Results Act: Observations on EPA's Draft Strategic Plan (Correspondence,
07/30/97, GAO/RCED-97-209R).

Pursuant to a congressional request, GAO reviewed the draft strategic
plan submitted by the Environmental Protection Agency (EPA), as required
by the Government Performance and Results Act.

GAO noted that: (1) EPA's draft strategic plan does not yet contain all
the elements required by the Results Act; (2) the draft plan provides a
mission statement, general goals and objectives, approaches and
strategies, and an identification of key external factors; (3) it
communicates the agency's planned activities, and its goals and
objectives are generally results oriented and measurable; (4) the draft
plan does not include two of the elements required by the Results Act:
(a) the relationship between the goals and objectives and the annual
performance goals; and (b) program evaluations used to develop the plan
and a schedule for future evaluations; (5) on the basis of its review of
relevant legislation, GAO believes that the: (a) activities defined in
EPA's draft plan are supported by legislation; (b) draft plan reflects
EPA's major legislative requirements; and (c) linkages that EPA provides
between goals, objectives, and strategies and potential statutory
authorities help the reader to understand the plan; (6) EPA's draft plan
does not discuss interagency coordination for crosscutting programs,
activities, or functions that are similar to those of other federal
agencies; (7) EPA's draft strategic plan recognizes major management
challenges that GAO has previously identified and discusses the agency's
plans to act on them but provides limited details on how these
long-standing problems will be resolved; (8) these challenges include
setting priorities, making effective use of nonregulatory approaches to
supplement traditional "command and control" regulations, improving
working relationships with the states, and ensuring the quality and
completeness of the scientific research on which the agency bases it
decisions; (9) EPA is currently developing an agencywide information
system to track performance and report on results; (10) however, this
system will depend on data from various other systems and sources that
currently do not provide the reliable information that EPA needs for
measuring results; (11) effort is still needed to identify, develop, and
reach agreement on a comprehensive set of performance measures for the
agency; (12) particularly needed are additional environmental measures
or indicators to link EPA's activities to changes in health and
environmental conditions; and (13) EPA needs to improve its financial
data by correcting internal control weaknesses that have been identified
by the agency's Office of the Inspector General.

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

 REPORTNUM:  RCED-97-209R
     TITLE:  Results Act: Observations on EPA's Draft Strategic Plan
      DATE:  07/30/97
   SUBJECT:  Accountability
             Agency missions
             Strategic planning
             Program evaluation
             Interagency relations
             Internal controls
             Environmental policies
             Management information systems
             Financial management
             Data collection
IDENTIFIER:  EPA National Environmental Goals Project
             Superfund Program
             EPA National Environmental Performance Partnership System
             EPA Integrated Financial Management System
             
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Cover
================================================================ COVER



September 1997


GAO/RCED-97-209R

EPA's Draft Strategic Plan

(160402)


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

  BOP - Federal Bureau of Prisons
  CFO - Chief Financial Officers
  DEA - Drug Enforcement Administration
  DOJ - Department of Justice
  EPA - x
  FBI - Federal Bureau of Investigation
  INS - Immigration and Naturalization Service
  NAPA - National Academy of Public Administration
  NPR - National Performance Review
  OMB - Office of Management and Budget

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


B-277552

July 30, 1997

The Honorable Richard K.  Armey
Majority Leader
House of Representatives

The Honorable John Kasich
Chairman
Committee on the Budget
House of Representatives

The Honorable Dan Burton
Chairman
Committee on Government Reform
 and Oversight
House of Representatives

The Honorable Bob Livingston
Chairman
Committee on Appropriations
House of Representatives

Subject:  Results Act:  Observations on EPA's Draft Strategic Plan

On June 12, 1997, you asked us to review the draft strategic plans
submitted by the cabinet departments and selected major agencies for
consultation with the Congress as required by the Government
Performance and Results Act of 1993 (the Results Act).  This letter
is our response to that request concerning the Environmental
Protection Agency (EPA). 


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
------------------------------------------------------------ Letter :1

Specifically, you asked us to review EPA's draft plan and (1) assess
whether it fulfills the requirements of the Results Act and to
provide our views on its overall quality; (2) assess whether it
reflects EPA's key statutory authorities; (3) assess whether it
reflects interagency coordination for crosscutting programs,
activities, or functions that are similar or complementary to other
federal agencies; (4) assess whether it addresses management problems
we have previously identified; and (5) assess whether EPA's data and
information systems are adequate for providing reliable information
for measuring results. 

We reviewed the draft strategic plan that EPA provided congressional
committees with on July 1, 1997.  Our overall assessment of the draft
plan was generally based on our knowledge of EPA's operations and
programs, our prior reviews of the agency, and other existing
information available at the time of our assessment.  The criteria
that we used to determine whether the draft strategic plan complied
with the requirements of the Results Act were the provisions of the
Results Act itself, supplemented by the Office of Management and
Budget's (OMB) guidance on developing the plans (OMB Circular A-11,
Part 2). 

To make judgments about the overall quality of the draft plan, we
used our May 1997 guidance for congressional review of the plans
(GAO/GGD-10.1.16) as a tool.  To determine whether the draft plan
contained information on interagency coordination and addressed the
management problems that we previously identified, we relied on our
general knowledge of EPA's operations and programs and the results of
our prior reports.  In determining whether the draft strategic plan
reflected EPA's major statutory responsibilities, we reviewed
applicable legislation, including laws cited in EPA's draft plan and,
as you requested, coordinated our review with the Congressional
Research Service.  To determine whether EPA had adequate systems in
place to provide reliable information on performance, we relied on
the results of our previous reports and those of EPA's Office of the
Inspector General.  We also discussed the draft plan with officials
of EPA's Office of Planning, Analysis, and Accountability, which is
responsible for preparing the plan.  Our work was performed during
July 1997.  We obtained comments from EPA on a draft of this report,
which are summarized at the end of this letter. 

It is important to recognize that EPA's final plan is not due to the
Congress and OMB until September 1997.  Furthermore, the Results Act
anticipated that it may take several planning cycles to perfect the
process and that the final plan would be continually refined as
future planning cycles occur.  Thus, our findings reflect a snapshot
status of the draft strategic plan at this time.  We recognize that
developing a strategic plan is a dynamic process and that EPA is
continuing to revise the draft with input from OMB, congressional
staff, and other stakeholders. 


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

EPA was formed in 1970 by executive reorganization from various
components of other agencies to better marshal and coordinate federal
pollution control efforts.  The agency does not have a single,
unified statute to enumerate an overarching mission and purpose. 
Instead, EPA is responsible for implementing about a dozen major
statutes. 

Although its activities have expanded to include various
international and nonregulatory approaches to controlling pollution,
EPA is, above all, a regulatory agency, responsible for setting and
enforcing the environmental standards called for in the various
statutes.  It also conducts environmental research; assists state and
local governments, private groups, individuals, and educational
institutions combatting environmental pollution; and assists in
developing and recommending to the President new policies for
environmental protection.  EPA has a significantly greater effect on
the national economy than its annual budget of about $7 billion would
suggest.  For example, the nation spent over $120 billion in
1994--the year of the latest available data--on controlling and
regulating pollution.\1

EPA relies heavily on the states to implement its programs.  Major
environmental laws--such as the Safe Drinking Water Act and the Clean
Water Act--assign to EPA the key functions involved in the delivery
of environmental programs but allow states to assume these
responsibilities.  Today, operational responsibilities for most of
EPA's major programs lie with the states and, for the most part, EPA
now depends on the states to implement the full range of
environmental responsibilities associated with these programs.  Even
when responsibilities have not been formally delegated, states often
play a major role in day-to-day program activities. 

