Superfund: EPA Can Improve Its Monitoring of Superfund Expenditures
(Letter Report, 05/11/1999, GAO/RCED-99-139).

The Environmental Protection Agency (EPA) spends about $1.4 billion a
year on the Superfund program to remedy potential threats to human
health and the environment arising from hazardous waste sites. This is
the third in a series of GAO reports discussing Superfund expenditures.
This report analyzes Superfund data for fiscal years 1996, 1997, and
1998 to determine (1) the relative shares of Superfund expenditures for
contractor cleanup work, site-specific, and non-site specific support;
(2) the activities carried out with EPA's cleanup support spending; and
(3) EPA's efforts to monitor and analyze how its regions and
headquarters units spend Superfund resources.

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

 REPORTNUM:  RCED-99-139
     TITLE:  Superfund: EPA Can Improve Its Monitoring of Superfund
	     Expenditures
      DATE:  05/11/1999
   SUBJECT:  Contract costs
	     Environmental monitoring
	     Administrative costs
	     Pollution control
	     Waste disposal
	     Waste management
	     Budget outlays
	     Funds management
	     Hazardous substances
IDENTIFIER:  Superfund Program
	     EPA National Priorities List

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    United States General Accounting Office GAO                Report
    to Congressional Requesters May 1999           SUPERFUND EPA Can
    Improve Its Monitoring of Superfund Expenditures GAO/RCED-99-139
    GAO                 United States General Accounting Office
    Washington, D.C. 20548 Resources, Community, and Economic
    Development Division B-282352 May 11, 1999 Congressional
    Requesters The Environmental Protection Agency (EPA) spends about
    $1.4 billion a year on the Superfund program to address the
    potential threats to human health and the environment resulting
    from hazardous waste sites. While EPA relies on cleanup
    contractors to study, design, and implement site cleanups, it
    undertakes a number of activities and incurs expenses that support
    the cleanups. Some of these support activities and costs are site-
    specific in nature, such as supervising cleanup contractors,
    performing laboratory analysis, and compelling private parties to
    perform cleanups for which they are responsible. Other support
    activities and costs are non-site-specific, such as management and
    administrative activities and expenses for rent and computer
    services. Each of EPA's 10 regional offices, as well as several
    headquarters units, carry out these activities. This is the third
    in a series of reports in which we have analyzed Superfund
    expenditures. The first report discussed trends in Superfund
    spending over a 10-year period.1 The second analyzed the portion
    of Superfund spending that went to cleanup contractors.2 As agreed
    with your offices, this report analyzes data for fiscal years
    1996, 1997, and 1998 to determine (1) the relative shares of
    Superfund expenditures for contractor cleanup work, site-specific
    support, and non-site-specific support; (2) the activities carried
    out with EPA's cleanup support spending, particularly its non-
    site-specific spending; and (3) EPA's efforts to monitor and
    analyze how its regions and headquarters units spend Superfund
    resources, particularly the distribution of expenditures among
    contractor cleanup work, site-specific support, and non-site-
    specific support. Results in Brief    Over the last 3 years, the
    share of total Superfund expenditures for contractor cleanup work
    was about 45 percent, but declined from about 48 percent in fiscal
    year 1996 to about 42 percent in fiscal year 1998. Over this
    period, expenditures for non-site-specific support were about 38
    percent, whereas those for site-specific support were about 17
    percent. However, we found substantial variation among EPA's
    regions in the shares of their expenditures devoted to each of
    these cost categories. For example, spending for non-site-specific
    support ranged from a low of 14 percent in EPA's Boston region to
    30 percent in EPA's San Francisco region. 1Superfund: Trends in
    Spending for Site Cleanups (GAO/RCED-97-211, Sept. 4, 1997).
