oversight

Environmental Protection: EPA Should Develop a Strategic Plan for Its New Compliance Initiative

Published by the Government Accountability Office on 2012-12-10.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                United States Government Accountability Office

GAO             Report to the Chairman, Committee on
                Environment and Public Works,
                U.S. Senate



                ENVIRONMENTAL
December 2012



                PROTECTION

                EPA Should Develop a
                Strategic Plan for Its
                New Compliance
                Initiative




GAO-13-115
                                               December 2012

                                               ENVIRONMENTAL PROTECTION
                                               EPA Should Develop a Strategic Plan for Its New
                                               Compliance Initiative
Highlights of GAO-13-115 a report to the
Chairman, Committee on Environment and
Public Works, U.S. Senate




Why GAO Did This Study                         What GAO Found
The Environmental Protection Agency            Since introducing its Next Generation Compliance initiative in fiscal year 2012,
(EPA) oversees many environmental              EPA has taken four primary steps to increase transparency and accountability in
programs that seek to protect public           enforcement and compliance. According to EPA documents and officials, these
health and the environment.                    actions will provide greater access to data under EPA-regulated programs and
Substantial noncompliance with these           make regulated entities more accountable to the public. In this regard, EPA
regulations and increasing budget
pressures, among other things, led             •   formed an electronic reporting task force in December 2011 to provide
EPA to propose a new enforcement                   recommendations for converting from existing paper-based reporting
and compliance initiative in fiscal year           requirements to electronic reporting;
2012. This new initiative—Next                 •   established a work group in April 2012 to identify advanced emissions and
Generation Compliance—attempts to                  pollutants monitoring technology and evaluate how the agency can better
capitalize on advances in emissions                use such technology;
and pollutants monitoring and                  •   formed a work group in September 2012 to advance the use of new
information technology. Among other                compliance tools in its enforcement activities, such as in settlement
things, EPA expects Next Generation
                                                   agreements with entities that are found in noncompliance with regulations;
Compliance to provide new and more
                                                   and
complete enforcement and compliance
information and promote greater public         •   increased the public availability of the enforcement and compliance
transparency and accountability.                   information it currently has available by, among other actions, placing a tool
                                                   on its enforcement website that allows the public to obtain information about
GAO was asked to review (1) actions                pollutants that are released into local waterways.
EPA has undertaken in Next
Generation Compliance to increase              EPA has not developed a strategic plan to integrate Next Generation Compliance
enforcement and compliance
                                               into its enforcement and compliance program. EPA has prepared some
transparency and accountability and
                                               documents on the initiative and its components, but these documents are general
(2) the extent to which EPA is
                                               in nature and provide little specificity regarding EPA’s plans related to Next
developing a strategic plan to integrate
Next Generation Compliance into its            Generation Compliance. GAO has previously reported that strategic planning for
enforcement and compliance program.            activities below the agencywide level is a leading practice for successful
To conduct this work, GAO reviewed             agencies. EPA acknowledges the need for an overall plan for Next Generation
Next Generation Compliance                     Compliance. Developing a plan that incorporates selected leading practices for
documents and interviewed selected             federal strategic planning could help EPA more effectively integrate Next
EPA officials.                                 Generation Compliance into its enforcement and compliance program and
                                               promote greater public transparency. Without a strategic plan incorporating these
What GAO Recommends                            leading practices, EPA may face challenges in helping to ensure that its initiative
GAO recommends that EPA                        will achieve its long-term goals of improving compliance and obtaining greater
(1) develop a schedule for completing          health and environmental benefits from the agency’s regulations. Additionally,
a strategic plan for its Next Generation       without a strategic plan to direct its Next Generation Compliance initiative, EPA
Compliance initiative in a timely              could waste valuable resources, time, and effort. For example, without proper
manner and (2) incorporate selected            planning, EPA may pursue emissions monitoring technologies that not all
leading practices in federal strategic         regulated entities—especially the growing numbers of smaller facilities—can fully
planning in the plan. EPA agreed with          utilize, thereby requiring EPA to rely on costly individual facility inspections with
GAO’s recommendations.                         its limited resources.