EPA has previously prepared strategic plans, the most recent of which
was issued in July 1994, about a year after the Results Act became
law.  The current draft plan builds on the 1994 plan but is the first
being developed in response to the Results Act.  The current draft
plan is also the first strategic plan being developed under EPA's new
planning, budgeting, and accountability organization.  In response to
April 1995 recommendations by the National Academy of Public
Administration (NAPA), EPA is in the process of improving and
integrating its planning, budgeting, and accountability processes. 
In January 1997, the EPA Administrator approved the staffing and
organizational structure for a new office--the Office of Planning,
Analysis, and Accountability within the Office of the Chief Financial
Officer--to design and implement a new system.  The current draft
strategic plan is being prepared by the Office of Planning, Analysis,
and Accountability as the first component of the new planning,
budgeting, and accountability system. 

The Results Act requires that agencies' strategic plans contain the
following six critical components:  (1) a comprehensive mission
statement; (2) agencywide long-term goals and objectives for all
major functions and operations; (3) approaches (or strategies) and
the various resources needed to achieve the goals and objectives; (4)
the relationship between the long-term goals and objectives and the
annual performance goals; (5) an identification of key factors,
external to the agency and beyond its control, that could
significantly affect the achievement of the strategic goals; and (6)
a description of program evaluations used to establish or revise
strategic goals and a schedule for future program evaluations. 


--------------------
\1 Survey of Current Business (Vol.  70, No.  9, Sept.  1996), Bureau
of Economic Analysis, Department of Commerce. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :3

EPA's draft strategic plan does not yet contain all the elements
required by the Results Act.  While EPA has made progress toward
developing a strategic plan for carrying out the agency's missions
and meeting the requirements of the Results Act, it still has some
work to do before it completes its final plan by September 30, 1997. 
The draft plan provides a mission statement, general goals and
objectives, approaches and strategies, and an identification of key
external factors.  It communicates the agency's planned activities,
and its goals and objectives are generally results oriented and
measurable.  However, the draft plan does not include two of the
elements required by the Results Act:  (1) the relationship between
the goals and objectives and the annual performance goals and (2)
program evaluations used to develop the plan and a schedule for
future evaluations. 

On the basis of our review of relevant legislation, we believe that
the activities defined in EPA's draft plan are supported by
legislation and that the draft plan reflects EPA's major legislative
requirements.  We also believe that the linkages that EPA provides
between goals, objectives and strategies, and "potential" statutory
authorities help the reader to understand the plan.  However, it
would be more helpful if EPA identified which of the laws actually
support each goal. 

EPA's draft plan does not discuss interagency coordination for
crosscutting programs, activities, or functions that are similar to
those of other federal agencies.  It is important that the plan do so
because EPA and other agencies carry out a number of mission-related
activities that are crosscutting or similar.  For example, to meet
the purposes of its plan, EPA must work closely with agencies
responsible for cleaning up hazardous waste sites at federal
facilities, address global warming and other international
environmental concerns, and ensure a food supply that is safe from
harmful chemicals.  EPA is currently taking steps to coordinate its
plan with other agencies, such as the Department of Energy and the
National Aeronautics and Space Administration, to address
crosscutting programs and activities.  As EPA identifies such
programs and activities, its strategic plan would be improved through
a discussion of the steps that the agency will take to ensure proper
coordination. 

EPA's draft strategic plan recognizes major management challenges
that we have previously identified and discusses the agency's plans
to act on them.  The draft plan, however, provides limited details on
how these long-standing problems will be resolved.  These challenges
include setting priorities, making effective use of nonregulatory
approaches to supplement traditional "command and control"
regulations, improving working relationships with the states, and
ensuring the quality and completeness of the scientific research on
which the agency bases its decisions. 

EPA is currently developing an agencywide information system to track
performance and report on results.  However, this system will depend
on data from various other systems and sources that currently do not
provide the reliable information that EPA needs for measuring
results.  Many gaps exist in these data, and the needed data are
often difficult to compile because different collection methods have
been used to obtain them.  Likewise, effort is still needed to
identify, develop, and reach agreement on a comprehensive set of
performance measures for the agency.  Particularly needed are
additional environmental measures or indicators to link EPA's
activities to changes in health and environmental conditions. 
Because the type and amount of data needed for environmental measures
can be costly, EPA has to find the right balance of environmental and
activity measures.  In a June 1997 report, we recommended that EPA,
in consultation with key stakeholders, establish benchmarks for the
information system and use them to monitor the agency's progress
toward obtaining the data it needs to accurately assess its progress
in managing environmental protection programs.\2 EPA also needs to
improve its financial data by correcting internal control weaknesses
that have been identified by the agency's Office of the Inspector
General.  EPA's final plan should address such weaknesses and set
clear expectations for correcting them and achieving an unqualified
opinion on the agency's financial statements. 


--------------------
\2 Managing for Results:  EPA's Efforts to Implement Needed
Management Systems and Processes (GAO/RCED-97-156, June 18, 1997). 


   EPA'S DRAFT STRATEGIC PLAN DOES
   NOT YET CONTAIN ALL THE
   ELEMENTS REQUIRED BY THE
   RESULTS ACT
------------------------------------------------------------ Letter :4

EPA's draft strategic plan does not contain all six of the Results
Act's key requirements, and certain aspects of those included could
be improved.  Nevertheless, the draft plan shows progress overall
toward meeting the purposes of the act. 


      EPA'S DRAFT STRATEGIC PLAN
      LACKS KEY ELEMENTS REQUIRED
      BY THE RESULTS ACT
---------------------------------------------------------- Letter :4.1

EPA's draft plan contains four of the six elements required by the
Results Act:  (1) a mission statement, (2) general goals and
objectives, (3) approaches or strategies to achieve the goals and
objectives, and (4) an identification of key external factors. 
However, the draft plan does not describe either the (1) relationship
between the general goals and objectives and the annual performance
goals or (2) program evaluations used in developing the plan and a
schedule for future evaluations.  Although the draft plan contains a
section on program evaluation, the discussion focuses on the role of
evaluation in assessing future results and provides general criteria
for deciding which evaluations to perform in the future.  For the
four elements that were included, we noted that the draft plan did
not contain all the details suggested by OMB Circular A-11 and/or
other improvements could be made to improve the plan's usefulness. 


      OBSERVATIONS ON THE OVERALL
      QUALITY OF EPA'S DRAFT PLAN
---------------------------------------------------------- Letter :4.2

EPA has made progress in producing a draft strategic plan in
accordance with the purposes of the Results Act.  Two elements are
missing and those that are included could be made more useful. 
However, the draft plan, in total, provides a good indication of
EPA's planned direction and major efforts to achieve its mission. 
The goals and objectives of the draft plan are, to a great extent,
outcome-oriented, and its objectives are largely measurable.  The
objectives--along with the sections on planned accomplishments,
strategies, and results expected--provide a basis for holding EPA
accountable for achieving results.  The draft plan also provides
several additional sections that are not required by the Results Act
or suggested in OMB Circular A-11 but which are helpful to
understanding EPA' s operations and activities.  For example, the
plan includes a chapter that discusses how EPA generally considers
benefit and cost information in its work and the significant costs
and benefits associated with the goals and objectives presented in
the plan.  According to EPA officials, this chapter was specifically
included in EPA's draft plan at the request of the Congress. 

