforts across the agency to avoid duplication. EPA’s workforce planning efforts should build on what the agency has accomplished thus far in identifying priority occupations, needed competencies, and skill gaps for the agency as a whole. As a next step, consistent with our 2001 recommendations, EPA should focus its efforts on a ground level assessment and identify (1) the agency’s workload and skill needs; (2) the skills and deployment of existing staff, geographically and organizationally; and (3) strategies to fill identified gaps.

Finally, we recommend that EPA meet its reporting responsibilities under section 516(b)(1) of the Clean Water Act or seek appropriate relief from the Congress.

Agency Comments and Our Evaluations

We provided a draft of this report to EPA for review and comment. EPA agreed with our recommendation regarding its reporting responsibilities under section 516(b)(1) of the Clean Water Act and plans to respond according to the requirements of the law. While not addressing our recommendation on eliminating potential duplication of effort, EPA acknowledged that the workforce planning strategies we recommended can be effective tools for identifying and addressing future performance needs and stated that it has already initiated several of these efforts. EPA also noted that our report raises important issues affecting the distribution of constrained resources. However, the agency noted that its resource allocation decisions are based on performance and results and expressed concern that a bottom-up assessment of the underlying workload contrasted with its approach. We do not take issue with the use of performance and results in developing budgets and allocating resources, although, based on our review, EPA’s budget and resource allocations were based primarily on historical precedent and, hence, year-to-year changes were marginal. Moreover, we believe our recommendation is fully compatible with an approach that links budgeting and resource allocation to performance goals and results. In our view, the agency’s performance goals should be informed by an assessment of the underlying workload— and how the tasks that must be accomplished drive resource needs organizationally and geographically. Finally, EPA officials also provided a number of technical comments and clarifications, which we incorporated as appropriate. EPA’s comments are in appendix IV.

As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies to appropriate congressional committees; the Administrator, EPA; and the Director of the Office of Management and Budget. We also will make copies available to others upon request. In addition, the report will be available at no charge on the GAO Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me at (202) 512-3841 or stephensonj@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contributions to this report are listed in appendix V.

Scope and Methodology

We defined the scope of our review to include Clean Water Act programs for controlling pollution from point and nonpoint sources and related activities, such as setting water quality criteria and standards, for both specific pollutants and individual water bodies; monitoring water quality; and establishing requirements for the disposal of sewage sludge. We excluded (1) financial assistance for local infrastructure under the Clean Water State Revolving Fund; (2) activities for which the primary federal responsibility lay outside the Environmental Protection Agency (EPA), such as issuing permits for dredged and fill material, managed by the U.S. Army Corps of Engineers; and (3) location-specific programs, such as those focused on the Great Lakes, Chesapeake Bay, and designated sites under the National Estuary Program. We performed our work at EPA’s Office of Congressional and Intergovernmental Relations; Office of the Chief Financial Officer; Office of Enforcement and Compliance Assurance; Office of General Counsel; Office of Human Resources; and Office of Water in EPA’s Washington, D.C., headquarters. We also obtained information from four EPA regional offices located in Atlanta, Ga.; Boston, Mass.; Philadelphia, Pa.; and San Francisco, Calif. Our criteria for selecting these offices included differences in how the offices are organized to implement the Clean Water Act, differences in the factors that drive their workload, and geographic distribution.

For information on EPA’s process for budgeting and allocating resources, we interviewed officials from the Office of the Chief Financial Officer and other EPA offices with responsibility for Clean Water Act programs to control pollution from point and nonpoint sources, including the Office of Congressional and Intergovernmental Relations, Office of Enforcement and Compliance Assurance, and Office of Water. Among other things, we reviewed relevant portions of EPA’s strategic plan, budget data, and operating plan. We also obtained (1) estimates of the funding and staff years allocated to EPA’s regional offices and (2) allotments to the states under two relevant grant programs. While these data may not be adequate in all respects, we determined that they were sufficiently reliable to illustrate differences in the relative share of resources across EPA’s regional offices. In the four EPA regional offices selected for review, we discussed the budgeting and allocation process with cognizant officials.

For information on EPA’s efforts to improve resource planning, we interviewed officials from EPA’s Office of the Chief Financial Officer, Office of Enforcement and Compliance Assurance, Office of Human Resources, and Office of Water, as well as the Association of State and Interstate Water Pollution Control Administrators, the Environmental Council of States, and the National Academy of Public Administration to identify such efforts and obtain relevant documents on their status and results. Officials from these entities and the four EPA regional offices selected for review also provided information on the challenges EPA faces in taking actions to improve resource planning. In particular, we researched sources of data for the workload factors identified by EPA officials and state environmental officials as among the key drivers of resource needs. For some factors, such as number of authorized states in EPA regions, states for which EPA has direct implementation responsibilities, population, and population growth, we determined that the data were sufficiently reliable for our purposes. Regarding other factors, such as number of facilities and water quality, we found the data to be incomplete or unreliable for certain states or regions, for certain years, or for certain types of facilities or water bodies. As a result, we were unable to analyze these data for workload trends or geographic distribution. We found them sufficiently reliable to provide illustrative examples. To identify key elements of strategic workforce planning, we reviewed reports from GAO, EPA’s Office of Inspector General, and the National Academy of Public Administration.

For information on EPA efforts to develop the detailed cost estimate required under section 516(b)(1)(A) of the Clean Water Act, we interviewed officials from EPA’s Office of the Chief Financial Officer, Office of General Counsel, and Office of Water.