View GAO-13-115. For more information,
contact David C. Trimble at (202) 512-3841or
trimbled@gao.gov.

                                                                                        United States Government Accountability Office
Contents


Letter                                                                                                   1
              Background                                                                                 4
              EPA Has Taken Steps under Next Generation Compliance to
                Increase Transparency and Accountability                                                 7
              EPA Has Not Developed a Strategic Plan for Its Next Generation
                Compliance Initiative                                                                    9
              Conclusions                                                                               11
              Recommendations for Executive Action                                                      12
              Agency Comments and Our Evaluation                                                        12

Appendix I    Comments from the Environmental Protection Agency                                         14



Appendix II   GAO Contact and Staff Acknowledgments                                                     16



Table
              Table 1: Selected Leading Practices in Federal Strategic Planning                         10




              Abbreviations

              ECHO                Enforcement and Compliance History Online
              EPA                 Environmental Protection Agency
              GPRA                Government Performance and Results Act
              NPDES               National Pollutant Discharge Elimination System
              OECA                Office of Enforcement and Compliance Assurance
              OMB                 Office of Management and Budget

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              necessary if you wish to reproduce this material separately.




              Page i                                               GAO-13-115 Environmental Protection
United States Government Accountability Office
Washington, DC 20548




                                   December 10, 2012

                                   The Honorable Barbara Boxer
                                   Chairman
                                   Committee on Environment and Public Works
                                   United States Senate

                                   Dear Madam Chairman:

                                   The Environmental Protection Agency (EPA) oversees many
                                   environmental programs, in partnership with state agencies, that seek to
                                   protect public health and the environment from pollutants produced by a
                                   range of entities, including sewage treatment facilities, petroleum
                                   refineries, and power plants. In carrying out its mission, EPA develops
                                   regulations governing facilities that treat, store, or dispose of hazardous
                                   waste; establishes limits for entities discharging pollutants such as
                                   effluent or wastewater to surface waters; and sets national ambient air
                                   quality standards for entities discharging certain pollutants into the air,
                                   among other things. To ensure that regulated entities meet these
                                   environmental regulations, EPA has established an enforcement and
                                   compliance program. This program includes EPA actions to monitor
                                   regulated entities’ compliance with environmental laws and regulations,
                                   enforcement of regulatory requirements through civil and criminal
                                   penalties for violations, and oversight of state enforcement activities
                                   authorized by EPA. 1 In recent years, EPA has reported that it is not
                                   achieving all of the environmental and public health benefits it expected in
                                   regulating certain entities because of substantial rates of noncompliance
                                   in some programs. For example, 2010 EPA data (the most recently
                                   available data) indicate that 45 percent of certain entities subject to
                                   effluent limits through EPA’s National Pollutant Discharge Elimination
                                   System (NPDES) permit program have reported violations. 2 Furthermore,


                                   1
                                    EPA has authorized states to carry out many of the day-to-day responsibilities for timely
                                   and appropriate enforcement of environmental laws and regulations.
                                   2
                                    EPA calendar year 2010 annual noncompliance report, A State-by-State Summary of
                                   Violations and Enforcement Response At Smaller Clean Water Act Dischargers under the
                                   NPDES Program, August 2012. Under the NPDES program, all facilities that discharge
                                   pollutants from any point source into U.S. waters are required to obtain a permit, typically
                                   from their state or EPA region. Before such an entity discharges pollutants, it must receive
                                   an NPDES permit that, at a minimum, incorporates any relevant pollutant limits from
                                   EPA’s effluent guidelines.




                                   Page 1                                                GAO-13-115 Environmental Protection
because of incomplete or unreliable data on compliance in some
programs, such as the NPDES, EPA cannot determine the full extent of
entities’ compliance. In addition, as we have previously reported,
unreliable data in EPA’s drinking water program limits EPA’s ability to
identify violations. 3 We and the EPA Inspector General have also
reported inconsistencies in the enforcement of certain state
environmental programs, which are overseen by EPA. 4 For example, the
Inspector General reported that, while EPA has made efforts to improve
state performance and oversight consistency, state enforcement
programs are underperforming. 5 Given these challenges, as well as
growing federal and state budget pressures, EPA stated that it has
become increasingly difficult to rely primarily on its traditional approach of
inspecting individual entities to increase compliance with the nation’s
environmental laws and regulations.