While the plan's goals and objectives are generally well defined, the
large number of goals and objectives may make it difficult for the
Congress, other stakeholders, and possibly agency managers to discern
EPA's priorities--that is, what will be most important to the agency
over the next several years.  The draft plan has 10 goals and 45
associated objectives.  In addition, the plan contains 14 strategic
principles that are similar to goals.  These principles include
emphasizing children's health; choosing common sense, cost-effective
solutions to environmental problems; and strengthening partnerships
with states and others. 

Although the draft plan points out the important role of other
federal agencies and states in carrying out EPA's programs, the plan
could more clearly describe (1) the contribution that these entities
are expected to make in meeting the agency's goals and objectives and
(2) the effect of their performance on the plan's success.  Our
specific observations on the six elements required by the Results Act
are discussed in the following sections. 


      MISSION STATEMENT
---------------------------------------------------------- Letter :4.3

According to OMB Circular A-11, the mission statement should briefly
define the basic purpose of the agency, with particular focus on its
core programs and activities.  In its draft plan, EPA provides an
overarching statement that its mission is "to protect public health
and to safeguard the natural environment--air, water, and land--upon
which life depends." EPA also identifies several purposes of the
agency, including ensuring that all Americans are protected from
significant risks to public health and the environment where they
live, learn, and work; basing national environmental efforts on the
best available scientific information; and ensuring that federal laws
protecting public health and the environment are enforced fairly and
effectively. 

The draft plan's overarching mission statement is general but
concisely states what EPA is broadly charged with doing under its
statutes.  This statement, along with the purpose statements, are
comprehensive in that they cover the agency's major statutes,
programs, and activities.  The mission statement is also results
oriented and clearly specifies the public need that the mission is to
fulfill. 

Although having a concise and straightforward mission statement is
important, EPA can better distinguish its responsibilities from those
of other agencies and recognize the important role of the states in
carrying out federal environmental programs.  Other agencies also
have major responsibilities for parts of EPA's mission, for example,
the Department of Health and Human Services protects human health,
the Department of Labor's Occupational Health and Safety
Administration regulates health risks in the workplace, and the
Departments of Agriculture and the Interior protect the environment. 
State and local governments also have health and environmental
programs. 


      GOALS AND OBJECTIVES
---------------------------------------------------------- Letter :4.4

OMB Circular A-11 states that strategic plans should set out an
agency's long-term programmatic, policy, and management goals,
outlining planned accomplishments and the schedule for their
implementation.  According to Circular A-11, the general goals and
objectives should elaborate on how the agency is to carry out its
mission and very often will be expressed as outcomes.  Circular A-11
also states that general goals and objectives should be stated in a
manner that allows a future assessment of whether they are being
achieved. 

EPA has listed 10 goals for the agency, most of which have multiple
objectives.  EPA officials told us that the strategic plan's goals
and objectives are largely derived from those developed by EPA's
National Environmental Goals Project.\3

The plan is generally developed along the same lines as EPA's
statutory requirements and organizational structure.  For example,
individual goals address clean air, clean water, waste management and
cleanup, international responsibilities, and internal management
functions.  (See encl.  I for a listing of EPA's draft goals.)

The goals are generally results-oriented and measurable.  For
example, EPA's goal for clean air states, in part, that the "air in
every American community will be safe and healthy to breathe, as
determined by the latest, best scientific evidence." However, EPA's
goals for "effective management" and "sound science, improved
understanding of environmental risk, and greater innovation to
address environmental problems" do not clearly define the expected
results, and it is unclear how EPA would assess progress toward
achieving these goals. 

Although the objectives are generally results oriented and
measurable, in some cases, obtaining the data needed to measure
progress toward the objectives will present a challenge for EPA.  For
example, one of EPA's clean and safe water objectives states that
watersheds will be restored and protected so that 80 percent of the
nation's surface waters will support healthy aquatic communities by
2005.  However, according to EPA's most recent National Water Quality
Inventory Report, the states have assessed only 42 percent of their
lake, pond, and reservoir acres; 17 percent of their river and stream
miles; and 9 percent of the nation's ocean shoreline.  In addition,
EPA reported inconsistencies in the assessments and in the assessment
methodologies themselves. 

In some instances, objectives are dependent upon actions to be taken
by other federal agencies or other entities that are not under EPA's
control.  For example, in order to fully achieve EPA's goal for
"better waste management and restoration of abandoned waste sites,"
EPA must depend on federal agencies such as the Departments of Energy
and Defense, which have cleanup responsibility for federal facilities
under their jurisdiction.  Likewise, as of December 1996, EPA
authorized 32 states to implement the cleanup requirements of the
Resource Conservation and Recovery Act of 1976, as amended, and EPA's
data suggests that about 70 percent of the cost of cleaning up
Superfund sites is the responsibility of the private sector. 
Although EPA must rely on other federal agencies, states, and the
private sector to clean up previously polluted sites, the draft plan
does not explain how EPA is going to coordinate this effort. 


--------------------
\3 EPA began the National Environmental Goals Project in 1992 to
establish, with input from the public and other government agencies,
a set of long-range national environmental goals with realistic and
measurable milestones for 2005.  EPA officials anticipate that the
final report will be issued in 1998. 


      APPROACHES TO ACHIEVING
      STRATEGIC GOALS AND
      OBJECTIVES
---------------------------------------------------------- Letter :4.5

Under the Results Act, the strategic plan must describe the
operational processes, staff skills, and technologies, as well as the
human, capital, information, and other resources, needed to meet the
goals and objectives of the plan.  Additionally, according to OMB
Circular A-11, strategies should outline how the agency will
communicate strategic goals throughout the organization and hold
managers and staff accountable for achieving these goals. 

In its draft plan, EPA provides a chapter on approaches organized by
its strategic or general goals.  For each goal, the plan generally
has sections on the importance of the goal, objectives, what will be
accomplished, strategies for how it will be accomplished, results
expected, and performance measures.  Together, these sections provide
considerable detail on EPA's planned actions for achieving each of
the goals.  The sections, along with the plan's chapter on assessing
results, which describes the agency's accountability process,
communicate how managers and staff will be held accountable for
achieving the draft plan's goals. 

Neither the chapter on approaches nor other parts of the plan
describe the staffing skills and resources needed to achieve the
goals, as required by the Results Act.  Instead, the approaches
chapter recognizes that achieving the goals will take substantial
human, capital, and technological resources.  This chapter also
states that the agency has developed a set of shorter-term objectives
that (1) define how the agency will spend its resources and (2)
provide a guide for assessing whether the goals are being reached. 
However, these shorter-term objectives--subobjectives--are generally
not included in the plan.  According to EPA officials, the annual
performance plans required by the Results Act will provide more
details on staffing and resource needs. 

The chapter on approaches could also be improved by better linking
the strategies to the specific objectives under each goal.  While the
strategies presented fit under the broad goals, the objectives state
more specifically what results EPA is trying to achieve during the
time frame covered by the strategic plan, and it is not always clear
how a particular strategy relates to one or more of these objectives. 
For example, EPA's safe food goal is that the "foods Americans eat
will be free from unsafe pesticide residue." Within this goal, EPA
has the following two objectives: 

  -- By 2005, the risk from the agricultural use of pesticides will
     be reduced by 50 percent from 1995 levels. 

  -- By 2005, the use on food of current pesticides that do not meet
     the new statutory standard of "reasonable certainty of no harm"
     will be substantially eliminated. 

Under the strategies section, the draft plan primarily discusses the
agency's current pesticide program without indicating what will be
done differently to, for example, achieve the 50-percent reduction in
risk from the agricultural use of pesticides. 


