oversight

Superfund: EPA Can Improve Its Monitoring of Superfund Expenditures

Published by the Government Accountability Office on 1999-05-11.

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

                  United States General Accounting Office

GAO               Report to Congressional Requesters




May 1999
                  SUPERFUND
                  EPA Can Improve Its
                  Monitoring of
                  Superfund
                  Expenditures




GAO/RCED-99-139
                   United States
GAO                General Accounting Office
                   Washington, D.C. 20548

                   Resources, Community, and
                   Economic Development Division

                   B-282352

                   May 11, 1999

                   Congressional Requesters

                   The Environmental Protection Agency (EPA) spends about $1.4 billion a
                   year on the Superfund program to address the potential threats to human
                   health and the environment resulting from hazardous waste sites. While
                   EPA relies on cleanup contractors to study, design, and implement site
                   cleanups, it undertakes a number of activities and incurs expenses that
                   support the cleanups. Some of these support activities and costs are
                   site-specific in nature, such as supervising cleanup contractors,
                   performing laboratory analysis, and compelling private parties to perform
                   cleanups for which they are responsible. Other support activities and costs
                   are non-site-specific, such as management and administrative activities
                   and expenses for rent and computer services. Each of EPA’s 10 regional
                   offices, as well as several headquarters units, carry out these activities.
                   This is the third in a series of reports in which we have analyzed
                   Superfund expenditures. The first report discussed trends in Superfund
                   spending over a 10-year period.1 The second analyzed the portion of
                   Superfund spending that went to cleanup contractors.2 As agreed with
                   your offices, this report analyzes data for fiscal years 1996, 1997, and 1998
                   to determine (1) the relative shares of Superfund expenditures for
                   contractor cleanup work, site-specific support, and non-site-specific
                   support; (2) the activities carried out with EPA’s cleanup support spending,
                   particularly its non-site-specific spending; and (3) EPA’s efforts to monitor
                   and analyze how its regions and headquarters units spend Superfund
                   resources, particularly the distribution of expenditures among contractor
                   cleanup work, site-specific support, and non-site-specific support.


                   Over the last 3 years, the share of total Superfund expenditures for
Results in Brief   contractor cleanup work was about 45 percent, but declined from about
                   48 percent in fiscal year 1996 to about 42 percent in fiscal year 1998. Over
                   this period, expenditures for non-site-specific support were about
                   38 percent, whereas those for site-specific support were about 17 percent.
                   However, we found substantial variation among EPA’s regions in the shares
                   of their expenditures devoted to each of these cost categories. For
                   example, spending for non-site-specific support ranged from a low of
                   14 percent in EPA’s Boston region to 30 percent in EPA’s San Francisco
                   region.

                   1
                    Superfund: Trends in Spending for Site Cleanups (GAO/RCED-97-211, Sept. 4, 1997).
                   2
                    Superfund: Analysis of Contractor Cleanup Spending (GAO/RCED-98-221, Aug. 4, 1998).



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             EPA spends its support funds predominately on administrative activities.
             Although EPA classifies its Superfund expenditures into over 100 separate
             activity categories, we found that over 60 percent of all Superfund support
             expenditures (both site-specific and non-site-specific) were accounted for
             by three activities—general support and management, general enforcement
             support, and remedial support and management. Moreover, almost
             80 percent of EPA’s non-site-specific spending was concentrated on these
             three administrative activities. For the three regions that we reviewed in
             detail, these non-site-specific expenditures were primarily personnel
             expenses for activities such as management, administrative and secretarial
             support, financial management, public affairs, and contract management.
             For the three headquarters units that we reviewed in detail, this spending
             was on items such as rent; information management; facilities operations
             and maintenance; program and policy development; and budgetary,
             financial, and administrative support.

             EPA monitors the Superfund spending of its regions and headquarters units
             in several ways, including tracking whether funds are obligated at the
             expected rate and in compliance with the approved operating plan, and
             monitoring program accomplishments. However, EPA does not monitor or
             analyze the expenditures of its regions and units in terms of the relative
             shares of contractor cleanup costs, site-specific support costs, and
             non-site-specific support costs. Conducting such analyses would provide
             EPA with an additional tool to identify potential cost savings in Superfund
             spending, and we are therefore recommending that EPA regularly conduct
             such analyses.


