oversight

Results Act: Observations on EPA's Draft Strategic Plan

Published by the Government Accountability Office on 1997-07-30.

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

                     United States
GAO                  General Accounting Office
                     Washington, D.C. 20548

                     Resources, Community, and
                     Economic Development Division

                     B-277552

                     July 30, 1997

                     The Honorable Richard K. Armey
                     Majority Leader
                     House of Representatives

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

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

                     The Honorable Bob Livingston
                     Chairman
                     Committee on Appropriations
                     House of Representatives

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

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


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




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

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

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


             EPA was formed in 1970 by executive reorganization from various
Background   components of other agencies to better marshal and coordinate federal
             pollution control efforts. The agency does not have a single, unified statute




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to enumerate an overarching mission and purpose. Instead, EPA is
responsible for implementing about a dozen major statutes.

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

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

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

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



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


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

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

                   EPA’s draft plan does not discuss interagency coordination for crosscutting
                   programs, activities, or functions that are similar to those of other federal
                   agencies. It is important that the plan do so because EPA and other
                   agencies carry out a number of mission-related activities that are
                   crosscutting or similar. For example, to meet the purposes of its plan, EPA
                   must work closely with agencies responsible for cleaning up hazardous
                   waste sites at federal facilities, address global warming and other
                   international environmental concerns, and ensure a food supply that is



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safe from harmful chemicals. EPA is currently taking steps to coordinate its
plan with other agencies, such as the Department of Energy and the
National Aeronautics and Space Administration, to address crosscutting
programs and activities. As EPA identifies such programs and activities, its
strategic plan would be improved through a discussion of the steps that
the agency will take to ensure proper coordination.

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

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



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



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                             EPA’s draft strategic plan does not contain all six of the Results Act’s key
EPA’s Draft Strategic        requirements, and certain aspects of those included could be improved.
Plan Does Not Yet            Nevertheless, the draft plan shows progress overall toward meeting the
Contain All the              purposes of the act.

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


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

                             While the plan’s goals and objectives are generally well defined, the large
                             number of goals and objectives may make it difficult for the Congress,



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                    other stakeholders, and possibly agency managers to discern EPA’s
                    priorities—that is, what will be most important to the agency over the next
                    several years. The draft plan has 10 goals and 45 associated objectives. In
                    addition, the plan contains 14 strategic principles that are similar to goals.
                    These principles include emphasizing children’s health; choosing common
                    sense, cost-effective solutions to environmental problems; and
                    strengthening partnerships with states and others.

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


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

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

                    Although having a concise and straightforward mission statement is
                    important, EPA can better distinguish its responsibilities from those of
                    other agencies and recognize the important role of the states in carrying
                    out federal environmental programs. Other agencies also have major
                    responsibilities for parts of EPA’s mission, for example, the Department of
                    Health and Human Services protects human health, the Department of



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                       Labor’s Occupational Health and Safety Administration regulates health
                       risks in the workplace, and the Departments of Agriculture and the
                       Interior protect the environment. State and local governments also have
                       health and environmental programs.


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

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

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

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

                       Although the objectives are generally results oriented and measurable, in
                       some cases, obtaining the data needed to measure progress toward the
                       objectives will present a challenge for EPA. For example, one of EPA’s clean
                       and safe water objectives states that watersheds will be restored and
                       protected so that 80 percent of the nation’s surface waters will support

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



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                          healthy aquatic communities by 2005. However, according to EPA’s most
                          recent National Water Quality Inventory Report, the states have assessed
                          only 42 percent of their lake, pond, and reservoir acres; 17 percent of their
                          river and stream miles; and 9 percent of the nation’s ocean shoreline. In
                          addition, EPA reported inconsistencies in the assessments and in the
                          assessment methodologies themselves.

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


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

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




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

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

                        •   By 2005, the risk from the agricultural use of pesticides will be reduced by
                            50 percent from 1995 levels.
                        •   By 2005, the use on food of current pesticides that do not meet the new
                            statutory standard of “reasonable certainty of no harm” will be
                            substantially eliminated.

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


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




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                       objectives; and (3) the relevance and use of performance goals in helping
                       determine the achievement of general goals and objectives.

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

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


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

                       EPA’s draft plan identifies as a key external factor the agency’s heavy
                       reliance on partnerships to protect the environment and human health.
                       The draft plan notes that, although the agency has some influence, it does
                       not control the actions of the state, local, and tribal governments that
                       implement federal environmental programs; other federal agencies with
                       significant environmental responsibilities; or other countries and
                       international organizations with which the United States shares



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                     environmental goals. The draft plan also notes that much of the success of
                     the agency’s programs depends on the voluntary cooperation of the
                     private sector and the general public. In addition, the draft plan identifies
                     significant external factors, such as (1) the development of new
                     environmental technology that works better and costs less and (2) natural
                     processes that affect the condition of ecosystems.