To ensure better enforcement and compliance by regulated entities, EPA
announced a new initiative in fiscal year 2012—Next Generation
Compliance—to capitalize on advances in emissions and pollutants
monitoring and information technology. 6 Under this initiative, which
remains in the early stages of development, the agency proposes to rely
less on its traditional single-entity-at-a-time inspection method and more
on electronic reporting of information from regulated entities and the use
of new technologies to monitor their compliance. For example, according
to EPA documents, EPA anticipates that advanced emissions and
pollutants monitoring equipment, such as infrared cameras that could
detect emission leaks and fence-line monitoring equipment that could
provide emissions monitoring around the perimeter of an entity, will be
used to identify violations and promote compliance. Also under this
initiative, EPA states that Next Generation Compliance will provide new


3
 GAO, Drinking Water: Unreliable State Data Limit EPA’s Ability to Target Enforcement
Priorities and Communicate Water Systems’ Performance, GAO-11-381 (Washington,
D.C.: June 17, 2011).
4
 GAO, Environmental Compliance and Enforcement: EPA’s Effort to Improve and Make
Consistent Its Compliance and Enforcement Activities, GAO-06-840T (Washington, D.C.:
June 28, 2006) and EPA Office of Inspector General, EPA Must Improve Oversight of
State Enforcement, Report No. 12-P-0113, Dec. 9, 2011.
5
EPA Office of Inspector General, 12-P-0113.
6
 EPA officials stated that, while the Next Generation Compliance initiative was formally
started in fiscal year 2012, it originated from the Clean Water Act Action Plan and some of
that plan’s ideas in 2010 and 2011.




Page 2                                                GAO-13-115 Environmental Protection
and more complete information to regulated entities and the public to
promote greater transparency and accountability, as well as improve the
ability of states to implement their authorized federal environmental
programs.

As we have previously reported, in developing new initiatives, agencies
can benefit from following leading practices for strategic planning. 7
Furthermore, federal departments and agencies such as EPA are to
comply with the Government Performance and Results Act (GPRA) of
1993, as amended, which was passed by Congress to improve the
efficiency and accountability of federal programs, among other purposes. 8
GPRA requires, among other things, that federal agencies develop long-
term strategic plans that include agencywide goals and strategies for
achieving those goals. The Office of Management and Budget (OMB) has
provided guidance in Circular A-11 to agencies on how to prepare these
plans in accordance with GPRA requirements. We have reported that
these requirements also can serve as leading practices at lower levels
within federal agencies, such as planning for individual divisions,
programs, or initiatives. 9

In light of EPA’s key role in enforcing our nation’s environmental laws and
helping protect the public’s health, you asked us to review EPA’s efforts
to improve enforcement and compliance. Our objectives were to examine
(1) the actions EPA has undertaken in Next Generation Compliance to
increase enforcement and compliance transparency and accountability
and (2) the extent to which EPA is developing a strategic plan to integrate
Next Generation Compliance into its enforcement and compliance
program.

To address our first objective, we obtained and reviewed EPA documents
about the Next Generation Compliance initiative. These documents
included a three-page Next Generation Compliance overview document,
slides describing the initiative, information regarding the roles and efforts


7
 GAO, Environmental Justice: EPA Needs to Take Additional Actions to Help Ensure
Effective Implementation, GAO-12-77 (Washington, D.C.: Oct. 6, 2011).
8
Pub. L. No. 103-62 (Aug. 1993), as amended.
9
 For example, see GAO, Foreign Aid Reform: Comprehensive Strategy, Interagency
Coordination, and Operational Improvements Would Bolster Current Efforts, GAO-09-192
(Washington, D.C.: Apr. 17, 2009).




