Drinking Water Research: Better Planning Needed to Link Needs and
Resources (Letter Report, 09/24/1999, GAO/RCED-99-273).

Pursuant to a congressional request, GAO provided information on the
Environmental Protection Agency's (EPA) safe drinking water research
efforts, focusing on: (1) comparing EPA's budget requests for drinking
water research during fiscal years (FY) 1997 through 2000 with: (a) the
amounts authorized for such purposes by the Safe Drinking Water Act
Amendments of 1996; and (b) the amounts estimated by EPA to be needed to
support the regulations and regulatory determinations required under the
amendments; (2) obtaining the views of stakeholders--those involved with
supplying and ensuring the safety of drinking water--regarding the
likelihood that EPA will be able to complete the research necessary to
support new regulations and regulatory decisions over the next 10 years
and the potential consequences if the research is not completed; and (3)
assessing EPA's drinking water research plans, including the tasks,
projected funding, and anticipated accomplishments, to support the
development of new regulations and regulatory decisions over the next 10
years.

GAO noted that: (1) for fiscal years 1997 through 2000, EPA annually
requested millions of dollars less than Congress authorized for drinking
water research and regulatory development in the 1996 amendments,
although the gap has narrowed recently; (2) for example, EPA requested
$77.4 million for FY 1998, or nearly 24 percent less than the $101.6
million that was authorized for that year, but this gap was reduced to
about 14 percent for FY 2000, since EPA requested $87 million of the
$101.6 million authorized; (3) according to EPA officials, the agency's
annual budget requests reflect the level of resources that agency
officials believe is needed to fulfill EPA's mission and program
responsibilities, within the planning ceilings and policy directives
provided by the Office of Management and Budget; (4) however, because
EPA does not generally prepare estimates of the total resources that
will be needed to carry out multiyear research programs, there is no
overall estimate of resource needs for drinking water with which to
compare EPA's annual budget requests; (5) the stakeholders GAO
interviewed all expressed concerns about the adequacy of the research
for the upcoming regulations on: (a) arsenic; and (b) microbial
pathogens, disinfectants (used to treat drinking water), and
disinfection by-products, particularly in the areas of health effects
and the analytical methods used to detect contaminants; (6) while EPA
officials acknowledge that some high-priority research projects will not
be completed in time for these regulations, they believe that the
available research will be sufficient to support the regulations with
sound science; (7) according to the stakeholders GAO interviewed, the
potential consequences of not having adequate research to support
upcoming regulations could be significant; (8) if EPA issues regulations
that are more stringent than can be justified by the available science,
then water utilities could bear unnecessarily high treatment costs; (9)
on the other hand, if EPA decides to set a less stringent standard
because some scientific data are not available, consumers could be
exposed to harmful contaminants longer than necessary; and (10) EPA has
prepared detailed research plans that identify the specific tasks that
it needs to complete in order to support upcoming regulations on arsenic
and microbial pathogens, disinfectants, and disinfection by-products.

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

 REPORTNUM:  RCED-99-273
     TITLE:  Drinking Water Research: Better Planning Needed to Link
	     Needs and Resources
      DATE:  09/24/1999
   SUBJECT:  Pollution monitoring
	     Hazardous substances
	     Safety standards
	     Water treatment
	     Safety regulation
	     Water supply management
	     Water pollution control
	     Potable water
	     Research programs
	     Future budget projections

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

Report to the Chairman,
Committee on Commerce,
House of Representatives

September 1999

DRINKING WATER RESEARCH - BETTER
PLANNING NEEDED TO LINK NEEDS AND
RESOURCES

GAO/RCED-99-273

Drinking Water Research

(160473)

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

  EPA - Environmental Protection Agency
  GAO - General Accounting Office

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

B-283292

September 24, 1999

The Honorable Thomas J.  Bliley, Jr.
Chairman, Committee on Commerce
House of Representatives

Dear Mr.  Chairman: 

As the Environmental Protection Agency's (EPA) safe drinking water
program matures, public water systems are faced with regulations that
are far more complex than in the past and whose costs could be
significant for both the systems and their customers.  In the Safe
Drinking Water Act Amendments of 1996,\1 the Congress made
significant changes to the way that EPA is required to set drinking
water quality standards for public water systems.  Among other
things, the regulations must be based on the best available
peer-reviewed science and must consider health risks, risk reduction,
and implementation costs.  The statute also authorized increased
funding for the scientific research needed to support the
regulations. 

Concerned about whether EPA's drinking water research will be
sufficient to support the agency's forthcoming regulations, you asked
us to

  -- compare EPA's budget requests for drinking water research during
     fiscal years 1997 through 2000 with (1) the amounts authorized
     for such purposes by the Safe Drinking Water Act Amendments of
     1996 and (2) the amounts estimated by EPA to be needed to
     support the regulations and regulatory determinations required
     under the amendments;

  -- obtain the views of stakeholdersï¿½those involved with supplying
     and ensuring the safety of drinking waterï¿½regarding the
     likelihood that EPA will be able to complete the research
     necessary to support new regulations and regulatory decisions
     over the next 10 years and the potential consequences if the
     research is not completed;\2 and

  -- assess EPA's drinking water research plans, including the tasks,
     projected funding, and anticipated accomplishments, to support
     the development of new regulations and regulatory decisions over
     the next 10 years. 

--------------------
\1 P.L.  104-182, 110 Stat.  1613 (1996). 

\2 To obtain stakeholders' views, we interviewed officials with the
American Water Works Association, American Water Works Association
Research Foundation, Association of Metropolitan Water Agencies,
Association of State Drinking Water Administrators, National
Association of Water Companies, National Drinking Water Advisory
Council, and Natural Resources Defense Council.  We also contacted
officials associated with the National Research Council and the
Science Advisory Board. 

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

For fiscal years 1997 through 2000, EPA annually requested millions
of dollars less than the Congress authorized for drinking water
research and regulatory development in the 1996 amendments, although
the gap has narrowed recently.  For example, EPA requested $77.4
million for fiscal year 1998, or nearly 24 percent less than the
$101.6 million that was authorized for that year, but this gap was
reduced to about 14 percent for fiscal year 2000, since EPA requested
$87 million of the $101.6 million authorized.\3 According to EPA
officials, the agency's annual budget requests reflect the level of
resources that agency officials believe is needed to fulfill EPA's
mission and program responsibilities, within the planning ceilings
and policy directives provided by the Office of Management and
Budget.  However, because EPA does not generally prepare estimates of
the total resources that will be needed to carry out multiyear
research programs, there is no overall estimate of resource needs for
drinking water with which to compare EPA's annual budget requests. 