    2Superfund: Analysis of Contractor Cleanup Spending (GAO/RCED-98-
    221, Aug. 4, 1998). Page 1
    GAO/RCED-99-139 Superfund B-282352 EPA spends its support funds
    predominately on administrative activities. Although EPA
    classifies its Superfund expenditures into over 100 separate
    activity categories, we found that over 60 percent of all
    Superfund support expenditures (both site-specific and non-site-
    specific) were accounted for by three activities-general support
    and management, general enforcement support, and remedial support
    and management. Moreover, almost 80 percent of EPA's non-site-
    specific spending was concentrated on these three administrative
    activities. For the three regions that we reviewed in detail,
    these non-site-specific expenditures were primarily personnel
    expenses for activities such as management, administrative and
    secretarial support, financial management, public affairs, and
    contract management. For the three headquarters units that we
    reviewed in detail, this spending was on items such as rent;
    information management; facilities operations and maintenance;
    program and policy development; and budgetary, financial, and
    administrative support. EPA monitors the Superfund spending of its
    regions and headquarters units in several ways, including tracking
    whether funds are obligated at the expected rate and in compliance
    with the approved operating plan, and monitoring program
    accomplishments. However, EPA does not monitor or analyze the
    expenditures of its regions and units in terms of the relative
    shares of contractor cleanup costs, site-specific support costs,
    and non-site-specific support costs. Conducting such analyses
    would provide EPA with an additional tool to identify potential
    cost savings in Superfund spending, and we are therefore
    recommending that EPA regularly conduct such analyses. Background
    In 1980, the Comprehensive Environmental Response, Compensation,
    and Liability Act created the Superfund program to clean up highly
    contaminated hazardous waste sites. Under the act, EPA is
    authorized to compel the parties responsible for the contamination
    to perform the cleanup. EPA may also pay for the cleanup and
    attempt to recover the cleanup costs from the responsible parties.
    When EPA pays for the cleanup, the work is conducted by a private
    contractor who is directly hired by EPA, another federal entity,
    or a state. Superfund contractors study and design cleanups, as
    well as manage and implement cleanup actions at sites on the
    National Priorities List (EPA's list of the nation's worst
    hazardous waste sites) or at sites where there are immediate
    threats from hazardous wastes. In our 1998 report on contractor
    cleanup spending, we reported that for remedial action Page 2
    GAO/RCED-99-139 Superfund B-282352 cleanups managed by EPA, about
    71 percent of the costs charged by cleanup contractors was for the
    subcontractors who physically performed the cleanups-such as
    earthmoving and constructing treatment facilities. The remaining
    29 percent went to the prime contractors for professional work,
    such as construction management and engineering services, and
    associated travel, overhead, and administrative costs and fees.
    For the purpose of this report, contractor cleanup work includes
    all Superfund spending for the study, design, and implementation
    of cleanups. The remaining Superfund spending is classified as
    cleanup support, which includes both site-specific and non-site-
    specific support. Site-specific support consists of Superfund
    activities linked to a specific hazardous waste site, such as
    supervising cleanup contractors and conducting site analyses. Non-
    site-specific support consists of activities related to the
    overall Superfund program, rather than a specific site, and
    includes activities such as financial management and policy
    development. Most Superfund        The share of total Superfund
    expenditures for contractor cleanup work Spending Is for
    declined from about 48 percent in fiscal year 1996 to about 42
    percent in fiscal year 1998. Over the same period, spending for
    site-specific support Support Activities    increased from about
    16 percent of total Superfund expenditures to about 18 percent.
    Finally, the non-site-specific expenditures also increased from
    about 36 percent to over 39 percent. (See fig. 1.) Page 3
    GAO/RCED-99-139 Superfund B-282352 Figure 1: Superfund Spending
    for Contractor Cleanup Work, Site-Specific Support, and Non-Site-
    Specific Support, as a Percentage of Total Expenditures, Fiscal
    Years 1996 Through 1998 Note: Not all fiscal year percentages add
    to 100 percent because of rounding. Source: GAO's analysis of
    EPA's data. As the figure shows, the share of Superfund
    expenditures used for contractor cleanup work decreased between
    fiscal year 1996 and fiscal year 1997, and again in fiscal year
    1998. EPA officials could not explain these changes in detail
    because they had not analyzed Superfund costs in this manner and
    were unaware of this decline until we presented the results of our
    analysis. Similarly, EPA officials were unaware of, and therefore
    did not have an explanation for, the changes in the other cost
    categories shown in figure 1 above. The actual expenditures for
    contractor cleanup work, site-specific support, and non-site-
    specific support for fiscal years 1996 through 1998 are shown in
    table 1. Page 4
    GAO/RCED-99-139 Superfund B-282352 Table 1: Superfund Expenditures
    for Contractor Cleanup Work,               Dollars in millions
    Site-Specific Support, and             Expenditure Non-Site-
    Specific Support, Fiscal      category                     FY 1996
    FY 1997      FY 1998              Total Years 1996 Through 1998
    Contractor cleanup work                   $685.4     $649.5
    $595.3        $1,930.2 Site-specific support
    230.4      241.7         253.9             726.0 Non-site-specific
    support                         524.9      559.6         553.9
    1,638.4 Total                        $1,440.7    $1,450.8
    $1,403.1        $4,294.6 Source: GAO's analysis of EPA's data.
