Clean Water Act: Improved Resource Planning Would Help EPA Better
Respond to Changing Needs and Fiscal Constraints (22-JUL-05,	 
GAO-05-721).							 
                                                                 
Federal and state fiscal constraints may jeopardize past and	 
future accomplishments resulting from the Clean Water Act (the	 
act). In this environment, it is important to manage available	 
resources as efficiently as possible and to identify future human
capital needs, including the size of the workforce and its	 
deployment across the organization. GAO was asked to determine	 
(1) the extent to which the Environmental Protection Agency's	 
(EPA) process for budgeting and allocating resources considers	 
the nature and distribution of its Clean Water Act workload and  
(2) the actions EPA is taking to improve resource planning and	 
the challenges the agency faces in doing so.			 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-721 					        
    ACCNO:   A30817						        
  TITLE:     Clean Water Act: Improved Resource Planning Would Help   
EPA Better Respond to Changing Needs and Fiscal Constraints	 
     DATE:   07/22/2005 
  SUBJECT:   Budget administration				 
	     Environmental law					 
	     Environmental monitoring				 
	     Environmental policies				 
	     Human capital management				 
	     Human capital policies				 
	     Intergovernmental fiscal relations 		 
	     Policy evaluation					 
	     Pollution control					 
	     Reporting requirements				 
	     Strategic planning 				 
	     Environmental protection				 
	     Policies and procedures				 

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GAO-05-721

                 United States Government Accountability Office

                     GAO Report to Congressional Requesters

July 2005

CLEAN WATER ACT

 Improved Resource Planning Would Help EPA Better Respond to Changing Needs and
                               Fiscal Constraints

                                       a

GAO-05-721

[IMG]

July 2005

CLEAN WATER ACT

Improved Resource Planning Would Help EPA Better Respond to Changing Needs and
Fiscal Constraints

                                 What GAO Found

EPA's process for budgeting and allocating resources is largely based on
historical precedent and does not fully consider the changing nature or
distribution of the workload either for specific environmental laws or the
broader goals and objectives in the agency's strategic plan. With prior
year's allocations as the baseline, year-to-year changes are marginal.
EPA's program offices and regions also have some flexibility to realign
resources based on actual workload. Overall, the impact of these changes
is minor, according to EPA. Because the nature and distribution of the
act's workload has changed as the scope of regulated activities has grown,
with EPA gaining new responsibilities and shifting others to the states,
more than marginal changes may be appropriate. EPA does not conduct the
periodic "bottomup" assessments of the work that needs to be done, the
distribution of the workload, or the resources needed to respond more
effectively to changing needs and constrained resources.

EPA has developed initiatives that could improve its ability to plan its
resources more strategically, including efforts that focus on workforce
planning. These efforts are promising but could be more effective if two
agencywide initiatives were better coordinated and employee skill surveys
were designed to identify gaps in needed skills. Beyond these initiatives,
EPA faces larger challenges in adopting a more systematic process for
budgeting and resource allocation, particularly in obtaining reliable data
on key workload indicators. According to EPA officials, data on many of
the factors that affect workload-and thus, drive resource needs-are not
comprehensive or reliable. One of the biggest challenges will be assessing
which of the workload indicators represent the most significant factors in
determining resource needs. While this assessment presents a challenge, it
would help EPA set priorities for improving data quality.

States Authorized to Issue Clean Water Act Permits 50 Number of states

Overall permit program

40

Federal facilities Pretreatment program 30 General permits

20 10

0 1972 1977 1982 1987 1992 1997 2002

Year

Source: EPA.

                 United States Government Accountability Office

Contents

  Letter

Results in Brief
Background
EPA's Process for Budgeting and Allocating Resources Does Not

Fully Consider the Current Workload in Terms of Strategic Goals or
Specific Laws EPA Has Made Some Progress in Improving Its Resource
Planning, but Challenges Remain EPA Has Not Developed a Detailed Estimate
of the Cost to

Implement the Clean Water Act, As Required Conclusions Recommendations for
Executive Action Agency Comments and Our Evaluations

1 3 5

8

12

22 23 23 24

Appendixes                                                              
                Appendix I:             Scope and Methodology              26 
                              Information on Resources Allocated to EPA    
               Appendix II:                Regional Offices                
                            and States for Controlling Point and Nonpoint  
                                                Source                     
                                              Pollution                    28 
                             Information on Selected Workload Indicators   
              Appendix III:                   Related to                   
                                Controlling Point and Nonpoint Source      35 
                                              Pollution                    
              Appendix IV:    Comments from the Environmental Protection   41 
                                                Agency                     
                Appendix V:     GAO Contact and Staff Acknowledgments      43 

Tables    Table 1: Increasing Workload Associated with Selected Clean   
                   Water Act Responsibilities Related to Controlling Point 
                      and Nonpoint Source Pollution Since 1972              6 
              Table 2: Strategic Plan Goals That Encompass Clean Water Act 
                Responsibilities Related to Controlling Point and Nonpoint 
                                  Source Pollution                         11 
Figures      Figure 1: States Authorized to Assume Key Permitting          
                           Responsibilities, 1972 to 2004                   8
              Figure 2: Allocation of Funding by the Office of Water under 
                                                                       the 
                          Surface Water Protection Program Project, by EPA 
                        Region, in Fiscal Years 2004 and 2005              29 

Contents

Figure 3:	Allocation of Staff Years by the Office of Water under the
Surface Water Protection Program Project, by EPA
Region, in Fiscal Years 2004 and 2005 30