Page 3                                            GAO-13-115 Environmental Protection
             of Next Generation Compliance work groups, an EPA training workbook
             on how to design rules with compliance, information on EPA’s efforts to
             implement electronic reporting for the NPDES program, and the Office of
             Enforcement and Compliance Assurance (OECA) fiscal year 2013
             national program manager guidance. We also interviewed EPA officials in
             headquarters from OECA and the Office of Research and Development.
             We reviewed related federal policies on regulatory accountability and
             compliance information to understand how they could apply to EPA’s
             Next Generation Compliance. In addition, to demonstrate how EPA has
             applied some aspects of Next Generation Compliance, we reviewed
             selected EPA settlement agreements with regulated entities that were
             publicly announced from October 2011 through October 2012. Through
             this review, we identified agreements that included facets of the Next
             Generation Compliance initiative, such as requirements for using
             advanced emission or pollutant controls, or reporting provisions intended
             to provide more information to the public. 10 To address our second
             objective, we also spoke with OECA officials about their planning efforts
             regarding the initiative and reviewed planning-related documents,
             specifically the three-page Next Generation Compliance overview
             document and descriptive slides. We also reviewed our prior work on
             leading practices in federal strategic planning for agency divisions,
             programs, or initiatives.

             We conducted this performance audit from March 2012 to December
             2012 in accordance with generally accepted government auditing
             standards. Those standards require that we plan and perform the audit to
             obtain sufficient, appropriate evidence to provide a reasonable basis for
             our findings and conclusions based on our audit objectives. We believe
             that the evidence obtained provides a reasonable basis for our findings
             and conclusions based on our audit objectives.


             EPA manages its environmental enforcement and compliance
Background   responsibilities primarily through its OECA. OECA monitors the
             compliance of regulated entities, identifies national enforcement concerns
             and sets priorities for addressing them, and provides overall direction on
             enforcement policies. OECA can take enforcement actions, such as fining


             10
               We did not review all EPA settlement agreements that we found from EPA news
             releases related to enforcement and compliance on EPA’s website, and information from
             our examples cannot be generalized to all EPA settlement agreements.




             Page 4                                             GAO-13-115 Environmental Protection
entities that are in noncompliance with EPA regulations, but most of
EPA’s enforcement responsibilities are carried out by its 10 regional
offices. These offices carry out program activities under each of the major
federal environmental statutes, such as the Clean Air Act and the Clean
Water Act, have compliance related responsibilities, and also take
enforcement actions. For example, among other things, a regional office
can conduct inspections, provide compliance assistance and training to
state enforcement programs, and take enforcement actions such as
assessing fines for noncompliance with EPA regulations. The regional
offices also oversee certain state enforcement programs and implement
certain programs in Indian country. 11 Many federal environmental statutes
direct EPA to approve or authorize qualified states to implement and
enforce environmental programs consistent with federal requirements,
and most states have responsibility for multiple laws. EPA-authorized
states are to monitor compliance of regulated entities, conduct
inspections, take enforcement actions against entities found in
noncompliance, and report their actions to EPA.

EPA proposed the Next Generation Compliance initiative in fiscal year
2012 to capitalize on advanced technical capabilities and efficiencies in
enforcement and compliance. In developing this new initiative, EPA
stated that it wanted to go beyond its traditional enforcement approach of
inspecting individual entities and make available, among other things,
new and more complete enforcement and compliance information.
According to agency documents, the long-term goals of the initiative are
to improve compliance and obtain greater health and environmental
benefits from EPA’s regulations. The proposed elements of the initiative
are described in a brief overview document and some slide presentations
that the agency has prepared about the initiative. In summary, according
to these materials, the five components of the Next Generation
Compliance initiative are the following:

•    Rulemaking—designing and structuring rules and regulations to
     ensure greater compliance, such as including requirements for
     regulated entities to regularly assess their compliance.




11
  “Indian country” includes all land within the limits of an Indian reservation under the
jurisdiction of the U.S. government, all dependent Indian communities within the borders
of the United States, and all Indian allotments, the Indian titles to which have not been
extinguished.




Page 5                                               GAO-13-115 Environmental Protection
•   Technology—using advanced emissions and pollutants monitoring
    technology, such as infrared cameras, for compliance monitoring so
    that regulated entities and the public are better informed about
    entities’ pollution.

•   Electronic reporting—using modern information technology to
    transition from paper to electronic reporting of items such as permit
    data, compliance information, and enforcement actions.