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


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

                     Office of Planning, Analysis, and Accountability officials told us that,
                     although not described in the plan, program evaluations and other studies,
                     including those done by EPA’s Office of the Inspector General and us, were
                     used in developing the draft plan. According to the officials, the agency’s



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                          program offices were aware of the evaluations and studies when
                          developing their goals, objectives, and strategies and took the findings into
                          consideration. As discussed earlier, the officials also said that the draft
                          plan’s strategic goals and objectives are largely derived from those
                          developed by EPA’s National Environmental Goals Project, and these
                          evaluations would have been identified and taken into account during the
                          almost 5 years since the project began. The officials further noted that
                          program evaluations will be an important part of the accountability
                          component of EPA’s new planning, budgeting, and accountability system,
                          but the component is under development. According to the officials, a
                          section on how program evaluations contributed to establishing the
                          agency’s goals is being drafted and will be included in the September 1997
                          version of the strategic plan.


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

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


                          EPA’s draft plan makes broad references to the need for coordination with
Crosscutting Program      federal agencies (and other stakeholders) to accomplish the agency’s
Activities Are Not        mission, but it does not explicitly address the relationship of EPA’s
Addressed, but            activities to federal agencies with crosscutting or similar activities. Neither
                          does it provide evidence that EPA has coordinated the plan’s development
Coordination Efforts      with them. However, the plan does identify “strengthening partnerships
Are Under Way             with stakeholders”—including other federal agencies—as a strategic
                          principle that will be used to guide senior management in making



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decisions about the agency’s priorities, activities, and ways in which the
plan’s goals and objectives may best be reached. The plan also recognizes
that voluntary partnerships with stakeholders are a key external
factor—to a large extent beyond EPA’s control—that could significantly
affect the agency’s ability to achieve its mission. While EPA has some
influence over the actions taken by other federal agencies with significant
environmental responsibilities (as well as some influence over state, tribal,
and local governments), it does not control their actions. Hence, the
agency acknowledges that effective partnerships with federal agencies and
other stakeholders are essential to successfully implementing the plan’s
goals and objectives.

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

To further refine the plan and determine areas of potential overlap
between EPA and federal agencies with related responsibilities, EPA
identified 16 federal agencies with crosscutting or similar functions and
sent each of them a draft outline of the strategic plan in May 1997 and the




4
 The stakeholders include states, regions, environmental and other public interest groups, business
associations, individual corporations, and local governments, among others. However, EPA’s efforts to
coordinate with other federal agencies were limited primarily by the time frames they were working
under to complete the plan.
5
 Environmental Goals for America: With Milestones for 2005, EPA (Dec. 1996).



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

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

•   One of EPA’s most visible relationships with other federal agencies involves
    the cleanup of hazardous waste (Superfund) sites at federal facilities.7 The
    process for cleaning up these sites consists of many steps involving both
    the responsible federal agencies and EPA. Our 1996 review of risk
    evaluations for federal facilities8 found that as of February 1996, EPA had
    designated 154 facilities as high priorities for cleanup,9 including facilities
    operated by the Departments of Agriculture (2), Defense (127), Energy
    (20), the Interior (2), and Transportation (1). Our work also found that
    interagency comparisons of risk posed by these sites are difficult because
    agencies have independently developed different risk-ranking and
    priority-setting approaches. While EPA’s draft strategic plan includes a goal

    6
     In late July 1997, a copy of EPA’s draft strategic plan was also sent to the National Science
    Foundation for review and comment. EPA is reviewing the Foundation’s draft plan, according to Office
    of Planning, Analysis, and Accountability officials. The officials said that the draft plan was not sent
    earlier because of an oversight, but EPA will have time to incorporate the comments before the plan is
    finalized.
    7
     Numerous federal facilities have been contaminated with a wide range of substances, including highly
    radioactive waste and toxic chemicals, and require cleanup. The Superfund program, established
    under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as
    amended, governs cleanups of hazardous waste sites, including those located on federal property.
    8
     Federal Facilities: Consistent Relative Risk Evaluations Needed for Prioritizing Cleanups
    (GAO/RCED-96-150, June 7, 1996).
    9
     As of April 1995, federal agencies had placed 2,070 facilities on the federal facility docket, EPA’s
    listing of the facilities awaiting evaluation for possible cleanup. In addition, EPA had placed 154
    federal facilities on the National Priorities List as of February 1996. EPA uses the list as an aid in
    determining which sites warrant further investigation to assess public health and environmental risks
    and which sites merit cleanup.