Figure 4:	Estimated Staff Years from the Office of Enforcement and
Compliance Assurance, by EPA Region, Dedicated to
Controlling Point Sources under the Clean Water Act
during Fiscal Years 2004 and 2005 31

Figure 5: Allotments to States for Section 106 Grants, by EPA
Region, for Fiscal Years 1999 to 2005 33
Figure 6: Allotments to States for Section 319 Grants, by EPA
Region, for Fiscal Years 1999 to 2005 34

Figure 7:	Number of States in Each EPA Region That Are
Authorized toIssueIndividual Permits and theNumber of
States Not Authorized 35

Figure 8: Number of Major and Minor Facilities, by EPA Region 36
Figure 9: Total River and Stream Miles, by EPA Region 37
Figure 10: Total Lake Acres, by EPA Region 38
Figure 11: Percent Change in Population, by EPA Region,

1990-2004 39
Figure 12: Change in Relative Share of U.S. Population, by EPA
Region, 1990-2004 40

Abbreviation

EPA Environmental Protection Agency

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separately.

A

United States Government Accountability Office Washington, D.C. 20548

July 22, 2005

The Honorable James L. Oberstar Ranking Democratic Member Committee on
Transportation and Infrastructure House of Representatives

The Honorable Jerry F. Costello House of Representatives

The Honorable John F. Tierney House of Representatives

For over 50 years, the Federal Water Pollution Control Act, commonly
referred to as the Clean Water Act, has played a critical role in reducing
water pollution and improving the health of the nation's waterways.1
However, federal and state fiscal constraints may jeopardize these
accomplishments and make it increasingly difficult to achieve further
progress in addressing new and existing sources of pollution. In this
environment, it is important to manage available resources as efficiently
as possible. The Environmental Protection Agency (EPA), as the federal
agency primarily responsible for administering the Clean Water Act, plays
a key role in determining what must be done to meet the act's
requirements, identifying the skills needed to accomplish the work, and
deploying resources to the appropriate entities.

In addition to fiscal constraints, other forces, such as demographic
trends and technological advances, are challenging government agencies to
change the way they do business by setting priorities and managing their
resources to achieve better performance more efficiently. In this context,
leading private sector organizations have found that ensuring that the
right people with the right skills are in the right place is critical to
achieving performance goals. Relatedly, in September 2000, GAO recommended
that federal agencies develop an explicit workforce planning strategy to
identify their current and future human capital needs, including the size
of the workforce; its deployment across the organization; and the
knowledge,

1For consistency, we refer to the statute as the Clean Water Act
throughout the report.

skills, and abilities needed for the agency to meet its goals and
objectives.2 GAO further recommended that such a strategy should be
explicitly linked to the agencies' mission and strategic and program
planning efforts.

For EPA specifically, both GAO and the National Academy of Public
Administration have recommended that EPA use data on workload requirements
and skill needs to better manage resources for its environmental programs.
For example, in July 2001, GAO recommended that EPA collect information on
the size of its workforce, the deployment of staff geographically and
organizationally, and the skills needed to support its strategic goals.3
GAO concluded that a workforce strategy could be particularly useful
during a time of fiscal constraint because such a strategy allows the
agency to tailor reductions in a manner that would minimize potential
adverse impacts on EPA's programs.

To carry out its responsibilities under the Clean Water Act, EPA relies on
its Office of Water, Office of Enforcement and Compliance Assurance, and
10 regional offices, as well as states' water pollution control agencies.
With a number of key amendments beginning in 1972, the scope of the act
has increased significantly, along with the workload associated with
implementing and enforcing its requirements. Major changes included, for
example, controls over pollution from sewer overflows, storm water, and
animal waste at concentrated feeding operations. At the same time, EPA has
authorized states to take on more responsibilities, shifting the agency's
workload from direct implementation to oversight. Changes in the nature,
extent, and distribution of the Clean Water Act workload can affect the
resources needed to carry out the act. In this regard, section 516(b)(1)
of the act requires, among other things, that EPA provide the Congress
with a detailed estimate of these costs every 2 years.4

You asked us to determine the (1) extent to which EPA's process for
budgeting and allocating resources considers the nature and distribution
of its Clean Water Act workload and (2) actions EPA is taking to improve

2GAO, Human Capital: A Self-Assessment Checklist for Agency Leaders,
GAO/OCG-00-14G (Washington, D.C.: Sept. 1, 2000).

3GAO, Human Capital: Implementing an Effective Workforce Strategy Would
Help EPA to Achieve Its Strategic Goals, GAO-01-812 (Washington, D.C.:
July 31, 2001). See also National Academy of Public Administration,
Setting Priorities, Getting Results: A New Direction for EPA (Washington,
D.C.: April 1995).

433 U.S.C. S:1375(b)(1).

resource planning and the challenges it faces in doing so. In addition, we
determined what effort EPA has made to develop the detailed estimate of
the cost of carrying out the provisions of the Clean Water Act, as
required by the act. As agreed with your offices, we focused on EPA and
state resources associated with implementing and enforcing the major
programs under the Clean Water Act. Also as agreed, for the purposes of
this review, we defined EPA's Clean Water Act workload to include
activities associated with controls over pollution from specific
facilities (called the National Pollutant Discharge Elimination System
program) and diffuse sources, such as agricultural runoff. We also
included related activities, such as setting water quality criteria and
standards, for both specific pollutants and individual water bodies;
monitoring water quality; and establishing requirements for the disposal
of sewage sludge. We excluded (1) financial assistance for local
infrastructure under the Clean Water State Revolving Fund; (2) activities
for which the primary federal responsibility lay outside EPA, such as
issuing permits for dredged and fill material, managed by the U.S. Army
Corps of Engineers; and (3) location-specific programs, such as those
focused on the Great Lakes, Chesapeake Bay, and designated sites under the
National Estuary Program. (App. I contains a detailed description of our
methodology.)

