    [Senate Hearing 114-306]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 114-306

        OVERSIGHT OF THE ENVIRONMENTAL PROTECTION AGENCY'S PROGRESS IN
      IMPLEMENTING INSPECTOR GENERAL AND GOVERNMENT ACCOUNTABILITY OFFICE
                                RECOMMENDATIONS

    =======================================================================

                                    HEARING

                                   before the

     SUBCOMMITTEE ON SUPERFUND, WASTE MANAGEMENT, AND REGULATORY OVERSIGHT

                                     of the

                                  COMMITTEE ON
                          ENVIRONMENT AND PUBLIC WORKS
                              UNITED STATES SENATE

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 JUNE 14, 2016

                                   __________

      Printed for the use of the Committee on Environment and Public Works

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

           Available via the World Wide Web: http://www.gpo.gov/fdsys

                                   _________

                       U.S. GOVERNMENT PUBLISHING OFFICE

     20-773 PDF                 WASHINGTON : 2016
    ____________________________________________________________________
     For sale by the Superintendent of Documents, U.S. Government Publishing Office,
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                   COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                        ONE HUNDRED FOURTEENTH CONGRESS
                                 SECOND SESSION

                      JAMES M. INHOFE, Oklahoma, Chairman
    DAVID VITTER, Louisiana              BARBARA BOXER, California
    JOHN BARRASSO, Wyoming               THOMAS R. CARPER, Delaware
    SHELLEY MOORE CAPITO, West Virginia  BENJAMIN L. CARDIN, Maryland
    MIKE CRAPO, Idaho                    BERNARD SANDERS, Vermont
    JOHN BOOZMAN, Arkansas               SHELDON WHITEHOUSE, Rhode Island
    JEFF SESSIONS, Alabama               JEFF MERKLEY, Oregon
    ROGER WICKER, Mississippi            KIRSTEN GILLIBRAND, New York
    DEB FISCHER, Nebraska                CORY A. BOOKER, New Jersey
    MIKE ROUNDS, South Dakota            EDWARD J. MARKEY, Massachusetts
    DAN SULLIVAN, Alaska

                     Ryan Jackson, Majority Staff Director
                   Bettina Poirier, Democratic Staff Director
                                  ----------

     Subcommittee on Superfund, Waste Management, and Regulatory Oversight

                       MIKE ROUNDS, South Dakota Chairman
    DAVID VITTER, Louisiana              EDWARD J. MARKEY, Massachusetts
    MIKE CRAPO, Idaho                    THOMAS R. CARPER, Delaware
    JOHN BOOZMAN, Arkansas               JEFF MERKLEY, Oregon
    DAN SULLIVAN, Alaska                 CORY A. BOOKER, New Jersey
    JAMES M. INHOFE, Oklahoma (ex        BARBARA BOXER, California(ex
        officio)                             officio)

                                C O N T E N T S

                                  ----------
                                                                       Page

                                 JUNE 14, 2016
                               OPENING STATEMENTS

    Rounds, Hon. Mike., U.S. Senator from the State of South Dakota..     1
    Markey, Hon. Edward J., U.S. Senator from the State of
      Massachusetts..................................................     3
    Inhofe, James M., U.S. Senator from the State of Oklahoma........    69

                                   WITNESSES

    Larsen, Alan, Counsel to the Inspector General, Office of
      Inspector General, U.S. Environmental Protection Agency and
      U.S. Chemical Safety And Hazard Investigation Safety Board.....     4
        Prepared statement...........................................     6
        Responses to additional questions from Senator Inhofe........    12
        Response to an additional question from Senator Sullivan.....    19
    Gomez, Alfredo, Director, Natural Resources and Environment Team,
      U.S. Government Accountability Office..........................    20
        Prepared statement...........................................    22
    Responses to additional questions from:
        Inhofe.......................................................    54
        Sullivan.....................................................    60

        OVERSIGHT OF THE ENVIRONMENTAL PROTECTION AGENCY'S PROGRESS IN
      IMPLEMENTING INSPECTOR GENERAL AND GOVERNMENT ACCOUNTABILITY OFFICE
                                RECOMMENDATIONS

                                  ----------

                             TUESDAY, JUNE 14, 2016

                                    U.S. SENATE
             Committee on Environment and Public Works,
    Subcommittee on Superfund, Waste Management, and Regulatory
                                                      Oversight
                                                        Washington, DC.
        The committee met, pursuant to notice, at 3:05 p.m. in room
    406, Dirksen Senate Office Building, Hon. Mike Rounds (chairman
    of the subcommittee) presiding.
        Present: Senators Rounds, Markey, Crapo, Boozman and
    Inhofe.