    Expenditure Mix Varies                 Over the 3-year period of
    our analysis, the mix of spending for contractor Among Regions and
    cleanup work, site-specific support, and non-site-specific support
    varied Headquarters Units                     substantially among
    EPA's regions and headquarters units. (See fig. 2.) Page 5
    GAO/RCED-99-139 Superfund B-282352 Figure 2: Types of Superfund
    Spending, by Regions and Headquarters, Fiscal Years 1996 Through
    1998 Note: Not all regional percentages add to 100 percent because
    of rounding. Source: GAO's analysis of EPA's data. As shown in
    figure 2, the mix among contractor cleanup work, site-specific
    support, and non-site-specific support is substantially different
    between headquarters and the regions. This difference can be
    expected because headquarters functions are more related to
    administration and management, while the regions have primary
    responsibility for overseeing the implementation of cleanups.
    However, our analysis also identified Page 6
    GAO/RCED-99-139 Superfund B-282352 substantial variation among the
    regions in the mix of their expenditures. Specifically,
    expenditures for contractor cleanup work ranged from a low of 42
    percent in EPA's Kansas City region to a high of 72 percent in
    EPA's Boston and New York regions. Site-specific support spending
    ranged from a low of 12 percent in EPA's New York region to a high
    of 29 percent in EPA's Kansas City region. Non-site-specific
    support ranged from a low of 14 percent to a high of 30 percent
    among EPA's regions. These differences in the relative shares of
    expenditures among these categories-more than double in some
    instances-raise questions about the factors underlying them. We
    discussed these variations with EPA headquarters officials.
    However, because EPA does not analyze Superfund expenditures in
    this manner, they did not have an explanation for the specific
    factors underlying these regional differences and whether they
    warrant action. Most Superfund Personnel                We also
    examined EPA's Superfund personnel costs because they account
    Spending Is for                         for a significant share of
    all Superfund support costs. In total, over the last Non-Site-
    Specific                       3 years, about 21 percent of EPA's
    Superfund personnel expenses have Functions
    been for site-specific functions and 79 percent for non-site-
    specific functions. As shown in figure 3, this breakdown varies
    substantially between regional personnel spending and headquarters
    personnel spending. Figure 3: Mix of Superfund Personnel Spending,
    by Regions and Headquarters, Fiscal Years 1996 Through 1998
    Source: GAO's analysis of EPA's data. Page 7
    GAO/RCED-99-139 Superfund B-282352 Over the 3-year period of our
    analysis, Superfund personnel spending totaled about $722 million.
    Of this, about $547 million was for regional personnel spending,
    and the remaining $175 million was for headquarters personnel
    spending. Over this period, the breakdown between site-specific
    and non-site-specific personnel spending within the individual
    units (headquarters and each of the regions) remained relatively
    constant from year to year. However, we found that there was
    variation among the regions. For example, site-specific personnel
    spending for the 3-year period ranged from a low of 22 percent in
    one region to a high of about 33 percent in another region-a 50-
    percent difference between the lowest and highest regions. Because
    EPA headquarters does not analyze Superfund personnel costs in
    terms of the amount of site-specific and non-site-specific
    spending, the meaning of these differences is unclear. EPA's
    Support          In 1996, EPA implemented improvements to its
    Superfund accounting Spending Is            system to better track
    Superfund expenditures. EPA expected that these improvements would
    help it compile more detailed cost information to Predominately
    for      support the agency's efforts to recover costs from
    responsible parties and Administrative         to improve internal
    tracking of Superfund financial data for management purposes.
