August 31, 1999

Thompson Letter on GPRA - EPA

Thompson Letter on GPRA - EPA

August 17, 1999

The Honorable Carol M. Browner

Administrator

U.S. Environmental Protection Agency

401 M Street, SW

Washington, D.C. 20460

Dear Administrator Browner:

As you know, the Congress is focused on ensuring that the federal government delivers better results to its citizens and taxpayers. The Congress has enacted a statutory framework to achieve these results. This statutory framework includes the Government Performance and Results Act (GPRA); financial management statutes, such as the Chief Financial Officers Act; and information resources management statutes, such as the Clinger-Cohen Act. Each of these reforms aims at achieving more efficient and effective performance throughout the federal government.

As part of our oversight agenda, the Committee has developed information on how effectively the Environmental Protection Agency (EPA) is using the above statutory tools to improve its performance in several key areas such as becoming more results-oriented and resolving long-standing problems of fraud, waste, and mismanagement. The purpose of this letter is to share with you the information we have developed and obtain your response to certain questions pertaining to it. With this dialog as a start, we hope to work with you on a continuing basis to ensure that EPA delivers the best possible results for the American people.

Performance Plan Assessment

The Congress continues to look closely at how well departments and agencies are implementing GPRA. At the request of this Committee and others, GAO recently completed an assessment of the EPA annual performance plan for fiscal year (FY) 2000. According to GAO, EPA’s FY 2000 plan "represents a moderate improvement" over its FY 1999 plan.

The FY 2000 plan’s major strengths are that it presents goals that are generally objective, measurable, and quantifiable (except for major management problems as discussed below); and the plan discusses strategies and resources for achieving intended performance. In some cases, the plan uses outcome measures for EPA’s activities. However, most measures are outputs that provide less value in gauging the important dimensions of programs’ performance. For instance, the performance measures for Superfund focus on the number of activities to clean up sites rather than the reduction of human exposure to harmful waste.

GAO found that the FY 2000 plan had two key weaknesses. One was the failure to provide sufficient details on crosscutting goals and activities. OMB guidance to agencies on preparing their performance plans states:

At a minimum, the annual plan should indicate those programs or activities that are being undertaken with other agencies to achieve a common purpose or objective; i.e, interagency and crosscutting programs . . .

Yet GAO found that EPA’s FY 2000 plan did not do this very well for its "Pollution Prevention" objective to reduce lead poisoning and its "Safe Food" objective to reduce health risks from pesticides.

The other key weakness was that the plan provides limited confidence that the agency’s performance information will be credible because EPA’s data management system is outmoded in many ways. For example, GAO says it has been difficult, if not impossible, for EPA to aggregate data from many different databases to present comprehensive information because data elements are not standardized.

GAO found that the FY 2000 plan has no performance goals for the mission-critical challenge of improving data management. In commenting on EPA’s FY 1999 plan, GAO said EPA needed to add goals for implementing the Clinger-Cohen Act. Now another year has passed, and EPA’s failure to include in the FY 2000 plan any goals or time frames for the processes needed to make sound information technology investment decisions is a serious omission.

Need to implement audit recommendations on major management problems

One area where there have been too few results is solving major management challenges that seem to persist year after year at most agencies, including EPA. One problem area of particular concern at EPA is Superfund program management. EPA has yet to fully implement several GAO recommendations related to this high-risk problem area that are detailed in the enclosure. One example is a GAO recommendation from September 1994 that EPA expedite the issuance of the regulation on indirect costs.

The proportion of Superfund dollars devoted to administrative support as opposed to actual cleanup activities also remains a problem, and one that is growing worse. GAO recently reported that the share of total Superfund expenditures for contractor cleanup work declined from about 48 percent in fiscal year 1996 to about 42 percent in fiscal year 1997. At the same period, spending for "support activities" increased from about 51 to 54 percent of total Superfund expenditures. Non-site specific expenditures also increased from about 36 percent to over 39 percent. EPA officials could not explain these changes in detail because they had not analyzed Superfund costs in this manner and were unaware of this decline until GAO presented their findings.

According to information provided to the Committee by your Inspector General (IG) and GAO, there are a number of open audit recommendations addressing other major management problems at EPA as well. For example, several of the IG recommendations propose ways to improve oversight of enforcement activities. The enclosure describes many such unresolved recommendations by the IG, and another enclosure describes additional open GAO recommendations.