We performed our work between August 2004 and July 2005 in accordance with
generally accepted government auditing standards.

Results in Brief	EPA's process for budgeting and allocating resources does
not fully consider the agency's current workload, either for specific
statutory requirements, such as those included in the Clean Water Act, or
for the broader goals and objectives in the agency's strategic plan.
Instead, EPA makes incremental adjustments and relies primarily on
historical precedent. With prior years' allocations as the baseline,
year-to-year changes are marginal and occur in response to (1) direction
from the Office of Management and Budget and the Congress, (2) spending
caps imposed by EPA's Office of the Chief Financial Officer, and (3)
priorities negotiated by senior agency managers. In addition, EPA's
program offices and regions have some flexibility to realign resources
based on their actual workload, but the overall impact of these changes is
also minor, according to agency officials. Changes at the margin may not
be sufficient because both the nature and distribution of the Clean Water
Act workload have changed as the scope of activities regulated under the
act has increased and EPA has taken on new responsibilities while shifting
others to the states. For example, controls over pollution from storm
water and animal waste at

concentrated feeding operations have increased the number of regulated
entities by hundreds of thousands and required more resources in some
regions of the country. EPA may be unable to respond effectively to
changing needs and constrained resources because it does not have a system
in place to conduct periodic "bottom-up" assessments of the work that
needs to be done, the distribution of the workload, or the staff and other
resource needs.

EPA has made progress in improving resource planning, but challenges
hinder comprehensive reform. Effective resource planning involves
identifying the tasks that must be accomplished to achieve an
organization's objectives, determining the type and level of resources
needed to carry out the work, and developing a strategy to obtain the
needed resources. Workforce planning is a key component of any successful
resource management strategy. While EPA's initiatives related to workforce
planning address, to varying degrees, some of its human capital management
problems, the agency's efforts could be more effective. For example, both
the Office of Enforcement and Compliance Assurance and the Office of Human
Resources surveyed current employees to determine the types of skills they
possess without first identifying the specific skills most needed to
accomplish the agency's mission. As a result, these surveys may not
necessarily capture the information EPA needs to comprehensively determine
the skills gap. Although the Office of Human Resources subsequently
identified priority occupations, needed competencies, and skill gaps for
the agency as a whole, EPA officials acknowledge that this was a high
level effort that was not linked to a detailed analysis of workload and
did not provide specific information on the type and deployment of
workforce needs. Other efforts by EPA show promise in providing useful
information, but they are still in the early stages. As EPA moves forward
with efforts to improve resource planning, it faces larger challenges in
adopting a more systematic process for budgeting and resource allocation:
obtaining reliable data on key workload indicators, such as the quantity
and quality of water in particular areas, and overcoming internal
resistance. Specifically, according to EPA officials, data on many of the
factors that affect workload-and thus, drive resource needs-are not
comprehensive or reliable. In addition, EPA staff may be reluctant to
adopt a more systematic, data-driven approach to resource allocation,
because of unsatisfactory experiences with using workload models in the
1980s.

At least in the last few years, EPA has not developed and submitted to the
Congress the detailed estimate of the cost of carrying out the provisions
of

the Clean Water Act, as required by section 516(b)(1) of the act.
According to EPA, the agency had been operating under the assumption that
the requirement had expired. Upon further investigation, EPA acknowledged
that the requirement was subsequently reinstated. While silent on reports
required in earlier years, EPA said that the agency had been remiss in not
producing reports due in 2003 and 2005. Regardless, EPA currently lacks
the information needed to develop the estimate. For example, in addition
to problems with the completeness and reliability of the workload data
needed to support sound cost estimates, EPA's budget and cost accounting
systems cannot isolate the resources allocated to Clean Water Act
enforcement activities. To the extent that EPA improves its resource
planning and allocation process, and develops the data required to support
such a process, the agency would also have the information it needs to
estimate the cost of carrying out the provisions of the Clean Water Act.

We are making recommendations to, among other things, improve EPA's
process for budgeting and allocating resources and help EPA comply with
its reporting requirement under section 516(b)(1).

In commenting on a draft of this report, EPA agreed with our
recommendation to comply with its reporting requirement and recognized
that workforce planning strategies we recommended can be effective tools
for identifying and addressing future performance needs and has already
begun some of these efforts. However, EPA expressed concern that a
bottom-up assessment of workload, as we recommended, contrasts with the
approach it advocates, which links budgeting and resource allocation to
performance goals and results. While we acknowledge EPA's concern, we
believe that assessing the underlying workload and how it drives resource
needs organizationally and geographically is critical to sound workforce
planning and can be fully compatible with EPA's overall approach.

Background	Through the National Pollutant Discharge Elimination System
program, the Clean Water Act established the basic structure for
regulating discharges of pollutants into the waters of the United States,
including rivers, lakes, and streams. Under this program, EPA and
EPA-authorized states issue and enforce permits to regulate pollution from
specific entities, including, for example, industrial dischargers and
municipal wastewater treatment facilities, known as "point sources." In
support of the permitting program, EPA and the states perform a number of
important activities, such as monitoring water quality and setting limits
on the amounts of specific

pollutants that can be discharged into water bodies. The act also requires
states to implement management programs for controlling pollution from
diffuse or "nonpoint" sources, such as agricultural runoff.