    These improvements introduced over 100 categories to account
    Activities             for the activities that are paid for with
    Superfund money. Some of the categories capture activities that
    are site-specific, such as monitoring and supervising cleanups
    conducted by private parties, while other categories capture
    activities that are more administrative, such as maintaining
    automated data processing systems. We found that Superfund
    spending is not evenly distributed among all the activity
    categories. Three of the more than 100 categories accounted for
    over 60 percent of all Superfund support costs (both site-specific
    and non-site-specific). These three categories are defined by EPA
    as follows: * General support and management-includes all
    activities associated with managing and evaluating costs for site
    characterization. Also includes the general support activities
    required to operate and maintain the Superfund program. Activities
    include, but are not limited to, the following contractual
    services: establishing, maintaining, and revising automated data
    processing systems, and conducting special studies to help
    determine programmatic direction in future years. * General
    enforcement support-includes all activities associated with
    managing and evaluating the enforcement program. Activities
    include, but are not limited to, the following contractual
    services: establishing, Page 8
    GAO/RCED-99-139 Superfund B-282352 maintaining, and revising
    automated data processing systems, and conducting special studies
    to help determine programmatic direction in future years. *
    Remedial support and management-includes all activities associated
    with managing and evaluating the remedial program. Figure 4 shows
    EPA's spending for non-site-specific and site-specific support.
    Figure 4: Categories of EPA's Superfund Support Expenditures,
    Fiscal Years 1996 Through 1998 (Dollars in Millions) Source: GAO's
    analysis of EPA's data. EPA's non-site-specific spending was more
    concentrated in these three administrative categories than its
    site-specific spending. Specifically, about 78 percent of EPA's
    non-site-specific spending was in the three administrative
    categories, compared to only 25 percent of the site-specific
    spending. Given the concentration of non-site-specific spending
    under Page 9
    GAO/RCED-99-139 Superfund B-282352 these three categories, we
    conducted a detailed analysis of 1 year's (fiscal 1997) non-site-
    specific spending under these three administrative categories for
    three EPA regions and the three headquarters offices that had the
    highest amount of Superfund spending-the Office of Administration
    and Resources Management, the Office of Enforcement and Compliance
    Assurance, and the Office of Solid Waste and Emergency Response.
    For the three regions, most of the non-site-specific spending was
    on personnel items-such as management, administrative, and
    secretarial support-and general support activities, such as
    financial management, facility management, public affairs, and
    contract management. We found that some of this spending
    represented cost allocations to the Superfund program, while other
    spending was more directly related to specific program activities.
    For example, in all three regions we found that some of the non-
    site-specific costs had been allocated to the Superfund program
    for its share of expenses, such as the regional administrator's
    management, clerical, and administrative costs, regional motor
    pool expenses, and computer equipment and service costs. We also
    identified a few instances in which non-site-specific expenditures
    were more directly related to implementing cleanups, such as
    expenditures on annual physical examinations for staff who conduct
    field work at hazardous waste sites. Among the headquarters units,
    the Office of Administration and Resources Management had non-
    site-specific Superfund expenditures for items such as rent,
    information management, and facilities operations and maintenance.
    The Office of Enforcement and Compliance Assurance had non-site-
    specific expenditures for items such as overall program direction;
    policy development; and budgetary, financial and administrative
    support. This Office also incurred expenses for criminal
    investigations and for activities such as field sampling and
    laboratory and forensic analyses in support of criminal cases.
    These expenses were recorded as non-site-specific to protect the
    confidentiality of ongoing criminal investigations. The Office of
    Solid Waste and Emergency Response had non-site-specific
    expenditures for personnel functions, such as developing national
    strategy programs, technical policies, regulations and guidelines,
    and for providing program leadership for such activities as
    community involvement, program planning and analysis, contract
    management, information management, and human and organizational
    services. This Office also incurred non-site-specific expenditures
    for contracted Page 10
    GAO/RCED-99-139 Superfund B-282352 functions such as worker
    training, analytic support for EPA's contract laboratory program,
    and information management support. We also analyzed EPA's
    spending for site-specific support activities for fiscal years
    1996 through 1998. We found that about $184 million of the site-
    specific spending was in the three administrative categories.
    About $542 million was in the other more than 100 categories, for
    activities such as developing information for enforcement cases,
    overseeing cleanups at federal facilities, conducting site
    analyses and studies, overseeing private party cleanups,
    conducting laboratory analysis, and supervising cleanup
    contractors. EPA's Monitoring and       EPA regularly monitors and
    performs analyses of Superfund spending. Analysis of Superfund
    These analyses, however, do not examine the breakdown of Superfund
    expenditures in terms of contractor cleanup work, site-specific
    support, Expenditures               and non-site-specific support.
