Environmental Compliance and Enforcement: EPA's Effort to Improve
and Make More Consistent Its Compliance and Enforcement 	 
Activities (28-JUN-06, GAO-06-840T).				 
                                                                 
The Environmental Protection Agency (EPA) enforces the nation's  
environmental laws and regulations through its Office of	 
Enforcement and Compliance Assurance (OECA). While OECA provides 
overall direction on enforcement policies and occasionally takes 
direct enforcement action, many enforcement responsibilities are 
carried out by EPA's 10 regional offices. In addition, these	 
offices oversee the enforcement programs of state agencies that  
have been delegated the authority to enforce federal		 
environmental protection regulations. This testimony is based on 
GAO's reports on EPA's enforcement activities issued over the	 
past several years and on observations from ongoing work that is 
being performed at the request of the Senate Committee on	 
Environment and Public Works, and the Subcommittee on Interior,  
Environment and Related Agencies, House Committee on		 
Appropriations. GAO's previous reports examined the (1) 	 
consistency among EPA regions in carrying out enforcement	 
activities, (2) factors that contribute to any inconsistency, and
(3) EPA's actions to address these factors. Our current work	 
examines how EPA, in consultation with regions and states, sets  
priorities for compliance and enforcement and how the agency and 
states determine respective compliance and enforcement roles and 
responsibilities and allocate resources for these purposes.	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-840T					        
    ACCNO:   A56067						        
  TITLE:     Environmental Compliance and Enforcement: EPA's Effort to
Improve and Make More Consistent Its Compliance and Enforcement  
Activities							 
     DATE:   06/28/2006 
  SUBJECT:   Environmental monitoring				 
	     Law enforcement					 
	     Environmental law					 
	     Environmental policies				 
	     Internal controls					 
	     Performance management				 
	     Performance measures				 

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GAO-06-840T

     

     * Regional Enforcement Activities Vary Substantially
     * Several Factors Contribute to Variations in Regional Enforce
          * Regions Differ in Their Philosophical Approaches to Enforcem
          * National Enforcement Data Are Incomplete and Inaccurate
          * EPA's Workforce Planning and Allocation System Is Not Adequa
     * EPA Has Initiated or Planned Actions to Achieve Greater Cons
          * EPA's State Review Framework Holds Promise, but It Is Too Ea
          * Efforts Are Underway to Improve Data, but Critical Gaps Rema
          * EPA Has Improved the Management of its Human Capital System,
     * Contact and Staff Acknowledgments
          * Order by Mail or Phone

Testimony

Before the Committee on Environment and Public Works, U. S. Senate

United States Government Accountability Office

GAO

For Release on Delivery Expected at 9:30 a.m. EDT

Wednesday, June 28, 2006

ENVIRONMENTAL COMPLIANCE AND ENFORCEMENT

EPA's Effort to Improve and Make More Consistent Its Compliance and
Enforcement Activities

Statement of John B. Stephenson, Director, Natural Resources and
Environment

GAO-06-840T

Mr. Chairman and Members of the Committee:

I am pleased to be here today to discuss our work on the Environmental
Protection Agency's (EPA) difficulties in ensuring consistent and
equitable enforcement actions among its regions and among the states. Our
testimony today is based on reports we have issued on EPA's compliance and
enforcement activities over the past several years,1 and provides some
observations from the ongoing work that we are performing at your request
and that of the Subcommittee on Interior, Environment and Related
Agencies, House Committee on Appropriations. As you know, we are assessing
how EPA, in consultation with regions and state agencies, sets priorities
for compliance and enforcement and how the agency and the states determine
respective compliance and enforcement roles and responsibilities and
allocate resources for these purposes. As part of this effort, we are
assessing EPA's initiated and planned actions to address key factors that
result in inconsistencies-identified in our previous work-in carrying out
its enforcement responsibilities. We expect to complete this ongoing
review on EPA and state enforcement and issue our report in March 2007.

EPA seeks to achieve cleaner air, purer water, and better protected land
in many different ways. Compliance with the nation's environmental laws is
the goal, and enforcement is a vital part of the effort to encourage state
and local governments, companies, and others who are regulated to meet
their environmental obligations. Enforcement deters those who might
otherwise seek to profit from violating the law, and levels the playing
field for environmentally compliant companies.

