Managing for Results: EPA's Efforts to Implement Needed Management
Systems and Processes (Letter Report, 06/18/97, GAO/RCED-97-156).

Pursuant to a congressional request, GAO reviewed the status of the
Environmental Protection Agency's (EPA) efforts to: (1) establish a new
office that would develop and implement an integrated planning,
budgeting, and accountability system for the agency; and (2) ensure that
the agency has comprehensive scientific and environmental data and
appropriate environmental measures of progress for use in strategic
planning, budgeting, and accountability. GAO also reviewed EPA's
previous efforts to implement this type of system and identified
elements of an effective system that could be used as benchmarks to
gauge progress in this current effort.

GAO noted that: (1) in January 1997, the EPA Administrator approved the
organizational structure and staffing for a new office, called the
Office of Planning, Analysis, and Accountability, which is responsible
for developing and implementing an integrated planning, budgeting and
accountability system; (2) earlier, in March 1996, EPA had established a
work group, composed of employees on temporary assignment, to begin
developing the new system; (3) although the work group was never fully
staffed and made limited progress in developing the system, it developed
a conceptual framework that the new office is beginning to implement;
(4) members of the work group were temporarily assigned to the new
office, which will not be fully staffed before July 1997; (5) EPA faces
long-term challenges to obtain the scientific and environmental
information needed to fully support its new system; (6) although much
scientific and environmental information has already been collected,
many gaps exist, and the data are often difficult to compile because
different data collection methods have been used; (7) likewise, much
effort is still needed to identify, develop, and reach agreement on a
comprehensive set of environmental measures to link the agency's
activities to changes in human health and environmental conditions; (8)
currently, EPA has to rely mainly on administrative measures, such as
the number of permits issued or inspections made, to measure its
performance or success; (9) EPA has been trying since the early 1970's
to revise its management systems to better manage for results; (10) in
the early 1990's, for example, EPA announced a strategic planning,
budgeting, and accountability effort that was very similar to the system
being proposed today; (11) however, such efforts proved to be difficult
and fell short of EPA's expectations; (12) EPA's current plans are no
less complex and challenging; (13) given this complexity, GAO identified
various elements of an effective planning, budgeting, and accountability
system that EPA can use as benchmarks to monitor its progress as it
works to implement its plans for an integrated system; (14) these
elements describe organizational, informational, and procedural
capabilities needed to improve and integrate EPA's management processes;
and (15) EPA also needs performance partnership agreements with the
states to set out expectations for their contributions to meeting
national environmental and agencywide goals and to specify measures for
assessing their performance.

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

 REPORTNUM:  RCED-97-156
     TITLE:  Managing for Results: EPA's Efforts to Implement Needed 
             Management Systems and Processes
      DATE:  06/18/97
   SUBJECT:  Environmental monitoring
             Strategic information systems planning
             Federal agency reorganization
             Accountability
             Management information systems
             Agency missions
             Federal/state relations
             Mission budgeting
             Data integrity

             
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Cover
================================================================ COVER


Report to Congressional Requesters

June 1997

MANAGING FOR RESULTS - EPA'S
EFFORTS TO IMPLEMENT NEEDED
MANAGEMENT SYSTEMS AND PROCESSES

GAO/RCED-97-156

EPA's Planning, Budgeting, and Accountability System

(160359)


Abbreviations
=============================================================== ABBREV

  EPA - Environmental Protection Agency
  GAO - General Accounting Office
  GPRA - Government Performance and Results Act of 1993
  NAPA - National Academy of Public Administration
  OPAA - Office of Planning, Analysis, and Accountability

Letter
=============================================================== LETTER


B-276608

June 18, 1997

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

The Honorable Jerry Lewis
Chairman, Subcommittee on VA, HUD,
 and Independent Agencies
Committee on Appropriations
House of Representatives

For over a decade, internal and external studies have called for the
Environmental Protection Agency (EPA) to "manage for environmental
results" as a way to both improve and better account for its
performance.  To implement this type of management, EPA must
establish goals and objectives identifying the improvements in
environmental conditions that it is seeking, develop strategies and
allocate resources to achieve these goals and objectives, and assess
and report the results achieved.  A 1995 study by the National
Academy of Public Administration (NAPA) recommended a series of steps
for EPA to take to manage for results, including actions to improve
and integrate its processes for planning, budgeting, and ensuring
accountability.\1

In March 1996, EPA responded to NAPA's recommendations by announcing
its plans to create a new office that would develop and implement an
integrated planning, budgeting, and accountability system for the
agency.  Because of your continued interest in how EPA sets its
priorities and plans its environmental activities, you asked us to
review the status of EPA's efforts to (1) establish the new office
and develop and implement an integrated system and (2) ensure that
the agency has comprehensive scientific and environmental data and
appropriate environmental measures of progress for use in strategic
planning, budgeting, and accountability.\2 In addition, you asked us
to discuss EPA's previous efforts to implement this type of system
and identify elements of an effective system that could be used as
benchmarks to gauge progress in this current effort. 


--------------------
\1 Setting Priorities, Getting Results:  A New Direction for EPA,
NAPA (Apr.  1995). 

\2 The preliminary results of our review of these issues were
reported to the Subcommittees on VA, HUD, and Independent Agencies,
Senate and House Committees on Appropriations in Managing for
Results:  EPA's Efforts to Implement Needed Management Systems and
Processes (GAO/T-RCED-97-116, Apr.  8, 1997, and GAO/T-RCED-97-133,
Apr.  15, 1997). 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

In January 1997, the EPA Administrator approved the organizational
structure and staffing for a new office--called the Office of
Planning, Analysis, and Accountability--which is responsible for
developing and implementing an integrated planning, budgeting, and
accountability system.  Earlier, in March 1996, EPA had established a
work group, composed of employees on temporary assignment, to begin
developing the new system.  Although the work group was never fully
staffed and made limited progress in developing the system, it
developed a conceptual framework that the new office is beginning to
implement.  Members of the work group were temporarily assigned to
the new office, which will not be fully staffed before July 1997. 

EPA faces long-term challenges to obtain the scientific and
environmental information needed to fully support its new system. 
Although much scientific and environmental information has already
been collected, many gaps exist, and the data are often difficult to
compile because different data collection methods have been used. 
Likewise, much effort is still needed to identify, develop, and reach
agreement on a comprehensive set of environmental measures to link
the agency's activities to changes in human health and environmental
conditions.  Currently, EPA has to rely mainly on administrative
measures, such as the number of permits issued or inspections made,
to measure its performance or success. 

