Chemical Safety Board: Improved Policies and Additional Oversight Are
Needed (Letter Report, 07/11/2000, GAO/RCED-00-192).

Pursuant to a congressional request, GAO reviewed the Chemical Safety
and Hazard Investigation Board's management problems, focusing on: (1)
the status of the Board's organization and operations; (2) the Board's
efforts to update and develop plans, policies, and procedures for
accomplishing the Board's mission, including those aimed at ensuring the
objectivity of its investigative activities; and (3) whether the Board
would benefit from the independent oversight of an inspector general.

GAO noted that: (1) since January 2000, the Board has been operating
under a new organizational structure based on shared decision-making,
which was not in effect during most of its first 2 years of operation;
(2) continuing disagreements between three of the Board members and the
former Chairman raise questions concerning the Board's future
productivity and effectiveness; (3) in terms of operations, the Board
has made only limited progress in addressing the investigative backlog
that developed after its first year, and it has not initiated a new
investigation since March 1999; (4) however, the realigned Board
established eight priorities for the balance of fiscal year 2000 that
support its primary investigative mission, including the completion of
three investigative reports; (5) the Board has made some progress in
developing needed plans, policies, and procedures to guide its
activities; (6) for example, the Board issued formal written procedures
for awarding and managing contracts in December 1999; (7) however, these
policies were not in place when most of the Board's larger contracts
($100,000 or more) were executed, and Board officials have identified a
number of contracting activities that appear to have provided limited
benefit to the agency; (8) furthermore, the Board is revising its
interim criteria for selecting incidents to investigate as well as its
investigative protocol and is developing a strategic plan to both meet
statutory requirements and update its business plan; (9) the Board plans
to have these plans and guides completed by September 2000; (10) the
Board's interim investigative protocol does not include needed policies
and procedures that would help ensure objectivity and balance in its
investigative work, such as those covering conflicts of interest; (11)
the operational problems that the Board has experienced in its 2-1/2
years of existence--including governance and management conflicts,
contracting expenditures of limited value, and the lack of basic
operating policies and procedures--suggest that ongoing institutional
oversight would be beneficial; and (12) while the Board could develop an
in-house audit function or contract out for evaluations, GAO believes an
option that offers the best potential for effective oversight would be
for the Board to obtain the services of an existing office of inspector
general.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-00-192
     TITLE:  Chemical Safety Board: Improved Policies and Additional
	     Oversight Are Needed
      DATE:  07/11/2000
   SUBJECT:  Investigations by federal agencies
	     Safety standards
	     Hazardous substances
	     Procurement regulations
	     Industrial accidents
	     Accident prevention
	     Contract oversight
	     Public administration
	     Strategic planning
	     Agency missions

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GAO/RCED-00-192

Appendix I: Comments From the Chemical Safety and Hazard Investigation Board

34

Table 1: The Board's Current and Projected Staffing Levels, by
Functional Office, as of June 15, 2000 10

CEO Chief Executive Officer

DOE Department of Energy

DOT Department of Transportation

EPA Environmental Protection Agency

GSA General Services Administration

NRC Nuclear Regulatory Commission

NTSB National Transportation Safety Board

OPM Office of Personnel Management

OSHA Occupational Safety and Health Administration

Resources, Community, and
Economic Development Division

B-285501

July 11, 2000

The Honorable Christopher S. Bond
Chairman, Subcommittee on VA, HUD,
and Independent Agencies
Committee on Appropriations
United States Senate

The Honorable Frank R. Lautenberg
United States Senate

The Chemical Safety and Hazard Investigation Board (the Board) is an
independent agency currently in its third year of operation. The Board's
mission is to enhance the health and safety of the public, workers, and the
environment by investigating the causes of accidental chemical releases and
using these findings to promote preventive actions by the private and public
sectors. The authorizing statute provides for five Board members, including
a chairperson, all appointed by the President. In 1999, the Chairman and the
other members of the Board disagreed over their respective roles and
responsibilities for managing the agency. The existing Chairman resigned his
position as chair in January 2000 but remained a Board member. As of June
30, 2000, there were four Board members and the position of chairperson was
vacant.

Concerned about the Board's management problems, you asked us to review the
effectiveness of the Board in carrying out its mission. As agreed with your
offices, our report addresses (1) the current status of the Board's
organization and operations; (2) the Board's efforts to update and develop
plans, policies, and procedures for accomplishing the Board's mission,
including those aimed at ensuring the objectivity of its investigative
activities; and (3) whether the Board would benefit from the independent
oversight of an inspector general. In conjunction with the Subcommittee's
appropriation hearings, we provided an interim statement for the record in
April 2000, which presented the results of our work as of that date.1

Since January 2000, the Board has been operating under a new organizational
structure based on shared decision-making, which was not in effect during
most of its first 2 years of operation. Continuing disagreements between
three of the Board members and the former Chairman raise questions
concerning the Board's future productivity and effectiveness. In terms of
operations, the Board has made only limited progress in addressing the
investigative backlog that developed after its first year, and it has not
initiated a new investigation since March 1999. However, the realigned Board
established eight priorities for the balance of fiscal year 2000 that
support its primary investigative mission, including the completion of three
investigative reports.

The Board has made some progress in developing needed plans, policies, and
procedures to guide its activities. For example, the Board issued formal
written procedures for awarding and managing contracts in December 1999.
However, these policies were not in place when most of the Board's larger
contracts ($100,000 or more) were executed, and Board officials have
identified a number of contracting activities that appear to have provided
limited benefit to the agency. Furthermore, the Board is revising its
interim criteria for selecting incidents to investigate as well as its
investigative protocol and is developing a strategic plan to both meet
statutory requirements and update its business plan. The Board plans to have
these plans and guides completed by September 2000. The Board's interim
investigative protocol does not include needed policies and procedures that
would help ensure objectivity and balance in its investigative work, such as
those covering conflicts of interest. We are recommending that the Board
adopt clear policies and procedures on potential conflicts of interest and
consider other policies and procedures used by some other investigative
agencies that also promote investigative impartiality and thoroughness.

The operational problems that the Board has experienced in its 2-1/2 years
of existence--including governance and management conflicts, contracting
expenditures of limited value, and the lack of basic operating policies and
procedures--suggest that ongoing institutional oversight would be
beneficial. While the Board could develop an in-house audit function or
contract out for evaluations, we believe an option that offers the best
potential for effective oversight would be for the Board to obtain the
services of an existing office of inspector general. We are therefore
recommending that the Board develop an agreement with an existing office of
inspector general that would provide for ongoing institutional oversight of
the Board.

Chemical incidents--accidental releases of toxic and hazardous
chemicals--occur frequently and often have serious consequences. However,
according to Board officials, reliable national statistics on the number of
accidents, injuries, and deaths do not exist.2 The Board is an independent
agency created in 1990 under amendments to the Clean Air Act.3 The act
directs the Board to (1) investigate and report on the circumstances and the
probable causes of chemical incidents resulting in a fatality, serious
injury, or substantial property damages; (2) recommend measures to reduce
the likelihood or the consequences of such accidents and propose corrective
measures; and (3) establish regulations for reporting accidental releases.