•   Transparency—making both current and new entities’ enforcement
    and compliance information, such as information obtained from
    advanced emissions and pollutants monitoring and electronic
    reporting, more publicly available.

•   Innovative enforcement approaches—employing new or innovative
    enforcement approaches, such as including tools like advanced
    emissions and pollutants monitoring or electronic reporting
    requirements in EPA enforcement settlement agreements with
    entities.

EPA envisions that Next Generation Compliance benefits will come from
(1) designing and structuring rules and regulations to ensure greater
compliance by regulated entities; (2) obtaining and making public more
and better compliance data so that the public can determine the extent of
regulated entities’ compliance with environmental regulations, thereby
exerting pressure on violators for greater compliance; and (3) improving
the ability of EPA-authorized states to implement their environmental
programs. EPA officials informed us that EPA has started provided
training to EPA staff on how to incorporate the Next Generation
components into designing rules and regulations. As part of this effort,
EPA developed a training workbook for staff on how to design rules with
an emphasis on increasing regulated entity compliance. With regard to
making public more and better compliance data, according to EPA
documents, providing information to the public, together with public
accountability, can result in greater compliance by regulated entities. For
example, EPA stated that reductions in regulated entities’ noncompliance
with NPDES permits in certain states may be related to EPA’s increasing
the public disclosure of related compliance data, along with the release of
state enforcement performance information. These actions, according to
EPA, created more pressure on states to enforce and on these entities to
comply with NPDES permit requirements. Furthermore, EPA believes that
the improved enforcement and compliance data Next Generation




Page 6                                       GAO-13-115 Environmental Protection
                      Compliance will provide will allow states and EPA to be more innovative
                      in developing new approaches to improving compliance.


                      Since introducing its Next Generation Compliance initiative in fiscal year
EPA Has Taken Steps   2012, EPA has taken four primary steps to increase transparency and
under Next            accountability in enforcement and compliance. According to EPA
                      documents and officials, these steps provide greater access to data under
Generation            EPA-regulated programs and make regulated entities more accountable
Compliance to         to the public.
Increase              First, EPA formed an electronic reporting task force in December 2011 to
Transparency and      provide recommendations for converting from existing paper-based
                      reporting requirements to electronic reporting. This action is in support of
Accountability        a broader EPA effort to require regulated entities to electronically report
                      data, such as permit data and compliance information, to EPA and state
                      environmental agencies. According to EPA documents, electronic
                      reporting is not simply e-mailing files to the government, but it is an
                      electronic method that guides the entity through the reporting process.
                      The task force is also developing agency policy to include electronic
                      reporting requirements in all new EPA regulations. According to a senior
                      EPA official responsible for coordinating the Next Generation Compliance
                      initiative, in June 2012, the task force started working with the
                      Environmental Council of the States, a national association of state and
                      territorial environmental agency leaders, to explore how regulated entities
                      could electronically conduct business with EPA and state environmental
                      agencies, including providing electronic submissions of permit
                      applications and modifications, as well as emissions and pollutants data.

                      Second, the agency formed a work group in April 2012 to identify
                      advanced emissions and pollutants monitoring technology and evaluate
                      how the agency can better use such technology. Among other things, the
                      work group is charged with preparing a national inventory of the
                      advanced monitoring equipment EPA owns or has access to from other
                      sources, such as contractors. The work group’s charter called for it to
                      prepare a report by September 2012 that addresses 10 items and, among
                      other things, provide suggestions to establish formal policies and
                      procedures for deploying and maintaining advanced emissions and
                      pollutants monitoring technology and training staff on its use. According to
                      EPA officials, an interim report that contained initial findings and
                      recommendations from the work group was provided to the OECA Deputy
                      Assistant Administrator on September 29, 2012.



