Chemical Safety Board: Realigned Management Faces Serious Challenges
(Statement/Record, 04/12/2000, GAO/T-RCED-00-147).

Pursuant to a congressional request, GAO discussed the fiscal year (FY)
2001 budget for the Chemical Safety and Hazard Investigation Board,
focusing on determining the status of the Board's: (1) organization; (2)
operations; and (3) efforts to update and develop plans, policies, and
procedures for accomplishing the Board's mission.

GAO noted that: (1) the Board is operating under a significantly
different organizational structure than was in effect during most of its
first 2 years of operation; (2) this new structure requires a majority
vote of the Board members for substantive management decisions and
delegates some specific responsibilities to individual Board members;
(3) the current structure represents a interim solution to address two
governance issues: the lack of an appointed chairperson and
disagreements concerning the rules of the chairperson and Board members;
(4) during the first 2 years of operation, the Chairman had individually
made substantive management decisions; (5) in addition, the Board has
implemented an organizational realignment that dedicates an increased
proportion of the Board's staffing resources to its investigations and
safety programs rather than supporting activities; (6) however, only 7
of the 17 investigative and safety positions are filled because of,
among other things, difficulties in recruiting qualified staff; (7) in
terms of operations, the Board has made minimal progress in addressing
the backlog of incomplete investigations that existed as of April 1999;
(8) specifically, only one of nine outstanding investigations has been
completed, and no new investigations were initiated; (9) most of the
Board's operations and plans are directed at completing its backlog of
investigations and the related policies and procedures that support
investigations; (10) the Board also plans to initiate two new
investigations and one as yet undefined safety study in FY 2000; (11)
the Board has made some progress in developing needed plans, policies,
and procedures; (12) however, all of the Board's larger contracts were
executed before the contracting policies and procedures were
established; (13) according to Board officials, the agency has received
limited benefit from some of these contracts; (14) also, the interim
criteria for selecting incidents to investigate are not ready for use,
and the Board plans to continue to work with external stakeholders
representing companies, employees, and the public to refine the process
for selecting incidents to investigate; (15) GAO believes that the
Board's initial steps since the management realignment appear to be
appropriately targeted to addressing the Board's key problems; and (16)
however, the success of these steps continues to be hampered by
difficulties in hiring and retaining investigators.

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

 REPORTNUM:  T-RCED-00-147
     TITLE:  Chemical Safety Board: Realigned Management Faces Serious
	     Challenges
      DATE:  04/12/2000
   SUBJECT:  Strategic planning
	     Agency missions
	     Safety standards
	     Hazardous substances
	     Federal agency reorganization
	     Industrial accidents
	     Accident prevention
	     Human resources utilization
	     Investigations by federal agencies
	     Safety regulation

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Testimony

Before the Subcommittee on Veterans Affairs, Housing and Urban Development,
and Independent Agencies, Committee on Appropriations, U.S. Senate

To Be Released

at 9:30 a.m. EDT

Wednesday

April 12, 2000

CHEMICAL SAFETY BOARD

Realigned Management Faces Serious Challenges

Statement for the Record by

David G. Wood, Associate Director,

Environmental Protection Issues,

Resources, Community, and Economic

Development Division

GAO/T-RCED-00-147

Mr. Chairman and Members of the Subcommittee:

We appreciate this opportunity to provide a statement for the record for use
in the Subcommittee's hearing on the fiscal year 2001 budget request for the
Chemical Safety and Hazard Investigation Board (the Board), an independent
agency. Currently in its third year of operation, the Board's mission is to
enhance the health and safety of the public, workers, and the environment by
determining the causes of accidental chemical releases and using these
findings to promote preventive actions by the private and public sectors.
The authorizing statute provides for five Board members, including a
chairperson, all appointed by the President. The staff includes
investigators, attorneys, and program analysts. The Board is required to
submit its budget request to the Congress and the Office of Management and
Budget concurrently. For fiscal year 2001, the Board has requested $9
million, an increase of $1 million over the prior year's funding. However,
the President's Budget requests $8 million for the Board.

Mr. Chairman, our statement is based on ongoing work for you and Senator
Lautenberg. As agreed with your offices, this work is focused on determining
the status of the Board's (1) organization; (2) operations; and (3) efforts
to update and develop plans, policies, and procedures for accomplishing the
Board's mission. Our statement today reflects our work to date and includes
information supplementing our recent testimony for the House Appropriations
Committee. We expect to complete our work and issue a final report in June
2000.