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

Table 1: Increasing Workload Associated with Selected Clean Water Act
Responsibilities Related to Controlling Point and Nonpoint Source
Pollution Since 1972

             Changes in scope of Clean Water Estimated workload for EPA and   
                       Act-related           states (as of June               
     Year              activities                         2005)               
1972-1973 Clean Water Act, as amended      o  15,033 municipal wastewater  
             (1972), establishes the               treatment facilities       
              National Pollutant Discharge    (municipal facilities) covered  
                   Elimination System             by individual permits       
             program; EPA issues             o  30,504 industrial facilities, 
             implementing regulations          785 federal facilities, and    
             (1973).                         
             The amendments also required    1,974 other facilities covered   
             EPA to oversee total            by individual permits            
                   amaximum daily load       o  52,304 facilities covered by  
               calculations by the states.           general permits          
1977-1978 Clean Water Act, as amended     o  1,500 municipal facilities    
             (1977), requires publicly       with approved pretreatment       
             owned treatment works serving    programs, collectively covering 
             industrial users to                 30,000 industrial facilities 
                 implement pretreatment      
                  programs; EPA issues       
                implementing regulations     
                        (1978). b            

Clean Water Act amended. Among other things, the  o  Includes controls
over urban and agricultural runoff, for
amendments require states to implement nonpoint source example; workload
in different regions of the United
pollution control programs, establish a framework for States varies
depending on pollution sources.
regulating storm water discharges, and require EPA to
issue regulations on managing sewage sludge.

EPA issues regulations implementing Phase I of storm  o  1,000 municipal
separate storm sewer systemsd c

water permitting program.  o  100,000 industrial facilities

o  Construction projects larger than 5 acres

EPA issues use and disposal regulations for  o  All domestic wastewater
treatment facilities

e

biosolids/sludge.

1994 EPA issues policy on combined    o  748 communities and cities with   
        sewer overflows. f                         combined sewer             
                                                       systems                
1996 States begin establishing total o  Of nearly 55,000 water quality     
        maximum daily loads.            impairments identified,               
                                         more than 14,000 total maximum daily 
                                                            load requirements 
                                         have been issued with EPA approval.  

1999 EPA issues regulations implementing Phase II of storm  o  5,000
municipal separate storm sewer systems

c

water permitting program.  o  80,000 industrial facilities

o  Construction projects larger than 1 acre

(Continued From Previous Page)

           Changes in scope of Clean Water   Estimated workload for EPA and   
           Act-related                             states (as of June         
    Year              activities                          2005)               
           EPA substantially revises         o  18,000 operations; still in   
           regulations implementing            the process of identifying     
                permitting requirements for            dischargers            
                concentrated animal feeding 
                     operations.g           
           EPA is developing regulations on    o  20,428 municipal facilities 
Ongoing sanitary sewer                    and satellite collection systems 
                     overflows. h           

Source: GAO analysis of EPA data and pertinent legal and regulatory
requirements.

Note: We are reporting estimated workload, as of June 2005, because data
were not available to determine the workload at the time regulatory
changes occurred.

aA total maximum daily load is a calculation of the amount of a specific
pollutant that a specific body of water can receive and still meet water
quality standards.

bUnder the pretreatment program, some industrial facilities are required
to pretreat their wastewater before discharging into sewer systems to
remove pollutants that may pass through or interfere with the treatment
processes at municipal wastewater treatment facilities.

cStorm water regulated under the Clean Water Act is defined as runoff from
point sources, such as industrial facilities, during rain or snow events.
In Phase I, EPA regulated storm water discharges from larger municipal
separate storm sewer systems, and from industrial facilities, including
larger construction projects. In Phase II, EPA began regulating storm
water discharges from smaller municipal storm sewers and smaller
construction projects.

dA municipal separate storm sewer system is a system designed for
collecting and conveying storm water only and is not part of a publicly
owned treatment works.

eBiosolid/sludge is any residue removed during the treatment of municipal
wastewater or domestic sewage, which can be recycled under certain
conditions stipulated by an EPA or state permit.

fA combined sewer system collects domestic and industrial sewage and
rainwater runoff in one system of pipes. During periods of heavy rainfall
or snowmelt, these systems may overflow, discharging untreated sewage into
the nation's waters.

gA concentrated animal feeding operation is a facility in which animal
waste can potentially enter water bodies as a result of breaks in waste
storage structures or other accidents.

hA sanitary sewer system is a wastewater collection system designed to
collect and convey only domestic sewage from homes and industrial and
commercial wastewater. In such systems, storm water is conveyed through a
municipal separate storm sewer system. As with combined sewer systems,
however, these systems can overflow and discharge sewage directly into
water bodies when collection system capacity is exceeded due to wet
weather.

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

Figure 1: States Authorized to Assume Key Permitting Responsibilities,
1972 to 2004

                              Number of states 50

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

                                       40

                                       30

                                       20

                                   10 0 1972

                                General permits

                                  Source: EPA.

Note: For certain types of facilities, EPA and the states issue a general
permit to cover all facilities with stated characteristics.

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

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

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

Within the existing system,5 EPA and state officials have some flexibility
to realign resources based on actual workload but have not taken full
advantage of such opportunities.6 For example:

5Realigning appropriated resources is subject to statutory language (e.g.,
earmarks or restrictions in appropriations acts) and reprogramming
guidelines, which specify how an agency might shift funds from one object
to another within an appropriations account.

