Since its creation in 1970, EPA has generally been responsible for ensuring the enforcement of the nation’s environmental laws. This responsibility has traditionally involved monitoring compliance by those in the regulated community (such as factories or businesses that release pollutants into the environment or use hazardous chemicals), ensuring that violations are properly identified and reported, and ensuring that timely and appropriate enforcement actions are taken against violators when necessary. Because states historically had primary responsibility for addressing environmental pollution, including taking the lead role in enforcement under federal environmental legislation of the 1950s and 1960s, many states were dissatisfied with the new enforcement powers Congress granted to EPA. Referring to his first term as EPA Administrator during the 1970s, William Ruckelshaus described relations between EPA and state governments as “terrible,” largely because EPA itself represented a repudiation of what the state regulators had been doing. The states felt, he believed, that in the face of very little public or political support, they had made considerable progress and were getting no credit for it. The very existence of EPA symbolized to state environmental agencies the lack of appreciation the public had for their efforts and accomplishments. Furthermore, because EPA was now responsible for ensuring the implementation and enforcement of environmental laws, states needed to demonstrate to EPA that they had acquired and were maintaining adequate authority to enforce program requirements consistent with federal law before EPA would “authorize” and continue to allow states to assume the day-to-day administration of new environmental programs. This federal oversight contributed to a very difficult period between EPA and the states. The states thought EPA dictated too much and was too intrusive. Difficulties in the EPA-state relationship manifested themselves from the 1970s through the 1990s and, to some degree, have continued to the present day. In 1980, we described the failings of the EPA-state partnership. In a 1988 comprehensive management review of EPA, we reported that while some progress had been made in improving the EPA/state relationship, the goal of a truly effective EPA-state partnership remained elusive. Many state officials expressed concerns about having limited flexibility, too much EPA control, and excessively detailed EPA oversight. In 2003, OECA officials said that environmental commissioners in several states and members of the Environmental Council of the States (ECOS) called for OECA to develop and implement a consistent and objective mechanism for measuring state performance. Specifically, ECOS wanted EPA’s oversight of state programs to be consistent between EPA regions and states in the same region. ECOS also wanted EPA oversight to be predictable, repeatable, and unbiased. In December 2003, OECA began jointly developing the SRF with input from EPA regions, associations representing state pollution control agencies, ECOS and state officials to evaluate the extent to which state performance in three major programs complies with specific legal requirements, policy and guidance. The SRF measures state performance using 12 required elements and an optional 13th element. The elements include five categories: (1) review of state inspection implementation; (2) review of state enforcement activity; (3) review of state enforcement commitments; (4) review of state data integrity; and (5) for the optional 13th element, a review of additional programs of the state’s choice to insure consideration of state activities that support the overall evaluation. Regions prepare a draft report of the findings and conclusions of each review, jointly discuss with the state how major recommendations will be addressed, and provide the draft reports to OECA headquarters. OECA reviews the draft reports and provides comments on the regions’ analyses and recommendations. A more detailed description of the SRF is included in appendix II. The relationship between EPA and state environmental agencies varies substantially from state to state and program to program. Staff in EPA’s regional offices operate programs in those states that have elected not to seek authorization and in those states that EPA has concluded are not prepared to manage the programs effectively. In some cases, where EPA has denied a state with program authorization, state personnel may do most of the work as if they had the authority to grant permits, with EPA employees handling only the final step of formally issuing the documents. In other states or programs, EPA may approve a “partial delegation” of authority, under which a state operates part of a program that can be delegated and EPA operates the remainder. Just as EPA can authorize a state to conduct day-to-day program management, environmental statutes may allow EPA to withdraw authorization if a state fails to meet certain conditions, including maintaining the capacity to effectively manage the program and adopting and properly exercising the legal authorities to enforce program compliance consistent with federal laws and regulations. In practical terms, however, EPA’s ability to directly manage state programs is limited