Need for specific performance goals to address major management problems

It is essential that agency heads and other managers commit themselves to tangible steps that will lead to solutions and that agency heads accept accountability for following through on these commitments. One obvious way to do this is to establish specific and measurable goals in your annual GPRA performance plans. OMB guidance in Circular A-11 for agencies to prepare their performance plans states:

Performance goals for management problems should be included particularly for problems whose resolution is mission-critical or which could potentially impede achievement of program goals . . .

GAO recently evaluated the extent to which EPA’s FY 2000 performance plan contains specific and measurable performance goals to address the high risk and other most serious management problems confronting EPA that GAO and your IG have identified. According to the GAO evaluation, which is detailed in the enclosures, EPA’s plan has no specific goals for 7 of these 12 problem areas. For example, GAO’s evaluation says that the performance plan discusses the Superfund program management challenges, but offers no specific performance goals, indicators, or measures to identify the sites with the greatest health and environmental risks.

Without such measures or goals, it is difficult, if not impossible, to assess progress in addressing major management problems and to hold EPA accountable.

Congressional follow-up

With so many tax dollars being wasted, this Committee expects agencies to take every opportunity to use the many tools available to them, such as GPRA plans, to resolve major management problems. Furthermore, the GAO and your own IG exist to work in partnership with you to solve longstanding issues of waste, fraud, and abuse.

I hope that the information provided with this letter will stimulate you to make greater use of these tools and resources. In this regard, I ask that you review the enclosed information and respond to the following questions:

• Do you disagree with any of the GAO or IG recommendations described in the enclosures? If so, what is the basis for your disagreement?

• Where you agree with the recommendations, what specific actions are you taking to implement each one and how long will it take to complete?

• Do you disagree with any of the GAO or IG designations of management problems facing EPA? If so, which ones and why?

• Where you agree with the problem designations, are you prepared to establish specific and measurable commitments to address each one of them in your next performance plan?

• If so, could you outline what approach you plan to take for each problem?

• If you believe that any of these problems do not lend themselves to specific and measurable performance plan goals, please explain why. Please also explain what alternative steps you are taking to solve the problem.

I would appreciate your early attention to this letter. After receiving your response, I will ask Committee staff to arrange a meeting with your representatives to discuss it. My Governmental Affairs Committee staff contact is Robert Shea.

Sincerely,

Fred Thompson

Chairman

FT/rs

Enclosures

OPEN GAO RECOMMENDATIONS ON "HIGH RISK" AREAS: Superfund Program Management

 

GAO Report No. and Date	Recommendation
RCED-94-196 Sept. 28, 1994	To ensure maximum recovery of EPA’s cleanup costs from the parties responsible for these costs, GAO recommends that the Administrator of EPA expedite the issuance of the regulation on indirect costs.
	To ensure maximum recovery of EPA’s cleanup costs from the parties responsible for these costs, GAO recommends that the Administrator of EPA establish goals for early action on cases and for the percentage of costs to be recovered.
AIMD-95-177 Aug. 25, 1995	To improve EPA’s ability to recover costs associated with cleaning up hazardous waste sites, GAO recommends that EPA take steps to ensure that cost recovery data and supporting documentation are complete and accurate by improving the documentation of financial systems’ application controls to help ensure accurate data input, processing, and output.
RCED-99-8 Nov. 30, 1998	Because of the need for current and accurate information on the risks posed by 1,789 sites that are potentially eligible for the National Priorities List in order to set cleanup priorities and delineate cleanup responsibilities, GAO recommends that the Administrator of EPA, in consultation with each applicable state, develop a timetable for EPA or the state to characterize and rank the risks associated with the potentially eligible sites.
	Because of the need for current and accurate information on the risks posed by 1,789 sites that are potentially eligible for the National Priorities List in order to set cleanup priorities and delineate cleanup responsibilities, GAO recommends that the Administrator of EPA, in consultation with each applicable state, establish interim cleanup measures that may be appropriate for EPA and the state to take as potentially eligible sites that pose the highest risks while these sites await either placement on the National Priorities List or state action to fully clean them up.
RCED-99-8 Nov. 30, 1998	Because of the need for current and accurate information on the risks posed by 1,789 sites that are potentially eligible for the National Priorities List in order to set cleanup priorities and delineate cleanup responsibilities, GAO recommends that the Administrator of EPA, in consultation with each applicable state, develop a timetable for determining whether EPA or the state will be responsible for cleaning up individual sites.