6While opportunities for more closely linking resources and workload
exist, as discussed later in this report, some of the data on key workload
indicators are not complete or reliable.

o 	During each budget cycle, EPA's regional offices have an opportunity to
influence how the program offices allocate any increases or decreases in
resources, as reflected in the agency's operating plan. While, in theory,
such changes could be directed to the regions based on their relative
need, regional officials report that most changes are allocated based on
historical precedent.

o 	Under section 106 of the Clean Water Act,7 EPA must distribute grants
to state water pollution control agencies based on the extent of the
pollution problem in the respective states. In 1997 and 1998, an EPAstate
work group developed a weighted distribution formula that considers
various workload indicators, such as a state's surface water area,
groundwater use, water quality impairment, point and nonpoint pollution
sources, and population of urbanized areas. The formula, currently in
regulations, includes a funding "floor," which stipulates that states must
receive at least as much as they received in fiscal year 2000, unless
funding goes down, with an annual adjustment for inflation and the current
year's appropriation.8 Consequently, as EPA regional officials pointed
out, the allocations do not fully reflect relative workloads.

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

In terms of overall structure, EPA has organized its budget requests and
allocated resources around its strategic plan, rather than specific
environmental laws or programs.9 The strategic plan lays out broad agency
goals and objectives, some of which encompass Clean Water Act

733 U.S.C. S:1256.

840 C.F.R. S:35.162.

9EPA restructured its fiscal year 2006 budget in response to congressional
direction so that it is organized by appropriations account and program
project. Information on strategic goals and objectives is provided as a
supplement.

responsibilities for controlling point and nonpoint source pollution.
EPA's current strategic plan includes these activities primarily under two
goals: Clean and Safe Water (Goal 2) and Compliance and Environmental
Stewardship (Goal 5). As table 2 indicates, however, the objectives and
subobjectives within each goal can include activities under multiple
environmental laws. Within the agency's goal for Clean and Safe Water, for
example, objectives for protecting water quality, protecting human health,
and enhancing science and research address requirements under the Safe
Drinking Water Act and other laws, in addition to those under the Clean
Water Act.

Table 2: Strategic Plan Goals That Encompass Clean Water Act
Responsibilities Related to Controlling Point and Nonpoint Source
Pollution

Goal 2: Clean and Safe Water Goal 5: Compliance and Environmental
Stewardship

Objective 2.1: Protect Human Health

o  Subobjective 2.1.1: Water Safe to Drink

o  Subobjective 2.1.2: Fish and Shellfish Safe to Eat

o  Subobjective 2.1.3: Water Safe for Swimming

Objective 2.2: Protect Water Quality

o  Subobjective 2.2.1: Improve Water Quality on a Watershed Basis

o  Subobjective 2.2.2: Improve Coastal and Ocean Waters

Objective 2.3: Enhance Science and Research

o  Subobjective 2.3.1: Apply the Best Available Science

o  Subobjective 2.3.2: Conduct Leading-Edge Research

Objective 5.1: Improve Compliance

o  Subobjective 5.1.1: Compliance Assistance

o  Subobjective 5.1.2: Compliance Incentives

o  Subobjective 5.1.3: Monitoring and Enforcement

Objective 5.2: Improve Environmental Performance Through Pollution
Prevention and Innovation

o  Subobjective 5.2.1: Prevent Pollution and Promote Environmental
Stewardship by Government and the Public

o  Subobjective 5.2.2: Prevent Pollution and Promote Environmental
Stewardship by Business

o  Subobjective 5.2.3: Business and Community Innovation

o  Subobjective 5.2.4: Environmental Policy Innovation

Objective 5.3: Build Tribal Capacity

Objective 5.4: Enhance Science and Research

o  Subobjective 5.4.1: Strengthening Science

o  Subobjective 5.4.2: Conducting Research

Source: EPA.

Note: Italicized text indicates objectives and subobjectives related to
controlling point and nonpoint source pollution. Some activities under
Goal 4, Healthy Communities and Ecosystems, which includes
location-specific programs authorized under the Clean Water Act, such as
those focused on the Great Lakes and Chesapeake Bay, also involve
controlling point and nonpoint sources of pollution.

According to officials from EPA's Office of the Chief Financial Officer,
Office of Enforcement and Compliance Assurance, and Office of Water,
isolating the amount of resources dedicated to specific Clean Water Act
programs and activities would be extremely difficult. The officials said
that the budgeting and allocation structure aligns resources with goals
and

objectives that encompass multiple laws and programs and is not intended
to provide statute-specific or program-specific breakdowns. The Office of
Enforcement and Compliance Assurance, in particular, organizes its budget
into program projects, such as compliance monitoring and civil
enforcement, that cut across all environmental media.

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

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

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

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

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

Studies by GAO and others have shown that successful organizations use
strategic workforce planning to identify and fill the gaps between their
current and future workforce needs in meeting organizational goals and
fulfilling their overall mission. Strategic workforce planning encompasses
a broad array of initiatives to attract, retain, develop, and motivate a
topquality workforce with the skills needed to meet performance goals. In
2003, for example, we reported that successful organizations have used
strategic workforce planning as a tool to both identify current needs and
anticipate and prepare for upcoming human capital issues, such as an aging
workforce or changes in mission-critical skills, that could jeopardize the
accomplishment of goals.10 More recently, we found that leading
organizations go beyond a succession planning approach that focuses on
simply replacing individuals and, instead, engage in broad, integrated
efforts that focus on strengthening both current and future organizational
capacity.