The Board has no enforcement authority and a very limited regulatory role.
According to a relevant legislative committee report, the Board is modeled
after the National Transportation Safety Board (NTSB), which retained the
lead role in investigating transportation-related chemical incidents. The
Board is to consist of five members, including a chairperson, appointed by
the President and confirmed by the Senate. The chairperson is the Chief
Executive Officer (CEO) of the Board. The staff includes a chief operating
officer, investigators, attorneys, and program analysts. The President's
budget requested $8 million for the Board in fiscal year 2001, the same
funding level provided in fiscal year 2000.

To accomplish its primary mission, the Board has conducted both full-scale
investigations of chemical accidents as well as limited investigations,
called reviews. In April 1999, we reported that the Board had a backlog of
incomplete investigations and had not developed a plan to address the
backlog.4 We also reported that it had not put into place formal, written
procedures for its staff to follow in awarding and managing contracts.
Finally, we determined that significant portions of the Board's actual and
planned resources were dedicated to activities, such as external relations,
that did not directly support the conduct of its investigations.

In December 1999, after almost 2 years of operations, the Board changed its
management responsibilities and functional alignment to address, among other
things, conflicts that had arisen over the roles and responsibilities of the
Board members. Specifically, in December 1999 and January 2000, the Board
developed interim solutions to important organizational issues regarding the
roles and the management responsibilities of the Board members. The Board
has also increased the proportion of staffing resources to be allocated to
its primary mission of conducting investigations and established eight
priority actions for the balance of fiscal year 2000, including the hiring
of investigations and safety staff. In terms of operations, since March
1999, the Board has made limited progress in addressing the investigative
backlog that had developed after its first year, and it has not initiated a
new investigation since that time. However, the Board plans to complete
three investigative reports and initiate one investigation in fiscal year
2000. The more limited review program was terminated because of problems
with both its design and implementation. The Board plans to initiate a new
program addressing safety problems that are beyond the scope of any one
particular incident under review and has initiated action to complete an
agreement with NTSB, as required by the Clean Air Act, addressing their
respective roles and responsibilities in investigating transportation
incidents involving chemicals. Finally, contracting activities have
primarily supported information technology and investigations, but,
according to Board officials, the agency has received limited benefits for
some of its contracts.

Members

In 1999, the Chairman and the other members of the Board disagreed over
their respective roles and responsibilities for managing the agency. In
essence, the Chairman asserted that he had sole control over many
significant agency decisions, while the other Board members believed that
making these decisions was the collective responsibility of the Board.
Consequently, the Board members did not necessarily support the actions
taken by the Chairman. For example, they were concerned about the initial
fiscal year 2001 budget request the Chairman had sent to the appropriations
committees in October 1999; this request would have doubled the Board's
funding to $16 million.5 In addition, according to a Board directive, both
the Chairman and the Board's Chief Operating Officer did not comply with
requests from the other Board members for contracting documents that they
wanted to review in order to identify the goods and services that had been
provided under the contracts.6

The Board members asked the agency's General Counsel to provide a legal
opinion on the roles and the responsibilities of Board members. In an August
1999 memorandum, the agency's General Counsel concluded that, for a number
of important agency functions, there should be at least some amount of
shared responsibility between the Chairman and the other Board members. For
example, the memorandum concluded that while the Chairman and his staff were
responsible for preparing the agency's budget request, it must be approved
by the full Board before being transmitted to the Congress and the Office of
Management and Budget. Similarly, the memorandum stated that while the use
and the distribution of the agency's funds for contracting purposes falls
within the scope of the Chairman's administrative functions, the exercise of
this authority is subject to the oversight of the other Board members.

In October 1999, the Board members accepted the General Counsel's opinion,
but the Chairman requested further legal clarification before implementing
the opinion. The Chairman interpreted the Board's authorizing statute as
giving him authority, as CEO, over a number of agency functions, including
all budget and contracting issues, subject to review only by the President
and the Congress. In November 1999, the Board members requested an opinion
from the Department of Justice's Office of Legal Counsel on the legal
accuracy of the General Counsel's memorandum and agreed to be bound by the
opinion.7 In addition, on December 1, 1999, the Chairman also requested that
the Office of Legal Counsel review the Board's authorizing statute to
determine the precise roles and responsibilities of the chairperson and the
Board, and he agreed to be bound by the Office's conclusion. Also on
December 1, 1999, the Chairman and the Board members developed an agreement
specifying the interim measures to be taken until the Department of Justice
provided its legal opinion.8 This agreement expanded the roles and the
responsibilities of the Board members. On June 26, 2000, the Department of
Justice's Office of Legal Counsel concluded that the day-to-day
administration of agency matters is the responsibility of the chairman but
is subject to oversight by the Board as a whole, and that the Board's
decisions would generally be controlling in disputes over the allocation of
authority in specific instances.

The Board's disagreement about its governance became a matter of public
record, reported in newspapers and periodicals. In January 2000, the
Chairman submitted his resignation as Chairman and CEO, effective January
12, 2000, but retained his position as a Board member. The President has not
appointed a new chairperson, and the Board is currently operating without a
chairperson and CEO.

On January 14, 2000, the Board members established and implemented interim
operating procedures that delineate their roles and responsibilities
whenever the position of chairperson is vacant. The procedures delegate
specific responsibilities, such as personnel matters and allocating
resources, to individual Board members. In addition, the procedures identify
the specific responsibilities, including developing budgets and awarding
contracts exceeding $10,000, that require a majority vote of the Board
members for approval.

The procedures are in place, and the Board is operating and making decisions
by majority vote. However, disagreements between three of the Board members
and the former Chairman about the management of the Board continue to be
aired in publications and raised with Members of Congress. A Board member
acknowledged that the productivity and effectiveness of the Board is
impaired by this on-going conflict to the extent that it requires the
expenditure of time and effort to resolving the conflict rather than to
managing the agency. In May 2000, the three Board members petitioned the
President to remove the former Chairman from his position as a Board member,
alleging malfeasance, inefficiency, and neglect of duty.

After delineating their roles and responsibilities, in March 2000 the Board
members established eight priority actions for the balance of fiscal year
2000 to better support the Board's primary investigative mission. The eight
priorities are hiring investigations and safety staff, developing a staff
training program, completing three investigative reports, revising the
investigation protocol, revising the incident selection criteria, and
initiating new investigations. In addition, during this fiscal year, the
Board is committed to developing a strategic plan and personnel policies and
procedures.

Positions Are Vacant

During fiscal year 1999 and the early part of fiscal year 2000, the Board
made organizational changes to better carry out its mission. Among other
things, the Board increased the proportion of staffing resources to be
allocated to its investigative function. However, because of difficulties in
recruiting qualified staff, many vacancies exist in the Office of
Investigations and Safety Programs. The Board also shifted several key
personnel. The former Chief Operating Officer has been assigned to an
interim position of special assistant to a Board member, and the General
Counsel has assumed the position of Chief Operating Officer in addition to
his legal responsibilities. Also, on February 2, 2000, the Board named a
staff member to the position of Director of the Office of Investigations and
Safety Programs.