EPA administers its environmental enforcement responsibilities through its
Office of Enforcement and Compliance Assurance (OECA). While OECA provides
overall direction on enforcement policies, and occasionally takes direct
enforcement action, many of its enforcement responsibilities are carried
out by its 10 regional offices (regions). These regions, in addition to
taking direct enforcement action, oversee the enforcement programs of
state agencies that have been delegated authority for enforcing federal
environmental protection requirements.2

1See GAO, Environmental Protection: More Consistency Needed Among EPA
Regions in Approach to Enforcement, GAO/RCED-00-108 (Washington, D.C.:
June 2, 2000); Human Capital: Implementing an Effective Workforce Strategy
Would Help EPA to Achieve Its Strategic Goals, GAO-01-812 (Washington,
D.C.: July 31, 2001); and Clean Water Act: Improved Resource Planning
Would Help EPA Better Respond to Changing Needs and Fiscal Constraints,
GAO-05-721 (Washington, D.C.: July 22, 2005).

In my testimony today, I will describe the (1) extent to which variations
exist among EPA's regions in enforcing environmental requirements, (2) key
factors that contribute to any such variations, and (3) status of the
agency's efforts to address these factors.

In summary, as we previously reported on regional efforts to enforce
provisions of the Clean Water Act and the Clean Air Act, the regions vary
substantially in the actions they take to enforce environmental
requirements. These variations show up in key management indicators that
EPA headquarters officials have used to monitor regional performance, such
as the number of inspections performed at regulated facilities and the
amount of penalties assessed for noncompliance with environmental
regulations. For example, in fiscal year 2000, the number of inspections
conducted under the Clean Air Act compared with the number of facilities
in each region subject to EPA's inspection under the act varied from a
high of 80 percent in Region 3 to a low of 27 percent in Regions 1 and 2.

We also reported that it is important to understand the reasons for some
of these variations, such as a regional determination to conduct more
in-depth inspections at a fewer number of facilities instead of conducting
less intensive examinations at many more facilities. Accordingly, we
recommended that EPA clarify which enforcement actions it expects to see
consistently implemented across the regions and direct the regions to
supplement its reporting with information that helps explain why variation
occurred. We did not focus our work on the effects of inconsistent
enforcement on various types of businesses, including small businesses,
the particular focus of the Committee's hearing today. However, in
performing our work we noted that a recent study for the Small Business
Administration,3 as well as other studies, have suggested that
environmental requirements fall most heavily on small businesses. To the
extent that this is the case, small businesses could be especially
disadvantaged by any inconsistencies and inequities in EPA's enforcement
approach. EPA has made progress toward resolving challenges in its
enforcement activities that we have previously identified. Nonetheless,
each of the challenges is complex and will require much more work and
continued vigilance to overcome.

2For many federal environmental programs, EPA either authorizes states to
administer the federal program or retains authority to administer the
program for the state. The state programs that have been approved by EPA
are described as "delegated" in this testimony for clarity and consistency
with EPA program terminology.

3W. Mark Crain, The Impact of Regulatory Costs on Small Firms, a report
prepared at the request of the Small Business Administration's Office of
Advocacy (Washington, D.C., September 2005).

Our work has identified several factors contributing to regional
variations: (1) differences in the philosophy of enforcement staff about
how to best achieve compliance with environmental requirements; (2)
incomplete and inadequate enforcement data, which hamper EPA's ability to
accurately determine the extent of variations; and (3) an antiquated
workforce planning and allocation system that is not adequate for
deploying staff to ensure greater consistency and effectiveness in
enforcing environmental requirements.

Finally, EPA recognizes that to ensure fair and equitable treatment, core
enforcement requirements must be consistently implemented so that similar
violations are met with similar enforcement responses, regardless of
geographic location. Accordingly, and in response to our findings and
recommendations, the agency has initiated or planned actions that are
intended to achieve greater consistency in regional and state enforcement
activities. These actions include the following:

           o  Developing the State Review Framework. This framework involves
           a new process for conducting reviews and measuring the performance
           of core enforcement programs in states with delegated authority
           (as well as nondelegated programs implemented by EPA regions).
           Although the process is a promising means for ensuring more
           consistent enforcement actions, it is too early to assess whether
           the process will result in more consistent enforcement actions and
           a level playing field for the regulated community across the
           nation.
           o  Improving management information. EPA has a number of ongoing
           activities to improve the agency's enforcement data, but the data
           problems are long-standing and complex. It will likely require a
           number of years and a steady top-level commitment of staff and
           financial resources to substantially improve the data so that they
           can be effectively used to target enforcement actions in a
           consistent and equitable manner.
           o  Enhancing workforce planning and allocation. For the past
           several years, EPA has taken measures to improve its ability to
           match its staff and technical capabilities with the needs of
           individual regions and states. For example, EPA developed a human
           capital strategy and performed a study of its workforce
           competencies. Nonetheless, the agency still needs to determine how
           to deploy its employees among its strategic goals and geographic
           locations so that it can most effectively use its resources,
           including its compliance and enforcement resources.

           Regional Enforcement Activities Vary Substantially
			  
			  EPA's enforcement program depends heavily upon inspections by
           regional or state enforcement staff as the primary means of
           detecting violations and evaluating overall facility compliance.
           Thus, the quality and the content of the agency's and states'
           inspections, and the number of inspections undertaken to ensure
           adequate coverage, are important indicators of the enforcement
           program's effectiveness. However, as we reported in 2000, EPA's
           regional offices varied substantially on the actions they take to
           enforce the Clean Water Act and Clean Air Act. Consistent with
           earlier observations of EPA's Office of Inspector General and
           internal agency studies, we found these variations in regional
           actions reflected in the (1) number of inspections EPA and state
           enforcement personnel conducted at facilities discharging
           pollutants within a region, (2) number and type of enforcement
           actions taken, and (3) the size of the penalties assessed and the
           criteria used in determining the penalties assessed. For example,
           as figure 1 indicates, the number of inspections conducted under
           the Clean Air Act in fiscal year 2000 compared with the number of
           facilities in each region subject to EPA's inspection under the
           act varied from a high of 80 percent in Region 3 to a low of 27
           percent in Regions 1 and 2.

           Figure 1: Percentage of Total Regulated Facilities Inspected Under
           the Clean Air Act During Fiscal Year 2000, by EPA Region

           While the variations in enforcement raise questions about the need
           for greater consistency, it is also important to get behind the
           data to understand the cause of the variations and the extent to
           which they reflect a problem. For example, EPA attributed the low
           number of inspections by its Region 5, in Chicago, to the regional
           office's decision at the time to focus limited resources on
           performing detailed and resource-intensive investigations of the
           region's numerous electric power plants, rather than conducting a
           greater number of less intensive inspections.

           We agree that regional data can be easily misinterpreted without
           the contextual information needed to clarify whether variation in
           a given instance is inappropriate or whether it reflects the
           appropriate exercise of flexibility by regions and states to
           tailor their priorities to their individual needs and
           circumstances. In this regard, we recommended that it would be
           appropriate for EPA to (1) clarify which aspects of the
           enforcement program it expects to see implemented consistently
           from region to region and which aspects may appropriately be
           subject to greater variation and (2) supplement region-by-region
           data with contextual information that helps to explain why
           variations occur and thereby clarify the extent to which
           variations are problematic.

           Our findings were also consistent with the findings of EPA's
           Inspector General and OECA that regions vary in the way they
           oversee state-delegated programs. In this regard, contrary to EPA
           policy, some regions did not (1) conduct an adequate number of
           oversight inspections of state programs, (2) sufficiently
           encourage states to consider economic benefit in calculating
           penalties, (3) take more direct federal actions where states were
           slow to act, and (4) require states to report all significant
           violators. Regional and state officials generally indicated that
           it was difficult for them to ascertain the extent of variation in
           regional enforcement activities, given their focus on activities
           within their own geographic environment. However, EPA headquarters
           officials responsible for the air and water programs noted that
           such variation is fairly commonplace and does pose problems. The
           director of OECA's water enforcement division, for example, told
           us that, in reacting to similar violations, enforcement responses
           in certain regions are stronger than they are in others and that
           such inconsistencies have increased.

           Similarly, the director of OECA's air enforcement division said
           that, given the considerable autonomy of the regional offices, it
           is not surprising that variations exist in how they approach
           enforcement and state oversight. In this regard, the director
           noted, disparities exist among regions in the number and quality
           of inspections conducted and in the number of permits written in
           relation to the number of sources requiring permits.