In summary, to date we have found the following:

   * The Board is currently operating under a significantly different
     organizational structure than was in effect during most of its first 2
     years of operation. This new structure requires a majority vote of the
     Board members for substantive management decisions and delegates some
     specific responsibilities, such as personnel matters, to individual
     Board members. The current structure represents an interim solution to
     address two governance issues: the lack of an appointed chairperson
     since January 2000 and disagreements concerning the roles of the
     chairperson and Board members. During the first 2 years of operation,
     the Chairman had individually made substantive management decisions. In
     addition, the Board has implemented an organizational realignment that
     dedicates an increased proportion of the Board's staffing resources to
     its investigations and safety programs, rather than supporting
     activities. However, only 7 of the 17 investigative and safety
     positions are currently filled because of, among other things,
     difficulties in recruiting qualified staff.

   * In terms of operations, the Board has made minimal progress in
     addressing the backlog of incomplete investigations that existed as of
     April 1999, when we last reported on the Board to this Subcommittee.
     Specifically, since then, only one of nine outstanding investigations
     has been completed, and no new investigations were initiated. Most of
     the Board's current operations and plans are directed at completing its
     backlog of investigations and the related policies and procedures that
     support investigations. The Board also plans to initiate two new
     investigations and one as yet undefined safety study in fiscal year
     2000.

   * The Board has made some progress in developing needed plans, policies,
     and procedures, such as those for awarding and managing contracts.
     However, all of the Board's larger contracts ($100,000 or more) were
     executed before the current contracting policies and procedures were
     established. According to Board officials, the agency has received
     limited benefit from some of these contracts. For example, the Board is
     not currently using--and may never use--an information system that cost
     about $636,000 to develop. Also, the interim criteria for selecting
     incidents to investigate are not yet ready for use, and the Board plans
     to continue to work with external stakeholders representing companies,
     employees, and the public to refine the process for selecting incidents
     to investigate. We believe that the Board's initial steps since the
     management realignment appear to be appropriately targeted to
     addressing the Board's key problems. However, the success of these
     steps continues to be hampered by difficulties in hiring and retaining
     investigators.

Background

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

The Board has no enforcement authority and a very limited regulatory role.
According to a relevant legislative committee report, the Board is modeled
after the National Transportation Safety Board, which retained the lead role
in investigating transportation-related chemical incidents.

The Board is to consist of five members, including a chairperson, appointed
by the President and confirmed by the Senate. The chairperson is the Chief
Executive Officer (CEO) of the Board. As of April 2000, the Board has four
members but does not have an appointed chairperson.

To accomplish its primary mission, the Board has conducted both full-scale
investigations of chemical accidents as well as limited investigations,
called reviews. In our April 1999 statement for the record before this
Subcommittee, we identified a backlog of incomplete investigations.
Furthermore, we determined that significant portions of the Board's actual
and planned resources were dedicated to activities, such as external
relations, that did not directly support the conduct of its investigations.

Status of the Board's Organization

Recently, the Board changed its management responsibilities and functional
alignment to address, among other things, conflicts that had arisen over the
roles and responsibilities of the Board members. Specifically, in December
1999 and January 2000, the Board developed interim solutions to important
organizational issues regarding the roles and the management
responsibilities of the Board members. In addition, changes in functional
alignment made in 1999 and early 2000 increased the proportion of staffing
resources to be allocated to the Board's primary mission of conducting
investigations and reduced staffing allocated for other activities, such as
external relations and information technology.

Conflicts Arose Over the Roles and

the Responsibilities of Board Members

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

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

In October 1999, the Board members accepted the General Counsel's opinion,
but the Chairman requested further legal clarification before implementing
the opinion. The Chairman interpreted the Board's authorizing statute as
giving him authority, as CEO, over a number of agency functions, including
all budget and contracting issues, subject to review only by the President
and the Congress. In November 1999, the Board members requested an opinion
from the Department of Justice's Office of Legal Counsel on the legal
accuracy of the General Counsel's memorandum and agreed to be bound by the
opinion. In addition, on December 1, 1999, the Chairman also requested that
the Office of Legal Counsel review the Board's authorizing statute to
determine the precise roles and responsibilities of the chairperson and the
Board, and he agreed to be bound by the Office's conclusion. On the same
day, the Chairman and the Board members developed an agreement specifying
the interim measures to be taken until the Department of Justice provided
its legal opinion. This agreement expanded the roles and the
responsibilities of the Board members.