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

In July 2001, we reported specifically on EPA and the extent to which the
agency was using key management practices associated with successful human
capital strategies, including strategic workforce planning.11 We also
examined how EPA's Office of Enforcement and Compliance Assurance deployed
resources across the 10 regional offices to ensure consistent enforcement
of federal environmental requirements. Among other things, we recommended
that EPA

o 	develop a system for workforce allocation and deployment that is
explicitly linked to the agency's strategic and program planning efforts

10GAO, Human Capital: Key Principles for Effective Strategic Workforce
Planning, GAO04-39 (Washington, D.C.: Dec. 11, 2003).

11GAO-01-812. 25, 26.

and that is based on systematic efforts of each major program office to
accurately identify the size of its workforce, the deployment of staff
geographically and organizationally, and the skills needed to support its
strategic goals;

o 	design succession plans to maintain a sustained commitment and
continuity of leadership within the agency; and

o 	target recruitment and hiring practices to fill the agency's short-and
long-term human capital needs and, specifically, to fill gaps identified
through EPA's workforce planning system and implement training with an
explicit link to needed competencies.

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

    EPA Has Several Efforts Under Way to Improve Resource Planning

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

Three initiatives within EPA focus specifically on workforce planning,
including one by the Office of Enforcement and Compliance Assurance, which
focused on civil enforcement activities and was completed in 2003, and two
agencywide efforts that are still in the early stages of development. The
agencywide efforts are being managed by EPA's Office of Human Resources
and the Office of the Chief Financial Officer. These three initiatives are
as follows:

o 	Workforce Deployment Review for civil enforcement activities. In
response to our July 2001 report, the Office of Enforcement and Compliance
Assurance surveyed about 2,600 headquarters and regional

employees engaged in civil enforcement activities to identify existing
workforce skills and specific areas of programmatic expertise.12 EPA's
report on the survey, issued in October 2003, recommended, among other
things, expanding the survey to include all of the office's employees,
periodically updating the information, and aligning training with national
priorities.13 In addition, the report recognized that circumstances have
changed since the 1980s, when EPA last used the workload models to
establish a baseline. The report concluded that enforcement officials
should reexamine the existing practice of adjusting staff levels based on
historical precedent.

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

12The skills assessment represents one element of the information needed
to support a systematic method for deploying enforcement resources to
address the agency's workload. We also recommended that the office develop
other information, such as the level of resources currently being
allocated to specific enforcement activities and the factors that
determine the enforcement workload in each region. However, enforcement
officials indicated that internal time constraints limited their ability
to address these issues.

13EPA, The Workforce Deployment Review, Executive Steering Committee
Report (Washington, D.C.: October 2003).

support the work. As a result of this effort, EPA identified 18 priority
occupations, 12 technical competencies, and 12 cross-occupational
competencies that are essential for the agency to accomplish its future
mission. In addition, based on projected retirements and other attrition,
EPA identified potential gaps in critical areas. Currently, the office is
examining any ongoing resource planning efforts by EPA regional and
program offices before moving ahead with its own planning process.

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

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

Two other initiatives within the Office of Water, while not directly
related to resource planning, could provide relevant and useful
information for a

data-driven approach to budgeting and allocating resources. For example,
beginning in December 1998, EPA and the states collaborated on a state
resource analysis for water quality management to develop an estimate of
the resources that states need to fully implement the Clean Water Act. The
primary focus of the project was identifying the gap between states' needs
and available resources. To develop the estimates of the gap, EPA and the
states created a detailed model of activities associated with implementing
the Clean Water Act, the average time it takes to complete such
activities, and the costs of performing them.14 The National Academy of
Public Administration subsequently reviewed the model and determined that
the underlying methodology was sound.15 In fact, the academy recommended
that EPA and the states refine the model to support data-driven grant
allocation decisions. According to EPA and representatives of state
environmental organizations, however, the agency has not implemented the
recommendation because of resource constraints and reluctance on the part
of some states.

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

14According to the project's interim report, issued in April 2002, the
total estimated needs for states to fully implement the Clean Water Act
ranged from $1.54 billion to $1.68 billion annually. Based on current
spending levels, the report estimated an annual resource gap ranging from
$735 million to $960 million.

15National Academy of Public Administration, Understanding What States
Need to Protect Water Quality (Washington, D.C.: December 2002).

that could be useful in any comprehensive and systematic resource planning
method.16

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

Perhaps the most significant obstacle to developing a systematic,
datadriven approach to resource allocation is ensuring that needed data on
EPA's workload are complete and reliable. While our particular interest
was Clean Water Act activities for controlling point and nonpoint source
pollution, evidence suggests that EPA would encounter similar reliability
concerns if a systematic resource allocation process were to be organized
around strategic goals and objectives, thus encompassing other program
areas.17 Without comprehensive and reliable data on workload, EPA cannot
accurately identify where agency resources, such as staff with particular
skills, are most needed.

According to EPA officials, some of the key workload factors related to
controlling point and nonpoint source pollution include the number of
point source dischargers, the number of wet weather dischargers, and the
quantity and quality of water in particular areas.18 However, for some of
this information, the relevant databases, such as the Permit Compliance
System, which contains information on discharging facilities, and the
National Water Quality Inventory, which contains information on water
quality, have been subject to criticism from several sources, including
GAO. For example:

o 	Discrepancies between Permit Compliance System and state data. In 2001,
the Environmental Council of the States reported that of 42 states
surveyed, more than 80 percent found "significant and pervasive data
discrepancies" between data tracked by state authorities and data
contained in the Permit Compliance System. Even among states that reported
using EPA's database as their primary information system, 75

16Among other things, the profiles contain information on a wide range of
activities that comprise state and regional workload, including monitoring
water quality, permitting, inspecting permitted facilities, and taking
enforcement actions. In collecting data for these profiles, the Office of
Water also worked with states to resolve data quality problems.