Increased Resources Allocated for Investigations and Safety

Currently, the Board has 27 staff, including the 4 Board members. The Board
expects to grow to a staff of 40 by the end of fiscal year 2000, with almost
all of the growth in the areas of investigations and safety. Table 1
identifies the Board's offices and staffing allocations, both current and
planned.

 Office                       Current         Projected staffing by the end
                              staffing        of fiscal year 2000
 Board members and staff      6               7a
 Chief Operating Officer      1b              2
 Investigations and Safety
 Programs                     8               18
 General Counsel              3b              3
 External Relations           2               2
 Administrationc              7               8
 Total                        27              40

a Currently, the Board's office includes the four Board members, one special
assistant, and one program analyst. Projected staffing includes the fifth
Board member, as provided by the Board's authorizing statute.

b The head of the Office of General Counsel also serves as the Chief
Operating Officer. This individual is included only in the staffing
allocated to the Office of General Counsel.

cThe Office of Administration includes two positions that were formerly in
the Office of Information Technology.

The projected staffing differs markedly from the staffing associated with
the Board's budget request for fiscal year 2000. Specifically, in February
1999, the Board expected to grow to a staff level of 60 by the end of fiscal
year 2000, compared with current plans to grow to 40 staff.9 In addition,
last year a greater proportion of staff was planned for organizational units
that did not directly support the Board's investigative mission. For
example, last year 33 percent of the Board's projected staffing resources at
the end of fiscal year 2000 was allocated to investigations and safety
programs, compared with the current projections of 45 percent. Currently,
the Board plans to allocate two staff to the Office of External Relations
compared with the planned allocation of nine staff a year ago.

Vacancies Exist in the Investigations Area

As shown in table 1, as of June 15, 2000, 10 of the18 positions planned for
the Office of Investigations and Safety Programs were vacant, and 6 of these
were investigative positions. However, according to a Board official, two
investigators accepted job offers during the week of June 19, 2000. As a
result, two of the six investigative vacancies are expected to be filled in
July and August 2000. The other vacancies are for one program analyst, one
technical writer, one library/researcher, and one administrative assistant.
Board officials told us that the vacancies exist because of recruitment
difficulties and the loss of two investigators. According to the Board,
potential recruits with the requisite chemical safety skills--primarily from
the oil and chemical process industries--are highly paid and typically
located in areas far from Washington, D.C. Board officials said that it has
been difficult to get prospective staff to relocate. In addition, the Board
has found that it takes 6 months or longer to recruit and hire staff. This
time frame for hiring staff is longer than the Board anticipated. Moreover,
according to Board officials, one investigator resigned and another was
terminated. In addition, another investigator has announced his intention to
resign.10

The newly constituted Board is focusing on personnel management issues in
fiscal year 2000. As reflected in its identified priorities for the fiscal
year, the Board will concentrate on hiring and training qualified
professional staff and retaining and retraining current staff. First, the
Board obtained approval from the Office of Personnel Management (OPM) in
March 2000 to reinstate through December 2000 special hiring authority
(termed Schedule A) that the Board had been granted previously. According to
Board officials, this special hiring authority, which it had until December
31, 1999, is typically granted to new federal agencies for a limited time
period and expedites the hiring process.

In its letter to OPM requesting special hiring authority, the Board stated
that it had an urgent need to expedite the hiring of investigative and
safety personnel to complete its work backlog. The Board's letter stated
that with some of its investigations more than 2 years old, it is under
pressure from the Congress, stakeholders, and the public to complete the
eight outstanding investigations as soon as possible. The letter
acknowledged that the Board could face serious consequences, including the
possible loss of funding, if it does not hire the additional staff needed to
make substantive progress on its investigative backlog.

In addition to using the special hiring authority, the Board has developed
and is implementing a new hiring plan that allows it to offer several
financial incentives to better recruit qualified staff, such as paying
travel and relocation expenses of new professional staff and providing a
recruitment bonus plan. Board officials said progress in filling key
technical positions is being made as a result of the new hiring plan. In
addition to the two investigators who accepted job offers in June, the Board
has recently hired a chemical safety recommendation specialist and a special
assistant with an extensive background in chemistry. As of June 15, 2000,
the Board was continuing to actively recruit investigators. A Board member
had said previously that the Board's ability to complete its priority tasks
would be jeopardized if new investigators were not on board by June 30,
2000.

In addition, the realigned Board has determined that it must develop
personnel policies and procedures for its staff. The Board plans to develop
needed policies on leave, office hours, and employee conduct and discipline,
among others. The Board also plans to revise and implement a performance
appraisal program. In most cases, according to Board officials, employees
have not received performance appraisals, although the Board has employed
most of them for more than 1 year.

The Board investigates accidental chemical releases resulting in a fatality,
serious injury, or substantial property damage. These investigations often
involve extensive site visits, evidence collection, and analytical work. The
Board started five full-scale investigations in 1998 and six in 1999,
although none have been initiated since March 1999. Of the 11
investigations, 3 started in 1998 have been completed. However, only one
report has been completed since March 1999. Nevertheless, a number of its
recommendations from the three completed reports have been implemented.11

Draft reports are in process for three investigations. Completion of these
reports by September 30, 2000, represents three of the Board's eight
priorities for fiscal year 2000. The Board has not decided what it will do
about the other five outstanding investigations. Alternatives include
developing investigative reports, issuing summary reports, or concluding the
investigations without reports. In addition to the personnel issues
discussed above, the Board believes one of the causes of the investigations
backlog was an overreliance on contractors to investigate accidents.
According to the Board, this overreliance on contractors resulted in some
poor investigations and draft reports because of insufficient Board staff or
inadequate procedures for monitoring the contractors' personnel to ensure
their activities met the Board's investigative needs. In terms of future
investigations, the Board plans to initiate one investigation during fiscal
year 2000 and four or five investigations each year beginning in fiscal year
2001.

The more limited review program was developed to provide information to
prevent future incidents by using an approach that was less
resource-intensive than full investigations. The protocol for these reviews
provided for a limited, office-based review of investigative reports
prepared by the organizations that responded to the incident. The Board
initiated a total of 23 reviews in 1998 and 1999. However, Board officials
told us that they terminated the program in 1999 because it conflicted with
the Board's independence by having the Board rely on the work of other
agencies. According to these officials, the Board cannot adopt the work of
other organizations whose missions and mandates differ from its own because
it cannot control or ensure the quality of the products prepared by others.
Other problems identified with the program included the
longer-than-anticipated time spent in collecting the information and
drafting the reports as well as the possibility of duplicating the work done
by other agencies. In July 1999, the Board decided to add the factual data
about these reviews to an existing incident database it maintains.