      RELATIONSHIP BETWEEN
      LONG-TERM GOALS AND
      OBJECTIVES AND ANNUAL
      PERFORMANCE GOALS
---------------------------------------------------------- Letter :4.6

Under the Results Act, the strategic plan must describe how the
agency's annual performance goals are related to the general goals
and objectives in the strategic plan.  A performance goal is the
target level of performance expressed as a tangible, measurable
objective against which actual achievement is to be compared. 
According to OMB Circular A-11, the strategic plan should outline the
(1) type, nature, and scope of the performance goals to be included
in an annual performance plan; (2) the relationship between the
performance goals and the general goals and objectives; and (3) the
relevance and use of performance goals in helping determine the
achievement of general goals and objectives. 

EPA's draft plan discusses, in a general way, the relevance and use
of performance goals to help determine the achievement of general
goals and objectives.  However, it does not identify the annual
performance goals and discuss their relationship to particular
general goals and associated objectives. 

Office of Planning, Analysis, and Accountability officials agreed
that the draft strategic plan does not describe the relationship
between long-term goals and objectives and annual performance goals,
as called for by the Results Act and OMB Circular A-11.  They said,
however, that they believe that the relationship will be clear once
the annual performance plan is available.  According to the
officials, annual performance goals are being developed for each of
the strategic goals and objectives, making the linkage clear.  The
officials further said that EPA's new planning, budgeting, and
accountability system calls for the preparation of multiyear plans as
a bridge between the plans.  Because of time constraints, the
strategic and annual performance plans are being developed
concurrently this planning cycle, and the multiyear plan will
probably be prepared next year, according to the officials.  The
officials stated that language discussing the relationship of the
annual performance goals to the strategic goals and objectives will
be added to the September 1997 version of the strategic plan. 


      KEY EXTERNAL FACTORS
---------------------------------------------------------- Letter :4.7

OMB Circular A-11 points out that agencies' achievement of their
goals and objectives can be influenced by certain external factors
that exist, occur, or change over the time period covered by their
plans.  Circular A-11 notes that these factors can be economic,
demographic, social, or environmental and states that the strategic
plan should briefly describe each external factor, indicate its link
with a particular goal(s), and describe how the achievement of the
goal could be affected by the factor. 

EPA's draft plan identifies as a key external factor the agency's
heavy reliance on partnerships to protect the environment and human
health.  The draft plan notes that, although the agency has some
influence, it does not control the actions of the state, local, and
tribal governments that implement federal environmental programs;
other federal agencies with significant environmental
responsibilities; or other countries and international organizations
with which the United States shares environmental goals.  The draft
plan also notes that much of the success of the agency's programs
depends on the voluntary cooperation of the private sector and the
general public.  In addition, the draft plan identifies significant
external factors, such as (1) the development of new environmental
technology that works better and costs less and (2) natural processes
that affect the condition of ecosystems. 

Some further discussion of the importance of the states, tribes,
industry, and the public to EPA's success is provided in the draft
plan's introductory chapter and, for the states, also in the chapter
on assessing results.  However, the plan does not link the external
factors to particular goals or describe how the achievement of the
goals could be affected by the factors.  In our view, the draft plan
would also benefit from further discussion, in the section on key
external factors, to identify the (1) significant environmental
responsibilities of other federal agencies that affect EPA's success,
(2) types of technological developments that have previously affected
the agency's programs or are currently under development, and (3)
natural processes that affect the environmental condition of
ecosystems.  For example, success in cleaning up waste sites largely
depends upon the actions of other federal agencies, such as the
Departments of Defense and Energy; meeting new air quality standards
depends upon the introduction of new technologies; and saving
watersheds depends upon the actions of federal, state, and local
organizations to protect natural environmental systems. 


      PROGRAM EVALUATION
---------------------------------------------------------- Letter :4.8

Under the Results Act, the strategic plan is to describe program
evaluations that were used in preparing the plan and include a
schedule for future evaluations.  OMB Circular A-11 calls for this
schedule to outline the general scope and methodology for the
evaluations, the key issues to be addressed, and the time when such
evaluations are to occur.  In EPA's draft plan, however, this
section--contained in the chapter on assessing results--generally
describes how program evaluations will be used in the future and the
general criteria for selecting programs to evaluate.  The section
does not describe program evaluations done by the agency or others,
such as its Inspector General or us, which were to be used to
establish strategic goals or a schedule for future evaluations. 

Office of Planning, Analysis, and Accountability officials told us
that, although not described in the plan, program evaluations and
other studies, including those done by EPA's Office of the Inspector
General and us, were used in developing the draft plan.  According to
the officials, the agency's program offices were aware of the
evaluations and studies when developing their goals, objectives, and
strategies and took the findings into consideration.  As discussed
earlier, the officials also said that the draft plan's strategic
goals and objectives are largely derived from those developed by
EPA's National Environmental Goals Project, and these evaluations
would have been identified and taken into account during the almost 5
years since the project began.  The officials further noted that
program evaluations will be an important part of the accountability
component of EPA's new planning, budgeting, and accountability
system, but the component is under development.  According to the
officials, a section on how program evaluations contributed to
establishing the agency's goals is being drafted and will be included
in the September 1997 version of the strategic plan. 


   LEGISLATIVE AUTHORITIES ARE
   REFLECTED IN PLAN
------------------------------------------------------------ Letter :5

On the basis of our review of relevant legislation, we believe that
(1) the activities defined in EPA's plan are supported by legislation
and (2) the plan reflects EPA's major legislative requirements.  In
addition, although not required by the Results Act, EPA has provided
a list of statutory authorities for each goal and related objectives
and strategies that potentially could be used in carrying out the
planned actions.  We believe that including these linkages in EPA's
plan should facilitate a better understanding of the diversity and
complexity of the agency's overall mission and goals and objectives. 
We note, however, that EPA's draft plan lists these laws as
"potential" authorities.  To be fully useful, EPA will need to
identify, in the final plan, which of these laws actually support
each goal. 

In commenting on a draft of this report, Office of Planning,
Analysis, and Accountability officials told us that they intend to
revise the draft plan to include actual, rather than potential,
statutory authorities.  They also said that these authorities would
be tied to the individual objectives, rather than to the broader
goals. 


   CROSSCUTTING PROGRAM ACTIVITIES
   ARE NOT ADDRESSED, BUT
   COORDINATION EFFORTS ARE UNDER
   WAY
------------------------------------------------------------ Letter :6

EPA's draft plan makes broad references to the need for coordination
with federal agencies (and other stakeholders) to accomplish the
agency's mission, but it does not explicitly address the relationship
of EPA's activities to federal agencies with crosscutting or similar
activities.  Neither does it provide evidence that EPA has
coordinated the plan's development with them.  However, the plan does
identify "strengthening partnerships with stakeholders"--including
other federal agencies--as a strategic principle that will be used to
guide senior management in making decisions about the agency's
priorities, activities, and ways in which the plan's goals and
objectives may best be reached.  The plan also recognizes that
voluntary partnerships with stakeholders are a key external
factor--to a large extent beyond EPA's control--that could
significantly affect the agency's ability to achieve its mission. 
While EPA has some influence over the actions taken by other federal
agencies with significant environmental responsibilities (as well as
some influence over state, tribal, and local governments), it does
not control their actions.  Hence, the agency acknowledges that
effective partnerships with federal agencies and other stakeholders
are essential to successfully implementing the plan's goals and
objectives. 