    The Director of the Superfund office responsible for resources and
    information management provided a summary of the activities EPA
    undertakes to manage Superfund spending, including: * monitoring
    whether regions and units obligate funds at the expected rate and
    in accordance with the agency's operating plan; * conducting
    midyear reviews that focus on program accomplishments, contracts
    and grants, and resources management; * reviewing contract
    management issues in all regions on a 3-year cycle; and *
    monitoring inactive contracts to identify and deobligate funds
    that are no longer needed. EPA's 1996 memorandum announcing
    improvements to its Superfund accounting system stated that one of
    the main benefits of the improvements would be to enable managers
    to more precisely account for site-specific and non-site-specific
    costs. The memo also stated that Superfund financial and
    programmatic managers would be able to track financial trends more
    accurately due to the increased level of financial detail now
    available in the accounting system. However, when we discussed our
    analyses with EPA officials, they told us that they do not perform
    the types of analyses we conducted. During the course of our work,
    we noted that another federal agency that deals with the cleanup
    of hazardous wastes-the Department of Energy-has been analyzing
    its costs using a functional cost reporting Page 11
    GAO/RCED-99-139 Superfund B-282352 system since 1994. This system
    breaks costs down into functional categories-mission-direct and
    several categories of support costs, including site-specific
    support and general support. While not identical to the categories
    we used in our analyses, Energy's functional cost categories are
    similar. In essence, Energy's system compares the share of costs
    in the different categories among the agency's operating units. If
    a unit's costs in any given category vary significantly from the
    other operating units', those costs are further analyzed to
    determine whether the differences are appropriate or whether they
    indicate areas for improvement. Department of Energy financial
    officials stated that the functional cost reporting system has
    resulted in support costs receiving increased attention by
    management and has been a helpful tool that has contributed to
    support costs declining faster than other costs-from 45 to 43
    percent of total costs between fiscal years 1994 and 1997.
    Conclusions       Detailed analyses of expenditure trends over
    time and among regions and headquarters units can be a valuable
    tool in identifying potential cost savings. While EPA's Superfund
    accounting system contains the data necessary to perform such
    analyses, EPA has not done so, even though tracking site-specific
    and non-site-specific costs more accurately was one of the major
    benefits anticipated when the 1996 system improvements were made.
    Given the variation in spending shares for contractor cleanup
    work, site-specific support, and non-site-specific support among
    EPA's regional and headquarters units, we believe that conducting
    such analyses would be a valuable tool in helping the agency to
    ensure that its Superfund resources are being used as wisely as
    possible. Recommendation    In order to better identify
    opportunities for potential cost savings, we recommend that the
    Administrator, EPA, require the Assistant Administrator for Solid
    Waste and Emergency Response to expand the monitoring of Superfund
    expenditures to regularly analyze the breakdown of expenditures in
    terms of contractor cleanup work, site-specific spending, and non-
    site-specific spending. These analyses should compare such
    spending shares among EPA's regional and headquarters units, and
    significant differences should be further analyzed to identify the
    underlying causes and to determine whether cost-saving corrective
    actions are warranted. Page 12
    GAO/RCED-99-139 Superfund B-282352 Agency Comments       We
    provided EPA with copies of a draft of this report for its review
    and and Our Evaluation    comment. In a letter from EPA's Acting
    Assistant Administrator for Solid Waste and Emergency Response,
    EPA disagreed with our characterization that EPA's activities fall
    into three groups-contractor cleanup costs, site-specific support,
    and non-site-specific support-and stated that this division gives
    the erroneous impression that site-specific and non-site-specific
    support do not contribute substantially to the achievement of
    cleanups. We do not believe that our categorization of Superfund
    costs leads to this impression. In fact, the first paragraph of
    the report explicitly states that EPA undertakes a number of
    activities, both site-specific and non-site-specific, that support
    cleanups, including supervising cleanup contractors, compelling
    private parties to perform cleanups, and performing management and
    administrative activities. Furthermore, the body of the report
    provides numerous examples of the purposes served by both site-
    specific and non-site-specific spending. We believe that these
    examples demonstrate that many of the site-specific and non-site-