                OPENING STATEMENT OF HON. MIKE ROUNDS,
              U.S. SENATOR FROM THE STATE OF SOUTH DAKOTA

        Senator Rounds. The Environment and Public Works
    Subcommittee on Superfund, Waste Management, and Regulatory
    Oversight is meeting today to conduct a hearing entitled
    Oversight of the Environmental Protection Agency's Progress in
    Implementing Inspector General and Government Accountability
    Office Recommendations.
        Approximately 1 year ago we held our first subcommittee
    hearing with Inspector General Arthur Elkins of the
    Environmental Protection Agency, who testified about his
    office's work in conducting audits and investigations related
    to EPA agency actions and programs. Since then we have held
    hearings conducting oversight on various aspects of the EPA
    rulemaking process to make certain the regulations the EPA
    implements are promulgated in an open, transparent process with
    adequate public participation.
        Unfortunately, we have found this is often not the case.
    The GAO is an independent, non-partisan agency that prepares
    reports that are either mandated by public laws or committee
    reports, or at the request of Congress. They provide
    comprehensive audits examining the economy and the efficiency
    of government operations.
        The Office of Inspector General reports to both the EPA and
    Congress regarding any problems and deficiencies relating to
    the administration of the Agency's programs and operations, and
    also serves as the investigative arm of the EPA, examining
    possible criminal or civil violations by the Agency. These
    offices conduct Agency oversight to determine whether Federal
    funds are being spent efficiently and effectively, the Agency
    is being managed property, and to make certain that Government
    programs and policies are meeting their objectives in an open,
    transparent manner, and are complying with the applicable
    statutes when promulgating regulations.
        In addition to conducting their own investigations, the GAO
    and OIG make recommendations to the EPA that, when successfully
    implemented in a timely fashion, can be effective at correcting
    mismanagement and holding the EPA accountable in properly
    fulfilling its mission and responsibly managing taxpayer
    dollars.
        The GAO and the IG prepare regular reports detailing EPA's
    progress in implementing these recommendations. While both
    offices track the EPA's implementation of these corrective
    actions for several years after the recommendation is made,
    testimony today reveals that the EPA is slow to implement
    recommendations and there may be a need for these offices to do
    more to followup on open recommendations.
        When the EPA does not implement these recommendations or
    delays their implementation while continuing to conduct
    business as usual, the mismanagement at the Agency continues
    and taxpayer dollars are improperly managed. Most alarmingly,
    the EPA continues to promulgate regulations that impose huge
    costs on the U.S. economy and American families, while not
    using proper safeguards.
        In the past year alone, the EPA has moved forward with its
    finalizing the Waters of the U.S. Rule, the Clean Power Plan,
    and tightening ozone NAAQS. These regulations will impose
    unprecedented costs on American families and the U.S. economy.
    Further, two of these regulations are on hold by the courts.
        When the EPA finalizes regulations through an improper
    process without implementing recommendations that would make
    the process better, the result is bad regulations, and that is
    what we have seen from the EPA. Additionally, in the past year,
    the EPA has made headlines with the Gold King Mine spill and
    the Flint water crisis. Now, more than ever, we need the EPA to
    get back to its core functions rather than pursuing burdensome
    regulations based on shaky legal ground. The GAO and the OIG
    play an important role in this.
        Our witnesses today will provide us with an update on the
    EPA's progress in implementing recommendations and help us
    conduct oversight over the EPA's process for implementing
    corrective actions.
        I am happy to have with us today Alan Larsen, the Counsel
    to the Inspector General of the Environmental Protection
    Agency, and Alfredo Gomez, the Director of the Natural
    Resources and Environmental Team of the Government
    Accountability Office.
        I would like to thank our witnesses for being with us
    today, and I look forward to hearing from your testimony.
        Now I would like to recognize my friend, Senator Markey,
    for a 5-minute opening statement.

              OPENING STATEMENT OF HON. EDWARD J. MARKEY,
              U.S. SENATOR FROM THE STATE OF MASSACHUSETTS

        Senator Markey. Thank you, Mr. Chairman, and thank you for
    scheduling today's hearing.
        The Government Accountability Office and the Environmental
    Protection Agency's Office of the Inspector General are a vital
    component of governmental integrity. These watchdogs must be
    independent, non-partisan, and maintain the highest ethical
    standards. In addition to fighting fraud, waste, and abuse of
    power, they ensure that Government works the way Congress
    intended, and in a manner that the public deserves.
        From its work uncovering nearly $100 million in wasted
    refundable airline tickets, to probing weaknesses in aviation
    security, to protecting our water supply from damage caused by
    oil and gas production, GAO has provided an invaluable service
    to the American public.
        Inspectors general play an equally important role. The
    Securities and Exchange Commission inspector general uncovered
    the mishandling of whistleblower tips in the Madoff Ponzi
    scheme. In response, Congress passed the Dodd-Frank Act,
    bringing the most significant changes in financial regulation
    since the Great Depression.
        At the EPA, the inspector general has raised concerns
    ranging from how the EPA oversees States' implementation and
    enforcement of programs designed to protect the public from
    bacteria-contaminated beaches to how the EPA conducts proper
    long-term monitoring of Superfund sites and ensuring that they
    are safe for reuse, to how the EPA can improve the review
    process for potentially harmful chemicals.
        EPA has implemented 174 GAO recommendations of the 325 made
    during the last 10 years. When one factors in the 4-year
    average time it takes to implement a GAO recommendation, the
    Agency has a 77 percent implementation rate. This rate is on
    par with other Federal agencies and with the 80 percent
    implementation target for recommendations that GAO has set for
    all agencies.
        The EPA has also worked hard to close out recommendations
    from the inspector general. Over the past 7 years, the
    inspector general has made over 1,700 recommendations to the
    EPA. At the time of the last annual report, only 158 remained
    unimplemented. The EPA is battling diminished resources, a lack
    of authority, and program updates that are underway but
    incomplete. Those struggles are compounded by a 20 percent
    decrease in appropriated funds and a 15 percent loss to its
    work force since 2010.
        If we are going to expect more rapid and complete agency
    responses to GAO and the inspector general recommendations,
    then we must ensure that EPA has access to the resources that
    are necessary to achieve its mission. Just look at Flint,
    Michigan and our Nation's failing water infrastructure, or
    hazardous air water pollutants with health risks that have yet
    to be assessed, or even the harmful pesticides that threaten
    bee populations that are vital to our ecosystem.
        We must recognize that our responsibility in creating those
    problems due to the prevailing dissidence between required
    funding levels and actions that should be taken by EPA are
    necessary to keep Americans safe. We must also combat other
    obstacles that hinder agency oversight. Both GAO and the
    inspectors general provide a crucial public service, and it is
    imperative that you are provided with all the tools you need to
    do your job effectively.
        Now, I have been made aware of the possibility that a
    Department of Energy contractor who cooperated with the GAO
    investigation that I requested may have been fired in
    retaliation for their cooperation. We should be doing
    everything possible to enhance GAO's ability to obtain the
    information it needs to undertake its mission of ensuring ``the
    accountability of the Federal Government for the benefit of the
    American people and protect those who help in such efforts.''
        Inspectors general's investigations can also be slowed
    without a review of all the critical materials. Preventing
    investigators from timely access to all records, documents, and
    other materials is contrary to the fundamental idea of
    transparency that Congress intended when establishing the
    inspector general.
        I thank each of you in advance for your testimony and I
    thank you again, Mr. Chairman, for holding this hearing.
        Senator Rounds. Thank you, Senator Markey.
        Our witnesses joining us for today's hearing are Mr. Al
    Larsen, Counsel to the Inspector General, Office of Inspector
    General, U.S. Environmental Protection Agency and U.S. Chemical
    Safety and Hazard Investigation Safety Board; Mr. Alfredo
    Gomez, Director, Natural Resources and Environment Team, U.S.
    Government Accountability Office.
        Gentlemen, your written statements will be made a part of
    the record without objection and at this time we will turn to
    both of you. Mr. Larsen, if you would like to begin, for your
    5-minute opening statements.