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

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

Current Functional Alignment Emphasizes

Investigations, but Many Positions Are Vacant

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

position of Chief Operating Officer in addition to his legal
responsibilities. Also, on

February 2, 2000, the Board named a staff member to the position of Director
of the Office of Investigations and Safety Programs.

Increased Resources Allocated for Investigations and Safety

Currently, the Board has 24 staff, including the 4 Board members and a
special assistant to the Board. The Board expects to grow to a staff of 40
by the end of fiscal year 2000, with almost all of the growth in the areas
of investigations and safety. Table 1 identifies the Board's offices and
staffing allocations, both current and planned.

Table 1: The Board's Current and Projected Staffing Levels, by Functional
Office, as of April 7, 2000

                                      Projected
                           Current    staffing by
 Office                               the end of
                           staffing   fiscal year
                                      2000
 Board members and staff   5          7a
 Chief Operating Officer   1b         2
 Investigations and Safety
 Programs                  7          17
 General Counsel           3b         3
 External Relations        2          2
 Information Technology
 Services                  2          4
 Administration            4          5
 Total                     24         40

aCurrently, the Board has four members and one special assistant. Projected
staffing includes the fifth Board member as provided by the Board's
authorizing statute.

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

The projected staffing differs markedly from the staffing associated with
the Board's budget request for fiscal year 2000. Specifically, in February
1999, the Board expected to grow to a staff level of 60 by the end of fiscal
year 2000, compared with current plans to grow to 40 staff. In addition,
last year a greater proportion of staff was planned for organizational units
that did not directly support the Board's investigative mission. For
example, last year, 33 percent of the Board's projected staffing resources
at the end of fiscal year 2000 was allocated to investigations and safety
programs, compared with the current projections of 43 percent. Currently,
the Board plans to allocate two staff to the Office of External Relations
compared with the planned allocation of nine staff a year ago.

Vacancies Exist in the Investigations Area

As shown in table 1, 10 of the 17 positions planned for the Office of
Investigations and Safety Programs are vacant. Six of the positions are for
investigators, and the other vacancies are for two program analysts, one
library/researcher, and one administrative assistant. Board officials told
us that the vacancies exist because of recruitment difficulties and the loss
of two investigators. According to the Board, potential recruits with the
requisite chemical safety skills--primarily from the oil and chemical
process industries--are highly paid and typically located in areas far from
Washington, D.C. Board officials said that it has been difficult to get
prospective staff to relocate. In addition, the Board has found that it
takes 6 months or longer to recruit and hire staff. This time frame for
hiring staff is longer than the Board anticipated. Moreover, according to
Board officials, one investigator resigned and another was terminated.

The newly constituted Board has stated its intent to focus on personnel
management issues in fiscal year 2000. The Board will concentrate on
retaining and retraining current staff and on hiring and training qualified
professional staff. Specifically, the Board has identified development of
hiring and training plans as priorities for fiscal year 2000. The Office of
Personnel Management (OPM) approved the Board's March 17, 2000, request to
reinstate through December 2000 special hiring authority (termed Schedule A)
that the Board had been granted previously. According to Board officials,
this special hiring authority, which it had until December 31, is typically
granted to new federal agencies for a limited time period and expedites the
hiring process.

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

In its fiscal year 2001 budget request, the Board acknowledged that it may
not be able to achieve its fiscal year 2000 hiring goals. The Board has also
acknowledged that the governance problems and the management difficulties
stemming from them contributed to staff turnover. In addition, the Board
believes that more initiatives than the agency could effectively handle were
undertaken hastily in its first year of operation in an effort to quickly
demonstrate that the Board was meeting its congressional mandate.

Status of the Board's Operations

The Board has not made progress in addressing its investigations backlog
this past year and has not initiated a new investigation since March 1999.
In addition, the more limited review program was terminated because of
problems encountered in performing these reviews. The Board plans to
initiate two investigations in fiscal year 2000 and four or five
investigations each year beginning in fiscal year 2001. Similarly, in fiscal
year 2000 the Board plans to initiate a safety study to better understand
the nature and causes of specific safety problems that are beyond the scope
of any one particular incident under review and another safety study next
year. Also, contracting activities have primarily supported information
technology and investigations, but according to Board officials, the agency
has received limited benefits for some of its contracts. To avoid
contracting for work of limited utility, the Board decided to require a
majority vote of the Board members to execute small as well as large
contracts-that is, approval is required for contracts exceeding $10,000.