because of its staffing levels and other resources. Overall funding to regions and authorized states increased from fiscal years 1997 through 2006. However, these increases did not keep pace with inflation and the growth in enforcement responsibilities. Both EPA and state officials told us they are finding it difficult to respond to new requirements while carrying out their previous responsibilities. However, EPA does not collect sufficient data on enforcement workload and staffing, which it needs to assess the capacity of the regions and states to effectively implement their responsibilities for enforcing environmental laws consistent with federal requirements. According to our analysis of EPA’s budget and workforce for fiscal years 1997 through 2006, EPA’s total budget increased from $7.3 billion to $7.7 billion—a decline of 13 percent in real terms. At the same time, total funding for EPA enforcement increased from $455 million to $522 million—a decline of 5 percent in real terms. For the regions, which command the bulk of enforcement resources, funding increased from $288 million to $322 million—a decline of 8 percent in real terms, while headquarters enforcement funding increased from $167 million to $200 million—a decline of 1 percent in real terms. Figure 1 shows the changes in EPA enforcement funding in real terms, in total, and by headquarters and regional offices. According to officials in OECA and EPA’s Office of the Chief Financial Officer, OECA headquarters absorbed decreases in OECA’s total enforcement funding in recent years to prevent further reductions to the regions. According to our analysis, enforcement funding for OECA headquarters increased from $197 million in fiscal year 2002 to $200 million in fiscal year 2006—a 9 percent decline in real terms. During the same time, regional enforcement funding increased from $279 million to $322 million—a 4 percent increase in real terms. EPA reduced the size of the regional enforcement workforce by about 5 percent over the 10 years, from 2,568 full-time equivalent (FTE) staff in fiscal year 1997 to 2,434 FTEs in fiscal year 2006. In comparison, the OECA headquarters workforce declined 1 percent, and the EPA total workforce increased 1 percent during the same period. Figure 2 shows the changes in headquarters and regional FTEs from fiscal years 1997 through 2006. As figure 3 shows, the change in FTEs was not uniform across the 10 regions over the period. For example: Two regions—Region 9 (San Francisco) and Region 10 (Seattle)— experienced increases in their workforce: Region 9 increased 5 percent, from 229 to 242 FTEs, and Region 10 increased 6 percent, from 161 to 170 FTEs. Two regions—Region 1 (Boston) and Region 2 (New York) experienced the largest declines: Region 1 experienced a 15 percent decline, from 195 to 166 FTEs, and Region 2 had a 13 percent decline, from 291 to 254 FTEs. As EPA’s real total funding declined, EPA’s real total grant funding to states and tribes declined, as shown in figure 4. States and tribes use these grant funds, combined with their own resources, to implement and enforce environmental programs consistent with federal requirements. EPA’s grants to authorized states and tribes increased from $2.9 billion to $3.2 billion from fiscal years 1997 through 2006—a decline of 9 percent in real terms. However, grant funding to states and tribes dropped substantially between fiscal years 2004 and 2006, from $3.9 billion to $3.2 billion—a 22 percent decline in real terms. For the programs we examined, EPA provides states with federal resources through grant programs. In addition, under the Clean Air Act, states must collect fees from permitted facilities to help fund the program. The following are some of the funding sources for the programs we examined: Clean Water Act Section 106 Grants. The Office of Water provides annual Water Pollution Control grant funds to the states under the Clean Water Act for, among other things, enforcement of point source pollution requirements. Clean Air Act Section 105 Grants. States finance enforcement of air quality laws with fees paid by permitted facilities (e.g., electric utilities and chemical manufacturers), in accordance with title V of the Clean Air Act. States assess fees based on tons of pollution emitted. The fee must be at least $25 per ton (as adjusted for inflation) of regulated pollutants (excluding carbon monoxide). EPA provides grants to states to help fund programs that prevent and control air pollution or to implement national ambient air quality standards, including programs that may address smaller sources that do not have to obtain permits (e.g., dry cleaners and gasoline stations). Resource Conservation and Recovery Act (RCRA) Section 3011 Grants. The Office of Solid Waste and Emergency Response provides annual grants to states under section 3011 of the Solid Waste Disposal Act to support, among other things, state enforcement of the RCRA Subtitle C Hazardous Waste Management programs. EPA’s financial assistance covers up to 75 percent of a state’s total costs for managing hazardous waste. Underground Storage Tank (UST) Grants. The Office of Underground Storage Tanks provides grants to states under subtitle I of RCRA to support state UST programs, including inspections and enforcement activities.