Although not among the Board's eight identified priorities for fiscal year
2000, the Board plans to establish a program--modeled after an NTSB
program--to develop safety studies to better understand the nature and
causes of specific safety problems that are beyond the scope of any one
incident under investigation. The Board plans to initiate one safety study
during fiscal year 2000. As of June 2000, the Board had not selected the
study to be initiated, but officials said it would likely evolve from one of
the three investigations to be completed in fiscal year 2000. Board
officials said that the safety studies selected would likely stem from the
research needs identified in recommendations the Board develops in its
investigative reports. They indicated they would receive, at a minimum, iput
from other parties to ensure the studies are useful.

Other federal agencies, including the Occupational Safety and Health
Administration (OSHA), NTSB, and the Environmental Protection Agency (EPA),
have responsibilities for responding to and/or investigating chemical
incidents. The Board is required by its authorizing statute to coordinate
its activities with these agencies. Furthermore, the Clean Air Act requires
the Board to enter into an agreement, called a memorandum of understanding,
with NTSB to ensure the coordination of functions and to limit the
duplication of activities.12 The agreement must designate NTSB as the lead
agency for investigating accidents that are transportation-related. The
Clean Air Act also requires the Board to enter into an agreement with OSHA
to limit the duplication of investigation activities. The Board developed an
agreement with OSHA in 1998 that establishes policy and general procedures
for cooperation and coordination and for minimizing duplication so that each
agency can carry out its specific statutory requirements in an efficient and
effective manner.13

However, the mandated agreement between NTSB and the Board has not been
completed. Board officials told us the agreement was not made final last
year, in part because NTSB did not follow through with its stated plan to
return a final version of the draft agreement to the Board by the end of
August 1999. After we discussed this issue with Board officials, the Board
sent a letter to the Chairman of NTSB on June 6, 2000, discussing, among
other things, the need to complete the draft agreement.

Board officials told us that the Board would generally not be involved in
transportation-related accidents and believe it is very unlikely that the
Board and NTSB would investigate the same incident. The officials said that
because NTSB has primary jurisdiction for transportation incidents, and
because of the Board's limited resources, the Board is appropriately
directing its attention to accidents at fixed facilities. However, they
indicated that the Board could not rule out being involved in an
extraordinary transportation incident. We note that while Board officials
have said that it is unlikely they would investigate a transportation
accident, one of the incidents that the Board chose to analyze under its
review program was a pipeline accident, a transportation area for which NTSB
has primary investigative responsibility.14

Since it began operations in January 1998, the Board has obligated about
$4.7 million to 13 contracts, purchase orders, and agreements of $100,000 or
more.15 A significant portion of these contracting obligations--$2.4
million--have supported information technology, such as the creation of data
systems and databases, compared with $1.4 million for investigative support.
These activities were contracted before the management realignments in
December 1999 and January 2000 and the establishment of contracting policies
and procedures in December 1999. Prior to the management realignments,
contracting actions were the responsibility of the former Chairman and the
former Chief Operating Officer, and the other Board members did not have a
role in reviewing or approving contracts. In addition, these contracts were
made prior to being directed--in the House conference committee report
accompanying the Board's fiscal year 2000 appropriations bill--to spend the
preponderance of its resources, including contract resources, on
investigations and safety instead of on information technology or external
affairs.

According to Board officials, the agency has received limited benefits for
some of its contracting activities. For example, the Board is not currently
using--and may never use--the $636,000 Incident and Investigation
Information System developed by Oak Ridge National Laboratory in 1999 that
would catalog information from the Board's accident investigations.16 The
officials said that the investigation and safety program staff who would use
this system had limited input into its design. According to Board officials,
the system is overly complex and an off-the-shelf database may better meet
the Board's needs. While the Board plans to formally evaluate the system to
determine its value to the Board, this evaluation is on indefinite hold
because of higher priority work for fiscal year 2000.

In addition, the realigned Board has been reviewing its information
technology projects and has determined, among other things, that it has
overcapacity in information technology. As a result, in June 2000, the Board
decided to reduce its information technology budget for fiscal year 2000 by
$1.3 million--more than 15 percent of its total annual appropriation--either
by not funding or by reducing funding to various contracts.

Similarly, Board officials also acknowledged that other contracting
activities may be of limited value to the Board, such as the following:

ï¿½ Baseline of chemical accidents. The Board spent more than $450,000 under
two contracts to develop a 10-year baseline of chemical accidents. However,
the Board believes these statistics have serious data quality limitations
and is developing a plan to determine a more reliable estimate of the
universe of chemical accidents.

ï¿½ Pressure relief systems. The Board paid about $326,000 for information on
pressure relief systems that are used in chemical processing operations.
Board officials said that the information from the study appears to be of
limited use to them. A Board member stated that while the agreement was
designed to assist the Board's investigators and safety staff in their work,
the work proposal was not reviewed by the Board members or the safety and
investigations staff for design, purpose, and outcomes. As a result, the
product is of lesser value than could have been attained if input from the
users and the Board members had been obtained. The Board member said that
the other pressing priorities have precluded the Board from completing its
review of the information provided under the agreement. He said, however,
that the agency needs to develop procedures for the internal technical
review of goods and services provided to the Board under contracts and
agreements.

ï¿½ Use of contractors to investigate incidents. As discussed earlier, Board
officials also believe that the agency relied too heavily on contractors to
investigate accidents, resulting in some poor investigations and draft
reports. They attribute this primarily to insufficient Board staff or
inadequate procedures to monitor the contractors' personnel to ensure their
activities met the Board's investigative needs.

In addition, given its limited productivity and workload changes, we
questioned the Board about its use of funds to develop an informational
video demonstrating the Board's purpose and activities. As of March 2000,
the Board had paid $80,000 of the $160,000 obligated in 1998 for the video.
One Board member told us that he did not believe it was appropriate to
develop a video at this time. In response to our questions about the views
of the other Board members on the need for a video, he said he would raise
this issue at the next meeting of the Board. In April 2000, the Board
decided it was not appropriate to develop a video. According to Board
officials, the contractor is entitled to recover incurred costs and profit
on the work already completed because the contract is being terminated for
the convenience of the government. The Board is currently determining what
this amount should be.

In January 2000, to ensure that future contracting activities contribute to
its overall goals, the Board approved interim operating procedures that
require contracts exceeding $10,000 be approved by a majority vote of the
Board members. In addition, one Board member is assigned the responsibility
for supervising the use and expenditure of funds, including authorizing
contracts between $2,500 and $10,000. A Board member said that this new
policy will provide greater transparency of proposed contracting actions and
avoid contracting for work of limited utility to the Board. In addition, the
Board is changing the way it uses contracting support for its
investigations. Rather than retaining contractors to perform the
investigations, the Board is contracting for specific expertise or tests
needed for investigations that are led by Board investigators.

and Procedures

In April 1999, we reported on two concerns about the Board's actions.17 One
concern related to the backlog of investigations and the fact that the Board
had not updated its initial business plan to reflect the backlog and examine
how to address this problem by, for example, reallocating existing and
planned resources. The second concern stemmed from the problems with
contracting that developed shortly after the Board began operations. We
indicated the need for formal procedures for its staff to follow in awarding
and managing contracts. As discussed earlier, the House conference committee
report accompanying the Board's fiscal year 2000 appropriations act directed
the Board to spend the preponderance of its resources, including contract
resources, on investigations and safety instead of on external affairs or
information technology. This report also directed the Board to complete, by
December 31, 1999, an updated business plan, formal policies and procedures
for awarding and managing contracts, and formal procedures for selecting and
performing investigations.