    specific support activities contribute to the achievement of
    cleanups. The purpose of our analyses was to disaggregate
    Superfund expenditures to provide more detailed information on the
    specific functions served by this spending. This analytic method
    can be used (and is being used by the Department of Energy) to
    identify cost category differences among operating units that can
    lead to potential cost savings. Our report does not attempt to
    define or determine which expenditures are "cleanup activities,"
    but rather to describe the purposes for which Superfund money has
    been expended. According to EPA, cleanup response spending
    includes "lab analysis, engineering and technical analyses,
    project manager salaries, State/Tribal activities, community
    involvement activities, and oversight of responsible parties and
    many other activities necessary to achieve cleanups." We agree
    that these activities support the cleanup of sites, as stated in
    this report. However, when these support costs are aggregated into
    the larger category of cleanup response, it is unclear what share
    of these costs are for work related to specific sites, as opposed
    to general program expenditures. EPA also stated that our analyses
    failed to recognize Superfund appropriations used by other federal
    agencies. In fact, our analyses included Superfund expenditures by
    other federal agencies, and these expenditures were included under
    our site-specific and non-site-specific spending categories, as
    appropriate. The only substantial expenditures excluded from our
    review were made by the Agency for Toxic Substances Page 13
    GAO/RCED-99-139 Superfund B-282352 and Disease Registry, because
    these expenditures are made directly by that agency and are not
    reported in EPA's Superfund accounting system. EPA further stated
    that our analyses did not account for the expenditures private
    parties make to clean up Superfund sites that are the result of
    EPA's enforcement expenditures. We did not analyze private
    parties' expenditures to clean up hazardous waste sites because
    our focus was on federal Superfund expenditures. However, as part
    of our work for this assignment, we found that more than half of
    EPA's fiscal year 1997 enforcement expenditures was for management
    and administrative activities. Notwithstanding EPA's concerns as
    discussed above, the agency agreed to consider analyzing Superfund
    spending in terms of site-specific and non-site-specific
    obligations and expenditures, as we recommended. The full text of
    EPA's comments is included as appendix II. We conducted our review
    from September 1998 through April 1999 in accordance with
    generally accepted government auditing standards. See appendix I
    for our scope and methodology. As arranged with your offices,
    unless you publicly announce its contents earlier, we plan no
    further distribution of this report until 30 days after the date
    of this letter. At that time, we will send copies to other
    congressional committees with jurisdiction over the Superfund
    program, and to the Honorable Carol M. Browner, Administrator,
    Environmental Protection Agency. We will also make copies
    available to others upon request. If you have any further
    questions about this report, please call me at (202) 512-6111.
    Major contributors to this report are listed in appendix III.
    David G. Wood Associate Director, Environmental Protection Issues
    Page 14                                               GAO/RCED-99-
    139 Superfund B-282352 List of Congressional Requesters The
    Honorable Thomas J. Bliley, Jr. Chairman, Committee on Commerce
    House of Representatives The Honorable Michael G. Oxley Chairman,
    Subcommittee on Finance and Hazardous Materials Committee on
    Commerce House of Representatives The Honorable Bud Shuster
    Chairman, Committee on Transportation and Infrastructure House of
    Representatives The Honorable Sherwood C. Boehlert Chairman,
    Subcommittee on Water Resources and Environment Committee on
    Transportation and Infrastructure House of Representatives The
    Honorable James T. Walsh Chairman, Subcommittee on VA, HUD, and
    Independent Agencies Committee on Appropriations House of
    Representatives Page 15                                  GAO/RCED-
    99-139 Superfund Contents Letter
    1 Appendixes    Appendix I: Scope and Methodology
    18 Appendix II: Comments From the Environmental Protection
    20 Agency Appendix III: Major Contributors to This Report
    22 Table          Table 1: Superfund Expenditures for Contractor
    Cleanup Work,              5 Site-Specific Support, and Non-Site-
    Specific Support, Fiscal Years 1996 Through 1998 Figures
    Figure 1: Superfund Spending for Contractor Cleanup Work,
    4 Site-Specific Support, and Non-Site-Specific Support, as a
    Percentage of Total Expenditures, Fiscal Years 1996 Through 1998
    Figure 2: Types of Superfund Spending, by Regions and
    6 Headquarters, Fiscal Years 1996 Through 1998 Figure 3: Mix of
    Superfund Personnel Spending, by Regions and              7
    Headquarters, Fiscal Years 1996 Through 1998 Figure 4: Categories
    of EPA's Superfund Support Expenditures,              9 Fiscal