EPA has been trying since the early 1970s to revise its management
systems to better manage for results.  In the early 1990s, for
example, EPA announced a strategic planning, budgeting, and
accountability effort that was very similar to the system being
proposed today.  However, such efforts proved to be difficult and
fell short of EPA's expectations.  EPA's current plans are no less
complex and challenging.  Given this complexity, we identified
various elements of an effective planning, budgeting, and
accountability system that EPA can use as benchmarks to monitor its
progress as it works to implement its plans for an integrated system. 
These elements describe organizational, informational, and procedural
capabilities needed to improve and integrate EPA's management
processes.  For example, EPA needs comprehensive data on health and
environmental risks and a process to compare these risks across
environmental problems and programs.  EPA also needs performance
partnership agreements with the states to set out expectations for
their contributions to meeting national environmental and agencywide
goals and to specify measures for assessing their performance. 


   BACKGROUND
------------------------------------------------------------ Letter :2

NAPA's April 1995 report recommended, among other things, that EPA
establish specific environmental goals and strategies to attain them,
use comparative risk analyses to inform the selection of priorities
and the development of specific program strategies, consolidate the
planning and budgeting functions, use the budget process to allocate
resources to the agency's priorities, and establish accountability by
setting and tracking benchmarks and evaluating performance. 

NAPA's recommendations on setting goals and objectives and ensuring
accountability for meeting them are similar to the requirements for
federal agencies established by the Government Performance and
Results Act of 1993 (GPRA).  Under GPRA, agencies are to develop
strategic plans by September 30, 1997.  In addition, agencies are to
submit to the Office of Management and Budget annual performance
plans, including annual performance goals and performance measures. 
The first annual performance plans are to be submitted in the fall of
1997 for fiscal year 1999.  Agencies are also required to submit
annual performance reports to the President and the Congress on the
extent to which their programs are meeting annual performance goals. 
The act requires the first performance reports, which are to cover
fiscal year 1999, by March 31, 2000.  In establishing these planning
and performance reporting requirements, GPRA did not specify the
management processes that the individual agencies are to use to
implement them. 

In response to NAPA's recommendations, EPA created a task force in
July 1995 to identify ways to improve and better integrate its
processes for planning, budgeting, and ensuring accountability.  The
task force's February 1996 report recommended a major restructuring
of these processes into a "strong, centrally managed" system.  The
recommended system was envisioned to provide for (1) the more
consistent and comprehensive use of science and analysis in setting
the agency's priorities and (2) greater management and fiscal
accountability for implementing programs and activities according to
budgets and operating plans. 

In March 1996, the EPA Administrator and Deputy Administrator
directed the agency to implement the task force's recommendations. 
They announced plans to create a new office by January 1997 to
develop and implement the integrated planning, budgeting, and
accountability system proposed by the task force.  In the interim,
EPA established the Planning, Budgeting, Accountability, and Analysis
Work Group composed of employees on temporary assignment, to begin to
develop the new system. 


   EPA'S NEW OFFICE IS BEING
   FORMED TO DEVELOP AN INTEGRATED
   SYSTEM
------------------------------------------------------------ Letter :3

Although approved by the Administrator in January 1997, EPA's new
Office of Planning, Analysis, and Accountability will not be fully
staffed until July 1997.  The Planning, Budgeting, Accountability,
and Analysis Work Group began to develop the new system in March
1996, and its staff has been detailed to the new office until
permanent employees are selected.  However, the work group was not
fully staffed, and much of its time was devoted to preparing the
strategic plan due under GPRA by September 30, 1997.  Given this
level of staffing and focus on meeting the requirements of GPRA, EPA
has made progress in designing an integrated system but has not yet
implemented all the needed processes and procedures. 


      STAFFING THE NEW OFFICE
---------------------------------------------------------- Letter :3.1

The Office of Planning, Analysis, and Accountability, which is
located in the Office of the Chief Financial Officer, is authorized
47 employees.\3 (An organizational chart for the Office of the Chief
Financial Officer is shown in fig.  1.)

   Figure 1:  Organizational Chart
   for EPA's Office of the Chief
   Financial Officer

   (See figure in printed
   edition.)

As of May 1997, EPA had filled 17 of the new positions--16 from
within EPA and 1 from outside the agency.  The remaining positions
are anticipated to be filled by July 1997.  The Acting Chief
Financial Officer told us that staffing could not begin until the
Administrator had approved the plans for the office.  In addition,
time is required to select staff using a competitive selection
process. 

After its formation in March 1996, the Planning, Budgeting,
Accountability, and Analysis Work Group began to develop the new
planning, budgeting, and accountability system.  The work group's
staff, who were detailed to the Office of Planning, Analysis, and
Accountability until the permanent staff could be selected, have
devoted much of their effort to preparing the strategic plan that
GPRA requires by September 30, 1997.  Although the work group was to
have 40 to 50 temporary employees assigned from other parts of EPA,
it has had no more than 27 employees assigned at any one time. 
Currently, 10 of the work group's members remain on detail to the
Office of Planning, Analysis, and Accountability.  According to the
Acting Chief Financial Officer, the work group had to compete with
other high-priority activities for staff. 


--------------------
\3 As part of the reorganization creating the Office of Planning,
Analysis, and Accountability, EPA's budget and financial divisions in
the Office of Administration and Resource Management were moved to
the Office of the Chief Financial Officer.  The Budget Division was
made responsible for both the annual planning and budgeting processes
because of their close link under EPA's new system.  The Chief
Financial Officer reports to the Administrator. 


      DEVELOPING AN INTEGRATED
      SYSTEM
---------------------------------------------------------- Letter :3.2

Because of the work group's staffing level and focus on meeting
GPRA's deadlines, EPA is in the early stages of developing an
integrated system.  EPA has a conceptual framework for the new system
and has begun to develop the individual components.  The agency is
reviewing its former accountability process to find out what did and
did not work well, contacting other federal agencies to determine how
they account for progress in meeting their goals, and examining
reporting systems in the agency's program offices to identify their
potential use in the new system.  EPA hopes to have the
accountability component in place by September 1999. 

EPA is also preparing the strategic plan that is to be completed in
September 1997.  On April 25, 1997, the agency provided the Congress
with a detailed outline of the plan, including a draft of its mission
statement and goals.  It provided its draft objectives on May 21,
1997.  The Congress is scheduled to receive a complete draft of the
plan for review and consultation in July 1997.  Once the strategic
plan is completed, the development of the new budgeting component
will begin.  According to EPA officials, the agency plans to seek
approval from the Office of Management and Budget and the Congress to
restructure its fiscal year 1999 budget along the lines of the goals
in the strategic plan.  (A more detailed discussion of the framework
and the status of EPA's implementation of the system is contained in
app.  I.)