                      Page 7                                       GAO-13-115 Environmental Protection
Third, EPA has begun including Next Generation Compliance in its
enforcement activities by incorporating elements of the initiative into
selected settlement agreements. For example, under an EPA settlement
agreement announced in May 2012, a petroleum company agreed to
install “state-of-the-art” pollution controls at its refinery, as well as a fence-
line emissions monitoring system. 12 According to the terms of the
settlement agreement, the company will post data collected from the
fence-line monitoring system on a public website. In an EPA agreement
announced in April 2012, another petroleum company also agreed to
install “state-of-the-art” pollution controls at its refineries and in the
process provided resources and assistance to EPA to acquire new
scientific information for measuring certain air emissions. 13 EPA informed
us that this settlement agreement, taken in its entirety, is an example of
identifying and using advanced technology to both monitor and reduce
emissions. In September 2012, EPA formed a work group to advance the
use of Next Generation compliance tools in EPA settlement agreements.

Fourth, the agency has increased the public availability of the
enforcement and compliance information it currently has available. EPA
officials informed us that they are observing the public’s increasing use of
EPA’s Enforcement and Compliance History Online (ECHO) website and
are continually looking for ways to improve and expand the information
publicly available on the website. For example, in January 2012, EPA
released a Clean Water Act Discharge Monitoring Report Pollutant
Loading Tool on its ECHO website to provide the public with information
about pollutants that are released into local waterways. 14 According to
EPA documents, the tool allows the public to compare annual pollutant
discharge amounts from certain regulated entities under the Clean Water
Act and includes a mapping application, toxicity data, and links to other
compliance information.



12
  In this agreement, the controls included certain modifications to the refinery heaters and
boilers, among other things. Additionally, a fence-line monitoring system is used to
determine representative pollutant concentrations at the boundary of an entity or source.
13
  In this agreement, the controls included certain modifications to the refineries’ waste gas
combustion devices, referred to as flares, among other things.
14
  According to information about the tool on ECHO, it includes discharge data for more
than 44,000 regulated entities, but does not contain a complete inventory of all discharges
permitted under the Clean Water Act. ECHO also contains other examples of EPA's
efforts to provide the public with enforcement and compliance information.




Page 8                                                 GAO-13-115 Environmental Protection
                        EPA has not developed a strategic plan to integrate Next Generation
EPA Has Not             Compliance into its enforcement and compliance program. EPA has
Developed a Strategic   prepared a brief overview document and some slides that provide basic
                        information on the initiative’s five components, but these documents are
Plan for Its Next       general in nature and provide little specificity regarding EPA’s plans,
Generation              goals, or performance measures related to Next Generation Compliance.
                        A senior EPA official responsible for coordinating the Next Generation
Compliance Initiative   Compliance initiative told us that EPA recognizes the need for a strategic
                        plan for the initiative and expects to prepare one in fiscal year 2013, but
                        he could not provide a specific time frame for either starting or completing
                        the plan.

                        Federal departments and agencies such as EPA must comply with GPRA
                        requirements and are to follow associated OMB guidance in developing
                        their departmental or agencywide strategic plans. We have previously
                        reported that strategic planning for activities below the agencywide
                        level— such as planning for individual divisions, programs, or initiatives—
                        is a leading practice for successful agencies. 15 In addition, we have
                        previously reported on federal agencies’ strategic planning efforts and
                        have identified additional useful practices to enhance agencies’ strategic
                        plans. Taken together, the strategic planning elements established under
                        GPRA and associated OMB guidance and practices we have identified
                        provide a framework of leading practices in federal strategic planning. 16
                        These include such actions as defining the missions and goals of a
                        program or initiative and involving stakeholders and leadership in
                        planning, among others. Table 1 lists five selected leading practices in
                        federal strategic planning and their characteristics. We highlight these five
                        practices because EPA’s Next Generation Compliance initiative is still




                        15
                          For example, see GAO, Pipeline Safety: Management of the Office of Pipeline Safety’s
                        Enforcement Program Needs Further Strengthening, GAO-04-801 (Washington, D.C.: July
                        23, 2004) and GAO-09-192.
                        16
                         For example, see GAO, Executive Guide: Effectively Implementing the Government
                        Performance and Results Act, GAO/GGD-96-118 (Washington, D.C.: June 1, 1996); GAO,
                        Tax Administration: IRS Needs to Further Refine Its Tax Filing Season Performance
                        Measures, GAO-03-143 (Washington, D.C.: Nov. 22, 2002); and GAO, Managing for
                        Results: Strengthening Regulatory Agencies’ Performance Management Practices,
                        GAO/GGD-00-10 (Washington, D.C.: Oct. 28, 1999).




