Cleaning Up

egulating the environment is a scientifically complex and emotionally charged task. Each decision affects human health, the economy and the future of the planet. Yet even its strongest critics concede the Environmental Protection Agency has done a commendable job of cleaning up the nation's air, water and soil since the agency was created by executive order in 1970.

The statistics speak volumes: Emissions of particulate matter have dropped 78 percent; more than a billion pounds of toxic pollution have been kept from waterways; dangerous pesticides such as DDT have been banned; and average blood-lead levels in children have declined 75 percent.

EPA has achieved all this despite being hamstrung by a rigid, stovepipe structure dictated by Congress in which there are separate program offices for air, water, toxic waste and other environmental categories. The 1970 Clean Air Act and amendments, for example, govern most activity within the Office of Air and Radiation. Each program office has established its own data collection procedures, computer systems and policy priorities. At the same time, EPA's 10 regional offices operate so independently of headquarters that they are widely referred to by people within and outside the agency as fiefdoms pursuing their own agendas.

This highly decentralized structure has been both a blessing and a curse. EPA regions have the autonomy to address local problems in creative ways. But the lack of coordination means national policy initiatives are difficult to pursue. Furthermore, although program offices have done a fine job helping EPA write regulations to control toxic material emerging from smokestacks or into waterways, they fall short in addressing pollutant interactions or the way pollution moves from air to water or land to water and back again. To tackle those issues, EPA needs better integration of data, research and policy priorities across programs.

The need for internal realignment to promote integration has been the focus of considerable attention in recent years. Many experts, including researchers at the National Academy of Public Administration (NAPA), believe the solution lies in replacing myriad environmental statutes with a single generic law giving the agency more administrative flexibility. With such a law, EPA could reorganize as needed to adapt to new environmental issues.

Given that more than 40 congressional committees and subcommittees currently oversee EPA, lawmakers are unlikely to put turf concerns aside long enough to pass an integrated law. EPA officials also have hesitated to push for a replacement statute for fear that if environmental laws are reconsidered, the agency might actually lose some of its power.

Still, even without an integrated statute, EPA has recognized that greater integration within the existing statutory framework is a worthy goal. Some regional offices have reorganized to promote collaboration among programs. There's also a heightened awareness that better coordination of data collection and information technology strategies is essential both to breaking down stovepipes and to measuring performance.

While EPA's increased attention to these issues predated the recent congressional push for performance-oriented government, there's no question that the 1993 Government Performance and Results Act and related laws have fueled change. The agency has made credible first stabs at developing and implementing a results-oriented strategic plan and has recognized that good financial management plays a critical role in measuring performance. Despite having relatively few capital assets, EPA also manages its buildings, laboratories and computer assets well. But the agency still has a long way to go before information technology and human resources management practices foster a truly integrated approach to protecting the environment.

Fixing Finances

Throughout most of its history, EPA has put mission ahead of management concerns. But the agency has made some significant recent improvements in financial matters. For the first time, EPA won an unqualified audit opinion from agency Inspector General Nikki Tinsley on its fiscal 1997 financial statements. However, except for some isolated program areas such as Superfund, where regular litigation demands detailed records, EPA still doesn't have detailed cost data across programs to help make informed strategic decisions.

Tinsley wrote a January 1998 letter to House Majority Leader Dick Armey, R-Texas, listing the agency's top 10 management problems, among them cost accounting. "The lack of adequate cost information adversely impacts nearly every facet of EPA's operations, from budget formulation and planning to program execution," Tinsley wrote. Agency officials have acknowledged this problem and are aggressively trying to rectify it. A good cost accounting system "will be critical to telling the story of whether we achieved our goals and how much they cost," EPA Chief Financial Officer Sallyanne Harper said at a GPRA best practices conference sponsored by NAPA last summer.

Using a new planning, budgeting, analysis and accountability process, Harper led EPA's fiscal 1999 launch of a goal-based budget system that tracks costs by performance objective rather than appropriation account. Harper also is creating a central database that will capture agencywide annual performance data to be used in generating future performance plans. Most observers consider these efforts good first steps toward better resource allocation but are reserving judgment until EPA fully implements the process.

Planning aside, IG auditors note oversight problems with EPA's assistance grants, which account for about half of EPA's budget. These grants fund state environmental agencies and academic research, among other things. Monitoring whether grant money is used for its intended purpose often is an ancillary duty for managers who have other pressing daily responsibilities.

On the contracts side, oversight has improved since Congress and the IG reprimanded the agency for poor practices in the early 1990s. But auditors insist EPA continues to award too many "level-of-effort" contracts, which buy work hours rather than results, putting the financial risk burden on the agency instead of the contractor.

Personnel Practices

Ask some EPA managers how well the agency's human resources function helps them do their jobs and they're likely to roll their eyes. They say years of being misinformed by HR staff about personnel issues have led to general cynicism. The agency's HR procedures and policies are clear enough, sources say, but the quality and commitment of the people communicating them vary considerably.

EPA managers express frustration about inefficient and unhelpful staff at the headquarters HR office in Washington, for example, but praise a satellite HR branch located in Las Vegas. Adding to the HR function's lack of credibility is the fact that HR officials never developed a comprehensive career management process to help agency employees build their skills and qualifications, notes one senior manager.