17See, for example, GAO, Environmental Information: EPA Needs Better
Information to Manage Risks and Measure Results, GAO-01-97T (Washington,
D.C.: Oct. 3, 2000).

18EPA uses the term wet weather discharges to include sewer overflows,
concentrated animal feeding operations, and storm water from municipal
separate storm sewer systems and from industrial facilities.

percent found errors in the data. Another problem is that the last system
modernization effort was in 1982; as a result, the database does not
contain information on more recently regulated entities, such as storm
water dischargers and concentrated animal feeding operations. The database
also lacks complete information on the point source dischargers it does
track, particularly smaller facilities and states' enforcement actions.
Although at one time EPA linked states' grant funding to the submission of
facility data to the database, the agency discontinued the policy. In
addition, EPA does not require complete information on minor facilities.19

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

o 	Data limitations in the National Water Quality Inventory. Data on the
quality of the nation's waters, which EPA compiles and presents in the
National Water Quality Inventory, are also subject to important
limitations.20 While the majority of states contributed data describing
rivers and lakes, data on other types of water bodies were less
comprehensive. For example, only nine states provided information on

19EPA classifies facilities (including municipal wastewater treatment
plants and industrial and federal facilities) as major or minor, depending
on the risk to the environment posed by the pollutants being discharged
from the facility; the volume of pollutants being discharged; and, in the
case of municipal wastewater treatment facilities, the size of the
population being served.

20The most recent year for which the full National Water Quality Inventory
is available is 2000. EPA has posted water quality information from the
2002 inventory for approximately 30 states on its Web site but has not yet
issued the full inventory.

the status of their wetlands. In addition, states are only able to assess
a portion of their waters every 2 years. For example, according to the
2000 report, states assessed 19 percent of the nation's total river and
stream miles and 43 percent of the total lake, pond, and reservoir acres.
Furthermore, states do not report data consistently. In 2002, GAO found
that variations in the approaches that states use to assess water quality
causes inconsistencies in the listing of impaired waters.21 These
inconsistencies also limit the ability to compare data from year to year.

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

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

21GAO, Water Quality: Inconsistent State Approaches Complicate Nation's
Efforts to Identify Its Most Polluted Waters, GAO-02-186 (Washington,
D.C.: Jan. 11, 2002).

resource needs. Making this determination, however, would also help EPA
prioritize efforts to improve data quality.

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

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

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

manage the resources they get and could provide information that could
stave off additional funding cuts or reduce how frequently headquarters
officials implement new requirements for the regions.

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

Section 516(b)(1)(A) of the Clean Water Act requires EPA, in cooperation
with the states, to make a detailed estimate of the cost of carrying out
the provisions of the act.22 Such estimates must be reported to the
Congress every 2 years. In response to our inquiries, EPA issued a letter
on May 2, 2005, stating that the agency has been operating under the
assumption that the requirement had expired as of December 1999. However,
the letter acknowledged that the reporting requirement may have been
reinstated. After studying the issue further, EPA issued a follow-up
letter on May 16, 2005, which confirmed that the requirement had been
reinstated and that the agency had been remiss in not producing reports
due in 2003 and 2005.23 EPA's letter was silent regarding the reports due
in 1999 and prior years.

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

2233 U.S.C. S: 1375(b)(1)(A).

23The reporting requirement was eliminated by section 3003(a) of the
Federal Reports Elimination and Sunset Act of 1995, which took effect on
December 21, 1999. Section 302(a)(10) of the Great Lakes and Lake
Champlain Act of 2002 reinstated the requirement as of November 27, 2002.
No report was required in 2001.

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

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

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

  Recommendations for Executive Action

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

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

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

  Agency Comments and Our Evaluations

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

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

If you or your staff have any questions about this report, please contact
me at (202) 512-3841 or [email protected]. Contact points for our
Offices of

Congressional Relations and Public Affairs may be found on the last page
of this report. GAO staff who made major contributions to this report are
listed in appendix V.

John B. Stephenson Director, Natural Resources and Environment

Appendix I

Scope and Methodology

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

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

For information on EPA's efforts to improve resource planning, we
interviewed officials from EPA's Office of the Chief Financial Officer,
Office of Enforcement and Compliance Assurance, Office of Human Resources,
and Office of Water, as well as the Association of State and Interstate
Water Pollution Control Administrators, the Environmental Council of
States, and

Appendix I Scope and Methodology

the National Academy of Public Administration to identify such efforts and
obtain relevant documents on their status and results. Officials from
these entities and the four EPA regional offices selected for review also
provided information on the challenges EPA faces in taking actions to
improve resource planning. In particular, we researched sources of data
for the workload factors identified by EPA officials and state
environmental officials as among the key drivers of resource needs. For
some factors, such as number of authorized states in EPA regions, states
for which EPA has direct implementation responsibilities, population, and
population growth, we determined that the data were sufficiently reliable
for our purposes. Regarding other factors, such as number of facilities
and water quality, we found the data to be incomplete or unreliable for
certain states or regions, for certain years, or for certain types of
facilities or water bodies. As a result, we were unable to analyze these
data for workload trends or geographic distribution.1 We found them
sufficiently reliable to provide illustrative examples. To identify key
elements of strategic workforce planning, we reviewed reports from GAO,
EPA's Office of Inspector General, and the National Academy of Public
Administration.

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

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

1See pages 19-21 for additional information on our efforts to assess data
reliability for certain workload indicators.