             In 1980, the Comprehensive Environmental Response, Compensation, and
Background   Liability Act created the Superfund program to clean up highly
             contaminated hazardous waste sites. Under the act, EPA is authorized to
             compel the parties responsible for the contamination to perform the
             cleanup. EPA may also pay for the cleanup and attempt to recover the
             cleanup costs from the responsible parties. When EPA pays for the cleanup,
             the work is conducted by a private contractor who is directly hired by EPA,
             another federal entity, or a state.

             Superfund contractors study and design cleanups, as well as manage and
             implement cleanup actions at sites on the National Priorities List (EPA’s list
             of the nation’s worst hazardous waste sites) or at sites where there are
             immediate threats from hazardous wastes. In our 1998 report on
             contractor cleanup spending, we reported that for remedial action



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                     cleanups managed by EPA, about 71 percent of the costs charged by
                     cleanup contractors was for the subcontractors who physically performed
                     the cleanups—such as earthmoving and constructing treatment facilities.
                     The remaining 29 percent went to the prime contractors for professional
                     work, such as construction management and engineering services, and
                     associated travel, overhead, and administrative costs and fees.

                     For the purpose of this report, contractor cleanup work includes all
                     Superfund spending for the study, design, and implementation of cleanups.
                     The remaining Superfund spending is classified as cleanup support, which
                     includes both site-specific and non-site-specific support. Site-specific
                     support consists of Superfund activities linked to a specific hazardous
                     waste site, such as supervising cleanup contractors and conducting site
                     analyses. Non-site-specific support consists of activities related to the
                     overall Superfund program, rather than a specific site, and includes
                     activities such as financial management and policy development.


                     The share of total Superfund expenditures for contractor cleanup work
Most Superfund       declined from about 48 percent in fiscal year 1996 to about 42 percent in
Spending Is for      fiscal year 1998. Over the same period, spending for site-specific support
Support Activities   increased from about 16 percent of total Superfund expenditures to about
                     18 percent. Finally, the non-site-specific expenditures also increased from
                     about 36 percent to over 39 percent. (See fig. 1.)




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Figure 1: Superfund Spending for
Contractor Cleanup Work,
Site-Specific Support, and
Non-Site-Specific Support, as a
Percentage of Total Expenditures,
Fiscal Years 1996 Through 1998




                                    Note: Not all fiscal year percentages add to 100 percent because of rounding.

                                    Source: GAO’s analysis of EPA’s data.




                                    As the figure shows, the share of Superfund expenditures used for
                                    contractor cleanup work decreased between fiscal year 1996 and fiscal
                                    year 1997, and again in fiscal year 1998. EPA officials could not explain
                                    these changes in detail because they had not analyzed Superfund costs in
                                    this manner and were unaware of this decline until we presented the
                                    results of our analysis. Similarly, EPA officials were unaware of, and
                                    therefore did not have an explanation for, the changes in the other cost
                                    categories shown in figure 1 above. The actual expenditures for contractor
                                    cleanup work, site-specific support, and non-site-specific support for fiscal
                                    years 1996 through 1998 are shown in table 1.




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Table 1: Superfund Expenditures for
Contractor Cleanup Work,              Dollars in millions
Site-Specific Support, and            Expenditure
Non-Site-Specific Support, Fiscal     category                     FY 1996    FY 1997      FY 1998           Total
Years 1996 Through 1998
                                      Contractor
                                      cleanup work                   $685.4    $649.5       $595.3        $1,930.2
                                      Site-specific
                                      support                         230.4     241.7        253.9           726.0
                                      Non-site-specific
                                      support                         524.9     559.6        553.9         1,638.4
                                      Total                        $1,440.7   $1,450.8     $1,403.1       $4,294.6
                                      Source: GAO’s analysis of EPA’s data.