The stakeholders we interviewed all expressed concerns about the
adequacy of the research for the upcoming regulations on (1) arsenic
and (2) microbial pathogens, disinfectants (used to treat drinking
water), and disinfection by-products, particularly in the areas of
health effects and the analytical methods used to detect
contaminants.  While EPA officials acknowledge that some
high-priority research projects will not be completed in time for
these regulations, they believe that the available research will be
sufficient to support the regulations with sound science.  According
to the stakeholders we interviewed, the potential consequences of not
having adequate research to support upcoming regulations could be
significant.  If EPA issues regulations that are more stringent than
can be justified by the available science, then water utilities could
bear unnecessarily high treatment costs.  On the other hand, if EPA
decides to set a less stringent standard because some scientific data
are not available, consumers could be exposed to harmful contaminants
longer than necessary. 

EPA has prepared detailed research plans that identify the specific
tasks that it needs to complete in order to support upcoming
regulations on arsenic and microbial pathogens, disinfectants, and
disinfection by-products.  However, EPA has not completed research
plans for other significant portions of its regulatory workload,
including determinations on contaminants that are candidates for
regulation and the review and revision of existing drinking water
standards.  Moreover, while the plans it has prepared specify
research tasks, projected accomplishments, and expected completion
dates, EPA has not identified the resources that are required to
implement the plans and does not have an effective system for
tracking the progress of ongoing research in relation to the plans. 
As a result, it is difficult to ascertain whether the research has
been adequately funded or will be available in time to support the
development of new regulations and regulatory determinations.  We are
recommending actions to improve the transparency of the budget
development process and the effectiveness of the system used to track
the progress and funding of research projects. 

--------------------
\3 We used fiscal year 1998 data for this example because EPA's
fiscal year 1997 budget request was prepared prior to the enactment
of the 1996 amendments and therefore was unusually low.  See table 1
for more information. 

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

EPA's responsibility for conducting drinking water research and
developing the applicable regulations is split between the agency's
Office of Research and Development and Office of Water.  The Office
of Research and Development's five laboratories and centers are
responsible for conducting research on health effects, exposure,
treatment technologies, and analytical methods.\4 In addition, the
Office's National Center for Environmental Assessment develops risk
assessments for some contaminants.\5 Within the Office of Water, the
Office of Science and Technology also does some risk assessments, and
the Office of Ground Water and Drinking Water collects data on the
occurrence of contaminants in drinking water; prepares the economic
assessments, including cost-benefit analyses, and makes the risk
management decisions necessary to support the regulatory decisions;
and writes the regulations. 

Among other things, the 1996 amendments to the Safe Drinking Water
Act required EPA to finish developing most of the regulations that
were in process at the time of the act's reauthorization, including
requirements for filtration treatment at surface water systems,
disinfection treatment at groundwater systems, and standards for
certain ï¿½priority contaminants.ï¿½\6 The amendments also replaced the
requirement to regulate 25 additional contaminants every 3 years with
a new selection process that explicitly allows EPA to identify
contaminants that warrant regulation on the basis of their adverse
health effects, their frequency of occurrence in public water
systems, and the projected risk reduction to be achieved by
regulating them.  EPA was required to publish, by February 1998, a
list of high-priority contaminants not currently regulated.  (This
list is known as the Contaminant Candidate List.) Beginning in August
2001 (and in 5-year cycles thereafter), EPA must determine whether to
regulate at least five of the contaminants on the list.  A
determination to regulate them must be based on the best available
public health information and data concerning the occurrence of the
contaminant.  In addition to regulating new contaminants, EPA must
review and revise, as appropriate, existing drinking water standards
at least once every 6 years. 

The 1996 amendments also modified EPA's standard-setting authority so
that health risks, risk reduction, and costs must be considered when
drinking water quality standards are established.  When proposing a
regulation, EPA is required to publish an analysis of, among other
things, the effects of the contaminant on the general population and
on subpopulations that are identified as likely to be at greater risk
of adverse health effects due to exposure to the contaminant in
drinking water than the general population.\7 In addition, EPA is
required to publish a determination of whether the benefits do or do
not justify the costs.  To the degree that its actions are based on
science, EPA must use the best available peer-reviewed science and
supporting studies conducted in accordance with sound and objective
scientific practices. 

--------------------
\4 The Office of Research and Development's five laboratories and
centers are the National Health and Environmental Effects Research
Laboratory, the National Exposure Research Laboratory, the National
Center for Environmental Assessment, the National Risk Management
Research Laboratory, and the National Center for Environmental
Research and Quality Assurance. 

\5 A risk assessment typically involves an evaluation of the
likelihood that a contaminant will cause an adverse health effect,
the extent to which the population is exposed to the contaminant
through drinking water and other sources, and the relationship
between the level of exposure and the adverse health effect. 

\6 Priority contaminants include arsenic; microbial pathogens, such
as cryptosporidium; disinfection by-products; and radon. 

\7 These ï¿½sensitive subpopulationsï¿½ may include infants, children,
pregnant women, the elderly, individuals with a history of serious
illness, or other groups. 

   EPA'S ANNUAL BUDGET REQUESTS
   FOR DRINKING WATER RESEARCH AND
   REGULATORY DEVELOPMENT ARE LESS
   THAN THE LEGISLATIVELY
   AUTHORIZED AMOUNTS
------------------------------------------------------------ Letter :3

For fiscal years 1997 through 2000, EPA annually requested millions
of dollars less than the amounts that the Congress authorized for
drinking water research and regulatory development in the 1996
amendments to the Safe Drinking Water Act.  The annual requests focus
on a specific budget year, reflecting known budgetary constraints. 
EPA does not generally prepare estimates of the total resources that
will be needed to carry out a multiyear research program for any
given research area. 

      AUTHORIZED AMOUNTS EXCEED
      EPA'S REQUESTS
---------------------------------------------------------- Letter :3.1

Table 1 shows the differences between the amounts authorized and
requested by fiscal year for drinking water research by the Office of
Research and Development and for regulatory development activities by
the Office of Water.  Beginning with fiscal year 1998, EPA requested
a much lower percentage of its authorized funding for drinking water
research than it did for regulatory development.  However, in both
fiscal years 1998 and 1999, the Office of Research and Development
ultimately received substantially more funding for drinking water
research than EPA requested for it; the total funds received during
those years were $40.3 million and $47.7 million, respectively. 

The gap between the authorized funding levels and budget requests has
narrowed recently.  For example, EPA requested 35 percent less than
what was authorized for drinking water research in fiscal year 1999,
but this gap was reduced to 24 percent for fiscal 2000.  Over the
same period, EPA requested about 13 percent less than what was
authorized for regulatory development in fiscal year 1999 and about 3
percent less for fiscal 2000. 