To address this coordination issue, EPA officials responsible for the
plan's development told us that the agency has taken a number of
steps to include stakeholders in developing and refining the plan.\4
For example, a wide range of stakeholders' views--including those of
other federal agencies--were incorporated into EPA's Environmental
Goals for America,\5 which served as the framework for developing the
agency's strategic plan.  In addition, while EPA did not formally
involve all federal agencies with similar activities in preparing its
plan, the agency's program offices informally solicited input from
some federal agencies in developing their respective goals and
objectives for inclusion in the plan.  In addition, according to one
of these officials, EPA's Office of Research and Development prepared
its own strategic plan last year through the involvement of a number
of stakeholders.  This plan incorporated recommendations made by the
agency's Science Advisory Board, the National Research Council, and
NAPA, among others, and was used as the basis for developing
science-related goals and objectives for the EPA-wide strategic plan. 

To further refine the plan and determine areas of potential overlap
between EPA and federal agencies with related responsibilities, EPA
identified 16 federal agencies with crosscutting or similar functions
and sent each of them a draft outline of the strategic plan in May
1997 and the full draft in early July 1997 for their review and
comment.\6 In addition, EPA is reviewing these agencies' draft plans
to identify areas of potential duplication that warrant further
coordination.  One official involved in the development of EPA's plan
told us that because strategic plans are written at such a broad
level, it can be difficult to use them as a tool for identifying
areas of duplication--this level of detail is often found at the
project level.  As a result, EPA may need a couple of years to fully
coordinate its activities with those of other federal agencies. 
According to EPA officials responsible for developing the strategic
plan, the September 1997 version will address comments made by
federal agencies and other stakeholders on the July draft circulated
for review and discuss EPA's past and ongoing efforts to coordinate
the plan with these stakeholders. 

Our past work has found that EPA--as the central federal agency
responsible for safeguarding the environment--carries out a number of
mission-related activities that are crosscutting or similar to those
of other federal agencies.  These activities include the following: 

  -- One of EPA's most visible relationships with other federal
     agencies involves the cleanup of hazardous waste (Superfund)
     sites at federal facilities.\7 The process for cleaning up these
     sites consists of many steps involving both the responsible
     federal agencies and EPA.  Our 1996 review of risk evaluations
     for federal facilities\8 found that as of February 1996, EPA had
     designated 154 facilities as high priorities for cleanup,\9
     including facilities operated by the Departments of Agriculture
     (2), Defense (127), Energy (20), the Interior (2), and
     Transportation (1).  Our work also found that interagency
     comparisons of risk posed by these sites are difficult because
     agencies have independently developed different risk-ranking and
     priority-setting approaches.  While EPA's draft strategic plan
     includes a goal and related objectives that pertain to the
     cleanup of hazardous waste sites, it does not specifically
     address the issue of interagency coordination in achieving
     "better waste management and restoration of abandoned waste
     sites."

  -- EPA shares responsibilities with other agencies for collecting
     and managing the data needed to perform environmental
     assessments.  For example, data on ecosystem management are
     collected independently by various agencies for different
     purposes.  Often, these data are noncompatible and insufficient
     for decision-making.  Data for health assessments are equally
     widespread among federal entities.  For example, EPA must
     coordinate such data with the Department of Labor, the National
     Institute for Occupational Safety and Health, the National
     Institute of Environmental Health Sciences, the National Science
     Foundation, and the National Cancer Institute, among other
     agencies.  While the plan recognizes the need for stakeholders'
     general involvement, it does not address the interagency
     coordination of data needed for health and environmental
     assessments.  Neither does it assume or assign responsibility
     for collecting, managing, and making the data available to
     others. 

  -- EPA, as the nation's chief technical and regulatory agency for
     environmental matters, also plays a major role in international
     environmental programs and activities--including efforts to
     address global environmental concerns, such as climate change,
     stratospheric ozone depletion, marine and coastal pollution, and
     loss of biological diversity.  Our recent work on international
     environmental agreements\10 noted that EPA shares responsibility
     for implementing international environmental agreements with
     several federal agencies, including (1) the Department of State,
     (2) the U.S.  Agency for International Development, (3) the
     Department of Energy, and (4) the Department of Commerce
     (primarily, the National Oceanic and Atmospheric
     Administration).  However, EPA's goal and related objectives on
     the reduction of global and cross-border environmental risks
     make only passing references to the need to cooperate with other
     federal agencies and other stakeholders in implementing this
     goal. 

  -- EPA also shares responsibility with other federal agencies for
     ensuring a safe food supply for the American public and has
     therefore included food safety as one of the plan's goals.  In
     particular, the agency will strive to keep foods free of
     pesticides and protect the public from threats posed by tainted
     foods.  While this goal makes a general reference to involving
     stakeholders in developing performance measures, there is no
     discussion of the related roles played by the U.S.  Department
     of Agriculture, the Food and Drug Administration, and the
     Centers for Disease Control, among others, in supporting EPA's
     efforts to accomplish this goal. 

As noted above, EPA is taking steps to coordinate its plan with other
federal agencies to address the issue of crosscutting or similar
functions.  However, because overlapping and fragmented programs can
waste scarce resources, confuse and frustrate programs' customers,
and limit the overall effectiveness of the federal effort, it is
important that the plan directly address this issue.  As EPA
identifies areas where its functions are similar to and/or duplicate
those of other federal agencies, its strategic plan would benefit
from explicitly identifying these functions or activities and
detailing the steps that EPA will take to ensure proper coordination
with these agencies and the elimination of unnecessary duplication. 
Providing this type of information would help assure the Congress
that crosscutting functions or activities shared by EPA and other
federal agencies are sufficiently distinct and are making effective
use of scarce federal resources. 

EPA officials told us that language will be added to the plan to
acknowledge the critical role that other federal agencies play in the
successful achievement of EPA's mission and that, to the extent
possible, the plan will identify specific federal agencies with a
prominent role in attaining the objectives listed in the plan. 
According to the officials, the September 1997 version of the plan
will also have an appendix summarizing, by goal, the crosscutting
issues shared by EPA and other federal agencies.  The officials said
that this information will serve as the basis for coordinating the
development of performance measures, resolving potential areas of
conflict, and improving the management of current and future
crosscutting initiatives. 


--------------------
\4 The stakeholders include states, regions, environmental and other
public interest groups, business associations, individual
corporations, and local governments, among others.  However, EPA's
efforts to coordinate with other federal agencies were limited
primarily by the time frames they were working under to complete the
plan. 

\5 Environmental Goals for America:  With Milestones for 2005, EPA
(Dec.  1996). 

\6 In late July 1997, a copy of EPA's draft strategic plan was also
sent to the National Science Foundation for review and comment.  EPA
is reviewing the Foundation's draft plan, according to Office of
Planning, Analysis, and Accountability officials.  The officials said
that the draft plan was not sent earlier because of an oversight, but
EPA will have time to incorporate the comments before the plan is
finalized. 

\7 Numerous federal facilities have been contaminated with a wide
range of substances, including highly radioactive waste and toxic
chemicals, and require cleanup.  The Superfund program, established
under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, governs cleanups of hazardous
waste sites, including those located on federal property. 

\8 Federal Facilities:  Consistent Relative Risk Evaluations Needed
for Prioritizing Cleanups (GAO/RCED-96-150, June 7, 1996). 

\9 As of April 1995, federal agencies had placed 2,070 facilities on
the federal facility docket, EPA's listing of the facilities awaiting
evaluation for possible cleanup.  In addition, EPA had placed 154
federal facilities on the National Priorities List as of February
1996.  EPA uses the list as an aid in determining which sites warrant
further investigation to assess public health and environmental risks
and which sites merit cleanup. 

\10 International Environment:  U.S.  Funding of Environmental
Programs and Activities (GAO/RCED-96-234, Sept.  30, 1996). 