Expenditure Mix Varies                Over the 3-year period of our analysis, the mix of spending for contractor
Among Regions and                     cleanup work, site-specific support, and non-site-specific support varied
Headquarters Units                    substantially among EPA’s regions and headquarters units. (See fig. 2.)




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                                         B-282352




Figure 2: Types of Superfund Spending, by Regions and Headquarters, Fiscal Years 1996 Through 1998




                                         Note: Not all regional percentages add to 100 percent because of rounding.

                                         Source: GAO’s analysis of EPA’s data.




                                         As shown in figure 2, the mix among contractor cleanup work, site-specific
                                         support, and non-site-specific support is substantially different between
                                         headquarters and the regions. This difference can be expected because
                                         headquarters functions are more related to administration and
                                         management, while the regions have primary responsibility for overseeing
                                         the implementation of cleanups. However, our analysis also identified




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                                       substantial variation among the regions in the mix of their expenditures.
                                       Specifically, expenditures for contractor cleanup work ranged from a low
                                       of 42 percent in EPA’s Kansas City region to a high of 72 percent in EPA’s
                                       Boston and New York regions. Site-specific support spending ranged from
                                       a low of 12 percent in EPA’s New York region to a high of 29 percent in
                                       EPA’s Kansas City region. Non-site-specific support ranged from a low of
                                       14 percent to a high of 30 percent among EPA’s regions. These differences
                                       in the relative shares of expenditures among these categories—more than
                                       double in some instances—raise questions about the factors underlying
                                       them. We discussed these variations with EPA headquarters officials.
                                       However, because EPA does not analyze Superfund expenditures in this
                                       manner, they did not have an explanation for the specific factors
                                       underlying these regional differences and whether they warrant action.


Most Superfund Personnel               We also examined EPA’s Superfund personnel costs because they account
Spending Is for                        for a significant share of all Superfund support costs. In total, over the last
Non-Site-Specific                      3 years, about 21 percent of EPA’s Superfund personnel expenses have
                                       been for site-specific functions and 79 percent for non-site-specific
Functions                              functions. As shown in figure 3, this breakdown varies substantially
                                       between regional personnel spending and headquarters personnel
                                       spending.


Figure 3: Mix of Superfund Personnel
Spending, by Regions and
Headquarters, Fiscal Years 1996
Through 1998




                                       Source: GAO’s analysis of EPA’s data.




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                        Over the 3-year period of our analysis, Superfund personnel spending
                        totaled about $722 million. Of this, about $547 million was for regional
                        personnel spending, and the remaining $175 million was for headquarters
                        personnel spending. Over this period, the breakdown between site-specific
                        and non-site-specific personnel spending within the individual units
                        (headquarters and each of the regions) remained relatively constant from
                        year to year. However, we found that there was variation among the
                        regions. For example, site-specific personnel spending for the 3-year
                        period ranged from a low of 22 percent in one region to a high of about
                        33 percent in another region—a 50-percent difference between the lowest
                        and highest regions. Because EPA headquarters does not analyze Superfund
                        personnel costs in terms of the amount of site-specific and
                        non-site-specific spending, the meaning of these differences is unclear.


                        In 1996, EPA implemented improvements to its Superfund accounting
EPA’s Support           system to better track Superfund expenditures. EPA expected that these
Spending Is             improvements would help it compile more detailed cost information to
Predominately for       support the agency’s efforts to recover costs from responsible parties and
                        to improve internal tracking of Superfund financial data for management
Administrative          purposes. These improvements introduced over 100 categories to account
Activities              for the activities that are paid for with Superfund money. Some of the
                        categories capture activities that are site-specific, such as monitoring and
                        supervising cleanups conducted by private parties, while other categories
                        capture activities that are more administrative, such as maintaining
                        automated data processing systems.