      STATEMENT OF ALAN LARSEN, COUNSEL TO THE INSPECTOR GENERAL,
      OFFICE OF INSPECTOR GENERAL, U.S. ENVIRONMENTAL PROTECTION
    AGENCY AND U.S. CHEMICAL SAFETY AND HAZARD INVESTIGATION SAFETY
                                 BOARD

        Mr. Larsen. Good afternoon, Chairman Rounds, Ranking Member
    Markey and members. I am Alan Larsen, counsel to the Inspector
    General for the Environmental Protection Agency and the U.S.
    Chemical Safety and Hazard Investigation Board. I would like to
    thank the Subcommittee for shining a spotlight on unimplemented
    OIG recommendations. I will provide an overview of what happens
    after OIG makes a recommendation and progress to date by both
    agencies with regard to implementation.
        Most of our audit and program evaluation work is performed
    in accordance with generally accepted Government auditing
    standards. Findings and recommendations for correcting any
    deficiencies are issued to agency officials as part of the
    final report, and that is also made public.
        The impact of a recommendation may be direct cost savings
    or an improvement in program efficiency or effectiveness. A
    recommendation may ensure the integrity of a program or result
    in other benefits.
        Once OIG issues a report, it is up to the agency to
    implement recommendations. However, OIG staff tracks each
    recommendation until it is fully implemented, which is a
    significant part of our oversight work.
        OIG lists unimplemented recommendations in our semiannual
    reports to Congress. Our most recent report cited 148
    recommendations unimplemented by EPA and 10 recommendations
    unimplemented by CSB. The average number of unimplemented
    recommendations for the last seven semiannual reporting periods
    was 144, or 133 for EPA and 11 for CSB. The numbers for the
    first and the most recent of those periods were virtually
    identical: 159 and 158. In other words, overall, the agencies
    have been implementing recommendations at the same pace that
    new ones are being added to the list.
        Of the pending unimplemented recommendations reported for
    EPA, the time elapsed since report issuance ranges from less
    than 1 year to more than 9 years. The age of CSB's
    unimplemented recommendations ranges from nearly 3 years to
    more than 5 years.
        Government auditing standards require that OIG obtains the
    agency's views regarding proposed recommendations. If the
    agency agrees with the recommendations, it must provide
    intended corrective actions and estimated completion dates.
    OIG's project team assesses the agency's proposal and
    determines if it sufficiently meets the intent of our
    recommendations.
        When the agency does not fully agree with OIG's findings or
    recommendations, we note that disagreement in our report. OMB
    requires an audit resolution process; EPA fulfills this
    requirement via its Manual 2750, which establishes that the
    agency is responsible for ensuring that management decisions on
    OIG recommendations are implemented.
        In most cases, OIG and the agency agree on final report
    recommendations. When there is a disagreement, we follow an
    escalating resolution process with three tiers as needed. OIG
    would not remove a recommendation from our unimplemented list
    based on agency refusal to act or because too much time has
    passed.
        The EPA chief financial officer and OMB managing director
    are responsible for assessing and reporting to OIG on each
    agency's progress. In turn, the OIG monitors, reviews, and
    verifies that progress. In addition, OIG conducts followup
    audits. These assignments are based on size, complexity, and
    significance of the issues and recommendations in the original
    report.
        In conclusion, accomplishing the tasks I have discussed
    requires sufficient appropriated funds from Congress. During
    the past year, we have returned $16 for every dollar given to
    us. When OIG is unable to carry out its responsibilities
    because of inadequate funding, it is a net loss to the Federal
    Government and the American taxpayers. While I am aware that
    this Subcommittee is not an appropriations committee, I
    respectfully ask for any help that you can provide us in this
    regard, and we certainly appreciate your support for our work.
        Mr. Chairman, this concludes my prepared statement. I will
    be pleased to answer any questions you or the members have.
        [The prepared statement of Mr. Larsen follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Rounds. Mr. Larsen, thank you for your testimony.
        We will now hear from Mr. Alfredo Gomez. Mr. Gomez, you may
    begin.