   EPA FACES INFORMATION
   CHALLENGES TO IMPLEMENT ITS NEW
   SYSTEM
------------------------------------------------------------ Letter :4

EPA's new planning, budgeting, and accountability system depends on
the availability of credible information to identify environmental
problems, establish priorities among competing needs, develop
effective strategies to achieve goals and objectives, and assess
progress or performance in meeting the goals and objectives. 
Although EPA continues to make improvements, the environmental data
that it compiles have substantial shortcomings, including gaps and
inconsistencies in quality.  In addition, the agency's information
systems are not integrated. 

To evaluate the impact of its programs on the environment and
determine whether they are achieving the desired results, EPA will
need a comprehensive set of environmental measures.  Although the
agency's efforts to develop such measures have been valuable,
focusing these and future efforts could enable EPA to more
effectively address scientific and technical obstacles and reach
agreement with the states on the measures that will be used to assess
their performance in carrying out environmental programs at the local
level. 


      SHORTCOMINGS IN EPA'S
      ENVIRONMENTAL DATA AND
      SYSTEMS
---------------------------------------------------------- Letter :4.1

The need to assess EPA's performance in terms of changes in
environmental conditions substantially increases the demand for
high-quality environmental data.  Such data are also needed to
identify and respond to emerging problems before significant damage
is done to the environment.  Although EPA has tried to improve the
quality of its data, these data are often unreliable, and the
agency's many disparate information systems are not integrated. 
These shortcomings have been raised in various external and internal
reports on EPA, including the Vice President's report on reinventing
government.\4

In its April 1995 report, NAPA identified the lack of high-quality
data on environmental conditions as a particularly important problem
for EPA.  NAPA specifically noted the limited amount of information
based on the real-time monitoring of environmental conditions.  NAPA
also concluded that much remains to be done to improve the agency's
overall management of environmental information.  It noted that EPA
had numerous information systems and that the agency's program
offices, which are responsible for their own data, use different
methods and definitions to gather data.  In addition, EPA relies on
data compiled by other federal agencies and the states.  According to
NAPA, these agencies and the states also use divergent methods of
collecting data. 

More recently, a 1996 EPA report concluded that the agency needs to
redesign its many disparate fiscal and environmental data systems so
that it and others can measure its success in meeting environmental
goals and can determine the costs of doing so.\5 The difficulty EPA
has had in demonstrating its performance or the impact of its actions
is illustrated by the findings of a team of agency personnel, which
was formed in 1995 to evaluate the agency's needs for environmental
information.  The team identified various problems with the
information needed to report on environmental goals, such as gaps in
the data and inconsistencies in the methods of collecting and/or
reporting data across states or federal agencies.  Specific examples
include the lack of (1) national reporting on risk reduction at waste
sites, (2) reliable data on the nature and cause of pesticide
poisonings, (3) effective reporting on progress in improving the
nation's water quality, and (4) complete data on air pollutants.\6


--------------------
\4 Reinventing Environmental Regulation, National Performance Review
(Mar.  16, 1995). 

\5 Managing for Results, EPA's Planning, Budgeting, and
Accountability Task Force (Feb.  23, 1996). 

\6 The Paperwork Reduction Act of 1995 and the Clinger-Cohen Act of
1996 establish an investment framework for having agencies better
plan and manage their technology efforts and link these efforts
directly to the achievement of their programs' goals and missions. 
If successfully implemented, these acts hold a key to ensuring that
agencies put systems in place to collect needed performance data. 


      NEED TO FOCUS EPA'S EFFORTS
      TO DEVELOP ENVIRONMENTAL
      MEASURES
---------------------------------------------------------- Letter :4.2

Although EPA and state officials recognize that measures of
activities are still needed, they believe that environmental measures
are more useful for assessing programs' performance and for informing
the public about environmental conditions.  However, they understand
that scientific and technical issues have to be addressed before EPA
can widely use indicators of environmental conditions and trends. 
Greater use of these measures also depends on agreement with the
states--EPA's partners in implementing environmental
programs--specifying the measures that will be used to assess their
performance. 

EPA and the states have various efforts under way to develop and use
environmental measures.  According to EPA officials, these efforts
have been valuable but disparate.  Furthermore, at a conference
convened by EPA in September 1996 to better coordinate these efforts,
as well as in interviews conducted by EPA staff to prepare for the
conference, regional and state representatives cited several
concerns.  They said, for example, that (1) clarification is needed
on EPA's and the states' direction in developing indicators; (2) some
qualities of a good indicator are not well understood; and (3) in
some cases, determining whether the best indicators have been chosen
will take many years.  The representatives also believed that the
data and resources needed to develop and use environmental indicators
are inadequate.  Focusing these disparate efforts could enable EPA to
better address (1) scientific and technical issues associated with
developing measures and (2) the states' concerns about the
appropriate measures to use. 

A major technical challenge in developing and using environmental
measures is to be able to scientifically establish a direct
cause-and-effect relationship between a program's activities and
changes in environmental conditions.  This relationship is especially
difficult to establish because factors beyond a program's control,
such as changes in weather patterns and economic conditions, can
substantially affect environmental conditions.  Furthermore, the data
needed to understand these relationships can be extensive.  Another
challenge is having sufficient monitoring data available to document
trends or changes in the environment.  In many cases, data or
indicators are not available for a specific aspect of the environment
because of high costs or technical difficulties.  Thus, it will be
some time before EPA is able to develop and use a set of
environmental indicators that accurately and comprehensively reflect
the impact of its programs or their results.\7

Reaching agreement within EPA and among the states and the agency's
other stakeholders on the specific environmental indicators to use
will also be a challenge.  A consensus may be difficult to achieve
because of the potential for disagreement about what should be
measured and whether a relatively small number of measures can
adequately reflect the effects of an agency's or a program's
activities.  For example, EPA will need a set of measures common to
all the states to report to the Congress and the public on the
agency's performance and the condition of the nation's environment. 
At the same time, the development of national measures, to the extent
that such measures drive the implementation of environmental
programs, will reduce the states' flexibility to tailor the programs
to meet local needs and conditions, a major concern of the states. 
Reporting on new measures will also increase the states' costs unless
other reporting requirements are eliminated or reduced. 

EPA is working with the states to develop a set of core performance
measures, including some environmental indicators, that the agency's
regional offices are to use in negotiating annual work plans and
performance partnership agreements with the states.\8 The core
measures are to be focused and limited in number, representing
measurable priorities for each of EPA's national program managers. 
They are to serve as the minimum measures in performance agreements
with the states, which may develop additional measures to represent
their own environmental or programmatic issues.  In addition, a
particular core measure may not be required if a state can
demonstrate that the measure does not apply or cannot be addressed. 