                                Table 1
                
                Comparison of Authorized Funding Levels
                 to Budget Requests for Drinking Water
                Research and Other Activities Related to
                Regulation Development for Fiscal Years
                           1997 Through 2000

                         (Dollars in thousands)

                           Amounts

                        authorized
                         under the
                              Safe              Difference
                          Drinking                 between
                             Water                 amounts
                               Act     Amounts
                        Amendments          of  authorized     Percent
                                of      budget         and  difference
Fiscal year                   1996     request   requested          \a
----------------------  ----------  ----------  ----------  ----------
1997\b
----------------------------------------------------------------------
Office of Water\c        $45,000.0   $19,343.5   $25,656.5        57.0
ORD\                      54,593.0    26,600.0    27,993.0        51.3
======================================================================
Total                    $99,593.0   $45,943.5   $53,649.5        53.9

1998
----------------------------------------------------------------------
Office of Water\c        $47,000.0   $41,467.5    $5,532.5        11.8
ORD\d                     54,593.0    35,900.0    18,693.0        34.2
======================================================================
Total                   $101,593.0   $77,367.5   $24,225.5        23.8

1999
----------------------------------------------------------------------
Office of Water\c        $47,000.0   $40,859.9    $6,140.1        13.1
ORD\d                     54,593.0    35,500.0    19,093.0        35.0
======================================================================
Total                   $101,593.0   $76,359.9   $25,233.1        24.8

2000
----------------------------------------------------------------------
Office of Water\c        $47,000.0   $45,484.9    $1,515.1         3.2
ORD\d                     54,593.0    41,500.0    13,093.0        24.0
======================================================================
Total                   $101,593.0   $86,984.9   $14,608.1        14.4
----------------------------------------------------------------------
Legend

ORD = Office of Research and Development

\a The amounts shown in the Total line for each fiscal year represent
the percent difference between the total amounts requested for the
Office of Research and Development and the Office of Water in a given
year and the total amounts authorized in that year. 

\b In fiscal year 1997, there were large differences between the
amounts authorized and requested because EPA's budget request for
that year was prepared prior to the enactment of the 1996 amendments. 
Subsequently, EPA received a supplemental appropriation under the
Omnibus Consolidated Appropriations Act of 1997.  Under this
appropriation, the Office of Water obtained an additional $6.8
million for regulatory development, and the Office of Research and
Development obtained an additional $10 million for health effects
research.  If these funds are added to the amounts requested for the
Office of Water and the Office of Research and Development in the
fiscal year 1997 budget, then the difference between the amounts
authorized and requested decreases to 41.9 percent and 33 percent,
respectively. 

\c The amounts shown for the Office of Water include funds for the
Standards and Risk Management Division within the Office of Ground
Water and Drinking Water and the Office of Science and Technology. 
In addition, the Office of Water's totals for fiscal years 1998,
1999, and 2000 include $2 million for unregulated contaminant
monitoring under the set-aside provision of section 1452(o) of the
Safe Drinking Water Act.  Although the 1996 amendments provided $10
million for such monitoring, EPA has never requested these funds. 

\d Since 1997, EPA has included $10 million for health effects
research in the base budget for drinking water research and has
obtained these funds through the annual appropriations process.  EPA
relies on the appropriations process for this funding rather than
reserving funds from the authorized set-aside of $10 million for
health effects studies in the Drinking Water State Revolving Loan
Fund under section 1452(n) of the Safe Drinking Water Act. 

Source:  GAO's analysis of EPAï¿½s data. 

According to officials within both the Office of Water and the Office
of Research and Development, EPA does not prepare its annual budget
requests on the basis of the specific funding authorizations in
environmental statutes.  Instead, the budget requests reflect (1) the
level of resources that agency officials believe is needed to fulfill
EPA's mission and program responsibilities and (2) the planning
ceilings and policy directives provided by the Office of Management
and Budget. 

Officials from the Office of Research and Development told us that
the amount of funding to be requested annually for research on
drinking water and other areas is determined through an extensive
planning process within the Office.  Research coordination teams
comprising representatives of the Office of Research and
Development's laboratories and centers and the applicable program
offices determine the Office's research priorities for the upcoming
budget year.  Each of the Office's five coordination teams is
responsible for a broad area of research:  air, water, pesticides and
toxic chemicals, hazardous wastes, and multimedia issues.  The teams
consider several factors in establishing research priorities,
including the Office's overall research strategy, the status of
ongoing research, program offices' priorities, and statutory and
budgetary constraints.  In the case of drinking water, for example,
the starting points for identifying priorities include EPA's
strategic plan, existing research plans, input from other federal
agencies engaged in related research, and advice from external
scientific advisory groups such as the Science Advisory Board.  Next,
an executive council within the Office of Research and Development
and EPA's Research Coordinating Council, comprising Deputy Assistant
Administrators from across the agency, review the teams'
recommendations and modify them as appropriate to ensure that the
Office's annual budget request focuses on the highest research
priorities across the agency.  The Assistant Administrator for
Research and Development works to resolve any differences and
forwards the budget for EPA-wide review. 

      ANNUAL REQUESTS ARE NOT
      LINKED TO MULTIYEAR RESOURCE
      ESTIMATES
---------------------------------------------------------- Letter :3.2

Using this process, EPA estimates only the resources needed for
drinking water (and other) research for a specific budget year,
rather than the total resources needed to carry out a multiyear
research program for any given research area.  In effect, the agency
determinesï¿½on an annual basisï¿½what research can be accomplished
within the targets provided by the Office of Management and Budget. 
Therefore, there is no overall estimate of the resource needs for
drinking water research with which to compare the annual budget
requests for drinking water research. 

Beginning with the fiscal year 2001 budget request, officials from
the Office of Research and Development plan to identify what
additional research could be accomplished at a funding level of 120
percent of their base budget.  However, the focus will still be on
research funded for a specific budget year.  Officials from the
Office of Research and Development told us that the Office of
Management and Budget discourages executive branch agencies from
projecting resource needs beyond the current budget-planning cycle. 
Out-year projections are included in the President's budget
submission to the Congress, but these estimates are provided at a
general account level--not at specific program levels.  In addition,
the officials said that EPA and other executive branch agencies must
work within current balanced budget constraints.  According to the
Staff Director of the Science Advisory Board, which annually reviews
EPA's research budget, the Office of Research and Development is
reluctant to develop a realistic estimate of the funding needed to
support drinking water research because such an estimate could lead
to funding reallocations within the agency. 