      STATEMENT OF ALFREDO GOMEZ, DIRECTOR, NATURAL RESOURCES AND
        ENVIRONMENT TEAM, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

        Mr. Gomez. Chairman Rounds, Ranking Member Markey, and
    members of the Subcommittee, good afternoon. I am pleased to be
    here today to discuss the status of recommendations GAO has
    made to the U.S. Environmental Protection Agency.
        As you have both noted, the mission of EPA is to protect
    human health and the environment. We have conducted reviews
    focused on various aspects of EPA's programs and operations,
    and through these reviews we have made numerous recommendations
    to improve EPA's performance and the efficiency and
    effectiveness of its programs and operations.
        My statement today focuses on two main areas: first, the
    status of EPA's implementation of GAO's recommendations from
    fiscal years 2006 through 2015, and how these recommendations
    relate to EPA programs and operations; and, No. 2, benefits
    realized by EPA based on our work.
        As part of our process, we followup on recommendations we
    have made and report their status to Congress. Agencies have a
    responsibility to monitor and maintain accurate records on the
    status of our recommendations. We then followup with EPA at
    least once a year to determine the extent to which our
    recommendations have been implemented and the benefits that
    have been realized. We consider a recommendation implemented
    when EPA has taken actions that address the issue or deficiency
    we have identified.
        With regard to the first area on the status of GAO
    recommendations, we found that of the 325 recommendations we
    made EPA had implemented 174. The remaining 151 recommendations
    remain open or not implemented. For recommendations that we
    made over a 4-year period, that is, from Fiscal Year 2006 to
    2011, EPA had implemented 77 percent. For recommendations made
    within the last 4 years, that is, from Fiscal Year 2012 to
    2015, EPA had implemented 17 percent.
        Experience has shown that it takes time for some
    recommendations to be implemented. It is for this reason that
    we actively track unaddressed or open recommendations for 4
    years.
        The 325 recommendations fall into six categories, such as
    EPA management and operations, water-related issues, and
    environmental contamination and cleanup. With regard to the 151
    recommendations that EPA has not yet implemented, 70 percent of
    these recs we made in the last 4 years and mainly concern EPA
    management and operations and water-related issues.
        For example, in 2014, we reported on EPA's Regulatory
    Impact Analyses, or RIAs, which are analyses of the benefits
    and costs of proposed regulations. We found that the
    information that EPA included and presented in the RIAs was not
    always clear. We recommended that EPA enhance the Agency's
    review process for RIAs to ensure that information for selected
    elements is transparent and clear, such as when discussing
    regulatory alternatives. While EPA agreed with this
    recommendation, the recommendation remains open until we see
    evidence that EPA has taken action to enhance its review
    process.
        We have also identified many benefits, such as programmatic
    and process improvements based on EPA taking actions on our
    recommendations. For example, we issued several reports on
    drinking water and wastewater infrastructure issues. In
    particular, we reported on the drinking water and wastewater
    infrastructure needs of rural and small communities.
        We found that these communities face potentially
    duplicative application requirements when applying to multiple
    State and Federal programs, making it more costly and time-
    consuming to complete the application process. We recommended
    that EPA work with the U.S. Department of Agriculture to
    develop a uniform preliminary engineering report template, a
    key step in the application process, and they have done so.
        In summary, our recommendations provide a good opportunity
    to improve the Government's fiscal position, better serve the
    public, and make Government programs more efficient and
    effective. EPA's implementation of our recommendations will
    help the Agency continue to improve its performance and the
    efficiency and effectiveness of its operations.
        We will continue to work with Congress to monitor and draw
    attention to this important issue.
        Chairman Rounds, Ranking Member Markey, and members of the
    Subcommittee, that completes my statement. I would be happy to
    answer any questions.
        [The prepared statement of Mr. Gomez follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Rounds. Thank you for your testimony, Mr. Gomez.
        Senators will now have 5 minutes each for questions. I will
    begin.
        Mr. Larsen, the OIG's most recent semiannual report to
    Congress cited 148 unimplemented EPA recommendations. Your
    testimony mentions annual followup audits, but how else does
    the OIG work with EPA to ensure these recommendations are
    thoroughly implemented in a timely manner?
        Mr. Larsen. The Agency has the official and ultimate
    responsibility to track and implement these recommendations,
    and they do that. We keep track, ourselves, of their progress,
    and at the end of each semiannual reporting period we compare
    with the Agency's tracking and we make sure that we agree on
    what are open recommendations and what are unimplemented
    recommendations. At that point we sometimes check back and say
    you promised progress as of a certain date and you haven't done
    it; why is that not happening. We also will do followup audits.
    In addition to tracking the existing recommendations, we may
    launch a new project to find out what is going on, why things
    aren't progressing.
        Senator Rounds. Do you report your progress back to
    Congress as well, on the implementations and the followup? Is
    there a followup on a regulation-by-regulation basis that
    Congress receives as well?
        Mr. Larsen. The primary reporting back is in the semiannual
    report, and in that we have an appendix that report-by-report,
    recommendation-by-recommendation indicates the status of the
    unimplemented recommendations; how far behind they are and what
    the Agency's reason for not having made the progress is.
        Senator Rounds. Thank you.
        Mr. Gomez, the EPA has implemented 77 percent of
    recommendations that the GAO made from 2006 to 2011, as you
    indicated, and only 17 percent of the recommendations were made
    from 2012 to 2015. These figures also reveal that for older
    recommendations, from 2006 to 2011, nearly 30 percent remain
    unimplemented. What is the average amount of time the EPA takes
    to implement GAO's recommendations and why does it take years
    to implement your recommendations?