According to EPA, its national program managers finalized their core
measures in April 1997, and its regional staff began negotiations
with the states to incorporate these measures into the performance
partnership agreements for fiscal year 1998.  However, because of
various state concerns, the core measures were issued as interim
measures and stamped as "draft" to permit work to continue on the
measures while negotiations on the partnership agreements take place. 
For example, the environmental commissioners of the New England
states have expressed to EPA their opposition to making any national
indicator or core performance measure mandatory.  It is too soon to
know how extensively EPA's regional offices will be negotiating
measures that reflect the direct effects of programs on human health
and the environment. 

According to Office of Planning, Analysis, and Accountability
officials, additional efforts to develop environmental measures are
needed, but the key is to find the right balance of environmental and
activity measures.  The officials said that environmental measures
can be costly to develop and use because they require so much
environmental information.  In their view, activity measures may be
the only available or appropriate measures for some programs or
activities. 


--------------------
\7 Our report Managing for Results:  Analytic Challenges in Measuring
Performance (GAO/HEHS/GGD-97-138, May 30, 1997) discusses in more
detail the analytic and technical challenges that EPA and other
federal agencies are experiencing as they try to measure their
programs' performance under GPRA. 

\8 EPA enters into performance partnership agreements with states
that are participating in the National Environmental Performance
Partnership System.  This new system of federal oversight for state
environmental programs, which is being established under a 1995
agreement with state leaders, places greater emphasis on the use of
environmental goals and performance indicators and provides
opportunities for reducing EPA's oversight of state programs that
exhibit high performance in certain areas.  About half the states
have signed performance partnership agreements to participate in the
system. 


   PREVIOUS EPA EFFORTS SUGGEST
   THAT EXPECTATIONS OR BENCHMARKS
   ARE NEEDED TO GUIDE SYSTEM'S
   IMPLEMENTATION
------------------------------------------------------------ Letter :5

For EPA, revising its management processes to implement an integrated
planning, budgeting, and accountability system that will enable it to
manage for environmental results is not easy.  According to EPA
officials, implementing the system as currently planned is a major
challenge that could take several years to complete.  This is also
not the first time that the agency has tried to develop and implement
such a system.  EPA's attempts to develop and use environmental
measures go back to 1974, and when we performed our general
management review of the agency in 1988, we reported that one of its
major management goals emphasized managing for measurable
environmental results.\9

In a March 1990 response to our report, EPA said that the new
Administrator had made managing for environmental results a major
policy and operational focus for the agency and was initiating a
strategic planning, budgeting, and accountability effort to improve
the agency's ability to protect human health and the environment. 
The goals of that effort were very similar to those of the system
being proposed today. 

Given the complexity of the task and time likely needed to fully
implement the proposed new system, it is important for EPA to
identify the processes, organization, and information that the system
will need to work effectively when implemented.  These elements can
be used as benchmarks to help guide the development of the system and
to monitor the progress of its implementation.  Over time, support
for fully implementing the system may be eroded by personnel changes
in top management or other key positions or by constraints on
resources. 

The major elements of an effective planning, budgeting, and
accountability system for EPA that we identified are shown in
appendix II.  We identified these key elements through our prior
reviews of EPA's management and programs, NAPA's report on EPA, and
various other studies, including the EPA task force's study
recommending the conceptual framework that the agency is currently
implementing.  We also considered the requirements of GPRA in
developing the system's elements.  While GPRA requires federal
agencies to set goals, measure performance, and report on results, it
does not discuss the characteristics of the management processes
needed to meet these requirements.  Thus, the specific elements that
we developed supplement GPRA's general management framework. 

We also obtained and incorporated comments on our descriptions of the
key elements from four former EPA officials who were responsible for
planning, budgeting, and/or ensuring accountability while at the
agency.\10 These former officials generally agreed with the key
elements but suggested various additions and clarifications.  We also
obtained and incorporated comments from representatives of NAPA and
EPA's Science Advisory Board.  The Board, which was established in
the Office of the Administrator to provide advice on scientific
matters, has evaluated various aspects of EPA's priority-setting and
other management systems that make use of scientific and technical
information and analyses. 

As shown in appendix II, we identified key elements for each of the
planning, budgeting, and accountability components of an effective
system.  These elements describe the organizational, informational,
and procedural capabilities that EPA needs to improve and integrate
its management processes.  For example, EPA needs to be able to
establish priorities on the basis of human health and environmental
risks.  Key elements of the planning component would include (1)
comprehensive data on risks and (2) a process to compare these risks
across environmental problems and the agency's programs.  Similarly,
the agency needs to work with the states as partners in carrying out
environmental programs.  Hence, performance partnership agreements
with the states are part of the agency's accountability component. 
These agreements would set out expectations for the states'
contributions to meeting national environmental and agencywide goals
and would specify measures for assessing the states' performance. 

In addition to the planning, budgeting, and accountability elements,
we included the elements of an effective analysis component to
reflect the importance of information and analytical capability to
the system's effectiveness.  For example, one of the elements of an
effective central planning, budgeting, and accountability office is
an analysis function to independently compile and assess relevant
information on health and environmental risks and on the performance
of programs across the agency.  Our list of elements for the analysis
component describes the environmental, risk, and performance
information needed to make decisions about planning, budgeting, and
accountability. 

In total, the key elements that we identified would provide EPA with
a structured approach for establishing direction, setting priorities,
and measuring performance.  They would aim to ensure that the agency
(1) has adequate environmental, risk, and performance data to support
decisionmakers and to inform stakeholders and (2) can link its
mission and priorities to programs' actions by setting and reporting
on its progress toward accomplishing measurable goals and objectives. 
Thus, the elements would be consistent with the plans for EPA's new
system and the requirements of GPRA. 


--------------------
\9 Environmental Protection:  Protecting Human Health and the
Environment Through Improved Management (GAO/RCED-88-101, Aug.  16,
1988). 

\10 These former EPA officials include a deputy administrator and
three assistant administrators--two for policy, planning, and
evaluation and one for administration and resource management. 


   CONCLUSIONS
------------------------------------------------------------ Letter :6

EPA is likely to need several years to develop and fully implement an
integrated planning, budgeting, and accountability system.  Even
given this much time, the agency will have difficulty obtaining the
scientific and environmental data and developing and reaching
agreement on the appropriate environmental measures of its programs'
and its own performance called for by the new system.  Furthermore,
the efforts EPA has made over the years to improve and integrate its
planning, budgeting, and accountability processes illustrate both the
importance and the difficulty of these efforts.  Given the complexity
of the efforts and the time required to complete them, clear
expectations or benchmarks for fully implementing an integrated
system would better enable the agency's management, the Congress, and
other stakeholders to monitor progress toward implementing such a
system. 