In fiscal year 1998, EPA did attempt to do an unconstrained needs
assessment that would identify the activities and resources necessary
to meet the new statutory mandates of the 1996 amendments, including
requirements for drinking water research, and to achieve public
health objectives.  EPA's Office of Water launched the Drinking Water
Strategic Needs Assessment project in the fall of 1997 and, with
input from the Office of Research and Development and experts in the
drinking water stakeholder community, comprehensively identified the
applicable statutory requirements, outputs, and deadlines for the
next 7 to 10 years.  On the basis of this information, the project
team calculated an initial, midrange estimate of the staffing and
financial resources necessary to meet those requirements.  As we
reported earlier this year, EPA concluded that the shortfall in
research and data collection funding was in the range of $10 million
to $20 million annually for fiscal years 1999 through 2005.\8 The
agency identified an additional but smaller resource gap over the
same period for program activities related to other aspects of the
1996 amendments.  The results of the assessment were presented to the
National Drinking Water Advisory Council and other stakeholders in
April 1998. 

EPA officials subsequently explained that the intent of the needs
assessment was not to calculate exact budget requirements.  Instead,
the purpose was to develop a ï¿½ballparkï¿½ estimate that would provide
trends and an overall picture of resource requirements for the full
and timely implementation of the Safe Drinking Water Act amendments. 
In March 1999, EPA officials testified that the level of funding
received in fiscal year 1999 and requested for fiscal 2000 is
sufficient to provide the resources needed to (1) meet all near-term
requirements of the act's amendments in a timely manner and (2) base
regulatory decisions on sound science.\9 Officials from the Office of
Water and Office of Research and Development are currently conducting
a comprehensive evaluation of resource needs for the drinking water
research program for fiscal year 2001 and beyond. 

Several of the stakeholders we interviewed expressed concern about
the adequacy of EPA's budget requests for drinking water research and
the proportion of the Office of Research and Development's research
budget that is devoted to drinking water.  Although safe drinking
water was identified as one of six priority research areas in the
Office's strategic plan, from fiscal years 1997 through 1999,
drinking water research has accounted for 4.9 to 6.9 percent of the
total research budget request.\10 Officials from the American Water
Works Association, the Association's Research Foundation, the
National Drinking Water Advisory Council, and the Natural Resources
Defense Council told us that considering its potential impact on
public health, drinking water research receives a disproportionately
small share of the Office of Research and Development's total
research budget.  They believe that funding for drinking water
research should receive a higher priority within EPA, and they cited
specific areas, such as certain health effects studies, in which they
believe that funding constraints caused the research to be started
too late to be available when needed. 

Officials from the Office of Research and Development pointed out
that drinking water research as a percentage of the total research
budget has more than doubled, from 3.3 percent in fiscal year 1995 to
7.8 percent in EPA's fiscal 2000 budget request.  They said that
research by EPA scientists and engineers in the areas of health
effects, exposure, risk assessment, and risk management is making
significant contributions to the understanding of drinking water
risks and to the development of reliable, cost-effective treatment
techniques.  While the officials acknowledge that it is beyond the
capacity of EPA to address all drinking water research needs, they
said that they have worked to establish partnerships with federal and
nonfederal research entities, such as the National Institute of
Environmental Health Sciences, the Centers for Disease Control and
Prevention, and the American Water Works Association Research
Foundation, to leverage additional resources. 

--------------------
\8 Safe Drinking Water Act:  Progress and Future Challenges in
Implementing the 1996 Amendments (GAO/RCED-99-31, Jan.  14, 1999). 

\9 Implementation of the 1996 Safe Drinking Water Act Amendments: 
Hearing Before the Subcommittee on Fisheries, Wildlife and Drinking
Water of the Senate Committee on Environment and Public Works, 106\th
Cong.  13-14 (1999) (Internet, GPO Access). 

\10 Over the same period, drinking water research represented 7.9 to
8.5 percent of the Office of Research and Development's operating
plan budget. 

   STAKEHOLDERS BELIEVE SOME
   RESEARCH WILL NOT BE AVAILABLE
   IN TIME TO SUPPORT UPCOMING
   REGULATIONS
------------------------------------------------------------ Letter :4

Beyond the questions surrounding the funding of drinking water
research, the stakeholders we interviewed all expressed concerns
about the adequacy of the research that will be available to support
the regulations on arsenic and microbial pathogens, disinfectants,
and disinfection by-products.\11 In the case of arsenic, for example,
several stakeholders told us that some of the epidemiological
studies, which will provide information on health effects,\12 will
not be completed in time, in part, because the research was started
too late for the results to be available when needed.  While some
stakeholders, such as the National Drinking Water Advisory Council
and the Association of Metropolitan Water Agencies, agree that there
will be gaps in health effects research, they believe that sufficient
information exists to take some interim action on arsenic.  They
expect EPA to lower the existing standard by the statutory deadline
of January 2001, and, when the longer-term research is completed, to
consider revising the standard again. 

Regarding the regulations on microbial pathogens, disinfectants, and
disinfection by-products, many stakeholders commented that some of
the health effects research--including epidemiological studies and
research on sensitive subpopulations, such as children and pregnant
women--will not be completed in time for the rule.  Both the Chairman
of the National Drinking Water Advisory Council and the Executive
Director of the National Association of Water Companies, among
others, also expressed concern about whether researchers will be able
to identify reliable analytical methods for detecting microbial
contaminants, such as cryptosporidium, that will be included in the
upcoming regulations.  Not having reliable analytical methods makes
it difficult to determine whether and to what extent drinking water
is contaminated and, thus, produces uncertainty with respect to any
assessment of consumers' exposure to microbial contaminants. 

EPA officials acknowledge that some high-priority research projects
will not be completed in time for the upcoming regulations on arsenic
and microbial pathogens, disinfectants, and disinfection by-products. 
For example, in the case of arsenic, EPA has testified that a
significant investment in health effects research must continue for
several years to address priority research needs.  In the case of
research on disinfection by-products, officials from the Office of
Research and Development told us that the importance of studying
certain noncancer health effects has only recently been recognized,
as EPA's understanding of the science has evolved.  Even so, EPA
officials believe that the available research will be sufficient to
support the regulations with sound science.  They told us that they
will issue regulations using the best available science and, when
additional research results become available, will modify the
regulations, if appropriate, as part of the review and revision of
existing standards that are required every 6 years.  In the case of
the research on microbial pathogens, disinfectants, and disinfection
by-products, some results may be available after the regulations are
proposed.  If this occurs, EPA would likely make the information
available to stakeholders through a notice of data availability. 