As in most agencies, managers also complain about the slow federal hiring process and low salaries relative to the private sector, which make it difficult to attract qualified people. In addition, firing or disciplining employees can be more trouble than it's worth. "Managers tend to ignore problem employees and hope they go away," one official notes. "When you hire, you have to assume you're hiring for life," adds another. That said, EPA has some of the most progressive work policies in government, offering employees public transportation subsidies and allowing them to adopt flexible work schedules and, in some offices, even work at home. For managers who buy into the flex-time concept and don't mind completing the paperwork for cash bonuses, there are ample opportunities to reward good performance.

Despite salary and hiring hurdles, EPA's mission enables the agency to attract well-educated, committed people. Whether the existing workforce comprises the best skill mix for the agency, however, is unclear. EPA has plenty of lawyers and engineers but not enough people who can bargain and negotiate, notes DeWitt John, director of NAPA's Center for the Economy and the Environment. Negotiation skills will be increasingly important as EPA moves away from a traditional regulatory system to one founded on partnerships, he says.

Similarly, IG auditors stress the need for better contracting skills among agency managers. EPA last year launched an initiative called Workforce 2000 in the hope of identifying precisely what skills and training will be needed to carry the agency into the next century. While it's too soon to judge the impact, agency managers and observers are encouraged by the effort.

Information Hurdles

If there's a make-or-break factor that could hinder EPA's ability to integrate program efforts and meaningfully track performance for years to come, it's the agency's fragmented information technology structure. Agency managers generally have their pick of systems and software that best meet individual program needs, but years without central IT coordination have resulted in a patchwork of often-incompatible computer systems and data collection methods.

"The present management structure allows each program, division, region and state to establish different data definitions," the IG noted in a June 1998 review of Office of Water data integration efforts. In addition, EPA relies on outside sources such as regulated entities and states for most of its data, so the agency has little power to prevent keypunching or other errors. These problems represent "a significant problem for all managers in the agency," says one senior official.

EPA has taken incremental steps to address IT issues in recent years. In 1995, the agency completed an information resources management strategic plan to help connect IT decisions with agency goals. An initiative to standardize data also is under way. Last summer, EPA Administrator Carol Browner created a high-level task force to study IT issues further. Little concrete change has come from these efforts yet, and given the depth of the problem, it could be years before workable solutions are in place. In the meantime, moving forward with GPRA implementation won't be easy. As Tinsley puts it, "If we don't get our IT shop in order, [measuring performance] is going to be an uphill battle."

These problems aside, the agency wins kudos from most stakeholders for its data dissemination efforts. Ensuring the public's "right to know" about environmental initiatives has long been a Browner priority and is one of the agency's strategic goals. EPA has posted several databases on its Web server, allowing users to check everything from facility-specific enforcement and chemical release data to general information on chemical risks. Citizens can download information and analyze the very data EPA uses.

Cultivating Capital

Because EPA relies heavily on state agencies to implement federal environmental requirements, the agency doesn't own a lot of capital assets. Nevertheless, EPA has solid planning processes in place for considering purchases and upgrades.

Each agency laboratory, program office and regional office maintains a facility master plan, which is formally updated every five years and tweaked as necessary. During the annual budget process, offices submit prioritized lists of asset needs--determined via life-cycle analyses that consider costs and benefits of various alternatives--to the Office of Administration and Resources Management. That office then recommends to the administrator which projects to fund.

A current construction project consolidating research and administration facilities in Research Triangle Park, N.C., illustrates how the process plays out. The new campus will replace seven aging leased buildings for which upkeep has become expensive and whose outdated laboratory facilities no longer meet researchers' needs. Ownership will allow EPA to save money over leasing in the long run.

For IT-related capital purchases, the agency is phasing in a new investment review process, as required by the 1996 Clinger-Cohen IT management law. EPA's goal is to link IT investment decisions to other critical management functions, such as budgeting and performance measurement, and also to regularly update IT plans based on past performance. Once fully in place, the review process could serve as a useful tool for addressing IT compatibility problems.

Reaping Results

Most observers agree that EPA is making a genuine effort to implement GPRA. The agency derived its 10 strategic goals and 45 objectives after extensive dialogue with states, industry, environmentalists and other groups. Indeed, EPA reviewed more than 800 written and oral comments on its draft plan before submitting the final version to Congress in September 1997.

Though they commend EPA's effort, many observers criticize the agency for relying too heavily on output measures, such as the number of environmental permits issued, to mark progress. They'd like to see more measures that directly show how EPA's work leads to improvements in environmental conditions. But since science still hasn't advanced enough in some environmental subject areas to allow for outcomes measurement, EPA may be stuck tracking mostly outputs for years.

Tinsley has also reported that the agency faces a huge challenge "developing an accurate baseline of environmental data for planning, budgeting, implementing and evaluating EPA's programs." For some strategic objectives, fiscal 1999 will mark the first year of baseline data collection. Given that the agency depends on states and other federal agencies to provide much of the necessary data, there also are concerns that data format inconsistencies may not be adequately resolved. In addition, because states are the main implementers of federal environmental laws, achieving some goals will be largely out of EPA's control.

Ultimately, strategic planning and outcomes measurement won't make EPA work better until structural hurdles are dealt with, say those who advocate an integrated statute. As NAPA's John puts it, "GPRA is a great idea, but [at EPA] it's being grafted onto a system that's archaic."

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