   RECOMMENDATION
------------------------------------------------------------ Letter :7

To help ensure the full implementation of the agency's plans for an
integrated planning, budgeting, and accountability system, we
recommend that the EPA Administrator, in consultation with key
stakeholders, establish expectations or benchmarks for how the new
system is to operate when fully implemented and use them to monitor
the agency's progress in implementing the system. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :8

We provided a draft of this report to EPA for review and comment. 
EPA officials, including the Acting Deputy Director of the Office of
Planning, Analysis, and Accountability, said that the report was well
done and accurately described the status of the agency's efforts to
implement the new planning, budgeting, and accountability system.  In
addition to suggesting clarifications, which we have incorporated
where appropriate, the officials noted that the ultimate success of
EPA's new system will largely depend on others, especially the
states, which primarily implement the agency's programs.  According
to the officials, in working with the states to implement the system,
the agency will face the inherent conflict between the states' desire
for flexibility and EPA's need to hold them accountable for their
performance. 

The EPA officials agreed with our recommendation and the need to
identify some measures of success for implementing the new planning,
budgeting, and accountability system--that is, some ways for them to
know whether they are progressing toward the type of system intended. 
They stated that the key elements listed in appendix II, including
the heavy involvement of stakeholders, are consistent with their
plans for implementing GPRA. 


---------------------------------------------------------- Letter :8.1

We conducted our audit work from June 1996 through May 1997 in
accordance with generally accepted government auditing standards.  A
detailed discussion of our objectives, scope, and methodology appears
in appendix III. 

As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 15 days
from the date of this letter.  At that time, we will send copies to
the EPA Administrator and other interested parties.  We will also
make copies available upon request. 

Please call me at (202) 512-6111 if you or your staff have any
questions.  Major contributors to this report are listed in appendix
IV. 

Peter F.  Guerrero
Director, Environmental
 Protection Issues


EPA'S CONCEPTUAL FRAMEWORK FOR AND
ACTIVITIES TO IMPLEMENT A NEW
PLANNING, BUDGETING, AND
ACCOUNTABILITY SYSTEM
=========================================================== Appendix I

The Environmental Protection Agency (EPA) has developed an outline,
or conceptual framework, for its new planning, budgeting, and
accountability system and has begun to develop the individual
components.\11 This appendix describes the framework and the agency's
implementation activities. 


--------------------
\11 EPA refers to its new system as the planning, budgeting,
accountability, and analysis system to highlight the greater role
planned for the use of scientific information and analysis in these
management processes. 


   EPA'S FRAMEWORK
--------------------------------------------------------- Appendix I:1

Under its new system, EPA is to (1) establish strategic or long-term
goals and objectives; (2) develop strategies to achieve the goals and
objectives; (3) identify the desired outcomes from these strategies;
(4) translate these goals, objectives, strategies, and desired
outcomes into annual goals, planned activities, and performance
measures; and (5) use the performance measures to assess the agency's
and individual programs' performance in achieving the desired
outcomes.  This information on performance is to be considered
whenever the agency's goals, objectives, and strategies are
reexamined. 

As figure I.1 shows, EPA's framework calls for the agency to first
prepare a strategic plan that defines its mission and sets out its
goals and objectives for the next 5 years or so.  This plan is also
to describe the principles and general strategies that are to be
employed to achieve the goals and objectives.  In turn, a multiyear
action plan is to be prepared for each objective in the strategic
plan, setting out, for a specific period, outcomes or results to be
achieved, ways to measure progress towards these outcomes,
alternative strategies to achieve the outcomes, the costs to EPA for
each of the strategies, and measures of costs and benefits or
cost-effectiveness for each of the alternatives. 

   Figure I.1:  General Framework
   for EPA's New Planning,
   Budgeting, and Accountability
   System

   (See figure in printed
   edition.)

Source:  EPA's Office of Planning, Analysis, and Accountability. 

Annual performance plans would then link strategic planning to annual
planning and budgeting by setting out annual performance goals and
annual measures of performance tied to strategic goals and
objectives.  These plans, which are to be developed for each
objective in the strategic plan, also describe specific activities to
be carried out during the year (outputs), specific results to be
achieved through these activities (outcomes), and the effects of
reductions or increases in available resources on outputs and
outcomes.  The annual plans, especially the sections on needed
resources, are to be the basis for preparing annual budget requests. 

The system's accountability component provides for examining actual
performance and costs against goals and objectives and cost
projections.  In addition to evaluating achievement against the
performance measures set out in the annual performance plans, EPA is
to conduct broader performance evaluations.  The results of both
types of evaluations are to be fed back into the planning and
budgeting processes and used to produce the annual performance
reports required by the Government Performance and Results Act of
1993 (GPRA) and other internal management reports on performance.\12


--------------------
\12 Over the longer term, improved financial reporting and auditing,
as required by the Chief Financial Officers Act of 1990, is to
strengthen the cost basis and reliability of performance information. 
Reporting concepts and standards developed by the Federal Accounting
Standards Advisory Board are intended to provide congressional and
other decisionmakers for the first time with annual "report cards" on
the costs, management, and effectiveness of federal agencies in order
to help strengthen federal decision-making and agencies'
accountability. 


   IMPLEMENTATION ACTIVITIES
--------------------------------------------------------- Appendix I:2

As discussed below, EPA has activities under way to develop the
planning, budgeting, and accountability components of its new system. 
Most of these efforts thus far have been directed to preparing the
strategic plan that GPRA requires by September 30, 1997. 


      PLANNING
------------------------------------------------------- Appendix I:2.1

Although EPA has experienced some delays, it plans to complete its
strategic plan by September 30, 1997, as required.  On April 25,
1997, EPA provided the Congress with an outline of its strategic
plan, including a draft of its mission statement, goals, and
strategic principles.\13 This outline is to serve as the basis for
discussion with the Congress during formal consultation on the plan. 
A list of the agency's draft objectives, which are to be measurable
statements of what EPA plans to accomplish under each goal, was
provided to the Congress on May 21, 1997.  EPA plans to give the
Congress sections of the plan as they become available rather than
waiting until they all are completed.  According to the agency's
projections, a complete draft of the plan will be available by early
July 1997. 

The Office of Planning, Analysis, and Accountability (OPAA) has
compiled a list of EPA's strategic objectives from lists of
objectives prepared by the agency's individual offices, using the
agency's draft goals.  In developing their objectives, the program
offices were directed to obtain input from states, Indian tribes,
associations, and other principal stakeholders.  According to the
Acting Deputy Director of OPAA, the office will ask these
stakeholders for their input on the mission statement, goals, and
objectives while the agency is consulting with the Congress on the
strategic plan. 