                        Page 9                                            GAO-13-115 Environmental Protection
                                           being developed, and these practices are particularly relevant to the early
                                           stages of developing a strategic plan. 17

Table 1: Selected Leading Practices in Federal Strategic Planning

Selected leading practice                  Characteristics
Define the mission and goals               A mission statement explains why the agency—or a specific program—exists, what it
                                           does, and how it does it.
                                           Strategic goals explain the purpose of agency programs and the results—including
                                           outcomes—that they intend to achieve.
Define strategies and identify resources   Strategies should be designed to align activities, core processes, and resources to
needed to achieve goals                    support the mission and help the agency meet long-term strategic goals. Strategies
                                           should also address management challenges that threaten an agency’s ability to meet its
                                           long-term strategic goals.
                                           Strategies should include milestones for significant actions to be taken, as well as a
                                           description of the resources needed to meet established goals.
Ensure leadership involvement and          Only an agency’s senior leadership can ensure that strategic planning becomes the basis
accountability                             for day-to-day operations.
                                           Successful organizations use formal and informal practices to hold managers accountable
                                           and create incentives for working to achieve the agency’s goals.
Involve stakeholders                       Successful organizations involve stakeholders in developing their mission, goals, and
                                           strategies to help ensure that they target the highest priorities. Stakeholders include:
                                           Congress and the administration; state and local governments; agency staff; and agency
                                           customers, interest groups, and the public.
                                           Stakeholders can influence success or failure of agencies’ programs.
Develop and use performance measures       Performance measures allow an agency to track the progress it is making toward its
                                           mission and goals.
                                           Measures provide managers information on which to base their organizational and
                                           management decisions and create powerful incentives to influence organizational and
                                           individual behavior.
                                           Sources: GAO analysis of GPRA, OMB guidance, and prior GAO work.


                                           Without a plan that incorporates leading strategic planning practices such
                                           as those included in table 1, EPA cannot be assured that it has
                                           established a framework to effectively guide and assess the success of
                                           this initiative and cannot be assured that it is effectively integrating the
                                           initiative into its overall enforcement and compliance program. For
                                           example, we have previously reported when developing a strategic plan,
                                           it is particularly important for agencies to define strategies that address
                                           management challenges that threaten their ability to meet long-term



                                           17
                                            We did not consider all practices from among these sources because the Next
                                           Generation Compliance initiative is still being developed.




                                           Page 10                                                            GAO-13-115 Environmental Protection
              strategic goals and include a description of the resources, actions, time
              frames, roles, and responsibilities needed to meet established goals. 18
              Without a strategic plan to direct its Next Generation initiative, EPA could
              waste valuable resources, time, and effort. For example, without proper
              planning, EPA may pursue emissions monitoring technologies that not all
              regulated entities—especially the growing numbers of smaller facilities—
              can fully utilize, thereby requiring EPA to rely on costly individual facility
              inspections with its limited resources.

              EPA acknowledges the need for a plan for the Next Generation
              Compliance initiative, but it has not yet developed one that clearly
              articulates a strategy for integrating the initiative into the existing
              enforcement and compliance program and provides a comprehensive
              analysis of how the initiative will help to achieve the overall goals of the
              program. The brief overview documents and slides EPA has developed
              for the initiative include only general statements about the need for and
              benefits of the new initiative and descriptions of the initiative’s broad
              goals. Specifically, EPA’s overview and other documents do not, among
              other actions, (1) clearly define the goals of the initiative and steps
              needed to achieve these goals; (2) identify and develop a strategy for
              including milestones for significant actions to be taken, as well as a
              description of the resources needed to accomplish them; and (3) ensure
              that all key stakeholders are involved in both the planning and
              implementation of the initiative. Without a strategic plan incorporating
              selected leading practices, EPA may face challenges in helping ensure
              that the initiative will achieve its long-term goals of improving compliance
              and obtaining greater health and environmental benefits from the
              agency’s regulations.