The Board has made some progress in complying with these directives.
Specifically, on December 27, 1999, the Board issued formal written
procedures for awarding and managing contracts. Also, as discussed above, in
January 2000, the Board approved procedures that include requiring contracts
exceeding $10,000 to be approved by a majority vote of the Board members.
However, the procedures do not include guidance the Board recognizes is
needed for its staff on the technical review of goods and services provided
to it under contracts.

In addition, the Board requested an extension of time in developing an
update to its business plan because of the former Chairman's announced
resignation from that position and the related governance issues. This
update will be accomplished by the development of strategic and performance
plans required by the Government Performance and Results Act. On February 7,
2000, the Board provided a performance plan for fiscal year 2001 along with
its budget request for fiscal year 2001. The Board plans to obtain feedback
from stakeholders from industry, public interest groups, government
agencies, and labor unions on the strategic plan in July 2000 and complete
it by September 2000.

On December 27, 1999, the Board also issued interim procedures for selecting
incidents to investigate. As of June 2000, the interim selection criteria
were being reviewed and thus were not ready to be used in selecting
incidents to investigate. Revising the selection criteria is one of the
Board's eight priority actions for fiscal year 2000. The Board is revising
the process for selecting incidents to investigate and plans to meet with
stakeholders on the revised draft selection criteria in July 2000. One issue
that the Board did not clarify in the interim selection criteria is the
circumstances in which it would investigate a transportation-related
accident. The Board receives numerous daily notifications of chemical
accidents from the National Response Center, which include, at the Board's
request, information on certain transportation accidents involving
chemicals, including pipeline and highway accidents.18

EPA and stakeholders such as the Chemical Manufacturers Association and the
American Petroleum Institute have also said that the Board should clarify
its primary mission and clearly define the Board's role, if any, in
transportation accidents. The Board's agreements with EPA and OSHA and its
interim investigative protocol indicate the Board may conduct investigations
of transportation accidents, but these documents do not provide guidance on
the overall focus of Board investigations (fixed facilities versus
transportation), nor do they indicate the circumstances in which the Board
would consider investigating a transportation accident.

Finally, on December 27, 1999, the Board issued an interim investigative
protocol that sets forth guidelines and procedures for the Board and the
staff to follow in conducting and reporting on investigations. The protocol
describes the activities necessary to conduct incident investigations from
inception through publication and includes two companion documents: a set of
detailed investigation procedures and a set of related investigation forms
and references. The protocol was issued as "interim" because the Board
recognized that it needed further development.19 Revising the investigative
protocol is one of the Board's eight priority actions for fiscal year 2000.

The Board acknowledges that parts of the protocol require policy decisions
by the Board and that some of the policies and procedures need to be more
fully developed. For example, the Board needs to decide when its
investigators are to conduct interviews with accident witnesses alone and
when joint interviews with other agencies may be appropriate. Currently,
there is a conflict between the Board's interim procedures and its agreement
with EPA. That is, the Board's interim procedures state both that it is the
Board's policy to conduct interviews alone and that the Board prefers to
interview witnesses separately. However, the Board's agreement with EPA
states that interviews of witnesses will be conducted jointly with EPA as
often as possible to avoid duplicative efforts.

Also, a Board official said that the Board must decide such issues as
whether outside attorneys can be present when Board investigators are
interviewing witnesses and what type of confidentiality assurances the Board
can extend to interviewees. The Board plans to contract for expert
assistance to improve the investigative protocol. A Board official told us
that the focus of these improvements would be primarily on the procedures
for conducting investigations.

Investigations

The Board does not have regulatory or enforcement powers and must maintain a
reputation for impartiality and thoroughness in order to convince its wide
range of stakeholders--including chemical companies, labor unions,
scientific organizations, and other agencies--to implement its
recommendations. We found that the Board's investigative protocol lacks
specificity in some areas that would help ensure objectivity and balance in
investigative work. Specifically, the Board's interim investigative protocol
either does not address or partially addresses (1) a potential for conflicts
of interest, (2) the reporting of substantive disagreements among
investigative team members, (3) the reporting of minority views of Board
members in investigative reports and the handling of requests for
reevaluations of investigations, and (4) a clear external peer review
policy. Policies and procedures on these topics--which are included in the
investigative policies and procedures of some other investigative
agencies--promote objectivity by formalizing and standardizing agency
practices that are aimed at eliminating the potential for bias on the part
of investigators and board members and ensuring that the investigation
consider all relevant findings and analyses.20

Conflicts of Interest

Conflicts of interest, or the appearance of conflicts of interest, could
seriously hamper the Board's efforts to convince stakeholders to implement
its safety recommendations. Conflicts of interest may include, but are not
limited to, Board employees and contractors having a financial interest
associated with the facility being investigated or having been previously
employed or a consultant with the facility. Several protocols of other
federal agencies and boards inform members of the investigative team about
potential conflicts of interest by including statements or sections on how
to help prevent them from occurring. For example, the Department of Energy's
(DOE) investigative protocol states that each board member, adviser, and
consultant must certify that he or she has no conflicts of interest. In
addition, the protocol states who to contact for advice if there are
concerns about potential conflicts of interest.

According to the Board's General Counsel, the Board has reviewed potential
conflicts of interest at the Board. For example, he said that the Office of
General Counsel evaluated the potential for conflict of interest for a Board
member assigned as the primary overseer of an accident investigation at a
company owned by the Board member's former employer. In addition, according
to a Board official, the Board reviews the terms of work included in
contracts to determine if the contractors may have any conflicts of
interest. Board employees are also required to receive annual ethics
training and complete the standard annual financial disclosure reports
required of federal employees. The Office of General Counsel reviews the
financial disclosure reports.

However, the Board does not have formal, written policies on conflicts of
interest that would guide the reviews of potential conflicts by the Office
of General Counsel. Written guidance would help ensure the consistency and
thoroughness of conflict-of-interest reviews and would provide clear and
consistent guidance to the staff and Board members on actual or perceived
conflicts of interest, including actions required to mitigate potential
conflicts. Because the Board has recently determined that it will focus its
recruitment efforts on individuals with experience in the oil and chemical
process industries--ones that it will likely be investigating--it will be
increasingly important for the Board to have clear, consistent
conflict-of-interest guidance.

Staff Disagreements on Investigations

During an investigation, disagreement between staff members and/or
management may occur on the facts or analysis of the case. According to
Board officials, divergent opinions of team members on investigations are
expected and welcome during the investigation. However, the goal is for team
members to come to an agreement before the draft report is sent forward for
approval. If no agreement can be reached at the team level, the current
investigative protocol states that the matter should be first taken to the
Director of Investigations and Safety and if not resolved at that level,
then taken to the Chief Operating Officer for resolution. However, the
protocol does not indicate that the inclusion of a record of such
disagreements can be made part of the official investigative file.