Two studies that could affect the selection of EPA's goals and
objectives are not scheduled to be completed in time for this initial
strategic plan.  One study, EPA's National Environmental Goals
Project, is being performed to establish a set of long-range national
environmental goals with realistic and measurable milestones for the
year 2005.  In January 1997, EPA made a draft of the national goals
available for "full government review," including reviews by the
legislative branch, other federal agencies, and the states.  Project
officials anticipate that the goals will be available for public
comment in late 1997 and will be issued in 1998.  The other study,
the Integrated Risk Project, is being done by EPA's Science Advisory
Board, which advises the Administrator on scientific matters.  A
draft report on the results of this study, which is being done to
rank the relative risks of environmental problems and to develop
methodologies that EPA can use to rank risks in the future, is to be
provided to other scientists and experts for peer review in August
1997.  According to EPA officials, strategic planning is an iterative
process and the plan will be updated, as appropriate, to reflect the
final results of these and other studies or factors.  The officials
said that a draft of the national goals was considered in developing
the agency's draft goals, and program offices were instructed to
consider risk and the potential for risk reduction in developing
their objectives.  According to EPA officials, the agency is
beginning to develop the data that it will need to compare risks
across programs. 

The framework for EPA's new system calls for the agency's program
offices to prepare multiyear action plans after the strategic plan is
completed and before annual performance plans are begun.  These
multiyear plans are to bridge the strategic plan and the annual
performance plans by describing for each objective in the strategic
plan the results or outcomes that are to be achieved, the methods of
measuring progress toward achieving these outcomes, and the costs of
achieving the outcomes under alternative strategies.  This
information on the outcomes, strategies, and costs associated with
achieving goals and objectives is then to be used for annual planning
and budgeting.  However, EPA officials believe that they need to
begin preparing the annual performance plans as soon as the strategic
goals and objectives are selected if the annual plans are to be
completed by September 30, 1997, as required by the Office of
Management and Budget.  According to agency officials, the
preparation of multiyear action plans, which are not required by
GPRA, will be delayed until the fiscal year 2000 planning cycle.  The
officials said that some items that would have been discussed in the
action plans may be incorporated into the strategic plan that is
currently being prepared. 

Once the strategic goals and objectives are approved by EPA
management, the program offices are to prepare annual performance
plans for fiscal year 1999.  These plans are to be prepared for each
of the objectives in the strategic plan.  OPAA is currently
developing guidance for the program offices on how these plans are to
be prepared. 


--------------------
\13 The term "strategic principles" refers to statements describing
the critical points to be considered when making decisions about
EPA's priorities and activities.  These principles--for example, an
equal focus on human health and ecological health and the use of risk
reduction as the first criterion for establishing ecological and
human health priorities--are to provide guidance to decisionmakers
and to serve as a common basis for making decisions across the
agency's programs. 


      BUDGETING
------------------------------------------------------- Appendix I:2.2

According to EPA officials, the agency plans to organize its budget,
starting with the one for fiscal year 1999, on the basis of its
strategic goals and objectives.  Under GPRA, this change has to be
negotiated with the Office of Management and Budget and the agency's
appropriations subcommittees.  EPA officials told us that they are
currently deciding how best to restructure the budget and have
discussed their views with Office of Management and Budget officials. 
Agency officials said that more than one budgeting cycle may be
needed to determine the best structure for the budget. 

GPRA requires federal agencies to use the program activities
appearing in the President's Budget as the basis for performance
planning and measurement.  This requirement aims at ensuring a
simple, straightforward link among plans, budgets, and performance
information and the related congressional oversight and resource
allocation processes.  However, program activity structures and their
suitability for planning and measurement purposes under GPRA vary
from agency to agency.  Under GPRA, agencies can consolidate,
aggregate, or disaggregate program activity structures for
performance planning purposes, where needed.  (Using this approach
requires subsequent crosswalks between performance plans and the
program activities appearing in the budget request.) Agencies may
also attempt to renegotiate program activities with their
appropriations subcommittees and the Office of Management and
Budget.\14

According to EPA officials, the ongoing strategic and annual
performance planning will influence budget decisions for fiscal year
1999.  The Office of Management and Budget will review EPA's and
other agencies' fiscal year 1999 annual performance plans when it
considers their budget requests for that year. 


--------------------
\14 In a March 1997 report, Performance Budgeting:  Past Initiatives
Offer Insights for GPRA Implementation (GAO/AIMD-97-46, Mar.  27,
1997), we noted a potential tension between legislative staff and
agency officials on using program activities as a basis for agencies'
performance planning and measurement.  Agency officials generally saw
a need to be flexible in using program activities for planning and
considered changes to program activity structures likely and
desirable to better align programs with GPRA's goals and objectives. 
Legislative staff generally viewed these structures as fundamental to
congressional oversight of agencies' activities.  The staff were
generally comfortable with the existing structures and suggested that
changes might frustrate congressional oversight. 


      ACCOUNTABILITY
------------------------------------------------------- Appendix I:2.3

EPA's two major activities to develop this component are the
implementation of accountability pilot projects and the development
of an agencywide reporting system.  EPA is implementing 46
accountability pilot projects across the agency's programs, offices,
and regions.  According to agency officials, these projects are being
conducted to provide organizational units with experience in using
performance measures and to obtain input into the development of an
agencywide accountability system.  Under the pilot projects, the
responsible units are to prepare performance plans, identify
performance measures, and use the measures to assess performance in
achieving the goals set out in the plans.  The final results of the
pilot projects are due to OPAA in September 1997.  In addition,
during fiscal years 1994 through 1996, EPA, as well as other
agencies, participated with the Office of Management and Budget in
carrying out projects to pilot-test GPRA's performance planning and
reporting requirements.  EPA's six pilot projects were in the
following programs:  (1) Acid Rain, (2) Leaking Underground Storage
Tanks, (3) Public Water System Supervision, (4) Environmental
Technology Initiative, (5) Chesapeake Bay, and (6) Superfund. 

EPA plans to have a formal reporting system as part of the
accountability process.  The target date for having the system in
place is September 1999, when the agency will need to begin preparing
the annual performance reports required under GPRA.  The act requires
agencies to submit these reports covering fiscal year 1999 by March
31, 2000.  According to the Acting Chief Financial Officer, designing
the accountability system will take some time because the system
needs to be linked to the financial management and personnel rewards
systems.  Decisions on certain issues, such as the extent to which
the system will be centralized or decentralized, have not yet been
made.  OPAA is reviewing previously used agencywide reporting systems
to find out what did and did not work well, contacting other federal
agencies to determine how they account for progress in meeting their
goals, and examining reporting systems in the agency's program
offices to identify their potential use in the new system. 