Some stakeholders questioned EPA's approach.  For example, the
Executive Director of the American Water Works Association Research
Foundation sees EPA's regulatory approach as a compromise that became
necessary because some research was started too late to be available. 
In addition, using a two-stage approach to regulate contaminants
could increase costs to utilities in some instances.  According to
the Executive Director of the National Association of Water
Companies, it is often not cost-effective to make incremental changes
in treatment technologies.  For example, in the case of arsenic,
water systems that meet the current standard of 50 parts per billion
(ppb) would be required to install additional treatment to achieve a
more stringent standard (i.e., a level that is less than 50 ppb but
more than 5 ppb).  If the standard is revised a second time to a
level below 5 ppb, then another treatment component would be
required.  Although the second treatment unit would be an additive
rather than a replacement unit, it is generally less expensive for
water systems to purchase and install all of the required equipment
at one time. 

The consensus among stakeholders is that the availability of research
for contaminants on the Contaminant Candidate List may be the most
serious concern because relatively little research has been initiated
so far and EPA does not expect to have a research plan until May
2000.  According to a variety of stakeholders and officials within
the Office of Water, EPA should be conducting research on these
contaminants now so that the regulatory determinations and
rulemakings associated with these contaminants will be supported by
sound science.  However, this research is just now beginning for the
most part.  In a March 1999 hearing before the House Committee on
Science, the Assistant Administrator for the Office of Research and
Development testified that in its fiscal year 2000 budget, EPA
redirected approximately $6 million from the funding that had been
dedicated to research on microbial pathogens, disinfectants, and
disinfection by-products to fill key data gaps and develop analytical
methods for chemicals and microbial pathogens on the Contaminant
Candidate List.  Although the Office of Research and Development has
already initiated research in the areas of health effects, exposure,
and treatment for selected high-priority contaminants on the list,
the fiscal year 2000 funding represents the first major transition of
resources within the drinking water research budget to address these
research needs. 

Some of the stakeholders we interviewed believe that EPA may have
sufficient information for the first set of regulatory
determinations, which is due in August 2001.  When EPA initially
developed the Contaminant Candidate List, the agency categorized some
contaminants as ï¿½regulatory determination prioritiesï¿½ because
sufficient information was already availableï¿½or could be obtained
quickly with a relatively small investment of resourcesï¿½to conduct
exposure and risk analyses.\13 From this group, EPA officials expect
to select five or more contaminants for the first set of regulatory
determinations.  However, stakeholders point out that although this
group may represent the contaminants for which the most information
is available, they are not necessarily among those on the list that
pose the most significant health risks.  Without more research,
however, this is impossible to know. 

Most of the stakeholders we interviewed raised concerns about whether
EPA will have sufficient information for the next round of regulatory
determinations on the Contaminant Candidate List, which must be made
by August 2006.  A number of stakeholders, including officials from
the Association of Metropolitan Water Agencies, the Natural Resources
Defense Council, and the National Drinking Water Advisory Council,
were particularly concerned that little or no health effects research
has been initiated for the contaminants on the list.  Some
stakeholders also noted that epidemiological studies, in particular,
can take 4 or more years to plan and conduct.  Consequently, they
believe that it is important to begin the work now so the results
will be available when they are needed. 

According to the stakeholders we interviewed, the potential
consequences of not having adequate science to support the
regulations could be significant.  They believe that if EPA issues
regulations that are more stringent than what is justified by the
available research, then water utilities could bear unnecessarily
high treatment costs.  In the case of arsenic, for example, under
both EPA's and industry's projections, annual compliance costs could
increase dramatically depending on how much the existing standard of
50 ppb is lowered, as shown in table 2. 

                                Table 2
                
                 Changes in Estimated Annual Compliance
                   Costs at Different Arsenic Levels

                         (Dollars in millions)

Arsenic level                     EPA's estimate\a   AWWA's estimate\b
------------------------------  ------------------  ------------------
20 ppb                                         $74                $330
10 ppb                                         270                 708
5 ppb                                          620               1,521
2 ppb                                        2,100               4,178
----------------------------------------------------------------------
Legend

AWWA = American Water Works Association

\a EPA's estimate is from a January 1995 informational briefing that
the agency provided for Senate staff; it was also published in an
article entitled ï¿½Uncertainties Drive Arsenic Rule Delayï¿½ in the
April 1995 issue of the Journal of the American Water Works
Association (p.12). 

\b The American Water Works Association's estimate was published in
an article entitled ï¿½Cost to Utilities of a Lower MCL for Arsenicï¿½ in
the March 1998 issue of the Journal of the American Water Works
Association (p.  96). 

According to an official in EPA's Office of Ground Water and Drinking
Water, the costs increase as the standard gets lower because
additional systems are affected at each level.  In addition, he said
that once the standard falls below 5 ppb, water systems would have to
add another treatment component to achieve compliance. 

On the other hand, not having adequate research could have an impact
on public health.  If EPA decides to set a less stringent standard or
defers the regulation of a contaminant because some scientific data
are not available, this could mean that consumers would be exposed to
harmful contaminants for an additional 6 or more years.\14 The
Natural Resources Defense Council and other organizations have
expressed concern about the relatively limited research on the impact
of drinking water contaminants on sensitive subpopulations, such as
pregnant women, children, the elderly, and people with compromised
immune systems.  An official with the Office of Ground Water and
Drinking Water acknowledged that the study of human reproductive and
developmental effects, in particular, is an area in which more
research is needed.  He told us that some earlier studies indicated a
possible association between these effects and exposure to drinking
water treated with disinfectants but that additional long-term
studies are needed to determine if there is any basis for concern. 
The National Program Manager for Drinking Water Research cited
several studies now being conducted or supported by EPA to evaluate
whether exposure to disinfection by-products is associated with
adverse reproductive outcomes. 

--------------------
\11 Conventional water treatment practices require the addition of
disinfectant chemicals to the water, that, while effective in
controlling many harmful microorganisms, combine with organic and
inorganic compounds in the water and form potentially harmful
disinfection by-products. 

\12 In general, environmental epidemiological studies are used to
determine whether an association exists between an adverse health
effect and a population's exposure to a contaminant.  Further studies
are often needed to confirm the epidemiological association and
determine the relationship between the level of exposure and the
adverse health effect. 

\13 Other contaminants were categorized as ï¿½researchï¿½ and/or
ï¿½occurrenceï¿½ priorities because of significant data gaps in the areas
of health effects, treatment, analytical methods, and/or occurrence. 
Of the 20 contaminants initially identified as regulatory
determination priorities, 7 or 8 have since been redesignated as
research priorities because EPA officials subsequently learned that
additional information is needed in one or more areas. 