   EPA'S STRATEGIC PLAN ADDRESSES
   MAJOR MANAGEMENT CHALLENGES
------------------------------------------------------------ Letter :7

In various reports and testimonies over the years, we have identified
several major management challenges for EPA.  These involve (1)
setting priorities, (2) making effective use of nonregulatory
approaches to supplement traditional command-and-control regulations,
(3) working better with the states, (4) ensuring the quality and
completeness of the scientific research on which the agency makes its
decisions, and (5) better managing the Superfund program.  NAPA also
identified these challenges in its April 1995 report on EPA's
performance in managing environmental protection.\11 EPA has been
working to improve in these areas, and its draft strategic plan
recognizes these problems and discusses plans for additional efforts
to address them.  However, the draft plan would benefit by being more
specific about actions that are planned. 

The draft plan is also vague with respect to how EPA intends to
implement information technology management reforms called for in the
Paperwork Reduction Act of 1995 and the Clinger-Cohen Act of 1996,
which direct agencies to integrate information technology investments
with the agency's overall strategic planning process.  In addition,
EPA's draft plan does not address other important emerging
information technology issues involving the need for computer systems
to be changed to accommodate dates beyond 1999--the "year 2000
problem"--and information security. 


--------------------
\11 Setting Priorities, Getting Results:  A New Direction for EPA,
National Academy of Public Administration (Apr.  1995). 


      SETTING THE AGENCY'S
      PRIORITIES
---------------------------------------------------------- Letter :7.1

We have reported that EPA needs to make two principal improvements in
the way it sets its priorities for planning and budgeting
purposes.\12 First, priorities could better reflect risks to human
health and the environment.  For example, we noted in our 1991 report
that EPA's Science Advisory Board, which advises the Administrator on
scientific matters, found that funding priorities were more closely
aligned with public opinion about health and environmental risks than
with scientific assessment.  In its 1995 report, NAPA concluded that
to set better priorities, EPA will need to do a better job of
comparing risks and risk reduction strategies across environmental
programs or problem areas.  Second, we have found that EPA's
priority-setting process has often yielded too many priority items,
that is, priorities that are too encompassing without being ranked as
to their importance.  Similarly in its 1995 report, NAPA said that
EPA's 1994 strategic plan appears to include almost everything of
interest in the agency. 

As noted in its draft strategic plan, EPA is working to improve and
integrate its planning, budgeting, and accountability processes.  As
we reported in June 1997, EPA's new processes are principally being
put in place in response to NAPA's concerns.\13 When fully
implemented, the improvements should help the agency to better define
its priorities, including making better use of available information
on risk. 

The draft strategic plan also addresses the need for better risk
information.  For example, in discussing the eighth goal of EPA's
draft strategic plan--"Sound Science, Improved Understanding of
Environmental Risks, and Greater Innovation to Address Environmental
Problems"--the draft plan states, among other things, that science
enables the agency to identify the most important sources of risk to
public health and the environment, and by doing so, informs
priority-setting, ensures credibility for policies, and guides the
deployment of resources.  According to the draft plan, the planned
efforts under this goal will provide EPA with greater certainty in
assessing and comparing environmental risks on the basis of access to
critical information and tested methodologies through high
quality-peer review. 

Although not specifically mentioned in the draft plan, a project is
being carried out by the Science Advisory Board to rank the relative
risks of environmental problems and develop methodologies that EPA
can use to rank risks in the future.  A draft report on the results
of this study, which is called the Integrated Risk Project, 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 this and other studies or factors. 


--------------------
\12 Environmental Protection:  Current Environmental Challenges
Require New Approaches (GAO/T-RCED-95-190, May 17, 1995), Management
Issues Facing the Environmental Protection Agency (GAO/T-RCED-93-26,
Mar.  29, 1993), Environmental Protection:  Meeting Public
Expectations With Limited Resources (GAO/RCED-91-97, June 18, 1991),
and Environmental Protection Agency:  Protecting Human Health and the
Environment Through Improved Management (GAO/RCED-88-101, Aug.  16,
1988). 

\13 Managing for Results:  EPA's Efforts to Implement Needed
Management Systems and Processes (GAO/RCED-97-156, June 18, 1997). 


      USING NONREGULATORY
      APPROACHES TO POLLUTION
      CONTROL
---------------------------------------------------------- Letter :7.2

The traditional approach to pollution control--which requires
polluters to adhere to certain performance or technology
standards--has helped control pollution from large, stationary
sources, such as factories and power plants.\14 However, a number of
environmental problems remain that the traditional approaches cannot
resolve or that could be resolved more efficiently and effectively
through other methods.  These problems include pollution from some
small, diffuse sources and pollution that crosses from one
environmental medium--air, water, or land--to another.  The selective
use of market incentives to supplement traditional regulatory
approaches, efforts to prevent pollution, and other nonregulatory
approaches may be less costly to the economy, as well as more
effective in controlling or preventing pollution. 

The fourth goal of EPA's draft strategic plan focuses on preventing
pollution.  The draft plan states that because traditional regulatory
programs can be costly, EPA is looking at alternative approaches that
may be used to augment basic programs.  Rather than traditional "end
of the pipeline" controls, preventing pollution at the source will be
EPA's strategy of first choice, according to the plan.  Some of the
goal's associated objectives involve the use of certain nonregulatory
approaches, such as the introduction of safer chemicals into the
marketplace, and one of the objectives is for EPA to improve
pollution prevention strategies, tools, and approaches.  In addition,
the discussion of strategies under some of the other goals includes
nonregulatory approaches.  Finally, one of the plan's strategic
principles is for managers to emphasize the prevention of pollution
in setting priorities and making key decisions. 

The draft plan mentions the use of emissions allowance trading,
another potentially effective nontraditional approach, in the
introductory chapter but does not relate additional efforts to a
particular goal or objective.  Under emissions-trading programs,
pollution sources that reduce their emissions below the required
levels can sell their extra allowances to other sources of pollution
to help them meet their requirements.  These programs can be a less
costly means to reduce pollution than traditional regulatory
approaches.  For example, we recently reported that EPA's acid rain
program, which includes the trading of emissions allowances, has been
successful thus far in reducing sulfur dioxide emissions while
reducing compliance costs.\15 We noted, however, that EPA has had
limited success in expanding the emissions trading of other
pollutants covered under the Clean Air Act.  Several important
issues, such as developing and implementing reliable emissions
monitoring and reporting systems, determining penalties for
noncompliance, and allocating emissions reductions among
participants, must be addressed in adopting any emissions-trading
program.  As a consequence, it will take time for EPA and the states
to resolve these issues.  Although the draft plan refers to EPA's
using a range of strategic approaches to promote clean air and
upgrading and improving air-monitoring networks, these details were
too general to determine whether the draft plan intends to address
these issues. 


--------------------
\14 Environmental Protection:  Meeting Public Expectations With
Limited Resources (GAO/RCED-91-97, June 18, 1991). 

\15 Air Pollution:  Overview and Issues on Emissions Allowance
Trading Programs (GAO/T-RCED-97-183, July 9, 1997). 