KEY ELEMENTS OF AN EFFECTIVE
PLANNING, BUDGETING, AND
ACCOUNTABILITY SYSTEM FOR THE
ENVIRONMENTAL PROTECTION AGENCY
========================================================== Appendix II

GAO has identified the following elements of a planning, budgeting,
and accountability system for the Environmental Protection Agency
(EPA) as important to its efforts to improve its processes for
establishing its direction, setting priorities, allocating resources,
and assessing results.  These elements are based on prior GAO work;
the findings and recommendations of various external and internal
reports on EPA, including those of the National Academy of Public
Administration; the requirements of the Government Performance and
Results Act of 1993; and input from several former high-level
officials responsible for planning, budgeting, and/or accountability
while at the agency and others knowledgeable about EPA's management. 
The elements are grouped by major management process or system
component, that is, planning, budgeting, and accountability.  They
also are shown for an analysis component.  The individual analysis
elements support and could have been included under one or more of
the other components.  They have been segregated and are shown
together to emphasize and highlight their importance to the
effectiveness of the system. 


   PLANNING COMPONENT
-------------------------------------------------------- Appendix II:1

OBJECTIVE:  To establish direction and priorities for EPA by
clarifying its mission; setting measurable, outcome-oriented goals
and objectives; and determining how these goals and objectives will
be met and how performance/results will be measured. 

Central office of planning, budgeting, accountability, and analysis
to oversee, manage, and facilitate an integrated, agencywide
planning, budgeting, and accountability structure that focuses on the
(1) identification of, (2) appropriate allocation of resources for,
and (3) measurement of results in achieving, priorities related to
the agency's mission. 

Strategic plan to define the agency's mission and clearly establish
its priorities in the longer term, that is, over the next 5 to 6
years.  The priorities are to be expressed in measurable,
outcome-related goals and objectives and linked to the agency's
mission, national environmental goals, comparative or relative
rankings of health and environmental risks, and potential for
reducing risk.  The adequacy and suitability of the goals and
objectives are to be periodically reviewed.  At a minimum, this
review could take place during updates of the action plans described
below, which would occur about half way through the period covered by
the strategic plan and again during the preparation of a strategic
plan for the next 5 to 6 years. 

The plan is to describe how the agency intends to achieve its goals
and objectives, including how external factors and resources may
affect what can be achieved.  The plan is also to discuss how
nonregulatory, incentive-based, and traditional regulatory approaches
will be considered and what changes in the agency's staffing or mix
of skills will be required.  Furthermore, the plan is to have a
"futures" component that looks 20 to 30 years ahead to identify
emerging environmental problems and new abatement strategies or
techniques that may warrant research or other actions during the
period covered by the plan.  Because abatement and control actions
can move pollutants from one environmental medium to another, the
goals, objectives, and strategies set out in the plan are to apply to
multiple media, rather than to a single medium--such as air, water,
or land--wherever possible and appropriate.  Stakeholders,
particularly the Congress, the states, Indian tribes, and appropriate
public interest groups, are to participate in the strategic plan's
development. 

Multiyear action plan for each objective in the strategic plan to
detail decisions for the shorter term--over the next 2 to 3 years--on
what the agency intends to achieve, how it will be achieved, and how
progress will be measured.  The plans are to also (1) establish
milestones for completing the specified actions or activities, (2)
determine the resources needed to achieve each milestone, and (3)
define the roles and responsibilities of EPA and its partners, such
as the states, for achieving the milestones.\15

Annual performance plan for each objective in the strategic plan to
describe the specific activities that are to be carried out and the
specific results that are to be achieved in a particular fiscal year
in support of the strategies and milestones in the action plan.\16
The annual plan is to establish specific performance goals for these
activities, summarize the necessary resources to conduct the
activities, and set out the performance indicators to be used to
measure performance.  The plan links day-to-day program activities
and outcomes to longer-term agency goals through the annual
performance goals.  It supports the budgeting process by providing
information on the outputs and outcomes that could not be achieved if
resources were reduced and on the additional outputs and outcomes
that could be achieved with additional resources. 


--------------------
\15 These functions of the multiyear action plans could also be
carried out as part of the strategic planning process and
incorporated into the strategic plan.  In this case, separate
documents would not be prepared. 

\16 GPRA requires the use of program activities appearing in the
President's Budget as the basis for performance planning.  GPRA
allows agencies to consolidate, aggregate, or disaggregate program
activities in conducting performance planning.  Agencies may also
attempt to renegotiate the program activity structures of their
budgets with their appropriations subcommittees and the Office of
Management and Budget. 


   BUDGETING COMPONENT
-------------------------------------------------------- Appendix II:2

OBJECTIVE:  To allocate the agency's resources to the highest
priorities so as to achieve the greatest reduction in risks to human
health and the environment. 

Annual budget document to finalize resource allocation decisions made
during the internal planning process.  The document is essentially
the resources section of the annual performance plan prepared to
present and defend the agency's allocation decisions to the Office of
Management and Budget and the Congress. 

Base program analysis to evaluate the contribution of individual
programs to meeting the agency's goals and identify areas of lower
priority for potential disinvestment and shifting of resources to new
initiatives or higher priorities in other programs.  These analyses
are to be performed by individual program managers under the guidance
of the central planning, budgeting, accountability, and analysis
office for review by the agency's management. 

Goals-based program element budget structure to organize the
presentation and execution of budget decisions around the agency's
goals, performance plans, and measures of success. 


   ACCOUNTABILITY COMPONENT
-------------------------------------------------------- Appendix II:3

OBJECTIVE:  To provide EPA managers, the Congress, and the public
with the information on programs' finances and results needed to
judge the agency's performance in making efficient and effective use
of resources to carry out its mission. 

Formal agencywide accountability system to compile--through internal
reporting requirements, program evaluation results, and other
analyses--relevant and essential information on the accomplishments
and resources expended relative to the commitments made in annual
performance plans, focusing on key measures of success for each goal. 

Performance measures to indicate the degree to which strategic goals
are being met and to gauge the impact of programs by linking their
activities or actions to environmental results.  Include measures of
the programs' activity levels as necessary but focus on indicators of
ambient (environmental) conditions.  The key performance measures,
especially the technical measures, are to be peer-reviewed by
independent sources, such as the Science Advisory Board. 

Program evaluations to provide information on the agency's
implementation of individual programs, including both what the agency
is achieving given its mandate and how the mandate is contributing to
the achievement of national goals.  These evaluations are to be
performed periodically, preferably near the end of the period covered
by the current multiyear action plans and before the new plans are
prepared.  At a minimum, the evaluations are to be completed for
major programs in time to be used in preparing new strategic plans. 