           In response to these findings, a number of regions have begun to
           develop and implement state audit protocols, believing that having
           such protocols could help them review the state programs within
           their jurisdiction with greater consistency. Here, too, regional
           approaches differ. For example:

           o  Region 1, in Boston, has adopted a comprehensive "multimedia"
           approach in which it simultaneously audits all of a state's
           delegated environmental programs.
           o  Region 3, in Philadelphia, favors a more targeted approach in
           which air, water, and waste programs are audited individually.
           o  In Region 5, in Chicago, the office's air enforcement branch
           chief said that he did not view an audit protocol as particularly
           useful, noting that he prefers regional staff to engage in joint
           inspections with states to assess the states' performance in the
           field and to take direct federal action when a state action is
           inadequate.

           We recognize the potential of these protocols to achieve greater
           consistency by a region in its oversight of its states, and the
           need to tailor such protocols to meet regional concerns. However,
           we also believe that EPA guidance on key elements that should be
           common to all protocols would help engender a higher level of
           consistency among all 10 regions in how they oversee states.

           Several Factors Contribute to Variations in Regional Enforcement 
			  Programs
			  
			  While EPA's data show variations in key measures associated with
           the agency's enforcement program, they do little to explain the
           causes of the variations. Without information on causes, it is
           difficult to determine the extent to which variations represent a
           problem, are preventable, or reflect appropriate regional and
           state flexibility in applying national program goals to unique
           circumstances. Our work identified the following causes: (1)
           differences in philosophical approaches to enforcement, (2)
           incomplete and inaccurate national enforcement data, and (3) an
           antiquated workforce planning and allocation system.

           Regions Differ in Their Philosophical Approaches to Enforcement
			  
			  While OECA has issued policies, memorandums, and other documents
           to guide regions in their approach to enforcement, the
           considerable autonomy built into EPA's decentralized, multilevel
           organizational structure allows regional offices considerable
           latitude in adapting headquarters' direction in a way they believe
           best suits their jurisdiction. The variations we identified often
           reflect different enforcement approaches in determining whether
           the region should (1) rely predominantly on fines and other
           traditional enforcement methods to deter noncompliance and to
           bring violators into compliance or (2) place greater reliance on
           alternative strategies, such as compliance assistance (workshops,
           site visits, and other activities to identify and resolve
           potential compliance problems). Regions have also differed on
           whether deterrence could be achieved best through a small number
           of high-profile, resource-intensive cases or a larger number of
           smaller cases that establish a more widespread, albeit lower
           profile, enforcement presence. Further complicating matters are
           the wide differences among states in their enforcement approaches
           and the various ways in which regions respond to these
           differences. Some regions step more readily into cases when they
           consider a state's action to be inadequate, while other regions
           are more concerned about infringing on the discretion of states
           that have been delegated enforcement responsibilities. While all
           of these approaches may be permissible, EPA has experienced
           problems in identifying and communicating the extent to which
           variation either represents a problem or the appropriate exercise
           of flexibility by regions and states to apply national program
           goals to their unique circumstances.

           National Enforcement Data Are Incomplete and Inaccurate
			  
			  OECA needs accurate and complete enforcement data to determine
           whether regions and states are consistently implementing core
           program requirements and, if not, whether significant variations
           in meeting these requirements should be corrected. The region or
           the state responsible for carrying out the enforcement program is
           responsible for entering data into EPA's national databases.
           However, both the quality of and quality controls over these data
           were criticized by state and regional staff we interviewed.

           Internal OECA studies have also acknowledged the seriousness of
           the data problem. An OECA work group, the "Targeting Program
           Review Team," stated that key functions related to data quality,
           such as the consistent entry of information by regions and states,
           were not working properly and that there were important
           information gaps in EPA's enforcement-related databases. Another
           OECA work group concluded in 2006, "OECA managers do not have
           available to them timely, complete, and detailed analyses of
           regional or national performance." A third OECA work group
           asserted that the situation has deteriorated from past years,
           noting:

           "managers in the regions and in OECA headquarters have become
           increasingly frustrated that they are not receiving from [the
           Office of Compliance] the reports and data analyses they need to
           manage their programs...[and there] has been less attention to the
           data in the national systems, a commensurate decline in data
           quality, and insufficient use of data by enforcement/compliance
           managers."