      WORKING BETTER WITH THE
      STATES
---------------------------------------------------------- Letter :7.3

While EPA is ultimately responsible for overseeing the delivery of
national environmental programs, the states are primarily responsible
for day-to-day implementation.  Despite the importance of a good
EPA/state relationship, we have reported that difficulties have
characterized the relationship over the years.\16 Resource
limitations are a major cause of these problems.  Federal funding has
not kept pace with new requirements, and the states have been unable
to make up the difference.  This resource shortage has been
exacerbated because EPA has sometimes required states to apply scarce
resources to national priorities at the expense of some of their own
environmental concerns.  Also affecting the EPA/state relationship
have been states' concerns that EPA (1) is inconsistent in its
oversight across regions, (2) sometimes micromanages state programs,
(3) does not provide sufficient technical support for increasingly
complex program requirements, and (4) often does not adequately
consult states before making key decisions affecting them. 

In EPA's draft plan, strengthening partnerships is one of the
agency's strategic principles.  According to the plan, EPA will
enhance its partnership with federal, tribal, state, and local
agencies; the Congress; private industry; public interest groups; and
citizens to identify environmental goals and work together to achieve
them.  Additionally, the introductory chapter describes the states'
important role and EPA's May 1995 agreement with state environmental
leaders to establish the National Environmental Performance
Partnership System.  Under the new system's performance partnerships,
EPA and the states are to determine together what work will be
carried out annually and how it will be accomplished.  According to
the plan, performance partnerships are helping to shape a
fundamentally different relationship between EPA and the states. 
Furthermore, the chapter on assessing results discusses working with
state environmental commissioners to draft core performance measures
to provide a common basis for tracking progress and establishing
commitments between the states and EPA. 

The draft plan, however, does not contain any specific objectives or
measures--such as increasing the number of states participating in
the National Environmental Performance Partnership System--to provide
a basis for measuring EPA's progress.  Currently, about half of the
states have signed performance partnership agreements with EPA. 


--------------------
\16 EPA and the States:  Environmental Challenges Require a Better
Working Relationship (GAO/RCED-95-64, Apr.  3, 1995) and
Environmental Protection:  Status of EPA's Initiatives to Create a
New Partnership With States (GAO/T-RCED-96-87, Feb.  29, 1996). 


      ENSURING THE QUALITY AND
      COMPLETENESS OF SCIENTIFIC
      RESEARCH
---------------------------------------------------------- Letter :7.4

EPA uses peer review to enhance the quality, credibility, and
acceptability of scientific and technical work products, which may
ultimately form the basis of regulations and other key decisions by
the agency.  In January 1993, EPA issued a policy statement calling
for peer review of the major scientific and technical work products
used to support the agency's rule making and other decisions.  (In
accordance with scientific custom and/or statutory mandates, several
offices within EPA have been using peer review for many years.) The
Congress, we, and others later raised concerns that the policy was
not being consistently implemented throughout EPA.  In 1994, the
policy was revised to expand and improve the use of peer review
throughout the agency.  However, in a September 1996 report and March
1997 testimony, we found that, despite some recent progress, peer
review continued to be implemented unevenly.\17 In some cases, the
policy was followed properly, but in others, key aspects of the
policy were not followed or peer review was not conducted at all. 

In its draft strategic plan, one of EPA's strategic principles is to
apply sound, peer-reviewed science.  According to this principle, EPA
will promote the development, peer review, and application of sound
science to meet the agency's current program requirements and to
guide future directions.  In addition, more defensible environmental
decisions through high-quality peer review is listed under the
"Results Expected" section of the goal on sound science.  Although
the draft plan does not establish compliance with EPA's peer review
policy as an objective, one of the performance measures under the
goal is the endorsement of research results by peer review and other
impartial, outside reviews. 


--------------------
\17 Peer Review:  EPA's Implementation Remains Uneven
(GAO/RCED-96-236, Sept.  24, 1996) and Peer Review:  EPA's
Implementation Remains Uneven (GAO/T-RCED-97-95, Mar.  11, 1997). 


      MANAGING THE SUPERFUND
      PROGRAM
---------------------------------------------------------- Letter :7.5

EPA's Superfund program began in 1980 as a relatively short-term
project to clean up abandoned hazardous waste sites whose number, at
that time, was thought to be limited.  Since then, thousands of sites
have been discovered--many of which are owned by the federal
government--and cleaning them up has proved to be more complicated
and costly than anticipated.  Recent estimates show that cleaning up
these sites could amount to over $300 billion in federal costs and
many billions more in private expenditures. 

Under the Superfund law, EPA can compel the private parties
responsible for hazardous waste sites to clean them up or it can
conduct the cleanup and demand reimbursement of its costs from the
responsible parties.  Private parties perform about 75 percent of
cleanups.  To pay for EPA's cleanups, the agency has drawn on a
legislatively established trust fund, primarily financed by a tax on
crude oil and certain chemicals and by an environmental tax on
corporations.  Federal agencies generally use their annual
appropriations to finance cleanups of the facilities under their
jurisdiction. 

The magnitude of the nation's hazardous waste problem calls for the
efficient use of available funds to protect the environment and the
public.  We have reported in the past, however, that (1) EPA and
other federal agencies have not consistently allocated their cleanup
resources to reduce the most significant threats to human health and
the environment; (2) although EPA is responsible for pursuing
reimbursement when it funds a cleanup, it has recovered from
responsible parties only a fraction of the moneys that it has spent;
and (3) while about half of the Superfund program's budget annually
goes to contractors, EPA has had long-standing problems controlling
contractors' costs.  In a 1997 report on the Superfund program's
management, we noted that EPA and other federal agencies have taken
steps toward addressing these problems, but further action is needed
in each area.\18 For example, in the area of contract management, we
reported that EPA needs to improve the quality of its independent
cost estimates and use them more effectively to determine the scope
and size of its contractors' work budgets. 

EPA's draft strategic plan addresses some of these problems in
general terms.  Two of the strategies under its better waste
management goal are to (1) maximize potentially responsible parties'
participation in conducting or funding response actions while
promoting fairness in the enforcement process and (2) manage the use
of contract dollars to improve performance and reduce cost.  The
draft plan also states under the effective management goal that EPA
will enhance its contract management information systems. 


--------------------
\18 High-Risk Series:  Superfund Program Management (GAO/HR-95-12,
Feb.  1995) and High-Risk Series:  Superfund Program Management
(GAO/HR- 97-14, Feb.  1997). 


      MANAGING INFORMATION
      RESOURCES
---------------------------------------------------------- Letter :7.6

The Paperwork Reduction Act of 1995 and the Clinger-Cohen Act of 1996
direct agencies to implement a framework of modern technology
management on the basis of practices followed by leading private and
public organizations that have successfully used technology to
improve performance and help meet strategic goals.  Under these laws,
agencies are to better relate their technology plans and information
technology use to their programs' missions and goals.  EPA's draft
plan notes that the agency plans to integrate information technology
investments with its overall strategic-planning process and implement
best practices identified by us for information resources management. 
However, the draft plan does not clearly describe how these
strategies will be carried out and how results will be measured. 

Furthermore, EPA, like many other agencies, will face the emerging
management challenges of implementing modern technology and resolving
the need for computer systems to be changed to accommodate dates
beyond 1999--the "year 2000 problem." Yet, EPA's draft plan does not
discuss how the agency intends to address the "year 2000 problem" as
well as any significant information security weaknesses--two issues
that we have identified as high risk across the government.\19

EPA's draft plan also highlights the need for enhancing information
systems to improve the quality and timeliness of management
information and for integrating information technology investments
with the agency's overall strategic-planning process.  However,
strategies and measures for doing so are not specifically addressed
in the draft plan.  In commenting on a draft of this report, EPA
officials said that the September 1997 version of the plan will
address these information management challenges. 


--------------------
\19 GAO High Risk Series (GAO/HR-97-20, Feb.  1997). 