OPEN GAO RECOMMENDATIONS ON EPA’s MAJOR MANAGEMENT CHALLENGES

EPA Needs More Comprehensive Information on the Environment

The Environmental Protection Agency (EPA) needs more comprehensive information on the condition of the environment to effectively set priorities, assess progress in achieving its goals and objectives, and report on its accomplishments in a credible way. Although EPA and the states collect a considerable amount of data, the agency’s data systems are often outmoded and difficult to integrate in order to produce comprehensive environmental information. Important gaps in the data also exist.

Seven open recommendations are related to this management challenge. Collectively, these recommendations focus on the need for EPA to develop agency-wide policies and procedures for disseminating information, find ways to make data more accessible to the public, develop agency-wide information systems architecture, and improve information resources planning and quality assurance activities.

GAO is currently performing a broad review that focuses on the key information management issues facing EPA. This review will identify the major information problems related to data inaccuracies, fragmentation, and gaps; the initiatives that EPA has implemented to address these problems; and the role of EPA’s new central information office, which the agency plans to create to manage its information requirements. A report on this review will be issued in September 1999.

GAO Product	Recommendation
RCED-98-245 Sept. 24, 1998	To help ensure that EPA provides the public with data that are accurate, complete, and relevant to its needs, the Administrator of EPA should supplement the agency’s existing policies on information resources management by developing agency-wide policies and procedures that specify guidance and standards for program offices involved in designing, developing, and implementing information dissemination projects. Such guidance and standards should address obtaining stakeholders’ involvement in the projects’ design and development, testing for and correcting errors in the data, and communicating contextual information on the data’s uses and limitations.
	Given the potential usefulness of the Emergency Planning and Community Right-to-Know Act of 1986 section 312 data to the public, the Administrator of EPA should evaluate options to make the data more accessible and implement the most cost-effective option that provides availability on a regional and national basis. In implementing the project, EPA should use the policies and standards for dissemination projects that GAO has recommended.
IMTEC-92-14 April 2, 1992	To strengthen EPA’s overall ability to accomplish its cross-media mission, the Administrator of EPA should complete the agency's cross-media information resources management (IRM) strategy by developing an agency-wide information systems architecture that explains the structure of and communications among the agency's information resources that are needed to achieve its single- and cross-media missions.
AIMD-94-25 Nov. 17, 1993	To assist the Office of Pollution Prevention and Toxics (OPPT) in its efforts to provide efficient and effective collection, dissemination, and use of Toxic Substances Control Act (TSCA) data as required by the Act, the Administrator of EPA should direct the Assistant Administrator for the Office of Prevention, Pesticides, and Toxic Substances to (1) complete a strategic IRM plan based on an analysis of internal users’ functional and informational needs, (2) evaluate alternative system architectures for meeting those needs, and (3) select a target architecture to guide the development and evolution of OPPT systems.
	To assist OPPT in its efforts to provide efficient and effective collection, dissemination, and use of TSCA data as required by the Act, the Administrator of EPA should limit new OPPT system development efforts until the IRM plan and target systems architecture are completed.
AIMD-95-167 Aug. 22, 1995	As a part of the recently initiated reassessment of Resource Conservation Recovery Act (RCRA) information needs, the Administrator of EPA should require the Assistant Administrator of the Office of Solid Waste and Emergency Response to develop clear data definitions for all EPA-required data.
	As part of the recently initiated reassessment of RCRA information needs, the Administrator of EPA should require the Assistant Administrator of the Office of Solid Waste and Emergency Response to develop a data quality assurance program that establishes data reliability standards and methods to ensure data reliability.

EPA Faces Challenges in Reinventing Environmental Regulation

Although the current regulatory system for environmental protection has its successes, it has proven to be costly and, at times, inflexible. Noting that complex future environmental challenges will require fundamentally different regulatory approaches, EPA has initiated a variety of actions aimed at reinventing environmental regulation. For example, in March 1995, EPA announced a series of high-priority and significant actions to improve the current regulatory system and lay the groundwork for a new system of environmental protection. However, as GAO concluded in July 1997, the agency faces several challenges that need to be addressed to create a climate in which regulatory reinvention can succeed. These broad issues include helping its rank-and-file employees understand and support changes to the current regulatory system, obtaining consensus among the agency’s varied stakeholders on what these changes should be, and effectively evaluating the success of many of its regulatory reform initiatives. EPA has initiated actions to deal with these issues. GAO does not currently have any open recommendations in this area.