        Mr. Gomez. So, in most cases, our experience has shown that
    it takes agencies, EPA among them, about 4 years to implement
    our recs. So we make a variety of recommendations. Some of them
    do require a little bit more time, for example, if the
    recommendation is where EPA has to work with stakeholders,
    whether they be other Federal agencies, State agencies, to put
    together different memorandums or strategies. In other cases,
    though, where we make a recommendation, for example, that EPA
    use existing web tools that it has to provide information to
    the public to clarify information, in those cases we think that
    the Agency could actually do those a lot faster than a couple
    of years.
        As I mentioned in my statement, we also track them for 4
    years very carefully. We have a website where you can see for
    each report the status of each recommendation, similar to what
    the IG does. So anyone can see what the status is. We do
    encourage the agency to implement the recommendations as
    quickly as possible.
        Senator Rounds. Thank you, Mr. Gomez.
        Mr. Larsen, you indicated there was a cost-savings for the
    amount of money that we spend in OIG activities versus the
    return. Can you elaborate on the amount of cost-savings your
    office finds at the EPA and how you find these cost-savings and
    how you make the recommendation?
        Mr. Larsen. Yes. What I can't do, and I am sorry to say I
    won't be able to do, is to take an individual recommendation
    and say that one will end up saving $1 million. So we can't do
    that. There are any number of recommendations we make that we
    don't attempt to and are unable to assign a dollar figure to.
        So those $16 per dollar comes from the projects we do where
    there is an identifiable dollar savings; and, as I say, many of
    the other projects may have, I don't know, a more intangible
    benefit, whether it is health benefits or a process savings. So
    we don't try to establish a cost-savings where it would be a
    fanciful number.
        Senator Rounds. I understand. Thank you. My time has
    expired.
        Senator Markey.
        Senator Markey. Thank you very much, Mr. Chairman.
        Director Gomez, for the EPA to properly evaluate and
    regulate toxic substances, it is essential that they have the
    most up-to-date chemical and toxicity data available. One key
    recommendation you have made is that EPA needs to improve its
    efforts to test and evaluate chemicals. To what extent will the
    recently passed TSCA reform legislation assist EPA in
    addressing GAO's open chemical safety recommendations?
        Mr. Gomez. So we believe that some of the provisions in the
    new TSCA law would help EPA address some of the open
    recommendations that we have. For example, one of the
    recommendations we made was that EPA should take steps to
    obtain more chemical toxicity and exposure information; and the
    new TSCA legislation does enhance EPA's authority to obtain
    such information from chemical manufacturers and processors. So
    once EPA takes action on those measures, we will then
    reevaluate to see if we can close those recommendations.
        Senator Markey. Thank you so much, because when we were
    working together on a bipartisan basis on that legislation, it
    was important, as we negotiated TSCA, that we remove the catch-
    22 that forced EPA to know a chemical was dangerous before it
    could require safety testing to be done on that chemical. And I
    am also that EPA's new authority will help with that as well.
        Again, Director Gomez, in your testimony you stated that
    the EPA has implemented 174 out of 325 recommendations made in
    the last 10 years. However, GAO recognizes that recommendations
    cannot be implemented overnight and takes an average of 4 years
    to implement.
        When you look at recommendations made four or more years
    ago, EPA has an implementation record that is just about equal
    to the 80 percent Government-wide average. Do you agree,
    Director Gomez, that EPA is putting a concerted effort toward
    implementing GAO recommendations in a manner that is similar to
    other Federal agencies?
        Mr. Gomez. So, right, EPA's average is similar to the
    agency-wide average. What we have done with EPA most recently
    was we decided to do outreach and update twice a year because
    we wanted to get more current information from EPA so that
    perhaps we could close more of the recommendations, or at least
    just work with them in terms of if there are some
    recommendations where they disagree with us, so we agree to
    disagree.
        But the recommendations for us is a pretty high bar. I
    mean, it is a recommendation that is made based on having good
    understanding of what is happening on the ground, what the
    requirements are that the Agency is supposed to be doing, what
    the reasons are as to why they are not doing that or why there
    is a deficiency. So our recommendations are fairly well
    supported and articulated, so we want the Agency to implement
    our recommendations.
        Senator Markey. Mr. Larsen, let me come over to you. In the
    last 7 years EPA has received over 1,700 recommendations from
    the inspector general. Since, in the last annual report, only
    148 of those 1,700 remained unimplemented, would you agree, Mr.
    Larsen, that EPA generally does act on your recommendations in
    about 4 years, similar to EPA's record in implementing GAO
    recommendations?
        Mr. Larsen. Yes, Senator Markey. We don't track them
    exactly that way, but in preparation for this hearing I asked
    our staff to try to come up with that number and we came up
    with 3.7 years on average for implementing the recommendations
    by the Agency.
        Senator Markey. So, in general, what you are saying is that
    GAO and the inspector general at the department at the EPA have
    a very similar view of the speed with which EPA does respond.
        Mr. Larsen. That is correct, Senator.
        Senator Markey. And that it is in line with all other
    agencies in the Federal Government.
        Mr. Larsen. That one I can't answer. We don't know where
    the other agencies stand, but for us it appears we are in line
    with the GAO.
        Senator Markey. I guess the fact that we were having a
    hearing, had you had to compile that information wouldn't give
    you enough time to then compare it to the rest of the whole
    Government.
        But do you agree with that, Mr. Gomez, that in general it
    is in the ballpark?
        Mr. Gomez. So that has been our experience, that
    Government-wide it generally takes agencies a little longer,
    and that is why we track it each year closely.
        Senator Markey. OK, beautiful. Thank you.
        Thank you, Mr. Chairman.
        Senator Rounds. Thank you.
        Chairman Inhofe.
        Senator Inhofe. Mr. Gomez, in response to a request that I
    submitted, the GAO issued a legal opinion on December 14th of