           Consistent with our findings and recommendations, EPA's Office of
           Inspector General recently reported that, "OECA's 2005
           publicly-reported GPRA [Government Performance and Results Act]
           performance measures do not effectively characterize changes in
           compliance or other outcomes because OECA lacks reliable
           compliance rates and other reliable outcome data. In the absence
           of compliance rates, OECA reports proxies for compliance to the
           public and does not know if compliance is actually going up or
           down. As a result, OECA does not have all the data it needs to
           make management and program decisions. What is missing most, the
           biggest gap, is information about compliance rates. OECA cannot
           demonstrate the reliability of other measures because it has not
           verified that estimated, predicted, or facility self-reported
           outcomes actually took place. Some measures do not clearly link to
           OECA's strategic goals. Finally, OECA frequently changed its
           performance measures from year to year, which reduced
           transparency." For example, between fiscal years 1999-2005, OECA
           reported on a low of 23 performance measures to a high of 69
           measures, depending on the fiscal year.

           Although EPA is working to improve its data, the problems are
           extensive and complex. For example, the Inspector General recently
           reported that OECA cannot generate programmatic compliance
           information for five of six program areas; lacks knowledge of the
           number, location, and levels of compliance for a significant
           portion of its regulated universe; and concentrates most of its
           regulatory activities on large entities and knows little about the
           identities or cumulative impact of small entities. Consequently,
           the Inspector General reported, OECA currently cannot develop
           programmatic compliance information, adequately report on the size
           of the universe for which it maintains responsibility, or rely on
           the regulated universe data to assess the effectiveness of
           enforcement strategies.4

           EPAï¿½s Workforce Planning and Allocation System Is Not Adequate
			  for Effectively Deploying Staff to Regions
			  
			  As we reported, 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 broader goals and objectives in the
           agency's strategic plan. Instead, in preparing its requests for
           funding and staffing, EPA makes incremental adjustments, 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. While EPA has initiated several projects over
           the past decade to improve its workload and workforce assessment
           systems, it continues to face major challenges in this area

           If EPA is to substantially improve its resource planning, we
           reported, it must adopt a more rigorous and systematic process for
           (1) obtaining reliable data on key workload indicators, such as
           the quality of water in particular areas, which can be used to
           budget and allocate resources, and (2) designing budget and cost
           accounting systems that are able to isolate the resources needed
           and allocated to key enforcement activities.

           Without reliable workforce information, EPA cannot ensure
           consistency in its enforcement activities by hiring the right
           number or type of staff or allocating existing staff resources to
           meet current or future needs. In this regard, since 1990, EPA has
           hired thousands of employees without systematically considering
           the workforce impact of changes in environmental statutes and
           regulations, technological advances in affecting the skills and
           expertise needed to conduct enforcement actions, or the expansion
           in state environmental staff. EPA has yet to factor these
           workforce changes into its allocation of existing staff resources
           to its headquarters and regional offices to meet its strategic
           goals. Consequently, should EPA either downsize or increase its
           enforcement and compliance staff, it would not have the
           information needed to determine how many employees are
           appropriate, what technical skills they must have, and how best to
           allocate employees among strategic goals and geographic locations
           in order to ensure that reductions or increases could be absorbed
           with minimal adverse impacts in carrying out the agency's mission.

           EPA Has Initiated or Planned Actions to Achieve Greater Consistency
			  in Enforcement Activities
			  
			  Over the past several years, EPA has initiated or planned several
           actions to improve its enforcement program. We believe that a few
           of these actions hold particular promise for addressing
           inconsistencies in regional enforcement activities. These actions
           include (1) the creation of a State Review Framework, (2)
           improvements in the quality of enforcement data, and (3)
           enhancements to the agency's workforce planning and allocation
           system.