Progress Has Been Slow in Initiating

and Completing Investigations

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

Draft reports are in process for three investigations that were started in
March 1998, April 1998, and March 1999. Completion of these reports by
September 30, 2000, represents three of the Board's eight priorities for
fiscal year 2000. The Board has not determined what decisions it will make
concerning the other five outstanding investigations. Alternatives include
developing investigative reports, issuing summary reports, or concluding the
investigations without reports. In addition to the personnel issues
discussed above, the Board believes one of the causes of the investigations
backlog was an over reliance on contractors to investigate accidents.
According to the Board, this over reliance on contractors resulted in some
poor investigations and reports because of insufficient Board staff or
inadequate procedures to monitor the contractors' personnel to ensure their
activities met the Board's investigative needs.

In terms of future investigations, the Board plans to initiate two
investigations during fiscal year 2000 and four or five investigations each
year beginning in fiscal year 2001.

Review Program Has Been Terminated

The more limited review program was developed to provide information to
prevent future incidents by using an approach that was less
resource-intensive than full investigations. The protocol for these reviews
provided for a limited, office-based review of investigative reports
prepared by the organizations that responded to the incident. The Board
initiated a total of 23 reviews in 1998 and 1999. However, Board officials
told us that they effectively terminated this program in July 1999 when they
decided to add the factual data about these reviews to an existing incidents
database maintained by the Board and that the program was officially
terminated in September 1999. This decision was made because of problems
encountered in performing these reviews, including the
longer-than-anticipated time spent in collecting the information and
drafting the reports as well as the possibility of duplicating work done by
other government agencies.

Safety Studies Planned

Although they are not among the Board's eight identified priorities for
fiscal year 2000, 6 percent of its fiscal year 2000 funding-$488,000-and
seven percent of the Board's budget request for fiscal year
2001-$670,000-are allocated for special safety studies and technical
guidance. The Board plans to use safety studies to better understand the
nature and causes of specific safety problems that are beyond the scope of
any one incident under investigation. The Board plans to initiate one safety
study in fiscal year 2000 and another in fiscal year 2001. As of March 2000,
the Board had not selected the study to be initiated this fiscal year, but
officials said it would likely evolve from one of the three investigations
to be completed in fiscal year 2000. Board officials said that safety
studies selected would likely stem from research needs identified in
recommendations developed by the Board in its investigative reports. They
indicated they would receive, at a minimum, input from other parties to
ensure the studies are useful.

Limited Benefits for Some

Contracting Activities

Since it began operations in January 1998, the Board has obligated about
$4.7 million to 16 contracts of $100,000 or more. A significant
portion--$2.4 million--of these contracting obligations have supported
information technology, such as the creation of data systems and databases,
compared with $1.4 million for investigative support (see app. I). These
activities were contracted before the management alignments in December 1999
and January 2000 and the establishment of contracting policies and
procedures in December 1999. Prior to the management alignment, contracting
actions were the responsibility of the former Chairman and the former Chief
Operating Officer, and the other Board members did not have a role in
reviewing or approving contracts. In addition, these contracts were made
prior to being directed--in the House conference committee report
accompanying the Board's fiscal year 2000 appropriations bill--to spend the
preponderance of its resources, including contract resources, on
investigations and safety instead of on information technology or external
affairs.

According to Board officials, the agency has received limited benefits for
some of its contracting activities. For example, the Board is not currently
using--and may never

use--the $636,000 Incident and Investigation Information System developed by
Oak Ridge National Laboratory in 1999 that would catalog information from
the Board's accident investigations. The officials said that the
investigators and safety program staff who would use this system had limited
input into its design. According to Board officials, the system is overly
complex and an off-the-shelf database may better meet the Board's needs.
While the Board plans to formally evaluate the system to determine its value
to the Board, this evaluation is on indefinite hold because of higher
priority work for fiscal year 2000.

In addition, Board officials acknowledged that other contracting activities
may be of limited value to the Board, such as:

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

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

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

In addition, given its limited productivity and workload challenges, we have
questions about the Board's use of funds to develop an informational video
demonstrating the Board's purpose and activities. To date, the Board has
paid $80,000 of the $160,000 obligated in 1998 for the video. One Board
member told us that he did not believe it was appropriate to develop a video
at this time. In response to our questions about the views of the Board
members on the need for a video, he said he would raise this issue at the
next meeting of the Board.