    2015 concerning the EPA's use of social media to promote its
    WOTUS rule. Because GAO found EPA had violated the Anti-
    Deficiency Act, the EPA was required to submit a report to the
    President and Congress and GAO. Now, the first thing I would
    ask is, what is the status of that request?
        Mr. Gomez. So we have not received the Anti-Deficiency Act
    report from EPA.
        Senator Inhofe. Are they making any statement that they
    deny that this was a violation of the Anti-Deficiency Act?
        Mr. Gomez. Based on our finding, as you noted, the agencies
    are required to submit a report to Congress, to the President
    through OMB, and at the same time submit that report to the
    comptroller general, who is my boss.
        Senator Inhofe. Now, do you have any idea of any kind of
    discussion or response to that particular one that has taken
    place since 2015?
        Mr. Gomez. I do not, but what we can do is we can inquire
    with EPA through our general counsel's office and get back to
    you.
        Senator Inhofe. OK, so it would be in line for me or any
    Member of Congress to request that you get a status report on
    that and anything that we want to release for public
    consumption would be acceptable?
        Mr. Gomez. Yes, I can take that back.
        Senator Inhofe. All right.
        Mr. Gomez. Thank you.
        Senator Inhofe. All right, I think we should do that,
    because in this case this is a statute that is on the books. It
    is one that we knew this was going on at the time. It is on an
    issue, the WOTUS issue is arguably the most significant issue
    of all the over-regulations that we have, at least in my State
    of Oklahoma, and I think it is really incumbent to do that.
        Mr. Larsen, as you know, I have been a frequent requester
    of the IG investigations reviews. For instance, in response to
    a request I submitted in 2011, the IG made several
    recommendations for EPA to update its conflict of interest
    policies and peer review process in the 2013 report. This is
    something that Senator Boozman has called to our attention in
    these meetings; it is something that is significant.
        Now, I understand the EPA has reported the recommendations
    are complete, but the OIG has not conducted any formal followup
    review to assess the adequacy of EPA actions. Does the IG plan
    to followup on EPA's actions per this report?
        Mr. Larsen. As I mentioned, we do followup reports. We are
    entering into, as we head into summer, the work plan planning
    process, and out of that comes our discretionary projects. I
    don't know if that is on tap for next year for followup. I will
    check with our entities that do those reports and get back to
    your staff.
        Senator Inhofe. What concerns me is if it is a case of a
    corporation, corporations or an individual could own stock in a
    corporation, the corporation could own two or 300 or many, many
    more. So that could fall as a conflict of interest. When it is
    an environmentalist group of some kind, you don't have that,
    you don't have the reams and reams.
        So I assume when you are looking at the reform of a
    conflict of interest, you are taking things like that into
    consideration, and they are looking at it now, is that correct?
        Mr. Larsen. What I don't know is if we have a new project
    planned in that area, and I will get back to you on whether we
    do.
        Senator Inhofe. OK, I appreciate that.
        Mr. Gomez, July 2014, the GAO report found, among other
    things, that the EPA does not properly consider the impact of
    its regulations on employment. The GAO recommended EPA update
    its approach to estimating employment impacts, but the EPA has
    not done so. You have heard, if you watch what goes on in this
    Committee, on three different occasions we have quoted
    Administrator McCarthy when she said that there is no evidence
    that EPA regulations have a negative impact on jobs.
        Senator Capito is sitting over here and her eyes started
    rolling around. There are some things that are so obvious it
    doesn't take that type of a report out there.
        Now, how can McCarthy make such claims when EPA's process
    for evaluating employment impacts remains broken?
        Mr. Gomez. So that was one of our recommendations in the
    report also, for EPA to look closely at the information they
    were using in calculating employment of facts, and to really
    find more current----
        Senator Inhofe. Let me ask both of you a question. I know
    my time has expired, but it is significant to me.
        I agree with Senator Markey when he said that both GAO and
    IG have to be independent. Now, GAO, in my eyes, is independent
    because there is not a relationship in that line. That isn't
    quite true with the IG because isn't the IG actually a part of
    EPA?
        Mr. Larsen. Senator, we are a part administratively, but
    the IG and the OIG do not take direction from the
    administrator; we report results to----
        Senator Inhofe. So you think your level of independence is
    not impaired by that relationship?
        Mr. Larsen. That is correct.
        Senator Inhofe. Thank you, Mr. Chairman.
        Senator Rounds. Thank you.
        Senator Boozman.
        Senator Boozman. Thank you, Mr. Chairman, and thank you and
    Senator Markey for having this hearing today.
        Mr. Gomez, last year you appeared before this Committee at
    a hearing examining S. 543, the Science Advisory Board Reform
    Act, which I introduced with Senator Manchin and Inhofe. At the
    time you testified that EPA's procedures for processing
    congressional requests to the Science Advisory Board did not
    comply with the law. GAO subsequently issued a report with four
    specific recommendations to ensure EPA compliance.
        Your written testimony for today's hearing indicates that
    EPA has not implemented the recommendations. The question is
    how can EPA go a year without adopting these common sense
    recommendations to ensure compliance with the law?
        Mr. Gomez. So, right, we made four recommendations in that
    report and the recommendations were focused on helping to
    improve the procedures that EPA has in place for processing
    congressional committee requests for scientific advice from the
    Science Advisory Board; and as we understand it, as of March of
    this year, EPA is developing a written process that would
    address our recommendations.
        We are waiting for that process to be completed so that we
    can then assess it and look to see if it addresses the intent
    of our recommendations. And our recommendations were very
    specific about the process that we believe EPA should have in
    place as it processes requests from Congress for scientific
    advice.
        Senator Boozman. So is this a budget issue, as to why they
    have not come forward?