    Years 1996 Through 1998 Abbreviations EPA          Environmental
    Protection Agency GAO          General Accounting Office IFMS
    Integrated Financial Management System Page 16
    GAO/RCED-99-139 Superfund Page 17      GAO/RCED-99-139 Superfund
    Appendix I Scope and Methodology To determine the share of annual
    Superfund spending for contractor cleanup work, site-specific
    support, and non-site-specific support for fiscal years 1996
    through 1998, we obtained information from the Environmental
    Protection Agency's (EPA's) Integrated Financial Management System
    (IFMS). Using the IFMS information, we classified the cleanup
    support activities into spending for site-specific support and
    non-site-specific support for these fiscal years. We confirmed
    this classification with Office of Comptroller officials. In order
    to give a complete representation of cleanup support activities,
    we made one adjustment to the analyses included in our prior
    reports. Specifically, we included the costs for EPA personnel who
    supervise the cleanup contractors into the category for site-
    specific support. In our two prior reports, we had included these
    personnel in the contractor cleanup work category as EPA's
    accounting system does. This change has the effect of reducing the
    percentage of contractor cleanup work by about 1 percent from the
    level we had previously reported. To determine what activities
    were carried out with EPA's cleanup support spending, particularly
    its non-site-specific spending, we used the IFMS information. We
    categorized the spending by EPA's budget action codes, which
    provided general activity descriptions for Superfund spending
    under the more than 100 action codes. To obtain more specific
    information for EPA's non-site-specific spending, we selected
    three regional offices-Philadelphia, Chicago, and Kansas City-for
    sampling. Among EPA's regions, the first two had the highest non-
    site-specific spending and the third had the lowest, based on
    fiscal year 1997 data, which was the most recent information for
    which we had a breakdown of total support spending at the time we
    made our selection. We also selected the three EPA headquarters
    units-the Office of Solid Waste and Emergency Response, the Office
    of Administration and Resources Management, and the Office of
    Enforcement and Compliance Assurance-with the highest levels of
    Superfund spending. We interviewed cognizant officials from the
    three regional offices and three headquarters units about the
    particular activities conducted under the various budget action
    codes for the non-site-specific spending, and obtained greater
    detail on the uses of this spending. In a 1995 report on the IFMS,
    we found instances of inaccurate and incomplete data in the
    system.3 While we did not consider these instances to be
    representative of the overall integrity of the IFMS data, we
    recommended that EPA conduct statistical testing of the data,
    which EPA 3Superfund: System Enhancements Could Improve the
    Efficiency of Cost Recovery (GAO/AIMD-95-177, Aug. 25, 1995). Page
    18
    GAO/RCED-99-139 Superfund Appendix I Scope and Methodology has
    done. During the course of our current review, officials of EPA's
    Office of Inspector General told us that in their opinion the IFMS
    has not led to any material misstatements in EPA's 1996 and 1997
    annual financial statements and that they believed that the IFMS
    information was reliable for the purposes of our review. Finally,
    in discussing spending activities with officials from EPA's
    regional offices and headquarters units, we did not identify any
    material variations between the IFMS information and the
    underlying detailed records. To ascertain how EPA monitors and
    analyzes its regions' and headquarters units' spending of
    Superfund resources, particularly for contractor cleanup work,
    site-specific support, and non-site-specific support, we met with
    EPA headquarters officials. These officials included
    representatives from EPA's Office of Solid Waste and Emergency
    Response-which is responsible for the Superfund program-and the
    Office of the Chief Financial Officer. We also obtained copies of
    pertinent documents describing EPA's monitoring and analysis
    procedures and related reports. In addition, we met with
    Department of Energy officials and obtained documentation on their
    Functional Cost Reporting System. Page 19
    GAO/RCED-99-139 Superfund Appendix II Comments From the
    Environmental Protection Agency Page 20            GAO/RCED-99-139
    Superfund Appendix II Comments From the Environmental Protection
    Agency Page 21                            GAO/RCED-99-139
    Superfund Appendix III Major Contributors to This Report
    Resources,              Chuck Barchok, Assistant Director
    Community, and          Patricia J. Manthe, Evaluator-in-Charge
    Donald J. Sangirardi, Evaluator Economic                Curtis
    Groves, Operations Research Analyst Development Division Office of
    General       Richard P. Johnson, Senior Attorney Counsel (160459)
    Page 22                                       GAO/RCED-99-139
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