                        We found that Superfund spending is not evenly distributed among all the
                        activity categories. Three of the more than 100 categories accounted for
                        over 60 percent of all Superfund support costs (both site-specific and
                        non-site-specific). These three categories are defined by EPA as follows:

                    •   General support and management—includes all activities associated with
                        managing and evaluating costs for site characterization. Also includes the
                        general support activities required to operate and maintain the Superfund
                        program. Activities include, but are not limited to, the following
                        contractual services: establishing, maintaining, and revising automated
                        data processing systems, and conducting special studies to help determine
                        programmatic direction in future years.
                    •   General enforcement support—includes all activities associated with
                        managing and evaluating the enforcement program. Activities include, but
                        are not limited to, the following contractual services: establishing,



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                                      maintaining, and revising automated data processing systems, and
                                      conducting special studies to help determine programmatic direction in
                                      future years.
                                  •   Remedial support and management—includes all activities associated with
                                      managing and evaluating the remedial program.

                                      Figure 4 shows EPA’s spending for non-site-specific and site-specific
                                      support.


Figure 4: Categories of EPA’s
Superfund Support Expenditures,
Fiscal Years 1996 Through 1998
(Dollars in Millions)




                                      Source: GAO’s analysis of EPA’s data.




                                      EPA’snon-site-specific spending was more concentrated in these three
                                      administrative categories than its site-specific spending. Specifically,
                                      about 78 percent of EPA’s non-site-specific spending was in the three
                                      administrative categories, compared to only 25 percent of the site-specific
                                      spending. Given the concentration of non-site-specific spending under



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these three categories, we conducted a detailed analysis of 1 year’s (fiscal
1997) non-site-specific spending under these three administrative
categories for three EPA regions and the three headquarters offices that
had the highest amount of Superfund spending—the Office of
Administration and Resources Management, the Office of Enforcement
and Compliance Assurance, and the Office of Solid Waste and Emergency
Response.

For the three regions, most of the non-site-specific spending was on
personnel items—such as management, administrative, and secretarial
support—and general support activities, such as financial management,
facility management, public affairs, and contract management. We found
that some of this spending represented cost allocations to the Superfund
program, while other spending was more directly related to specific
program activities. For example, in all three regions we found that some of
the non-site-specific costs had been allocated to the Superfund program
for its share of expenses, such as the regional administrator’s
management, clerical, and administrative costs, regional motor pool
expenses, and computer equipment and service costs. We also identified a
few instances in which non-site-specific expenditures were more directly
related to implementing cleanups, such as expenditures on annual
physical examinations for staff who conduct field work at hazardous
waste sites.

Among the headquarters units, the Office of Administration and Resources
Management had non-site-specific Superfund expenditures for items such
as rent, information management, and facilities operations and
maintenance. The Office of Enforcement and Compliance Assurance had
non-site-specific expenditures for items such as overall program direction;
policy development; and budgetary, financial and administrative support.
This Office also incurred expenses for criminal investigations and for
activities such as field sampling and laboratory and forensic analyses in
support of criminal cases. These expenses were recorded as
non-site-specific to protect the confidentiality of ongoing criminal
investigations. The Office of Solid Waste and Emergency Response had
non-site-specific expenditures for personnel functions, such as developing
national strategy programs, technical policies, regulations and guidelines,
and for providing program leadership for such activities as community
involvement, program planning and analysis, contract management,
information management, and human and organizational services. This
Office also incurred non-site-specific expenditures for contracted




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                            functions such as worker training, analytic support for EPA’s contract
                            laboratory program, and information management support.

                            We also analyzed EPA’s spending for site-specific support activities for
                            fiscal years 1996 through 1998. We found that about $184 million of the
                            site-specific spending was in the three administrative categories. About
                            $542 million was in the other more than 100 categories, for activities such
                            as developing information for enforcement cases, overseeing cleanups at
                            federal facilities, conducting site analyses and studies, overseeing private
                            party cleanups, conducting laboratory analysis, and supervising cleanup
                            contractors.