\14 Under section 102(a) of the 1996 amendments, the EPA
Administrator has authority to take action more quickly (i.e.,
promulgate an interim national primary drinking water regulation)
whenever contaminants are determined to pose urgent threats to public
health. 

   EPA HAS NOT COMPLETED SOME
   RESEARCH PLANS AND DOES NOT
   IDENTIFY OR TRACK THE RESOURCES
   NEEDED TO IMPLEMENT EXISTING
   PLANS
------------------------------------------------------------ Letter :5

Although EPA has prepared detailed research plans in two significant
areas--arsenic and microbial pathogens, disinfectants, and
disinfection by-productsï¿½it has not yet completed plans for other
major aspects of its regulatory workload.  Where research plans do
exist, they lack key information on resource requirements.  In
addition, although the Office of Research and Development uses a
variety of methods to communicate the results of ongoing research
projects, the Office does not have an effective system for tracking
the progress and funding of the projects in relation to the research
plans. 

      SOME PLANS ARE STILL UNDER
      DEVELOPMENT
---------------------------------------------------------- Letter :5.1

EPA has not yet completed research plans for its anticipated work on
the Contaminant Candidate List and the review and revision of
existing standards, and has not developed a comprehensive research
plan that integrates both near-term and long-term research needs. 
EPA started work on a research strategy for the Contaminant Candidate
List after the first list was published in 1998.\15 Although EPA will
be required to make a regulatory determination on at least five
contaminants from the first list by August 2001, the agency does not
expect to complete its strategy until May 2000.  Similarly, although
EPA must complete the review and revision of about 80 existing
standards by August 2002, EPA only recently began the initial work
associated with identifying the research needs for this effort.  EPA
officials explained that at this point, they do not expect the review
of existing standards to require a significant research effort. 
According to the National Program Manager for Drinking Water
Research, EPA is not currently considering the development of a
separate research plan for the review and revision of existing
standards.  Instead, this work will be incorporated into EPA's
comprehensive research plan, which is targeted for completion by
December 2000.\16

A number of stakeholders were concerned that EPA does not yet have a
comprehensive research plan.  They believe that developing such a
plan would require EPA to lay out an integrated approach for
supporting ongoing regulatory efforts and identifying and conducting
research on emerging concerns, such as the presence of
pharmaceuticals in some sources of drinking water.  In addition, a
long-term plan would allow the agency to be more anticipatory and
less reactive.  The stakeholders cited several reasons why it is
important for EPA to make developing a long-term research plan a
priority as shown below: 

  -- Officials from both the American Water Works Association and the
     Association of Metropolitan Water Agencies said that it is
     essential for EPA to break the cycle in which the research lags
     behind the regulatory needs.  They said that EPA must avoid
     falling back into the position that it was in after the 1986
     amendments when the agency was required to set standards at a
     rapid pace-- namely, facing regulatory deadlines without having
     adequate science to support its decisions. 

  -- The Chairman of the National Drinking Water Advisory Council
     said that EPA needs to identify emerging concerns, articulate a
     plan of attack, and develop scientific information before a
     crisis occurs.  He noted that when the 1993 waterborne disease
     outbreak from cryptosporidium occurred in Milwaukee, Wisconsin,
     over 100 people died and several hundred thousand people became
     ill as a result.  He said that utilities were in a panic about
     their potential vulnerability to similar incidents.  However,
     very little was known about cryptosporidium or whether it could
     be detected and treated effectively because little or no
     research had been done. 

  -- The Executive Director of the American Water Works Research
     Foundation commented that knowing what research is planned by
     EPA helps shape the Foundation's own research planning.  The
     Foundation can avoid duplicating research that EPA already plans
     to fund itself and, instead, sponsor research that complements
     EPA's efforts. 

--------------------
\15 According to the Office of Research and Development, a strategy
is less specific than a plan in that the former provides the
framework for making and explaining decisions about a program's
purpose and direction and serves as a link between the Office's
overall strategic plan and individual research plans. 

\16 EPA is required to develop a long-term research plan under
section 202(a) of the 1996 amendments.  The statute does not impose a
deadline on the plan's completion. 

      RESOURCES NEEDED TO
      IMPLEMENT EXISTING PLANS ARE
      NOT IDENTIFIED OR TRACKED
---------------------------------------------------------- Letter :5.2

The research plans that EPA has prepared for arsenic and microbial
pathogens, disinfectants, and disinfection by-products identify the
specific research tasks that will be performed and provide
information on the anticipated accomplishments.  However, the plans
do not include estimates of the resources needed to fund the planned
research.  As a result, it is not possible to make the link between
the estimated cost of the research laid out in the plans and the
funds requested for drinking water research in EPA's budgetï¿½or to
determine whether the research is adequately funded. 

Not only do existing research plans lack key information on resource
requirements, but EPA also does not have an effective system for
tracking the progress and funding of ongoing research in relation to
the plans.  The Office of Research and Development does make
significant efforts to communicate the status and results of its work
to the Office of Water (e.g., through regular staff-level contacts,
special briefings, and status reports).  In addition, the Office of
Research and Development periodically communicates the results of
individual projects to interested groups outside the agency through
stakeholder meetings and other means.  Research status tables
prepared by the Office of Research and Development at our request
indicate that the project duration and completion dates for arsenic
and microbial pathogens, disinfectants, and disinfection by-products
were consistent with what was contemplated in the applicable research
plans.  However, the Office does not routinely report this
information and could not provide accurate and timely information on
project funding.  Moreover, officials from both the Office of Water
and outside stakeholder groups indicated that they would like to
receive regular reports that contain more detailed information on the
status of projects in the research plans, including the estimated and
actual start and completion dates and the funding for individual
projects. 

Because the Office of Water needed better information to monitor the
status of the work laid out in the research plan and to track
project-level resource expenditures, the Office developed its own
tracking system for the research on microbial pathogens,
disinfectants, and disinfection by-products.  Since 1997, the Office
of Water has paid a contractor over $148,000 to develop and maintain
the tracking system and input data on the status of individual
projects.  EPA officials believe that the system has been useful for
summarizing the types of studies being conducted by the Office of
Research and Development and outside entities; it served as the basis
for a series of charts, produced for meetings with stakeholders, that
indicated the timelines for individual projects.  However, we found
that as of mid-July 1999, the system did not contain information on
the funding allocated to individual projects for either fiscal years
1998 or 1999. 