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

Status of the Board's Efforts to Update and

Develop Plans, Policies, and Procedures

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

   * On December 27, 1999, the Board issued formal written procedures for
     awarding and managing contracts. Also, as discussed above, in January
     2000, the Board approved procedures that include requiring contracts
     exceeding $10,000 be approved by a majority vote of the Board members.

   * On December 27, 1999, the Board issued interim procedures for selecting
     incidents to investigate and an interim investigative protocol for
     conducting accident investigations. As of March 2000, the interim
     selection criteria are being reviewed and thus are not ready for use in
     selecting incidents to investigate. The Board plans to revise the
     process for selecting incidents to investigate, continuing to work with
     stakeholders from industry, public interest groups, government
     agencies, and labor unions. Similarly, the Board plans to revise its
     investigation protocol through reviews with stakeholders and external
     experts on investigative practices. These efforts are among the Board's
     eight priorities for fiscal year 2000.

   * The Board requested an extension of time in developing an update to its
     business plan because of the former Chairman's announced resignation
     from that position and the related governance issues. This update will
     be accomplished by the development of strategic and performance plans
     required by the Government Performance and Results Act. On February 7,
     2000, the Board provided a performance plan for fiscal year 2001 along
     with its budget request for fiscal year 2001. The Board plans to
     develop a strategic plan by September 2000.

Observations

The governance issues that arose in 1999 limited the Board's ability to
effectively address the problems that we identified almost a year ago--the
backlog of investigations and the lack of key plans, policies, and
procedures to guide this new agency. The Board's initial steps since the
management realignments in December 1999 and January 2000 appear to be
appropriately targeted to addressing these issues. The priorities the Board
has established for (1) hiring and training staff and (2) completing
investigations and key policies and procedures to support the selection and
conduct of investigations are critical ones that the Board must accomplish
to demonstrate that it is a viable agency capable of accomplishing its
important safety mission in an efficient and effective manner. Along these
lines, the Board's decision to review and approve contracts appears prudent
given the amount of money that has been spent on contracting activities
without apparent direct or immediate benefit to the Board.

The Board is facing many challenges as it seeks to accomplish a number of
important tasks with a limited number of personnel to conduct them. While
the Board plans to provide more resources to its investigations and safety
programs, it is not clear how the backlog will be addressed or when the
agency will be in a position to realistically initiate any new
investigations. The Board's progress in these areas is limited by
difficulties in hiring and retaining investigators and the need to dedicate
some of these resources to other priorities, such as revising accident
selection criteria and the investigation protocol and developing its
strategic plan. Finally, in our view, initiating a safety study this year
does not appear essential to the operations of the Board in the short
run--as it seeks to establish its credibility--and will divert resources
from its priorities.

Scope and Methodology

To review the status of the Board's efforts to carry out its mission, we
reviewed documents supplied by the Board related to its organization,
planning, budgeting, and programs; personnel data; and contract files. We
also interviewed Board employees, including Board members, attorneys, and
investigators. We discussed the contents of this statement with Board
members, the Chief Operating Officer, and other Board staff, who generally
agreed with the facts presented. Based on our discussions, we made revisions
as appropriate to reflect the clarifications the Board requested. We
conducted our work between January and April 2000 in accordance with
generally accepted government auditing standards.

Contact and Acknowledgements

For additional information, please contact David G. Wood at (202) 512-6111.
Individuals making key contributions to this statement included Gregory
Carroll, Harriet Drummings, and Christine Fishkin.

Appendix I Appendix I

Chemical Safety Board Contracts

The Chemical Safety and Hazard Investigation Board has contracted with a
number of vendors since it became operational in fiscal year 1998 using
contracts, purchases orders, and agreements. The contracts, purchase orders,
and agreements of $100,000 or more (excluding those for office space and
telephone charges) are identified in table 2. The Board obligated about $4.7
million under these contracts in fiscal years 1998, 1999, and 2000 (up to
March 1, 2000). Only one contract over $100,000 has been executed in fiscal
year 2000. As of March 1, 2000, total expenditures under these contracts
were about $3.5 million. The contracts in table 2 are categorized according
to (1) information technology, database, and network support; (2)
investigative support; and (3) other activities.