           EPAï¿½s State Review Framework Holds Promise, but It Is Too Early
			  to Assess Its Effectiveness
			  
			  The State Review Framework is a new process for conducting
           performance reviews of enforcement and compliance activities in
           the states (as well as for nondelegated programs implemented by
           EPA regions). These reviews are intended to provide a mechanism by
           which EPA can ensure a consistent level of environmental and
           public health protection across the country. OECA is in the second
           year of a 3-year project to make State Review Framework reviews an
           integral part of the regional and state oversight and planning
           process and to integrate any regional or state corrective or
           follow-up actions into working agreements between headquarters,
           regions, and states. It is too early to assess whether the process
           will provide an effective means for ensuring more consistent
           enforcement actions and oversight of state programs to help ensure
           a level playing field for the regulated community across the
           country. Issues that still need to be addressed include how EPA
           will assess states' implementation of alternative enforcement and
           compliance strategies, such as strategies to assist businesses in
           their efforts to comply with environmental regulations; encourage
           businesses to take steps to reduce pollution; offer incentives
           (e.g., public recognition) for businesses that demonstrate good
           records of compliance; and encourage businesses to participate in
           programs to audit their environmental performance and make the
           results of these audits and corrective actions available to EPA,
           other environmental regulators, and the public.

           Efforts Are Underway to Improve Data, but Critical Gaps Remain
			  
			  Regardless of other improvements EPA makes to the enforcement
           program, it needs to have sufficient environmental data to measure
           changes in environmental conditions, assess the effectiveness of
           the program, and make decisions about resource allocations.
           Through its Environmental Indicators Initiative and other efforts,
           EPA has made some progress in addressing critical data gaps in the
           agency's environmental information. However, the agency still has
           a long way to go in obtaining the data it needs to manage for
           environmental results and needs to work with its state and other
           partners to build on its efforts to fill critical gaps in
           environmental data. Filling such gaps in EPA's knowledge of
           environmental conditions and trends should, in turn, translate
           into better approaches in allocating funds to achieve desired
           environmental results. Such knowledge will be useful in making
           future decisions related to strategic planning, resource
           allocations, and program management.

           Nevertheless, most of the performance measures that EPA and the
           states are still using focus on outputs rather than on results,
           such as the number of environmental pollution permits issued, the
           number of environmental standards established, and the number of
           facilities inspected. These types of measures can provide
           important information for EPA and state managers to use in
           managing their programs, but they do not reflect the actual
           environmental outcomes that EPA must know in order to ensure that
           resources are being allocated in the most cost-effective ways to
           improve environmental conditions and public health.

           EPA also has worked with the states and regional offices to
           improve enforcement data in its Permit Compliance System and
           believes that its efforts have improved data quality. EPA
           officials said that the system will be incorporated into the
           Integrated Compliance Information System, which is being phased in
           this year. According to information EPA provided, 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 among states and from year-to-year.

           While these efforts are steps in the right direction, progress in
           this area has been slow and the benefits of initiatives currently
           in the discussion or planning stages are likely to be years away
           from realization. For example, initiatives to improve EPA's
           ability to manage for environmental results are essentially
           long-term. They will require a long-term commitment of management
           attention, follow-through, and support-including the dedication of
           appropriate and sufficient resources-for their potential to be
           fully realized. A number of similar initiatives in the past have
           been short-lived and unproductive in terms of lasting
           contributions to improved performance management. The ultimate
           payoff will depend on how fully EPA's organization and management
           support these initiatives and the extent to which identified needs
           are addressed in a determined, systematic, and sustained fashion
           over the next several years.

           EPA Has Improved the Management of its Human Capital System,
			  but Challenges Remain in Allocating Staff to Match Enforcement
			  Requirements in its Regions
			  
			  Since the late 1990s, EPA has made progress in improving the
           management of its human capital. EPA's human capital strategic
           plan was designed to ensure a systematic process for identifying
           the agency's human capital requirements to meet strategic goals.
           Furthermore, EPA's strategic planning includes a cross-goal
           strategy to link strategic planning efforts to the agency's human
           capital strategy. Despite such progress, effectively implementing
           a human capital strategic plan remains a major challenge.
           Consequently, the agency needs to continue monitoring progress in
           developing a system that will ensure a well-trained and motivated
           workforce with the right mix of skills and experience. In this
           regard, the agency still has not taken the actions that we
           recommended in July 2001 to comprehensively assess its
           workforce-how many employees it needs to accomplish its mission,
           what and where technical skills are required, and how best to
           allocate employees among EPA's strategic goals and geographic
           locations. Furthermore, as previously mentioned, EPA's process for
           budgeting and allocating resources does not fully consider the
           agency's current workload. 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.