                            EPA regularly monitors and performs analyses of Superfund spending.
EPA’s Monitoring and        These analyses, however, do not examine the breakdown of Superfund
Analysis of Superfund       expenditures in terms of contractor cleanup work, site-specific support,
Expenditures                and non-site-specific support. The Director of the Superfund office
                            responsible for resources and information management provided a
                            summary of the activities EPA undertakes to manage Superfund spending,
                            including:

                        •   monitoring whether regions and units obligate funds at the expected rate
                            and in accordance with the agency’s operating plan;
                        •   conducting midyear reviews that focus on program accomplishments,
                            contracts and grants, and resources management;
                        •   reviewing contract management issues in all regions on a 3-year cycle; and
                        •   monitoring inactive contracts to identify and deobligate funds that are no
                            longer needed.

                            EPA’s 1996 memorandum announcing improvements to its Superfund
                            accounting system stated that one of the main benefits of the
                            improvements would be to enable managers to more precisely account for
                            site-specific and non-site-specific costs. The memo also stated that
                            Superfund financial and programmatic managers would be able to track
                            financial trends more accurately due to the increased level of financial
                            detail now available in the accounting system. However, when we
                            discussed our analyses with EPA officials, they told us that they do not
                            perform the types of analyses we conducted.

                            During the course of our work, we noted that another federal agency that
                            deals with the cleanup of hazardous wastes—the Department of
                            Energy—has been analyzing its costs using a functional cost reporting



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                 system since 1994. This system breaks costs down into functional
                 categories—mission-direct and several categories of support costs,
                 including site-specific support and general support. While not identical to
                 the categories we used in our analyses, Energy’s functional cost categories
                 are similar. In essence, Energy’s system compares the share of costs in the
                 different categories among the agency’s operating units. If a unit’s costs in
                 any given category vary significantly from the other operating units’, those
                 costs are further analyzed to determine whether the differences are
                 appropriate or whether they indicate areas for improvement. Department
                 of Energy financial officials stated that the functional cost reporting
                 system has resulted in support costs receiving increased attention by
                 management and has been a helpful tool that has contributed to support
                 costs declining faster than other costs—from 45 to 43 percent of total
                 costs between fiscal years 1994 and 1997.


                 Detailed analyses of expenditure trends over time and among regions and
Conclusions      headquarters units can be a valuable tool in identifying potential cost
                 savings. While EPA’s Superfund accounting system contains the data
                 necessary to perform such analyses, EPA has not done so, even though
                 tracking site-specific and non-site-specific costs more accurately was one
                 of the major benefits anticipated when the 1996 system improvements
                 were made. Given the variation in spending shares for contractor cleanup
                 work, site-specific support, and non-site-specific support among EPA’s
                 regional and headquarters units, we believe that conducting such analyses
                 would be a valuable tool in helping the agency to ensure that its Superfund
                 resources are being used as wisely as possible.


                 In order to better identify opportunities for potential cost savings, we
Recommendation   recommend that the Administrator, EPA, require the Assistant
                 Administrator for Solid Waste and Emergency Response to expand the
                 monitoring of Superfund expenditures to regularly analyze the breakdown
                 of expenditures in terms of contractor cleanup work, site-specific
                 spending, and non-site-specific spending. These analyses should compare
                 such spending shares among EPA’s regional and headquarters units, and
                 significant differences should be further analyzed to identify the
                 underlying causes and to determine whether cost-saving corrective actions
                 are warranted.




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                     We provided EPA with copies of a draft of this report for its review and
Agency Comments      comment. In a letter from EPA’s Acting Assistant Administrator for Solid
and Our Evaluation   Waste and Emergency Response, EPA disagreed with our characterization
                     that EPA’s activities fall into three groups—contractor cleanup costs,
                     site-specific support, and non-site-specific support—and stated that this
                     division gives the erroneous impression that site-specific and
                     non-site-specific support do not contribute substantially to the
                     achievement of cleanups. We do not believe that our categorization of
                     Superfund costs leads to this impression. In fact, the first paragraph of the
                     report explicitly states that EPA undertakes a number of activities, both
                     site-specific and non-site-specific, that support cleanups, including
                     supervising cleanup contractors, compelling private parties to perform
                     cleanups, and performing management and administrative activities.
                     Furthermore, the body of the report provides numerous examples of the
                     purposes served by both site-specific and non-site-specific spending. We
                     believe that these examples demonstrate that many of the site-specific and
                     non-site-specific support activities contribute to the achievement of
                     cleanups.