Table 2: Total Obligations and Expenditures from January 1998 Through March
1, 2000, For Contracts, Purchase Orders, and Agreements of $100,000 or More

 Vendor      Description                       Total         Total
                                               obligations   expenditures
             Information technology,
             database,

             and network support
             Information Technology
             Infrastructure. Identify
 Oak Ridge   functional requirements and
 National    develop the Investigation and
 Laboratory  Incident Notification System to   $658,000      $636,000
 (ORNL)a b   capture information developed
             and collected from
             investigations.
             Establishment of chemical
             incident baseline and database.
             Analyze and prepare a summary
 Tri-Data    report on 10 years of data from   350,000       350,000
             five federal agencies' databases
             to establish a chemical incident
             baseline.
             Technical support. Assist the
             Board with library and research
             work, and regulatory analyses.
 ORNLa b                                       332,000       60,000
             Strategic Plan. Assist in the
             development of a 5-year
             information technology plan.
             Network/Helpdesk Support.
 AAC         Provide a senior engineer and
 Associates  support specialist to cover       308,000       39,000
             helpdesk support and local area
             network support.
             Internet and Intranet web site.
 Bell        Provide one dedicated staff to
 Atlantic    develop, manage, and administer   231,000       223,000
             the web database.

 Federal     Internet service. Host, update,
 Emergency   and administer the Board's web
 Management  site and e-mail. Provide a        137,000       137,000
 Agency      24-hour, 7 days-a-week
             communications center.

 Vendor          Description                    Total         Total
                                                obligations   expenditures
                 Helpdesk support. Provide
 Bell Atlantic   helpdesk support and local     $130,000      $116,000
                 area network support.
                 Database support. Provide one
                 dedicated database
 General Service administrator/developer to
 Administration  develop, manage and administer 120,000       51,000
                 database requirements,
                 including technical support.
                 Baseline study support. Assist
                 the Board in improving the
 Dun & Bradstreetdata quality of the five       108,000       108,000
                 databases used to develop a
                 universe of chemical incidents
                 for 1987 to 1996.
 Subtotal                                       $2,374,000    $1,720,000
                 Investigative support
                 Investigative support. Assist
 ORNL a b        the Board in conducting        1,006,000     799,000
                 several investigation.
                 Investigative support. Assist
 Battelle        the Board in conducting the    410,000       385,000
                 Sierra Chemical investigation
                 in Nevada.
 Subtotal                                       $1,416,000    $1,184,000
                 Other activities
                 Study. Develop training
                 program and reference
                 materials on process pressure
 ORNLa b         relief systems since many      300,000       326,000
                 incidents that occur are due
                 to inadequate assessment,
                 design, and installation of
                 these systems.
                 Furniture, equipment and
 Bureau of Publicsupport. Provide furniture and
 Debt            equipment in addition to       255,000       33,000
                 technical support services and
                 organizational development.

 Rowland         Informational video. Provide a
 Productions     video to publicize the Board's 160,000       80,000
                 purpose and activities.
                 Software development. Develop
                 a civilian version of military
                 intelligence software to help
 National Ground facilities determine where
 Intelligence    safety systems were prone to   100,000       100,000
 Center          failure and how to best
                 address the problems.
                 Initially planned as a
                 multi-year effort, this
                 contract has been suspended.
                 Resources support. Provide a
                 full spectrum of personnel
 FPMI            management services, including
 Communications, but not limited to, writing    100,000       19,000
 Inc.            position descriptions and
                 preparing recruiting analyses
                 and recommendations.
 Subtotal                                       $915,000      $558,000
 Total                                          $4,705,000    $3,462,000

Source: Chemical Safety Board

Note: Dollar amounts rounded to the nearest thousand. Obligations over
$100,000 for office space and telephone charges are not included.

aORNL conducts work for the Board under one agreement with specific tasks.
The Board has been unable to confirm the costs associated with some of the
tasks listed in the table. The Board has found discrepancies between the
monthly cost reports received from ORNL for work performed on specific tasks
and the monthly billing amounts. It is currently attempting to reconcile
these differences. For example, expenditures appear to exceed obligations
for the task relating to the study on pressure relief systems, but actual
expenditures have not yet been confirmed. Because of these problems, on
February 15, 2000, the Chief Operating Officer instructed ORNL to stop all
work under the agreement temporarily.

bAll expenditures are as of March 1, 2000, except for Oak Ridge National
Laboratory, which is as of March 7, 2000.

(160523)
  
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