Appendix II

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

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

We asked Office of Water officials to provide a regional breakdown of the
funding contained in the Surface Water Protection program project (see
fig. 2).1 Fiscal years 2004 and 2005 are the only years for which
consistent data are available because the program project for Surface
Water Protection was created in 2004.

1EPA's regional offices are located in the following cities: Boston, Mass.
(I); New York, N.Y. (II); Philadelphia, Pa. (III); Atlanta, Ga. (IV);
Chicago, Ill. (V); Dallas, Tex. (VI); Kansas City, Mo. (VII); Denver,
Colo. (VIII); San Francisco, Calif. (IX); and Seattle, Wash. (X).

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

Figure 2: Allocation of Funding by the Office of Water under the Surface
Water
Protection Program Project, by EPA Region, in Fiscal Years 2004 and 2005

Dollars (in millions)
12

10

8

6

4

2

0
1 2 3 4 5 6 7 8 910
Region

2004
2005
Source: EPA.

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

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

Figure 3: Allocation of Staff Years by the Office of Water under the
Surface Water Protection Program Project, by EPA Region, in Fiscal Years
2004 and 2005

Dollars (in millions)

12

10

8

6

4

2

0 1 2 3 4 5 6 7 8 910 Region

2004

2005 Source: EPA.

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

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

Figure 4: Estimated Staff Years from the Office of Enforcement and
Compliance Assurance, by EPA Region, Dedicated to Controlling Point
Sources under the Clean Water Act during Fiscal Years 2004 and 2005

Staff years

50

40

30

20

10

0 1 2 3 4 5 6 7 8 910 Region

2004

2005 Source: EPA.

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

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

The states receive annual allotments from the Office of Water under two
major grant programs. Grants under section 106 of the Clean Water Act
provide funds for water quality monitoring, regulating point source
dischargers, and related activities. Grants under section 319(h) of the
act fund the implementation of state programs for controlling pollution
from nonpoint sources, such as agricultural runoff.2 Figures 5 and 6 show
allotments to the states, by region, under the program projects for
Pollution Control (Section 106) and Nonpoint Source (Section 319).

233 U.S.C. S:1329(h).

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

Figure 5: Allotments to States for Section 106 Grants, by EPA Region, for
Fiscal Years 1999 to 2005

Dollars (in millions)

35

30

25

20

15

10

5

0 1 2 3 4567 8 910 Region

1999

2000

2001

2002

2003

2004 2005 Source: EPA.

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

Figure 6: Allotments to States for Section 319 Grants, by EPA Region, for
Fiscal Years 1999 to 2005

Dollars (in millions)

45

40

35

30

25

20

15

10

5

0 1 2 3 4 5 6 78910

Region

1999

2000

2001

2002

2003

2004 2005 Source: EPA.

Appendix III

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

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

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

Figure 7: Number of States in Each EPA Region That Are Authorized to Issue

Individual Permits and the Number of States Not Authorized

Number of states

8

7

6

5

4

3

2

1

0 1 2 3 4 5 6 7 8 910 Region

States not authorized

States authorized Source: EPA.

Note: Puerto Rico, which is unauthorized, and the U.S. Virgin Islands,
which is authorized, are included in the count of states for region 2. The
District of Columbia, which is unauthorized, is included in the count of
states for region 3. American Samoa, Guam, and the Northern Mariana
Islands, all of which are unauthorized, are included in the count of
states for region 9. Tribal lands are not included for any region.

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

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

Figure 8: Number of Major and Minor Facilities, by EPA Region

Number of facilities 25,000

20,000

15,000

10,000

5,000

0 1 2 3 4 5 6 7 8 910 Region

Number of minor facilities with general permits

Number of major facilities Source: EPA.

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

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

Figure 9: Total River and Stream Miles, by EPA Region

Miles (in thousands)

700

600

500

400

300

200

100

0
1 2 3 4 5 6 7 8 910
Region

Source: EPA.
Note: Region 10 does not include data on miles of rivers and streams in
Alaska.

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

Figure 10: Total Lake Acres, by EPA Region

Acres (in millions)

7

6

5

4

3

2

1

0 1 2 3 4 5 6 7 8 910 Region

Source: EPA.

Note: Region 10 does not include data on acres of lakes in Alaska.

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

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

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

region.1 We used 1990 as the starting point for this comparison because it
was shortly after EPA abandoned the use of workload models in the late
1980s.

Figure 11: Percent Change in Population, by EPA Region, 1990-2004

                            Population (in millions)

                                      26%

                              1 2 3 4 5 6 7 8 910

Region

1990

2004

Source: Census.

Note: The District of Columbia is included in the population count for
region 3.

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

1The 2004 census data are based on state estimates from 2004.

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

Percentage of U.S. population
20

15

10

5

0
1 2 3 4 5 6 7 8 910
Region

1990

2004
Source: Census.

Note: The District of Columbia is included in the population count for
region 3.

Appendix IV

Comments from the Environmental Protection Agency

Appendix IV
Comments from the Environmental
Protection Agency

Appendix V

                     GAO Contact and Staff Acknowledgments

GAO Contact John B. Stephenson (202) 512-3841

Staff 	In addition to the individual named above, Christine Bonham,
Stephen Cleary, Ellen Crocker, Elizabeth Curda, Denise Fantone, Julian
Klazkin,

Acknowledgments	Krista Loose, Naved Qureshi, Lisa Shames, Carol Herrnstadt
Shulman, Gregory Wilmoth, and Melissa Wolf made key contributions to this
report.

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