        Mr. Gomez. We have not been told that is a budget issue.
    Our recommendations were about improving the process that they
    have in place. In some cases it wasn't well documented, so we
    don't see that it is a resource issue and they haven't said it
    is a resource issue there.
        Senator Boozman. And I guess that is an irritant of mine.
    We hear a lot about budgets and budgets are tight, but some of
    these things just don't get done; and, again, a year is a long
    time.
        On the topic of the EPA Science Advisory Board, I want to
    ask you about a requirement of the Fiscal Year 2016 omnibus
    that EPA develop a policy statement on Science Advisory Board
    membership that would incorporate the goals of increasing State
    and Tribal representation on the Science Advisory Board, as
    well as update its conflict of interest policy similar to what
    Senator Inhofe was asking Mr. Larsen.
        Per the omnibus, EPA was to develop the policy and submit
    to the GAO again for review in March. Has EPA submitted the
    statement to GAO?
        Mr. Gomez. EPA has not submitted that conflict of interest
    statement to us yet. The last we had heard was that they were
    reviewing it internally and it was due to us the end of April,
    but we have not received it yet.
        Senator Boozman. OK. So do they say the reason for the
    delay, then?
        Mr. Gomez. Only that it is currently being reviewed by the
    EPA Office of congressional and Intergovernmental Relations.
        Senator Boozman. And, again, this is another thing that
    doesn't seem to be driven by budget, but just simply not
    getting things done.
        Mr. Gomez. Yes, it is not a budget issue, as we understand
    it; it is going through their process. And I know that you had
    a timeframe for when it was due to GAO, and it is over that
    timeframe.
        Senator Boozman. Thank you.
        Mr. Larsen, IG plays an important oversight role in helping
    Congress improve programs by leading efforts to cut waste,
    fraud, and abuse across Washington. In the EPA OIG semiannual
    report to Congress, more than $6 billion was accounted for as
    insufficient or not documented as being provided to the EPA
    because EPA failed to have complete and accurate data. The
    report goes on to further describe the negative impact this has
    had on taxpayers, public health, and natural resources.
        Can you address the findings and explain to us how the EPA
    could mismanage $6 billion? Again, with us talking about the
    problem of not having the resources that some of these basic
    functions need to get done.
        Mr. Larsen. I understand the question and I am not going to
    pretend that I have the answer to each and every of the reports
    we have. I do have in the room our assistant inspector general
    for audit, or I can get back to you with a specific answer to
    that, but I don't have those facts at my fingertips.
        Senator Boozman. My time is up.
        Thank you, Mr. Chairman.
        Senator Rounds. Thank you.
        Senator Boozman. But I would appreciate it if you would get
    back to us.
        Mr. Larsen. Yes, sir.
        Senator Boozman. Thank you.
        Senator Rounds. Just thinking and listening to the
    testimony here and your responses to the questions, first of
    all, I appreciate the candid way in which you have responded.
    Second of all, I sense the frustration that members of this
    Committee have offered, both Senator Markey and also Chairman
    Inhofe and Senator Boozman. In each case there has been a
    frustration suggested, and I am just going to try to paraphrase
    this and see if there isn't something that we need to do about
    it.
        Three and a half to 4 years seems like an awfully long time
    in which to expect to have these things implemented as an
    average, regardless of whether it is with the EPA or with any
    other Federal agency. And at the same time, as Senator Inhofe
    had suggested, there was clearly a wrongdoing, one that you
    have pointed out and that you have asked for a response on,
    none of which has been forthcoming at this time.
        If there was one thing that would frustrate anybody who is
    concerned with appropriate application of law, protections, as
    Senator Markey has shared or as Senator Inhofe has indicated, a
    violation of a law in terms of how the money was spent, justice
    that takes that long to come through seems to me to be, as they
    would suggest, justice denied.
        I am just going to ask this, and, Senator Markey, I
    understand that you have another meeting that you have to be
    at, but I would give you, as Ranking Member, the opportunity to
    respond as well.
        Gentlemen, is there something that we should be doing here
    in order to expedite responses? Is there something we can do to
    actually get a more expedited response from not just EPA, but
    from other agencies as well, when those recommendations are
    there and clearly there is a time delay?
        Mr. Larsen. Senator, this is going to sound more
    bureaucratic than I intend it to be, but the structure that was
    created for the IGs allows us to make recommendations. We
    cannot order an agency to do anything. And it is left to them
    to decide what to do. Part of the independence that I was
    discussing with Senator Inhofe is that we report to the agency.
    We also report to the Congress. If the agency chooses not to,
    or is unable to, act, Congress is also aware of the
    recommendations we have made; and the way the process works,
    then, if Congress has the ability, if it chooses, to waggle its
    finger or take more strong action.
        Senator Rounds. Thank you.
        Mr. Gomez.
        Mr. Gomez. So our recommendations are exactly that,
    recommendations; they are not binding. I think what you are
    doing now is exactly what we would like, is to bring more
    attention to the recommendations. As I noted also, our reports
    are public. Anyone can go and look at the recommendations and
    look at the status.
        And I have to tell you that we get a lot of inquiries from
    lots of people asking what is the status of recommendations, so
    EPA is well aware of that; and that is one of the reasons why
    we have agreed to update the recommendations twice a year, so
    that we can try and bring closure to them or at least
    articulate why there is disagreement in some cases.
        Senator Rounds. Thank you.
        Gentlemen, once again I want to thank you for your
    testimony and just for taking the time today to be with us and
    participate in this hearing.
        I would also like to thank Senator Markey, my colleague,
    Senator Boozman, Senator Inhofe for being here.
        The record will be open for 2 weeks, which brings us to
    Tuesday, June 28th, and, with that, this hearing is adjourned.
    Thank you.
        [Whereupon, at 3:50 p.m. the subcommittee was adjourned.]
        [Additional material submitted for the record follows.]