A systematic process for resolving professional differences of opinion can
help avoid the perception that an investigator's findings are
inappropriately discounted. The Board has had to address an allegation by a
former Board investigator that investigators were in some cases being
pressured to change findings or recommendations inappropriately. In this
case, the Board investigated this allegation and concluded on the basis of,
among other things, statements from its investigative staff, that it was not
substantiated.

We believe a process, such as one used by the Nuclear Regulatory Commission
(NRC), regarding professional differences of opinion would be helpful to the
Board both in ensuring that objectivity is maintained and in responding to
any similar allegations in the future. Specifically, NRC's investigation
protocol requires each team member's concurrence on investigative reports,
signifying that each team member has reviewed the report and that any
differences of opinion have either been resolved or are documented in an
appendix. This policy appropriately places a responsibility on team members
to disclose any outstanding differences of opinion before the report is
issued, allowing the decisionmakers to evaluate these views. The policy
establishes accountability for issues and can protect NRC from allegations
that known, relevant information was not appropriately considered.

Minority Views of Board Members and Requests for Reevaluations

The NTSB investigative manual identifies the procedures to be followed if
all its board members do not concur on a report, including the option for
publishing the minority opinions in the final report. In contrast, Board
officials told us that they do not believe the minority views, if any, of
its Board members on investigative reports should be published in final
investigative reports because doing so would seriously hamper the Board's
ability to have recommendations accepted and acted upon. Thus, the
investigative protocol does not provide for publishing dissenting opinions
of Board members in investigative reports. We found, however, that Board
officials have not discussed with NTSB officials their experience in
publishing minority views in investigative reports, including how this
practice affects their ability to convince stakeholders to implement
recommendations. Such discussions may help the Board clarify the pros and
cons of this policy, which offers the potential to enhance its reputation
for objectivity, thoroughness, and openness. In response to our questions, a
Board member acknowledged that such a discussion would be useful.

Another NTSB procedure that may be relevant to the Board provides that all
parties involved with the investigation or other interested persons may
petition for reconsideration of all or part of the analysis, conclusions, or
probable cause(s) identified in a published report. NTSB reviews such
petitions following established criteria to determine whether to grant them
in entirety or in part or to deny them. In contrast, the Board's
investigative protocol does not address the circumstances in which the Board
would reconsider a published report.

Peer Review

Peer review--the critical evaluation of scientific and technical work
products by independent experts--is an important mechanism for enhancing the
quality, credibility, and acceptability of scientific and technical reports.
While the Board utilizes independent expert assistance and peer review, its
investigative protocol does not provide a clear policy statement on its use
of independent review. A section of the protocol (separate from the
investigative procedures) states only that the Board may contract for
technical review by recognized outside experts. Furthermore, the tasks
currently specified in the Board's investigative procedures under the topic
"legal review and vetting of the report" do not address the use of outside
experts. This section states that the factual content portion of reports
will be provided to the "appropriate parties" to help ensure accuracy. This
guidance is implemented by providing copies to the affected company, the
employee's union, and, in some cases, to other government agencies involved
in the incident investigation, for reviews for factual accuracy and
confidential business information. Finally, we found that the Board's issued
reports do not identify the expert reviews that were obtained.

We recognize that there are different peer review approaches the Board could
adopt. For example, a comprehensive peer review approach is incorporated in
a draft EPA/OSHA investigative protocol that requires independent review of
draft investigative reports before final reports are issued. Alternatively,
peer review can be obtained on specific investigative issues. Nonetheless,
the Board's peer review approach is not clearly defined in its investigative
protocol. That is, the protocol does not indicate whether expert technical
reviews are generally required and whether the technical reviews are to
encompass the investigative report as a whole or are to be limited to
discrete technical elements. In addition, the protocol does not address the
disclosure in the relevant investigative reports of the expert reviews
obtained.

Although the Board's history suggests the need for ongoing oversight, the
Board is not subject to institutional oversight of its operations and
programs. To obtain the benefits of oversight, the Board could establish an
in-house audit and investigations unit, contract out for evaluations of its
operations and programs, or obtain the services of an existing office of
inspector general. We believe obtaining the services of an established
office of inspector general offers important advantages over the first two
options by, for example, offering the potential for the greatest degree of
audit independence. However, this approach could also have serious
limitations if it is not structured to give the inspector general the
authority, among other things, to initiate audits. For example, NTSB has
obtained inspector general assistance using voluntary agreements that did
not permit the inspectors general to initiate audits. While this approach
has helped NTSB to some extent, the experience suggests that broader
inspector general oversight--enabling an inspector general to initiate
investigations as well as to perform audits in response to agency requests
and providing a hotline for agency employees--could be more effective in
helping to prevent fraud, waste, and abuse.

Mismanagement and a Need for Oversight

The Board's experience to date suggests the need for ongoing, institutional
oversight of its operations and programs. Specifically, the Board's short
history is dominated by management conflicts, failures, and inefficiencies
that have resulted in the Board's applying its scarce staffing and funding
resources to programs and activities that have provided little benefit while
its primary investigative mission has faltered. In the short term,
institutional oversight could assist the Board in developing sound policies
and procedures and in ensuring they are developed and implemented in a
timely fashion. Such assistance could help address a serious
shortcoming--the lack of a basic administrative infrastructure, including
policies and procedures to guide staff--that has contributed to the Board's
problems and which still remains. In the longer term, ongoing institutional
oversight could help ensure that the Board's policies and procedures are
being implemented and that the Board's operations are efficient and
effective. In addition, with institutional oversight, the Board could obtain
guidance and assistance on sensitive matters, such as those that have arisen
from its governance conflicts.

For example, the Board sought inspector general assistance on its own
initiative, in part because it recognized that an investigation into alleged
irregularities relating to an interagency acquisition agreement accepted by
the former Chairman and the former Chief Operating Officer needed to be
independent in both appearance and fact.21 Specifically, in December 1999,
the Board requested assistance from DOE's Inspector General to resolve
problems it was experiencing with DOE for work to be performed by DOE's Oak
Ridge National Laboratory under an interagency acquisition. The issues
included billing discrepancies and the potentially inappropriate use of an
interagency agreement to acquire goods and services.22 However, the DOE
Inspector General declined to conduct an investigation to address the
Board's allegations, primarily because the agency's officials determined
that the Board's allegations did not indicate wrongdoing or fraud on the
part of DOE or its contractors. Rather, the DOE Inspector General believed
that the Board's allegations indicated poor project management oversight of
the contractor and potentially the inappropriate use of an interagency
acquisition--problems stemming from the Board's actions rather than from DOE
or its contractors.

To provide on-going, institutional oversight of its operations and programs,
the Board could adopt one of several approaches. For example, the Board
could establish an in-house audit and investigations unit, contract out for
evaluations of its operations and programs, or obtain the services of an
existing office of inspector general. While the first two options may be
appropriate in some cases, we do not believe either is appropriate for the
Board for several reasons.