A Good Working Relationship With the States Has Been a Long-Term Challenge for EPA

As authorized by environmental statutes, EPA has delegated the responsibility for the day-to-day implementation of most federal environmental programs to the states. The working relationship between EPA and the states has often been characterized by fundamental disagreements over such issues as EPA’s and state environmental agencies’ respective roles, appropriate priorities among state environmental programs, and the appropriate degree of federal oversight. For example, GAO’s May 1998 report on EPA’s and states’ efforts to focus state enforcement programs on achieving environmental results cited unanimous concerns among the 10 states contacted that different EPA offices convey an inconsistent message on the appropriate use of compliance tools. Oregon officials, for example, cited "internal battles" between EPA’s Office of Enforcement and Compliance Assurance and the agency’s program offices, noting that the offices tend to have different initiatives and priorities, which has led to confusion for both the EPA regions and the states. Officials in Colorado, Massachusetts, and Pennsylvania cited similar problems. EPA and the states are pursuing an initiative with the potential to address many of these concerns. The National Environmental Performance Partnership System (NEPPS), which was established by EPA and state leaders in May 1995, is intended to focus the efforts of EPA and state regulators more on results and less on administrative management and oversight. The details of how NEPPS will work are still evolving as the system is currently being implemented and refined. GAO recently did a review of NEPPS and issued a report on June 21, 1999 (GAO/RCED-99-171). GAO recommended that EPA work with senior-level state officials to initiate a joint evaluation process that would identify the key issues which are impeding further NEPPS progress and that would develop mutually agreed upon remedies for the identified issues. Because the report only recently was issued, GAO has not included a detailed discussion of its recommendation and EPA’s actions in the below discussion.

There are two open recommendations related to EPA’s working relationship with the states, which were made in GAO’s May 1988 report.

GAO Product	Recommendation
RCED-98-113 May 27, 1998	The Administrator of EPA should ensure that the development of the Office of Enforcement and Compliance Assurance’s (OECA) Performance Profile stays on the schedule outlined in its National Performance Measures Strategy, the profile will be developed collaboratively with interested states in a manner that helps these states meet their own performance measurement needs, and that OECA periodically disseminates information (as it becomes available) among the states on effective practices in measuring enforcement programs’ results.
RCED-98-113 May 27, 1998	The Administrator of EPA should promote greater consistency in what has been a fragmented and inconsistent message by different EPA offices on the appropriate balance in EPA’s enforcement program between enforcement and compliance assurance activities. In doing so, the Administrator should build on EPA’s recent efforts to address this issue by ensuring that (1) the expectations set for OECA, program offices, and other EPA headquarters and regional offices are consistent with the agency’s policy calling for an appropriate mix of tools to achieve compliance, (2) different EPA offices with enforcement responsibility more systematically coordinate their negotiations with, and oversight of, state agencies on enforcement-related matters, and (3) the enforcement-related provisions of EPA’s Performance Plan, prepared pursuant to the Government Performance and Results Act, focus on outcomes in a manner consistent with that of the core performance measures developed under EPA’s National Performance Measures Strategy, the National Environmental Performance Partnership System, and the agency’s other results-oriented initiatives.