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    and related objectives that pertain to the cleanup of hazardous waste sites,
    it does not specifically address the issue of interagency coordination in
    achieving “better waste management and restoration of abandoned waste
    sites.”
•   EPA shares responsibilities with other agencies for collecting and managing
    the data needed to perform environmental assessments. For example, data
    on ecosystem management are collected independently by various
    agencies for different purposes. Often, these data are noncompatible and
    insufficient for decision-making. Data for health assessments are equally
    widespread among federal entities. For example, EPA must coordinate such
    data with the Department of Labor, the National Institute for Occupational
    Safety and Health, the National Institute of Environmental Health
    Sciences, the National Science Foundation, and the National Cancer
    Institute, among other agencies. While the plan recognizes the need for
    stakeholders’ general involvement, it does not address the interagency
    coordination of data needed for health and environmental assessments.
    Neither does it assume or assign responsibility for collecting, managing,
    and making the data available to others.
•   EPA, as the nation’s chief technical and regulatory agency for
    environmental matters, also plays a major role in international
    environmental programs and activities—including efforts to address global
    environmental concerns, such as climate change, stratospheric ozone
    depletion, marine and coastal pollution, and loss of biological diversity.
    Our recent work on international environmental agreements10 noted that
    EPA shares responsibility for implementing international environmental
    agreements with several federal agencies, including (1) the Department of
    State, (2) the U.S. Agency for International Development, (3) the
    Department of Energy, and (4) the Department of Commerce (primarily,
    the National Oceanic and Atmospheric Administration). However, EPA’s
    goal and related objectives on the reduction of global and cross-border
    environmental risks make only passing references to the need to
    cooperate with other federal agencies and other stakeholders in
    implementing this goal.
•   EPA also shares responsibility with other federal agencies for ensuring a
    safe food supply for the American public and has therefore included food
    safety as one of the plan’s goals. In particular, the agency will strive to
    keep foods free of pesticides and protect the public from threats posed by
    tainted foods. While this goal makes a general reference to involving
    stakeholders in developing performance measures, there is no discussion
    of the related roles played by the U.S. Department of Agriculture, the Food

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



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                       and Drug Administration, and the Centers for Disease Control, among
                       others, in supporting EPA’s efforts to accomplish this goal.

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

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


                       In various reports and testimonies over the years, we have identified
EPA’s Strategic Plan   several major management challenges for EPA. These involve (1) setting
Addresses Major        priorities, (2) making effective use of nonregulatory approaches to
Management             supplement traditional command-and-control regulations, (3) working
                       better with the states, (4) ensuring the quality and completeness of the
Challenges             scientific research on which the agency makes its decisions, and (5) better
                       managing the Superfund program. NAPA also identified these challenges in
                       its April 1995 report on EPA’s performance in managing environmental
                       protection.11 EPA has been working to improve in these areas, and its draft

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



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                       strategic plan recognizes these problems and discusses plans for
                       additional efforts to address them. However, the draft plan would benefit
                       by being more specific about actions that are planned.

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


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

                       As noted in its draft strategic plan, EPA is working to improve and integrate
                       its planning, budgeting, and accountability processes. As we reported in
                       June 1997, EPA’s new processes are principally being put in place in
                       response to NAPA’s concerns.13 When fully implemented, the improvements



                       12
                        Environmental Protection: Current Environmental Challenges Require New Approaches
                       (GAO/T-RCED-95-190, May 17, 1995), Management Issues Facing the Environmental Protection Agency
                       (GAO/T-RCED-93-26, Mar. 29, 1993), Environmental Protection: Meeting Public Expectations With
                       Limited Resources (GAO/RCED-91-97, June 18, 1991), and Environmental Protection Agency:
                       Protecting Human Health and the Environment Through Improved Management (GAO/RCED-88-101,
                       Aug. 16, 1988).
                       13
                        Managing for Results: EPA’s Efforts to Implement Needed Management Systems and Processes
                       (GAO/RCED-97-156, June 18, 1997).



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                          should help the agency to better define its priorities, including making
                          better use of available information on risk.

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

                          Although not specifically mentioned in the draft plan, a project is being
                          carried out by the Science Advisory Board to rank the relative risks of
                          environmental problems and develop methodologies that EPA can use to
                          rank risks in the future. A draft report on the results of this study, which is
                          called the Integrated Risk Project, is to be provided to other scientists and
                          experts for peer review in August 1997. According to EPA officials, strategic
                          planning is an iterative process and the plan will be updated, as
                          appropriate, to reflect the final results of this and other studies or factors.