An in-house unit does not appear practical because of, among other things,
the continuing management conflicts at the Board that could hamper the
effectiveness of this unit and the limited staffing that would reasonably be
allocated to this function at an agency of this size. While a very small
unit could potentially provide needed oversight of the Board, we believe
benefits would be better ensured with a larger staff of varied expertise.
Such benefits could also be achieved by contracting out the audit and
investigative function. However, considering the Board's past contracting
problems, the numerous priorities the Board is trying to accomplish to
demonstrate it is a viable agency, and the limitations of contracting both
in terms of audit independence and the potentially limited duration of the
contracting relationship, we do not believe this approach offers the optimal
way for the Board to obtain institutional oversight.

Obtaining the services of an established office of inspector general offers
several important advantages over in-house or contracted audit and
investigative support, provided that the arrangement is appropriately
structured. First, of the three options, this approach offers the potential
for the greatest degree of audit independence from the Board. In addition,
this approach would allow the Board to benefit from the varied expertise of
staff at an existing office of inspector general. While maintaining
objective independence, such staff are to accomplish the mission of these
offices by (1) conducting and supervising audits and investigations of
programs and operations and (2) providing leadership and coordination and
recommending policies to promote economy, efficiency, and effectiveness and
to prevent and detect fraud and abuse. In addition, offices of inspector
general offer a continuity of oversight over time, and they are required to
keep agency heads and the Congress informed about problems and deficiencies
existing at the agencies--important aspects that contracting may not
provide.

We recognize that the Board would likely have to allocate funding to
reimburse an office of inspector general for oversight services. Given the
problems that have arisen in the Board's 2-1/2 years of operation, however,
we believe that such funding is appropriate. Funding may be available from
the information technology savings the Board has identified, and the Board
can include an allocation for inspector general oversight in its budget
requests.

General Model

While we believe the use of an existing office of inspector general offers
the best potential for effective institutional oversight, we recognize that
this approach could also have serious limitations if it is not structured,
for example, to give the inspector general the authority to initiate audits.
In this regard, the Board can benefit from the experience of NTSB--the
agency that provided the organizational model for the Board. Like the Board,
NTSB does not have a designated inspector general to provide institutional
oversight. However, NTSB has had agreements with the Office of the Inspector
General of both the General Services Administration (GSA) and Department of
Transportation (DOT) to provide oversight assistance. According to the DOT
Inspector General, these agreements allowed NTSB to request specific
assistance from these offices but did not allow the Inspector General to
initiate work, follow up on agency responses to its reports, or provide a
hotline for agency staff to report allegations of fraud, waste, or abuse.

The DOT Inspector General has indicated that these limitations in inspector
general oversight may have contributed to recent cases in which NTSB
employees forged records and embezzled funds. For example, NTSB employees
had raised concerns to the Chief Financial Officer that users of a financial
system were not complying with internal controls, but the Chief Financial
Officer did not take appropriate steps to address the problems they had
identified. If NTSB had had an institutional oversight organization, the
employees who reported irregularities to the Chief Financial Officer would
have had an in-house channel (a hotline) to pursue. In addition, a prior GSA
Inspector General report had identified internal control weaknesses that,
had they been corrected, could have prevented the embezzlement. However,
NTSB did not implement them. According to the DOT Inspector General, the
likelihood of NTSB taking effective corrective action would have been
greater if the GSA Inspector General had been in a position to follow up on
its audit results.

A House bill (H.R. 2910) passed in September 1999 contains a provision
addressing institutional oversight of NTSB.23 Specifically, it would give
the DOT Inspector General the authority to oversee the financial management
and business operations of NTSB, including internal accounting and
administrative control systems, to determine compliance with federal laws,
rules, and regulations. Under the bill, NTSB would reimburse the inspector
general for the costs associated with carrying out these activities. In
testimony before the Congress, NTSB stated that it strongly favors having
the ability to resort to independent, expert assistance as a means of
quality assurance and improved performance, and the DOT Inspector General
agreed that institutional oversight of the NTSB is appropriate.

Given the small size of the Board and the fact that it could benefit from
timely and ongoing institutional oversight, an approach similar to the one
being considered for NTSB appears to be appropriate for the Board as well.
That is, an existing office of inspector general could provide the Board
with timely and necessary oversight, rather than a separate office of
inspector general for the Board, which would have to be created.24
Furthermore, benefiting from the NTSB experiences, the designated office of
inspector general could be structured to provide the inspector general with
the authority to initiate audits and investigations; provide a hotline for
reporting fraud, waste or abuse; follow up on agency responses to its
recommendations; and report to the agency head and the Congress on existing
problems and deficiencies at the Board.

In terms of possible offices of inspector general to assume this role, one
option would be the Department of the Treasury's Office of the Inspector
General because the Board currently is contracting with Treasury's Bureau of
the Public Debt for various support services. According to Board officials,
however, the Department of the Treasury's Office of Inspector General has
told the Board that it was not interested in providing hotline services to
the Board. Other options include, but are not limited to, the Offices of
Inspector General at the Federal Emergency Management Agency, EPA, and DOT.

The Board's initial steps since the management realignments in December 1999
and January 2000 appear to be appropriately targeted to addressing the
problems that we identified in April 1999. The priorities the Board has
established for fiscal year 2000, including the hiring of six qualified
investigators and the completion of three investigative reports, are
critical ones that the Board must accomplish to demonstrate that it is a
viable agency capable of accomplishing its important safety mission in an
efficient and effective manner. The Board's unique chemical safety mission
must be accomplished by persuasion rather than through regulatory or legal
powers. It is therefore incumbent upon the Board to develop and consistently
use policies and procedures that can help ensure objectivity and
thoroughness. If the Board is perceived as being either biased or incomplete
in its investigative work, its effectiveness will be diminished or even
lost. The Board could better ensure objectivity if it had clear policies and
procedures addressing issues such as potential conflicts of interest,
substantive disagreements among investigation team members, the minority
views of Board members, requests for reconsidering aspects of issued
reports, and the nature and extent of external peer review that is to be
obtained and the identification of such reviews in its investigative
reports.

On-going, institutional oversight by an existing inspector general could
enhance the Board's ability to carry out its mission and better protect the
government's financial interests. The Board is clearly at risk for fraud,
waste, and abuse, as evidenced by its contracting expenditures of limited
value, lack of basic policies and procedures, poor productivity, and
governance and management conflicts. NTSB's experience suggests that such
oversight would be most effective if a designated inspector general for the
Board had the authority to initiate investigations, follow up on them, and
provide a hotline to report any allegations of suspected fraud, waste, or
abuse.

We recommend that the Board develop and implement clear policies and
procedures on potential conflicts of interest and consider other policies
and procedures that would further promote investigative impartiality and
thoroughness, such as ensuring substantive disagreements among investigative
team members are appropriately identified and addressed, the reporting of
minority views of Board members in investigative reports, the handling of
requests for reconsideration of aspects of issued reports, and external peer
review.