                     The purpose of our analyses was to disaggregate Superfund expenditures
                     to provide more detailed information on the specific functions served by
                     this spending. This analytic method can be used (and is being used by the
                     Department of Energy) to identify cost category differences among
                     operating units that can lead to potential cost savings. Our report does not
                     attempt to define or determine which expenditures are “cleanup
                     activities,” but rather to describe the purposes for which Superfund
                     money has been expended. According to EPA, cleanup response spending
                     includes “lab analysis, engineering and technical analyses, project
                     manager salaries, State/Tribal activities, community involvement activities,
                     and oversight of responsible parties and many other activities necessary to
                     achieve cleanups.” We agree that these activities support the cleanup of
                     sites, as stated in this report. However, when these support costs are
                     aggregated into the larger category of cleanup response, it is unclear what
                     share of these costs are for work related to specific sites, as opposed to
                     general program expenditures.

                     EPA also stated that our analyses failed to recognize Superfund
                     appropriations used by other federal agencies. In fact, our analyses
                     included Superfund expenditures by other federal agencies, and these
                     expenditures were included under our site-specific and non-site-specific
                     spending categories, as appropriate. The only substantial expenditures
                     excluded from our review were made by the Agency for Toxic Substances



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and Disease Registry, because these expenditures are made directly by
that agency and are not reported in EPA’s Superfund accounting system.
EPA further stated that our analyses did not account for the expenditures
private parties make to clean up Superfund sites that are the result of EPA’s
enforcement expenditures. We did not analyze private parties’
expenditures to clean up hazardous waste sites because our focus was on
federal Superfund expenditures. However, as part of our work for this
assignment, we found that more than half of EPA’s fiscal year 1997
enforcement expenditures was for management and administrative
activities.

Notwithstanding EPA’s concerns as discussed above, the agency agreed to
consider analyzing Superfund spending in terms of site-specific and
non-site-specific obligations and expenditures, as we recommended. The
full text of EPA’s comments is included as appendix II.


We conducted our review from September 1998 through April 1999 in
accordance with generally accepted government auditing standards. See
appendix I for our scope and methodology.

As arranged with your offices, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days after the
date of this letter. At that time, we will send copies to other congressional
committees with jurisdiction over the Superfund program, and to the
Honorable Carol M. Browner, Administrator, Environmental Protection
Agency. We will also make copies available to others upon request.

If you have any further questions about this report, please call me at
(202) 512-6111. Major contributors to this report are listed in appendix III.




David G. Wood
Associate Director,
  Environmental Protection Issues




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List of Congressional Requesters

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

The Honorable Michael G. Oxley
Chairman, Subcommittee on Finance
  and Hazardous Materials
Committee on Commerce
House of Representatives

The Honorable Bud Shuster
Chairman, Committee on Transportation
  and Infrastructure
House of Representatives

The Honorable Sherwood C. Boehlert
Chairman, Subcommittee on Water
  Resources and Environment
Committee on Transportation
  and Infrastructure
House of Representatives

The Honorable James T. Walsh
Chairman, Subcommittee on VA, HUD,
  and Independent Agencies
Committee on Appropriations
House of Representatives




Page 15                                 GAO/RCED-99-139 Superfund
Contents



Letter                                                                                1


Appendixes   Appendix I: Scope and Methodology                                       18
             Appendix II: Comments From the Environmental Protection                 20
               Agency
             Appendix III: Major Contributors to This Report                         22


Table        Table 1: Superfund Expenditures for Contractor Cleanup Work,             5
              Site-Specific Support, and Non-Site-Specific Support, Fiscal Years
              1996 Through 1998