                Statement of Hon. James M. Inhofe, U.S. Senator
                           from the State of Oklahoma

        Thank you Subcommittee Chairman Rounds for convening
    today's oversight hearing, and thank you to our witnesses from
    the Government Accountability Office (GAO) and the
    Environmental Protection Agency's (EPA) Office of Inspector
    General (OIG) for being here to testify.
        Today's hearing is important because Members of Congress
    are charged with conducting oversight over executive agencies,
    such as the EPA, to ensure compliance with their statutory
    authority and mission in a manner free of waste, fraud, and
    abuse. EPA watchdogs such as the GAO and the OIG play a
    critical role in partnership with Congress to fulfill this
    oversight function.
        I have long valued this partnership as a frequent requester
    of both GAO and EPA OIG reviews and investigations, which in
    many cases result in recommendations for the Agency to enhance
    performance, create efficiencies, and safeguard taxpayer
    dollars. However, as testimony today reveals, EPA has been slow
    to implement OIG and GAO recommendations. For instance, GAO
    will testify that nearly thirty percent of EPA recommendations
    made between 2006 and 2011 remain unimplemented, and only 17
    percent of GAO's recommendations from 2012 to 2015 have been
    implemented. The EPA OIG's testimony similarly highlights a
    significant number of open recommendations; most recently
    reporting 148 unimplemented EPA recommendations, 89 of which
    are more than a year old.
        Among those unimplemented OIG and GAO recommendations,
    several are of great interest to the Committee's oversight
    efforts. For example, EPA has yet to implement various GAO
    recommendations regarding the Agency's procedures for
    processing congressional requests for scientific advice by the
    Agency's Science Advisory Board. Further, EPA has yet to
    implement nearly 2-year-old recommendations from GAO to improve
    its regulatory impact analyses, including updates to the way
    EPA estimates the impact its regulations have on employment.
    Finally, EPA still needs to implement various recommendations
    from the OIG to ensure its hiring process is sound in light of
    the John Beale scandal and the Agency's recent mass hiring.
        These outstanding recommendations are concerning as both
    the EPA OIG and GAO are in the midst of substantial reviews and
    investigations into the Animas River spill at Gold King Mine
    and the drinking water crisis in Flint, Michigan. Subsequent
    GAO and OIG reports will undoubtedly include numerous
    recommendations for EPA, yet based on testimony today I have
    little confidence EPA will fully and swiftly implement these
    recommendations.
        Indeed, today's hearing raises questions about why EPA has
    been late to implementing many common-sense recommendations. I
    have been concerned the EPA has been deviating from its core
    mission and focusing on pushing new regulatory actions that are
    political priorities of President Obama without new authority
    from Congress, as is the case with the Clean Power Plan and
    Waters of the U.S. rule, which have both been halted by the
    Courts pending judicial review.
        For these reasons, we need to engage with EPA watchdogs
    like GAO and the OIG to ensure they are effective and hold EPA
    accountable. Today is another step toward continuing that
    relationship.
        I look forward to hearing from our witnesses today who will
    share perspective on EPA's major challenges and how the Agency
    is implementing GAO and OIG recommendations.
        I ask that my full statement be entered into the record.
    Thank you.