              EPA began its Next Generation Compliance initiative in an effort to move
Conclusions   beyond its traditional enforcement strategies to improve overall regulatory
              compliance. As part of the effort, the agency has undertaken several
              worthwhile steps to increase enforcement and compliance and encourage
              transparency and accountability. However, the agency has not developed
              a strategic plan for implementation of Next Generation Compliance and


              18
                GAO, Managing for Results: Critical Issues for Improving Federal Agencies’ Strategic
              Plans, GAO/GGD-97-180 (Washington, D.C.: Sept. 16, 1997) and GAO, U.S. Tsunami
              Preparedness: NOAA Has Expanded Its Tsunami Programs, but Improved Planning Could
              Enhance Effectiveness, GAO-10-490 (Washington, D.C.: Apr. 28, 2010).




              Page 11                                           GAO-13-115 Environmental Protection
                      could face challenges in helping ensure that the initiative will achieve its
                      goals of improving compliance and obtaining greater health and
                      environmental benefits from agency regulations if it moves forward
                      without one. Also, without such a plan to direct its Next Generation
                      Compliance initiative, EPA could waste valuable resources, time, and
                      effort and cannot be certain that it effectively integrates the initiative into
                      its overall enforcement and compliance program.


                      To better integrate Next Generation Compliance into its overall
Recommendations for   enforcement and compliance program and ensure that the initiative will
Executive Action      achieve the goals EPA envisions for it, we recommend that the
                      Administrator of EPA direct the Assistant Administrator of OECA to take
                      the following two actions:

                      •   Develop a schedule for completing, in a timely manner, a strategic
                          plan for Next Generation Compliance; and

                      •   Ensure that this strategic plan incorporates selected leading practices
                          in federal strategic planning, as appropriate, and describes how Next
                          Generation Compliance is to be integrated into the enforcement and
                          compliance program.


                      We provided a draft of this report to EPA for review and comment. In
Agency Comments       written comments, which are included in appendix I, EPA agreed with the
and Our Evaluation    report’s recommendations. Regarding the first recommendation, EPA
                      stated it will prepare a strategic plan for Next Generation Compliance in
                      fiscal year 2013. Regarding the second recommendation, EPA stated it
                      will consider incorporating leading practices in federal strategic planning,
                      where appropriate, as it develops the strategic plan. The agency also
                      stated that it anticipates that integrating Next Generation Compliance into
                      its enforcement and compliance program will be a primary component of
                      the strategic plan. EPA also provided technical comments on the draft
                      report, which we incorporated as appropriate.


                      As agreed with your office, unless you publicly announce the contents of
                      this report earlier, we plan no further distribution until 30 days from the
                      report date. At that time, we will send copies to the Administrator of EPA,
                      the appropriate congressional committees, and other interested parties. In
                      addition, the report also will be available at no charge on the GAO
                      website at http://www.gao.gov.



                      Page 12                                         GAO-13-115 Environmental Protection
If you or your staff members have any questions about this report, please
contact me at (202) 512-3841 or trimbled@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. GAO staff who made major contributions to
this report are listed in appendix II.

Sincerely yours,




David C. Trimble,
Director, Natural Resources and Environment




Page 13                                    GAO-13-115 Environmental Protection
Appendix I: Comments from the
             Appendix I: Comments from the Environmental
             Protection Agency



Environmental Protection Agency




             Page 14                                       GAO-13-115 Environmental Protection
Appendix I: Comments from the Environmental
Protection Agency




Page 15                                       GAO-13-115 Environmental Protection
Appendix II: GAO Contact and Staff
                  Appendix II: GAO Contact and Staff
                  Acknowledgments



Acknowledgments

                  David C. Trimble (202) 512-3841 or trimbled@gao.gov
GAO Contact
                  In addition to the individual named above, Vincent P. Price, Assistant
Staff             Director; Cheryl Arvidson; Elizabeth Curda; Cindy Gilbert; Richard P.
Acknowledgments   Johnson; Kirk D. Menard; Carol Herrnstadt Shulman; Kiki
                  Theodoropoulos; and Jason Trentacoste made key contributions to this
                  report.




(361377)
                  Page 16                                   GAO-13-115 Environmental Protection
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