SPECIFIC PERFORMANCE GOALS IN EPA’s FY 2000 PERFORMANCE PLAN ADDRESSING

GAO- AND IG-DESIGNATED MAJOR MANAGEMENT CHALLENGES

Major Management Challenges	Specific Performance Goal(s)
Environmental information: EPA needs more comprehensive information on the condition of the environment to effectively set priorities, assess progress in achieving its goals and objectives, and report on its accomplishments in a credible way. EPA’s data systems are often outmoded and difficult to integrate, and important gaps in the data also exist.	None.
Regulatory reinvention: Noting that complex future environmental challenges will require fundamentally different regulatory approaches, EPA has initiated a variety of actions aimed at reinventing environmental regulation. However, the agency faces several challenges, including helping its rank-and-file employees understand and support changes to the current regulatory system and obtaining consensus among the agency’s varied stakeholders on what these change should be.	None.
EPA/State relations: The states have become important EPA partners as they have assumed the responsibility for implementing most national environmental programs on a daily basis. Despite the importance of this partnership, the relationship has often been characterized by fundamental disagreements over roles, priorities, and the extent of federal oversight.	None.
Superfund program management: EPA needs to take additional actions to (1) ensure that limited resources are used to clean up sites that pose the greatest health and environmental risks, (2) recover billions of dollars in cleanup costs from those responsible for the contamination, and (3) control site cleanup costs through the efficient and effective administration of cleanup contracts. Related to GAO’s concerns, the Inspector General has identified quality assurance plans at Superfund sites as a management challenge. According to the Inspector General, EPA is not consistently using a scientifically based, systematic planning process to take actions at Superfund sites.	The plan has no goals to address sites with the greatest health and environmental risks. However, EPA has a goal to address cost recovery at sites with statute of limitations on total past costs equal to or greater than $200,000. On the other hand, it has no goal addressing GAO’s concern that EPA has used an understated, conservative rate for charging its indirect costs. Also, EPA has not established a measure for tracking actual cost recoveries compared to potential cost recoveries for any given period of time. With regard to contracting, in the "Special Analysis" section of the plan, EPA states that it is "placing particular emphasis on improving Superfund contracts, providing oversight of the Independent Government Cost Estimates to ensure cost effective use of contract dollars."
Accountability: The Inspector General identified four accountability issues. Resources budgeted for environmental programs by EPA headquarters should be controlled and accounted for to ensure that they are used for the designated purpose. The advent of performance grants giving states increased flexibility in how they use resources raises new questions regarding the extent to which EPA can be held accountable for work performed by states and their agents. EPA does not consistently enforce its environmental regulations across the country. Without reliable management information systems to measure this progress, personal accountability is difficult to assess.	None.
EPA’s oversight of enforcement activities: The Inspector General has identified fundamental weaknesses with state identification and reporting of significant violators of the Clean Air Act and the Resources Conservation and Recovery Act.	Under its "Credible Deterrence" strategic goal, EPA has a performance goal to improve the capacity of states, localities, and tribes to conduct enforcement and compliance assurance programs. Also, the "Special Analysis" section describes actions to correct the weaknesses. They include evaluating and revising current policies, implementing quality assurance of enforcement data, and reviewing applications for compliance certification under title V of the Clean Air Act.
Backlog of National Pollutant Discharge Elimination System permits: The backlog of permits is a nationwide problem.	In the "Special Analysis" section of the plan, EPA says that it has developed and is implementing a multi year plan to reduce the backlog. Also, a performance goal under the "Clean Water" strategic goal is that major point sources, storm water sources, combined sewer overflows, new hardrock mines, and concentrated animal feeding operations requiring National Pollutant Discharge System permits are covered by a current permit.
Use of inefficient contract types: EPA continues to rely extensively on level-of-effort cost reimbursable contracts that essentially buy labor hours, not results, and place the burden of cost control on the Government.	A performance goal under the "Effective Management" strategic goal is to implement performance-based contracting for 11 percent of EPA’s contracts.
Oversight of assistance agreements: Over the years, many of the Inspector General’s audits have shown that some recipients of assistance agreements have wasted taxpayers’ dollars, and at times EPA did not get what it paid for.	None.
The agency relationship with contractors: A personal services contract makes contractor staff appear to be government employees. Federal Acquisition Regulation 37.104(b) states that agencies are not permitted to award personal services contracts unless specifically authorized by statute. The Inspector General’s audit work has shown that instances or appearances of personal services contracts are a vulnerability that EPA needs to address.	None.
Need for resources to enhance employee competencies: According to the Inspector General, the agency has recognized that one of its biggest challenges over the next several years is to develop and implement a strategy that focuses its attention and resources on employee development.	Under its "Effective Management" strategic goal, EPA has a goal to "improve the capability of its workforce by: formalizing a leadership development approach; rolling out a training curriculum to enhance necessary cross-functional skills; clearly identifying and defining support staff career paths; and continuing to hire talented and diverse individuals."
EPA’s security plan for automated information systems: The agency attempts to assess risk to its information systems and minimize potential vulnerabilities through a series of individual security plans. However, there is no centralized validation process for these plans.	None.