National environmental performance partnership agreements with the
states to set out expectations for their contribution to achieving
national environmental and agencywide goals and measures for
assessing their performance in achieving these goals.  Expectations
are to be in the form of negotiated, goal-oriented commitments for
EPA-funded and delegated program responsibilities and linked to
individual national and agency goals.  The states are to have input
into the agency's processes for setting these goals, selecting the
strategies to achieve them, and allocating the resources to implement
the strategies. 

Annual performance reports to evaluate and compare a program's
achievements to the goals set out in the annual performance plans. 
If a goal is not met, the report is to explain why and identify the
actions needed to achieve the goal.  These reports are to be provided
to the Office of Management and Budget and the Congress.  They are
also to be made available to the public. 


   ANALYSIS COMPONENT
-------------------------------------------------------- Appendix II:4

OBJECTIVE:  To provide the data and analyses decisionmakers need to
make informed judgments about the environmental problems or concerns
that the agency should address, its strategies for dealing with them,
and the resources to be allocated for these purposes. 

ORGANIZATIONAL/PROCESS NEEDS: 

Bureau or center of environmental information and statistics that is
independent of program/project offices and the central planning,
budgeting, and accountability office.  This entity is responsible to
the Administrator for defining data quality and collection methods;
identifying data gaps; and independently assembling, analyzing, and
reporting comprehensive, objective, and reliable statistics that
reflect environmental quality and trends. 

Independent analytical capability to compile and assess relevant
information on health and environmental risks, risk reduction
potential, and performance across the agency's programs.  This
capability is to be located within the central planning, budgeting,
and accountability office.  The information is to be provided by the
program offices; other units within the agency, such as the research
and development office; and outside sources. 

"Lookout" panel of scientists and other experts to identify future or
emerging environmental problems for consideration by the agency's
management during the planning and budgeting process.  Conflict of
interest rules are to apply to panel members.  Participants in the
agency's grants and contracts are generally not to participate on the
panel. 

INFORMATION NEEDS: 

Monitoring data to comprehensively document environmental conditions
and trends on a regional and national basis.  In describing how
performance is to be measured, multiyear action plans, annual
performance plans, and national environmental performance partnership
agreements are also to describe the extent to which ambient
monitoring data are available for use in assessing programs' results
and determining how critical gaps in the data are to be filled. 

National environmental goals to express intended, long-range results
of national (federal, state, local, industry, and private) efforts to
protect the environment, reflecting stakeholders' judgment as to the
measurable progress the nation can and should achieve. 

Comparative or relative risk information to permit the assessment or
weighing of health and environmental risks and the potential for
reducing risks across environmental problems and programs. 

Options information to help identify cost-effective measures or
actions to address environmental problems.  This information is to
include data on the benefits and costs of alternative ways of
achieving similar results and the incremental social costs of given
actions compared with their incremental benefits. 

Performance information, including risk reductions achieved; program
evaluation results; and reporting on environmental indicators/outcome
measures, program activity levels, and financial data, to identify
how well and at what cost programs and projects are meeting their
objectives. 


OBJECTIVES, SCOPE, AND METHODOLOGY
========================================================= Appendix III

The Chairmen of the Subcommittees on VA, HUD, and Independent
Agencies, Senate and House Committees on Appropriations, requested
that we review EPA's plans to implement a new planning, budgeting,
and accountability system.  Specifically, the Chairmen asked us to
review the status of EPA's efforts to (1) establish a new planning,
budgeting, and accountability office and develop and implement an
integrated system and (2) ensure that the system uses comprehensive
scientific and environmental data and appropriate environmental
measures.  They also asked us to discuss EPA's previous efforts to
implement this type of system and to identify elements of an
effective system that could be used as benchmarks to gauge progress
in this current effort. 

To determine the status of EPA's efforts to establish the new office
and to develop and implement an integrated system, we reviewed
relevant documents on EPA's plans, target dates for these efforts,
and actions taken; the staffing provided for the Planning, Budgeting,
Accountability, and Analysis Work Group that was set up until the new
planning, budgeting, and accountability organization could be
established; and the status of the new office's approval and
staffing.  We also discussed the status of EPA's plans with the
Acting Chief Financial Officer; the Comptroller; and other personnel
of the Planning, Budgeting, Accountability, and Analysis Work Group
and the new Office of Planning, Analysis, and Accountability. 

In addition, we compared activities for implementing the system with
the recommendations of EPA's Planning, Budgeting, and Accountability
Task Force, which were accepted by the EPA Administrator.  We also
reviewed relevant documents and held discussions with staff of the
Office of Policy, Planning, and Evaluation to determine the status of
the National Environmental Goals Project.  In addition, we discussed
the purpose and status of the Integrated Risk Project with staff of
the Science Advisory Board, reviewed pertinent documents on the
project, and attended various sessions of the Board's committees and
subcommittees established to carry out the project. 

To determine EPA's efforts to ensure that its new system uses
comprehensive scientific and environmental data and appropriate
environmental measures, we reviewed pertinent studies and other
documents to identify improvements needed in the data and measures. 
We compared the needed improvements to EPA's plans for the use of
data and measures in the new system.  In addition, we discussed the
status of EPA's efforts to identify and develop environmental
measures with various EPA regional and state officials, including
representatives of the Environmental Council of the States. 
Furthermore, we attended two EPA workshops on environmental data and
measures.  These were "Managing for Environmental Results:  Using
Goals and Indicators," held in September 1996, and "Environmental
Management in the Nineties:  Using the Right Tools," held in January
1997. 

To identify elements that could be used as benchmarks for monitoring
EPA's progress in implementing an integrated planning, budgeting, and
accountability system, we reviewed the findings and recommendations
of the NAPA report on EPA, the requirements of the Government
Performance and Results Act, our prior reviews of EPA, and other
external and internal EPA studies and evaluations to identify key
elements of an effective planning, budgeting, and accountability
system for EPA.  We then obtained and incorporated comments on these
key elements from four former top EPA officials who had
responsibilities for the planning, budgeting, and/or accountability
functions when at the agency--a deputy administrator and three
assistant administrators (two for policy, planning, and evaluation
and one for administration and resource management).  We also
obtained comments from representatives of NAPA and EPA's Science
Advisory Board.  We conducted our review from June 1996 through May
1997 in accordance with generally accepted government auditing
standards. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix IV

RESOURCES, COMMUNITY AND ECONOMIC
DEVELOPMENT DIVISION, WASHINGTON,
D.C. 

Stanley J.  Czerwinski, Associate Director
Edward A.  Kratzer, Assistant Director
Raymond H.  Smith, Jr., Evaluator-in-Charge
Frank J.  Gross, Senior Evaluator
Jennifer W.  Clayborne, Staff Evaluator

BOSTON FIELD OFFICE

Bruce Skud, Senior Evaluator


*** End of document. ***