To provide the Board with the benefits of independent institutional
oversight and to protect the government's financial interests, we recommend
that the Board develop an agreement with an existing office of inspector
general, giving that office the authority to investigate the Board's
operations and programs, monitor agency responses to its recommendations,
report to the Board and the Congress about weaknesses and deficiencies, and
provide a hotline to report instances of suspected fraud, waste, or abuse.
We further recommend that the Board notify the Congress in the event that it
is unable to negotiate an agreement for these services with an existing
inspector general.

To review the status of the Board's efforts to carry out its mission, we
reviewed documents supplied by the Board related to its organization,
planning, and budgeting; policies and procedures; programs; personnel data;
and contract files. We also interviewed Board employees, including Board
members, attorneys, investigators; and officials from stakeholder
organizations, including the Chemical Manufacturers Association, the
American Petroleum Institute, and the Center for Chemical Process Safety. To
report on the Board's procedures aimed at ensuring the objectivity of its
investigative activities, we reviewed the Board's interim investigative
protocol and held discussions with Board members and the investigative
staff. We also reviewed the investigative policies and procedures of other
agencies that conduct similar investigations, including the National
Transportation Safety Board, the Nuclear Regulatory Commission, the
Department of Energy, and the Environmental Protection Agency.

Our examination of whether the Board would benefit from independent
oversight of an inspector general relies, to a great extent, on the results
of this review of the Board as well as our earlier review in 1999. We also
examined the experience of NTSB in obtaining institutional oversight.

We conducted our work from January through June 2000 in accordance with
generally accepted government auditing standards.

We provided a draft copy of this report to the Board for its review and
comment. In commenting on the report, Board officials agreed with both of
our recommendations, stating that the observations and recommendations in
the report will help to strengthen the Board's operations. However, the
Board believed it needed to clarify that the problems cited in the report
were the result of the prior Chairman's tenure and that the decisions and
actions were made under his sole authority. The report clearly identifies
the relevant dates or time periods associated with the operational
activities discussed in the report and with the Board's organizational
changes, including the former Chairman's resignation as Chair. For example,
we point out that prior to the management realignments in December 1999 and
January 2000 and the establishment of contracting policies and procedures in
December 1999, contracting actions were the responsibility of the former
Chairman and the former Chief Operating Officer, and the other Board members
did not have a role in reviewing or approving contracts. Accordingly, we
believe our report's discussion of these matters was fair and complete.

In addition, the Board stated that there is no on-going "governance"
disagreement because the governance structure--based on majority
voting--that has been in place since January 2000 is in compliance with the
statutory interpretations of both its General Counsel and of the Justice
Department. The opinion of the Justice Department was issued on June 26,
2000, after we had provided our draft report to the Board. We have revised
our report to reflect this Justice Department opinion and to distinguish
between governance conflicts and ongoing disagreements between three of the
Board members and the former Chairman about the management of the Board. The
Board's comments are provided in appendix I.

We are providing copies of this report to interested congressional
committees; the Chemical Safety and Hazard Investigation Board; and other
interested parties. Copies will also be made available upon request.

If you have any questions about this report, please contact me at (202)
512-6111. Individuals making key contributions to this report included
Gregory P. Carroll, Harriet Drummings, Christine Fishkin, and Richard P.
Johnson.

David G. Wood
Associate Director,
Environmental Protection
Issues

Comments From the Chemical Safety and Hazard Investigation Board

(160511)

Table 1: The Board's Current and Projected Staffing Levels, by
Functional Office, as of June 15, 2000 10
  

1. Chemical Safety Board: Realigned Management Faces Serious Challenges
(GAO/T-RCED-147 , Apr. 12, 2000).

2. In 1999, the Board compiled statistics from five federal databases; these
statistics indicated that about 60,000 chemical incidents occur each year,
resulting in about 2,300 injuries and more than 100 deaths. However, the
Board recognizes that these statistics have serious limitations and is
developing a plan to determine a more reliable estimate.

3. The Board did not become operational until 1998 because of funding
constraints.

4. Chemical Safety Board: Status of Implementation Efforts
(GAO/T-RCED-99-167 , Apr. 29, 1999).

5. On November 16, 1999, the Board members sent a letter to the
appropriations committees to state their reservations about the budget
request and ask that the Chairman's request be disregarded.

6. The former Chairman told us that he did not agree with the Board members'
assertion that they were denied access to contracting files.

7. The former Chairman told us that prior to the November 1999 letter, he
sought assistance from White House officials to help resolve the matter. The
officials referred him to Justice's Office of Legal Counsel.

8. On December 1, 1999, Senator Lautenberg sent a letter to the Board
stating that his understanding of the statute creating the Board was that it
intended the Board as a whole to direct and approve the executive and
administrative functions performed by the chairperson.

9. The Board's budget request for fiscal year 2000 was $12.5 million.
However, the Congress provided $8 million. This amount does not support the
planned staffing growth to 60 staff.

10. The position that will become available when this investigator resigns
is not included as one of the six vacancies discussed above.

11. To date, the Board has made 28 recommendations aimed primarily at
encouraging industry and government agencies to upgrade safety procedures,
training, and the communication of hazards. Fourteen of the recommendations
have been agreed to and/or implemented; 10 are no longer applicable because
they are directed to a company that did not resume manufacturing operations
following the accident; and 4 remain open.

12. 42 U.S.C. 7412(r)(6).

13. Although the Clean Air Act does not mandate the Board to enter into a
similar agreement with EPA, the Board did so in 1999.

14. Board officials said that they determined that NTSB was not going to
investigate this accident before they undertook the review.

15. Information as of March 2000. Contracts for office space or telephone
charges are not included.

16. This information system was developed by the Department of Energy's Oak
Ridge National Laboratory under an interagency acquisition agreement between
the Board and the Department.

17. Chemical Safety Board: Status of Implementation Efforts
(GAO/T-RCED-99-167 , Apr. 29, 1999).

18. The National Response Center serves as the sole national point of
contact for reporting all oil, chemical, radiological, biological, and
etiological discharges into the environment anywhere in the United States
and its territories. It also maintains agreements with a variety of federal
entities to make additional notifications regarding incidents meeting
established trigger criteria.

19. As noted earlier, a House conference committee report directed the Board
to complete its investigative protocol by December 31, 1999.

20. We reviewed the investigative protocols of the National Transportation
Safety Board, the Department of Energy, and the Nuclear Regulatory
Commission and a draft Environmental Protection Agency/Occupational Safety
and Health Administration investigative guide.

21. Board officials also told us they did not have the resources internally
to pursue the matter.

22. As of June 2000, $2.3 million has been obligated under this agreement,
referred to as a work-for-others agreement, entered into in fiscal year
1998.

23. The related Senate bill, S. 2412, was reported out of the Committee on
Commerce, Science and Transportation in June 2000 with a similar provision.

24. The Congress has created separate offices of inspector general for some
small agencies and boards, including the Federal Housing Finance Board, the
Federal Labor Relations Authority, and the Federal Maritime Commission.
*** End of document. ***