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




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



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

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


Working Better With the   While EPA is ultimately responsible for overseeing the delivery of national
States                    environmental programs, the states are primarily responsible for
                          day-to-day implementation. Despite the importance of a good EPA/state

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



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

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

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


Ensuring the Quality and     EPA uses peer review to enhance the quality, credibility, and acceptability
Completeness of Scientific   of scientific and technical work products, which may ultimately form the
Research                     basis of regulations and other key decisions by the agency. In

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



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

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


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

                         Under the Superfund law, EPA can compel the private parties responsible
                         for hazardous waste sites to clean them up or it can conduct the cleanup
                         and demand reimbursement of its costs from the responsible parties.
                         Private parties perform about 75 percent of cleanups. To pay for EPA’s
                         cleanups, the agency has drawn on a legislatively established trust fund,
                         primarily financed by a tax on crude oil and certain chemicals and by an


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



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                       environmental tax on corporations. Federal agencies generally use their
                       annual appropriations to finance cleanups of the facilities under their
                       jurisdiction.

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

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


Managing Information   The Paperwork Reduction Act of 1995 and the Clinger-Cohen Act of 1996
Resources              direct agencies to implement a framework of modern technology
                       management on the basis of practices followed by leading private and
                       public organizations that have successfully used technology to improve
                       performance and help meet strategic goals. Under these laws, agencies are
                       to better relate their technology plans and information technology use to
                       their programs’ missions and goals. EPA’s draft plan notes that the agency
                       plans to integrate information technology investments with its overall
                       strategic-planning process and implement best practices identified by us

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



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                       for information resources management. However, the draft plan does not
                       clearly describe how these strategies will be carried out and how results
                       will be measured.

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

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


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


Scientific and         Although EPA has collected much scientific and environmental
Environmental Data     information, many gaps exist, and the data are often difficult to compile
                       because different data collection methods have been used. Although EPA
                       has tried to improve the quality of its data, these data are often unreliable,
                       and the agency’s disparate information systems are not integrated. These

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



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shortcomings have been raised in various external and internal reports on
EPA, including the Vice President’s report on reinventing government.20


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


In our June 1997 report, we pointed out that EPA has been trying since the
1970s to revise its management systems to better manage for results. We
observed that the agency will likely need several years to develop and fully
implement an integrated planning, budgeting, and accountability system.
Even with this much time, the agency will have difficulty obtaining the
scientific and environmental data and developing and reaching agreement
on the appropriate environmental measures of its programs’ and its own
performance called for by the new system. Given the complexity of these
efforts and the time required to complete them, we recommended that the
EPA Administrator, in consultation with key stakeholders, establish
expectations or benchmarks for how the new system is to operate when
fully implemented and use them to monitor the agency’s progress in
implementing the system. EPA agreed with our recommendation and the
need to identify some measures of success for implementing the new
planning, budgeting, and accountability system—that is, some way for the
agency to know whether it is progressing toward the type of system
intended.

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

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



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                  these efforts, state and EPA regional representatives said that
                  (1) clarification is needed on EPA’s and the states’ direction in developing
                  indicators; (2) some qualities of a good indicator are not well understood;
                  and (3) in some cases, determining whether the best indicators have been
                  chosen will take many years. Thus, it appears that it will be some time
                  before EPA is able to develop and use a set of environmental indicators that
                  accurately and comprehensively reflect the impact of its programs or their
                  results.


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

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


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




                  Page 26                               GAO/RCED-97-209R EPA’s Draft Strategic Plan
B-277552




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

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




Peter F. Guerrero
Director, Environmental
  Protection Issues

Enclosure




Page 27                               GAO/RCED-97-209R EPA’s Draft Strategic Plan
EPA’s Draft Goals


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

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

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

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

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

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

               7. Expansion of Americans’ Right to Know About Their Environment. Easy
               access to a wealth of information about the state of their local
               environment will expand citizen involvement and give people tools to



               Page 28                               GAO/RCED-97-209R EPA’s Draft Strategic Plan
           EPA’s Draft Goals




           protect their families and their communities as they see fit. Increased
           information exchange between scientists, public health officials,
           businesses, citizens, and all levels of government will foster greater
           knowledge about the environment and what can be done to protect it.

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

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

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




(160402)   Page 29                              GAO/RCED-97-209R EPA’s Draft Strategic Plan
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