           EPA's program offices and regions have some flexibility in
           realigning 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 workload have changed as
           the scope of activities regulated has increased and as 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. However, 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.

           Mr. Chairman, to its credit, EPA has initiated a number of actions
           to improve its enforcement activities and has invested
           considerable time and resources to make these activities more
           effective and efficient. While we applaud EPA's actions, they have
           thus far achieved only limited success and illustrate both the
           importance and the difficulty of addressing the long-standing
           problems in ensuring the consistent application of enforcement
           requirements, fines and penalties for violations of requirements,
           and the oversight of state environmental programs. To finish the
           job, EPA must remain committed to continuing the steps that it has
           already taken. In this regard, given the difficulties of the
           improvements that EPA is attempting to make and the time likely to
           be required to achieve them, it is important that the agency
           remain vigilant. It needs to guard against any erosion of its
           efforts by factors that have hampered past efforts to improve its
           operations, such as changes in top management and priorities and
           constraints on available resources.

           Mr. Chairman, this concludes my prepared statement. I would be
           happy to respond to any questions that you or Members of the
           Committee may have.

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Highlights of GAO-06-840T , testimony before the Committee on Environment
and Public Works, U.S. Senate

June 2006

ENVIRONMENTAL COMPLIANCE AND ENFORCEMENT

EPA's Efforts to Improve and Make More Consistent Its Compliance and
Enforcement Activities

The Environmental Protection Agency (EPA) enforces the nation's
environmental laws and regulations through its Office of Enforcement and
Compliance Assurance (OECA). While OECA provides overall direction on
enforcement policies and occasionally takes direct enforcement action,
many enforcement responsibilities are carried out by EPA's 10 regional
offices. In addition, these offices oversee the enforcement programs of
state agencies that have been delegated the authority to enforce federal
environmental protection regulations.

This testimony is based on GAO's reports on EPA's enforcement activities
issued over the past several years and on observations from ongoing work
that is being performed at the request of this Committee and the
Subcommittee on Interior, Environment and Related Agencies, House
Committee on Appropriations. GAO's previous reports examined the (1)
consistency among EPA regions in carrying out enforcement activities, (2)
factors that contribute to any inconsistency, and (3) EPA's actions to
address these factors. Our current work examines how EPA, in consultation
with regions and states, sets priorities for compliance and enforcement
and how the agency and states determine respective compliance and
enforcement roles and responsibilities and allocate resources for these
purposes.

EPA regions vary substantially in the actions they take to enforce
environmental requirements, according to GAO's analysis of key management
indicators that EPA headquarters uses to monitor regional performance.
These indicators include the number of inspections performed at regulated
facilities and the amount of penalties assessed for noncompliance with
environmental regulations. In addition, the regions differ substantially
in their overall strategies to oversee states within their jurisdictions.
For example, contrary to EPA policy, some regions did not require states
to report all significant violators, while other regions adhered to EPA's
policy in this regard.

GAO identified several factors that contribute to regional variations in
enforcement. These factors include (1) differences in philosophy among
regional enforcement staff about how best to secure compliance with
environmental requirements; (2) incomplete and unreliable enforcement data
that impede EPA's ability to accurately determine the extent to which
variations occur; and (3) an antiquated workforce planning and allocation
system that is not adequate for deploying staff in a manner to ensure
consistency and effectiveness in enforcing environmental requirements.

EPA recognizes that while some variation in environmental enforcement is
necessary to reflect local conditions, core enforcement requirements must
be consistently implemented to ensure fairness and equitable treatment.
Consequently, similar violations should be met with similar enforcement
responses regardless of geographic location. In response to GAO findings
and recommendations, EPA has initiated or planned several long-term
actions that are intended to achieve greater consistency in state and
regional enforcement actions. These include (1) a new State Review
Framework process for measuring states' performance of core enforcement
activities, (2) a number of initiatives to improve the agency's compliance
and enforcement data, and (3) enhancements to the agency's workforce
planning and allocation system to improve the agency's ability to match
its staff and technical capabilities with the needs of individual regions.
However, these actions have yet to achieve significant results and will
likely require a number of years and a steady top-level commitment of
staff and financial resources to substantially improve EPA's ability to
target enforcement actions in a consistent and equitable manner.
*** End of document. ***