We conducted our work from August 2004 through July 2005 in accordance with generally accepted government auditing standards.

Information on Resources Allocated to EPA Regional Offices and States for Controlling Point and Nonpoint Source Pollution

Across the Environmental Protection Agency (EPA), the program offices track the funds and staff years dedicated to the goals and objectives laid out in the agency’s strategic plan, down to a level of detail known as program projects. The plan’s objectives generally contain multiple program projects and the reverse may also be true: an individual program project can contribute funds or staff years to multiple agency objectives. For example, within the Office of Water, most of the resources applicable to controlling point and nonpoint source pollution under the Clean Water Act are included under the program project called Surface Water Protection and the projects for categorical grants on Pollution Control (Section 106) and Nonpoint Source (Section 319). However, the Surface Water Protection program project contains resources for a broader range of activities than those included within our scope. At the same time, some of the resources that are relevant to controlling point and nonpoint source pollution are included in program projects that contain resources for other Clean Water Act and Safe Drinking Water Act-related activities.

We asked Office of Water officials to provide a regional breakdown of the funding contained in the Surface Water Protection program project (see fig. 2). Fiscal years 2004 and 2005 are the only years for which consistent data are available because the program project for Surface Water Protection was created in 2004.

Figure 3 provides a similar breakdown in terms of regional staff years.

Within the Office of Enforcement and Compliance Assurance, it is difficult to isolate resources dedicated specifically to implementing the Clean Water Act or other environmental statutes because the office organizes its budget by program projects, such as compliance monitoring and civil enforcement, that cut across all environmental media. Beginning in fiscal year 2000, however, the office’s budget officials asked the regional offices to provide a “best guess estimate” of the number of staff years devoted to particular program areas, including activities related to controlling point sources under the Clean Water Act. (See fig. 4.) The budget officials indicated that this exercise likely does not capture all relevant staff years and said that they did not verify the regional estimates. Fiscal years 2004 and 2005 were the only years for which complete data were available.

The Office of Enforcement and Compliance Assurance does not develop similar estimates for the amount of funding allocated to the regional offices. Although budget officials suggested that we could estimate regional spending based on the average cost of a staff year, regional officials said such an approach might be misleading because the cost of staff years varies from year to year and region to region.

The states receive annual allotments from the Office of Water under two major grant programs. Grants under section 106 of the Clean Water Act provide funds for water quality monitoring, regulating point source dischargers, and related activities. Grants under section 319(h) of the act fund the implementation of state programs for controlling pollution from nonpoint sources, such as agricultural runoff. Figures 5 and 6 show allotments to the states, by region, under the program projects for Pollution Control (Section 106) and Nonpoint Source (Section 319).

Information on Selected Workload Indicators Related to Controlling Point and Nonpoint Source Pollution

This appendix contains information on selected workload indicators for which the underlying data are sufficiently reliable to illustrate potential differences in the regional distribution of workload.

Figure 7 shows the number of states in each Environmental Protection Agency (EPA) region that are authorized to issue individual permits under the Clean Water Act and the number of states for which EPA retains direct implementation responsibility. The number of authorized states in a given region affects workload in several ways, including the number of staff devoted to oversight. When states are not authorized, regional officials have greater responsibilities, such as writing permits for regulated entities.

Figure 8 shows the regional distribution of major and minor facilities, including both municipal and industrial dischargers. Although these data are from EPA’s Permit Compliance System, for which concerns about data reliability are significant, EPA officials believe that the information on the number of facilities is adequate.

One of the key workload indicators cited by EPA and representatives of state environmental organizations was the quantity of surface waters that must be assessed and monitored to obtain a complete picture of water quality. These assessments may, in turn, trigger other resource-intensive activities, such as establishing total maximum daily loads. Figures 9 and 10 portray the miles of rivers and streams and the acres of lakes in each EPA region, according to the 2002 update of the National Hydrography Dataset, which was first compiled by the U.S. Geological Survey in 1992.

The National Hydrography Dataset does not contain detailed information on wetlands. The most recent information on wetlands was compiled in 1997 by the U.S. Fish and Wildlife Service. However, the information is no longer considered accurate because, for example, the Fish and Wildlife Service estimates that the United States loses 58,500 acres of wetlands annually.

EPA identified population and population growth as indirect indicators of workload, which are not necessarily linked to resource needs. For example, while a large population may indicate that the region has a large number of municipal wastewater treatment facilities, the population may be concentrated in a few large cities with centralized facilities, resulting in fewer individual facilities than otherwise expected. Similarly, growth in population might indicate that EPA and state staff will need to regulate more construction sites. However, the work required of environmental officials could vary depending on the number and size of these sites in each region. Figure 11 shows the census population estimates for the EPA regions for 1990 and 2004, along with the percentage increase in each region. We used 1990 as the starting point for this comparison because it was shortly after EPA abandoned the use of workload models in the late 1980s.

Figure 12 presents a slightly different picture of the same population data. It shows the change in the relative share of the U.S. population in each region between 1990 and 2004.

The 2004 census data are based on state estimates from 2004.

Comments from the Environmental Protection Agency

GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the individual named above, Christine Bonham, Stephen Cleary, Ellen Crocker, Elizabeth Curda, Denise Fantone, Julian Klazkin, Krista Loose, Naved Qureshi, Lisa Shames, Carol Herrnstadt Shulman, Gregory Wilmoth, and Melissa Wolf made key contributions to this report.