Concerns about the Office of Research and Development's systems for
tracking research are not new.  The Office's Federal Managers
Financial Integrity Act report for fiscal year 1994 identified

     ï¿½difficulties in understanding the nature and relationships of
     projects and resources to the overall research plan due to
     limited stand-alone systems which do not communicate or
     integrate with one another.  Resources are difficult to
     correlate with each project at the project and task level. 
     Events associated with the development of each project are not
     trackable over time (life-cycle planning).  At risk is a lack of
     current on-line responsiveness to requests for information.ï¿½

In response to the report, the Office of Research and Development
developed a new management information system that was designed to
track information at all necessary levels and produce accurate and
timely reports.  According to officials from the Office of Research
and Development, this system is adequate to meet the internal needs
of the Office's laboratories and centers.  However, it appears that
the system is not adequate to meet the needs of key stakeholders in
the Office's research within and outside EPA.  For example, the
system does not compile status reports on projects identified in the
research plans or track resources at a project level over the life of
individual projects.  To obtain such information, it is necessary for
the Office to make a special data request to its laboratories and
centers. 

Better planning and a more explicit link between research needs and
resources would improve the transparency of the budget development
process.  The Science Advisory Board, which annually reviews the
Office of Research and Development's budget requests, has noted
improvements in the Office's efforts to link research priorities with
specific environmental goals and improvements in the coordination
between the Office and the needs of EPA's program offices.  However,
in commenting on the Office's fiscal year 2000 budget, the Board's
Research Strategies Advisory Committee indicated that the lack of
transparency in the process used to set research priorities made it
difficult for the Committee to evaluate the adequacy of the proposed
budget.  The Committee recommended that EPA make available
information on the high-ranking programs that it entertained during
the budget-making process but could not fund because of overall
budget constraints and competition with other programs.  In addition,
the Committee found that the criteria that EPA used to emphasize or
de-emphasize programs in the proposed budget were unclear and
recommended that EPA develop explicit criteria that can be used for
setting research priorities during the budget development process. 
The Committee concluded that such an exercise would not only improve
communication and understanding of the budget process for those
outside the agency, but would also assist EPA in making its internal
decision process more efficient. 

In September 1998, the Committee issued a report to EPA that
identified, among other things, ways that the Office of Research and
Development could improve its presentation of budget materials.\17
For example, the Committee recommended that the Office provide more
detail on how the budget is allocated to individual objectives and
research programs and how the current fiscal year's budget fits into
the contemplated budgets over the 5-year planning horizon of the
Strategic Plan and even over the longer term (10 to 15 years).  The
Committee also recommended that the Office provide timelines for
multiyear programs, showing both past budget trends and future
projections.  Officials from the Office of Research and Development
told us that they recently began a pilot project to link the
strategic long-term research priorities for drinking water with
annual planning and budgeting. 

--------------------
\17 Commentary on the Process for Science Advisory Board Review of
the Office of Research and Developmentï¿½s Presidential Budget Request
(Sept.  17, 1998). 

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

EPA has invested considerable time and funds in an effort to
undertake research needed to support complex new regulations that
will profoundly affect water systems and their customers.  While the
agency has made significant efforts to communicate the progress and
accomplishments of its drinking water research, the Congress, water
supply industry, and other key stakeholders have indicated a need for
greater assurance that the research is adequately funded and will be
completed in time to ensure that the applicable regulations will be
supported by sound science.  This widely expressed desire for greater
assurance is understandable, given both the millions of dollars being
spent on the research program and the prospect that billions of
dollars could be spent by the water supply industry to comply with
new and expensive regulations.  We believe that more detailed and
better-communicated information on planned and ongoing research is
warranted on the grounds of both accountability and efficiency. 

Developing a realistic estimate of the resources required to support
needed research will not guarantee that EPA's budget request will be
sufficient to meet all needs.  We recognize that overall funding
constraints and competing demands within the Office of Research and
Development and EPA as a whole may prohibit the agency from fully
funding all its needs.  However, identifying the nature, timing, and
estimated cost of needed research for the multiyear research
plansï¿½and linking these needs to the annual budget requestï¿½will make
the funding process far more transparent.  Providing information on
which projects will be funded in a given fiscal year (and which
projects will not) will give stakeholders within and outside EPA a
clear basis for assessing the impact of the agency's budget
decisions.  In addition, EPA's reliance on outside research entities
to fill the gaps that are beyond the agency's capacity to meet makes
it all the more important for EPA to identify high-priority projects
that may be deferred or abandoned because of funding constraints. 
Similarly, having a more effective system for tracking ongoing
research will both enhance the budget development process and allow
stakeholders to make informed judgments about whether the research is
adequately funded and will be available when needed.  We recognize
that research, by its very nature, is an evolving process and that
some of the projects contemplated in the agency's research plans will
likely be modified or halted and some new projects will be added over
time.  While tracking research may be a more challenging proposition
under these circumstances, it is no less important. 

   RECOMMENDATIONS
------------------------------------------------------------ Letter :7

To improve the link between research needs and resources and to
better ensure that limited research funds within EPA and other
organizations are most efficiently targeted, we recommend that the
Administrator, EPA, take steps to ensure that the budget development
and planning processes for drinking water research are more
transparent.  Specifically, EPA should (1) identify the specific
research that must be accomplished, (2) establish time frames that
indicate when the results must be available, (3) estimate the
resources that will be required to support the needed research, and
(4) use these data to develop budget requests and inform stakeholders
of what research will be funded.  In addition, we recommend that the
Administrator take steps to improve (1) the tracking of ongoing
research in relation to existing research plans and (2) the
communication of the agency's progress so that the Office of Research
and Development's key customers, including the Office of Water and
outside stakeholders, can obtain timely and accurate reports on the
status, timing, and funding of individual research projects. 

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

We provided EPA with copies of a draft of this report for review and
comment.  In general, EPA concluded that the report provides an
accurate characterization of its views.  The agency commented that it

     ï¿½agrees with the importance of the central issues examined in
     [the] report, including the critical need for an adequate
     investment in drinking water research to provide a sound
     scientific basis for drinking water regulations, the importance
     of linking multi-year research planning to the yearly budget
     cycle, and the value of using effective tracking systems for
     monitoring and communicating the status of research activities
     and resource requirements.ï¿½

EPA also made some general observations to clarify its position on
key issues raised by the report.  Regarding the planning and
budgeting process, EPA expressed concern that the report does not
recognize the significant reallocation of resources to address
drinking water needs and implies that EPA does not consider drinking
water research as a priority.  The agency noted that as part of its
annual planning and budgeting process, the Office of Research and
Development works with the program and regional offices to allocate
funds across various research programs and ensure that the areas of
greatest need, such as drinking water research, are given the highest
priority.  EPA maintained that when other factors, such as balanced
budget constraints, are considered, its yearly budget requests are
consistent with the needs identified in the Office of Research and
Development's research plans and pointed out that its funding for
drinking water research has doubled from fiscal year 1995 to fiscal
2000.  While we acknowledge that the funding for drinking water
research has increased significantly, we continue to believe that an
overall estimate of resource needs is essential to assessing the
adequacy of the funding and the extent to which EPA will have to rely
on external research organizations to supply needed scientific data. 