   EPA FACES CHALLENGES TO PROVIDE
   RELIABLE INFORMATION ON
   ACHIEVEMENT OF STRATEGIC GOALS
------------------------------------------------------------ Letter :8

In its draft strategic plan, EPA points out that its new planning,
budgeting, analysis, and accountability process will enable it to
better manage for results.  However, the agency does not currently
have the reliable information it needs to measure results.  The
accountability component of the new system is being designed to allow
EPA to obtain the information necessary to evaluate and report its
progress toward its goals and objectives.  Nonetheless, as we
reported in June 1997, EPA faces substantial challenges to obtain the
scientific and environmental information needed to fully support its
new system, including determining progress toward meeting key
environmental indicators.  Furthermore, various problems in EPA's
financial data and internal control systems could hinder EPA's
ability to accurately measure cost information supporting its goals
and objectives. 


      SCIENTIFIC AND ENVIRONMENTAL
      DATA
---------------------------------------------------------- Letter :8.1

Although EPA has collected much scientific and environmental
information, many gaps exist, and the data are often difficult to
compile because different data collection methods have been used. 
Although EPA has tried to improve the quality of its data, these data
are often unreliable, and the agency's 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.\20

Likewise, much effort is still needed to identify, develop, and reach
agreement on a comprehensive set of environmental measures to link
EPA's activities to changes in health and environmental conditions. 
Currently, EPA has to rely mainly on activity measures, such as the
number of permits issued or inspections made, to measure its
performance or success.  In its April 1995 report, NAPA identified
the lack of high-quality data on environmental conditions as a
particularly important problem for EPA. 

In our June 1997 report, we pointed out that EPA has been trying
since the 1970s to revise its management systems to better manage for
results.  We observed that the agency will likely need several years
to develop and fully implement an integrated planning, budgeting, and
accountability system.  Even with 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.  Given the complexity of these efforts and the time
required to complete them, we recommended 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.  EPA 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 way for
the agency to know whether it is progressing toward the type of
system intended. 

In its draft strategic plan, EPA also recognizes that meeting its
objectives will depend upon developing and using common indicators
and measures with the states to track progress and establish
commitments between the states and EPA.  The plan briefly discusses
the agency's efforts to work with the environmental commissioners of
states to draft "core performance measures," which EPA expects will
eventually be part of most state/EPA work plans and related
agreements.  While EPA and the states have various efforts under way
to develop and use environmental measures and indicators, as stated
in our June report on EPA's efforts to manage for results, these
efforts, while valuable, have been disparate.  For example, at a
conference convened by EPA in September 1996 to better coordinate
these efforts, state and EPA regional representatives said 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.  Thus, it appears
that 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. 


--------------------
\20 Reinventing Environmental Regulation, National Performance Review
(Mar.  16, 1995). 


      FINANCIAL DATA
---------------------------------------------------------- Letter :8.2

EPA's Office of the Inspector General's (OIG) opinion on the agency's
consolidated financial statements for fiscal year 1996 was, in part,
qualified because data supporting amounts accrued for grantees'
unbilled expenses could not be confirmed and estimates for unbilled
Superfund oversight costs were not sufficiently accurate.  The OIG's
audit identified these same issues as resulting in internal control
weaknesses that were deemed to be material weaknesses.  Additionally,
the OIG report cited a number of other reportable conditions in their
evaluation of internal control.  These reportable conditions included
internal control weaknesses in areas, such as accounts receivable,
property, and documentation of the agency's Integrated Financial
Management System.  While the strategic plan addresses a material
weakness in the area of grant closeouts, it does not address the
above issues that directly relate to the reliability of data
supporting fiscal performance. 

EPA officials told us that the September 1997 version of the
strategic plan will contain more information on financial management. 
According to the officials, at a minimum, a performance measure for
financial management will be added to the plan under the effective
management goal. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :9

We provided EPA with copies of a draft of this report for review and
comment.  We met with EPA officials, including the Acting Deputy
Director of the Office of Planning, Analysis, and Accountability and
the Director of the Office's Planning Staff.  The EPA officials said
that the report is a fair and objective assessment of the July 1,
1997, draft strategic plan that we reviewed.  The officials also said
that they are continuing to revise the draft plan, will add the two
missing elements required by the Results Act, and will incorporate
the other improvements noted in this report.  The officials also
suggested clarifications or technical changes that we have
incorporated, as appropriate. 


---------------------------------------------------------- Letter :9.1

We are sending copies of this report to the Minority Leader of the
House of Representatives; Ranking Minority Members of your
Committees; the Chairmen and Ranking Minority Members of other
Committees that have jurisdiction over EPA's activities; the
Administrator, EPA; and the Director, Office of Management and
Budget.  We will send copies to others on request. 

Please call me at (202) 512-6111 if you or your staff have any
questions about this report. 

Peter F.  Guerrero
Director, Environmental
 Protection Issues

Enclosure


EPA'S DRAFT GOALS
=========================================================== Appendix 0

1.  Clean Air.  The air in every American community will be safe and
healthy to breathe, as determined by the latest, best scientific
evidence.  In particular, children, the elderly, and people with
respiratory ailments will be protected from health risks of breathing
polluted air.  Strategies to reduce air pollution will also restore
life in damaged forests and polluted waters. 

2.  Clean and Safe Water.  All Americans will know that their
drinking water is clean and safe.  Effective protection of America's
rivers, lakes, wetlands, aquifers, and coastal and ocean waters will
sustain fish, plants, and wildlife, as well as recreational,
subsistence, and economic activities.  Watersheds and their aquatic
ecosystems will be restored and protected to improve public health,
enhance water quality, reduce flooding and provide habitat for
wildlife. 

3.  Safe Food.  The foods Americans eat will be free from unsafe
pesticide residues.  Children especially will be protected from the
health threats posed by tainted food because they are among the most
vulnerable groups in our society. 

4.  Preventing Pollution and Reducing Risk in Communities, Homes,
Workplaces andEcosystems.  Pollution prevention strategies, risk
management, and remediation strategies aimed at cost-effectively
eliminating, reducing, or minimizing emissions and contamination will
result in cleaner and safer environments in which Americans can live,
work, and enjoy.  EPA will safeguard ecosystems and promote the
health of natural communities that are integral to the quality of
life in this nation. 

5.  Better Waste Management and Restoration of Abandoned Waste Sites. 
America's wastes will be stored, treated, and disposed of in ways
that prevent harm to people and to the natural environment.  EPA will
work to clean up previously polluted sites and restore them to uses
appropriate for surrounding communities. 

6.  Reduction of Global and Cross-Border Environmental Risks.  The
United States will lead other nations in successful, multilateral
efforts to reduce significant risks to human health and ecosystems
from climate change, stratospheric ozone depletion, and other hazards
of international concern. 

7.  Expansion of Americans' Right to Know About Their Environment. 
Easy access to a wealth of information about the state of their local
environment will expand citizen involvement and give people tools to
protect their families and their communities as they see fit. 
Increased information exchange between scientists, public health
officials, businesses, citizens, and all levels of government will
foster greater knowledge about the environment and what can be done
to protect it. 

8.  Sound Science, Improved Understanding of Environmental Risk, and
Greater Innovation to Address Environmental Problems.  EPA will
develop and apply the best available science for addressing current
and future environmental hazards, as well as new approaches toward
improving environmental protection. 

9.  A Credible Deterrent to Pollution and Greater Compliance With the
Law.  EPA will ensure compliance with laws intended to protect public
health and the environment. 

10.  Effective Management.  EPA will establish a management
infrastructure that will set and implement the highest-quality
standards for effective internal management and fiscal
responsibility. 

*** End of document. ***