Regarding the tracking of research, EPA commented that the Office of
Research and Development uses ï¿½a comprehensive system to ensure
fiscal controls and to track resources to the project and task
level,ï¿½ although, in the agency's view, our report implies otherwise. 
EPA stated that the Office's management information system was
designed to produce accurate and timely reports for use by its
laboratories and centers according to (1) fiscal year, (2) goal
(e.g., air, water, waste), (3) program results code, (4)
organization, (5) research area, and (6) task.  However, EPA
acknowledged that the Office of Water needs information in a
different format and stated that the Office of Research and
Development and the Office of Water are currently examining ways to
provide information that is more closely aligned with the program
office's rulemaking efforts.  We believe that this is an important
step in addressing our concerns.  EPA faces a difficult task in
managing a large body of research to ensure that its regulations are
supported by sound science and the data are available in time to meet
regulatory deadlines.  We recognize that the Office of Research and
Development has an information system that meets its internal needs. 
However, the Office does not have a system that tracks the progress
and funding of specific research projects in relation to the research
plans.  We believe that tracking this information makes sense, in
light of EPA's regulatory responsibilities and the time and effort
that the Office of Research and Development invests in preparing
detailed research plans.  A tracking system that meets the needs of
key stakeholders in the Office of Research and Development's
research--within and outside the agency--should provide detailed
information on the status of projects in the research plans,
including the estimated and actual start and completion dates and the
funding for individual projects. 

EPA also commented that our report implies that the agency is not
sharing relevant information with stakeholders and stated that it
places a high priority on sharing information regarding the status of
and plans for research on drinking water contaminants.  EPA stated
that its efforts to share information in numerous stakeholder
meetings and to work closely with other federal agencies offer
excellent opportunities to coordinate the utilization of resources
and ensure that the research conducted or supported by these
organizations is complementary to EPA's research and not duplicative. 
The agency said that it is prepared to further strengthen these
interactions, as necessary, to ensure that all groups are fully
informed of research needs, activities, and resource requirements. 
We agree that EPA has made significant efforts to communicate the
results of its drinking water research and believe that implementing
our recommendations to improve the link between research needs and
resources and to develop a more effective tracking system for ongoing
research would enhance this communication. 

In addition, EPA commented that the report's title does not
accurately reflect the report's contents.  We believe that the title
is consistent with our findings in that the need for better planning
is a key issue throughout the report.  Thus, we retained the report's
original title. 

Finally, in commenting on one of our recommendations, as part of its
technical comments, EPA stated that it is not able to disclose what
activities were not proposed for funding once the final decisions are
made on the agency's budget request because this information involves
internal budget deliberations.  We modified the recommendation
accordingly.  However, we believe that the modified recommendation
can still achieve its intended purpose.  By linking the agency's
budget requests to detailed research plans that identify specific
projects, timelines, and required resources--and then providing
information on what research ï¿½made the cutï¿½ and will be funded--EPA
will give stakeholders the information they need to determine where
the gaps are and, thus, where their own resources would be most
efficiently targeted. 

The full text of EPA's comments appears in appendix I.  EPA also
provided technical comments to clarify and amplify the information
presented in this report.  We incorporated those comments throughout
the report as appropriate, but did not reproduce them in the
appendix. 

   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :9

To obtain information on the authorized and requested funding for
drinking water research, we reviewed the Safe Drinking Water Act
Amendments of 1996 to identify specific funding authorizations and
EPA's budget requests for fiscal years 1997 through 2000.  We also
interviewed officials within the Office of Research and Development's
Office of Resource Management and Administration and the Office of
Ground Water and Drinking Water's Budget and Accountability section
to obtain a breakdown of their budget requests by statutory
authorization.  We were unable to obtain information on the amounts
estimated to be needed for drinking water research because, as a
general practice, EPA does not identify resource needs outside the
targets provided by the Office of Management and Budget.  We did
obtain information on applicable EPA policies and documentation of a
preliminary needs assessment that was prepared by the Office of
Water.  We also interviewed key stakeholders to obtain their views on
the adequacy of the funding for drinking water research.  The
stakeholders included the American Water Works Association, American
Water Works Association Research Foundation, Association of
Metropolitan Water Agencies, Association of State Drinking Water
Administrators, National Association of Water Companies, National
Drinking Water Advisory Council, and Natural Resources Defense
Council. 

The stakeholders also provided their views on the likelihood that EPA
will be able to complete the research necessary to support upcoming
regulations and the potential consequences if the research is not
completed in time.  In addition, we interviewed several EPA
officials, including the Office of Research and Development's
National Program Manager for Drinking Water Research and the Director
of the Standards and Risk Management Division within the Office of
Ground Water and Drinking Water, regarding the status of the ongoing
and planned research needed to support near-term and longer-term
regulatory efforts. 

To obtain detailed information on EPA's drinking water research
planning, we reviewed existing research plans for arsenic and
microbial pathogens, disinfectants, and disinfection by-products and
interviewed officials from EPA and stakeholder organizations about
the status of plans that have not yet been completed.  We also
contacted officials from scientific advisory organizations, including
the Science Advisory Board and the National Research Council, and
reviewed their reports relating to EPA's research planning and
budgeting.  Finally, we obtained and analyzed various reports
intended to track ongoing research, reviewed documentation relating
to the Office of Research and Development's information system, and
interviewed officials responsible for the information system and
research tracking reports.  Our work was conducted from February
through September 1999 in accordance with generally accepted
government auditing standards. 

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

As arranged with your office, unless you 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 make copies
available to interested congressional committees; the Honorable Carol
M.  Browner, Administrator, Environmental Protection Agency; and the
Honorable Jacob J.  Lew, Director, Office of Management and Budget. 
We will make copies available to others on request. 

If you have any questions regarding this report, please contact me at
(202) 512-6111.  Key contributors to this assignment were Ellen
Crocker, Teresa Dee, and Les Mahagan. 

Sincerely yours,

Peter F.  Guerrero
Director, Environmental
 Protection Issues

(See figure in printed edition.)Appendix I
COMMENTS FROM THE ENVIRONMENTAL
PROTECTION AGENCY
============================================================== Letter 

(See figure in printed edition.)

(See figure in printed edition.)

*** End of document. ***