Figures      Figure 1: Superfund Spending for Contractor Cleanup Work,                4
               Site-Specific Support, and Non-Site-Specific Support, as a
               Percentage of Total Expenditures, Fiscal Years 1996 Through
               1998
             Figure 2: Types of Superfund Spending, by Regions and                    6
               Headquarters, Fiscal Years 1996 Through 1998
             Figure 3: Mix of Superfund Personnel Spending, by Regions and            7
               Headquarters, Fiscal Years 1996 Through 1998
             Figure 4: Categories of EPA’s Superfund Support Expenditures,            9
               Fiscal Years 1996 Through 1998




             Abbreviations

             EPA       Environmental Protection Agency
             GAO       General Accounting Office
             IFMS      Integrated Financial Management System


             Page 16                                           GAO/RCED-99-139 Superfund
Page 17   GAO/RCED-99-139 Superfund
Appendix I

Scope and Methodology


             To determine the share of annual Superfund spending for contractor
             cleanup work, site-specific support, and non-site-specific support for fiscal
             years 1996 through 1998, we obtained information from the Environmental
             Protection Agency’s (EPA’s) Integrated Financial Management System
             (IFMS). Using the IFMS information, we classified the cleanup support
             activities into spending for site-specific support and non-site-specific
             support for these fiscal years. We confirmed this classification with Office
             of Comptroller officials. In order to give a complete representation of
             cleanup support activities, we made one adjustment to the analyses
             included in our prior reports. Specifically, we included the costs for EPA
             personnel who supervise the cleanup contractors into the category for
             site-specific support. In our two prior reports, we had included these
             personnel in the contractor cleanup work category as EPA’s accounting
             system does. This change has the effect of reducing the percentage of
             contractor cleanup work by about 1 percent from the level we had
             previously reported.

             To determine what activities were carried out with EPA’s cleanup support
             spending, particularly its non-site-specific spending, we used the IFMS
             information. We categorized the spending by EPA’s budget action codes,
             which provided general activity descriptions for Superfund spending
             under the more than 100 action codes. To obtain more specific
             information for EPA’s non-site-specific spending, we selected three regional
             offices—Philadelphia, Chicago, and Kansas City—for sampling. Among
             EPA’s regions, the first two had the highest non-site-specific spending and
             the third had the lowest, based on fiscal year 1997 data, which was the
             most recent information for which we had a breakdown of total support
             spending at the time we made our selection. We also selected the three EPA
             headquarters units—the Office of Solid Waste and Emergency Response,
             the Office of Administration and Resources Management, and the Office of
             Enforcement and Compliance Assurance—with the highest levels of
             Superfund spending. We interviewed cognizant officials from the three
             regional offices and three headquarters units about the particular activities
             conducted under the various budget action codes for the non-site-specific
             spending, and obtained greater detail on the uses of this spending.

             In a 1995 report on the IFMS, we found instances of inaccurate and
             incomplete data in the system.3 While we did not consider these instances
             to be representative of the overall integrity of the IFMS data, we
             recommended that EPA conduct statistical testing of the data, which EPA

             3
              Superfund: System Enhancements Could Improve the Efficiency of Cost Recovery
             (GAO/AIMD-95-177, Aug. 25, 1995).



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Appendix I
Scope and Methodology




has done. During the course of our current review, officials of EPA’s Office
of Inspector General told us that in their opinion the IFMS has not led to
any material misstatements in EPA’s 1996 and 1997 annual financial
statements and that they believed that the IFMS information was reliable for
the purposes of our review. Finally, in discussing spending activities with
officials from EPA’s regional offices and headquarters units, we did not
identify any material variations between the IFMS information and the
underlying detailed records.

To ascertain how EPA monitors and analyzes its regions’ and headquarters
units’ spending of Superfund resources, particularly for contractor cleanup
work, site-specific support, and non-site-specific support, we met with EPA
headquarters officials. These officials included representatives from EPA’s
Office of Solid Waste and Emergency Response—which is responsible for
the Superfund program—and the Office of the Chief Financial Officer. We
also obtained copies of pertinent documents describing EPA’s monitoring
and analysis procedures and related reports. In addition, we met with
Department of Energy officials and obtained documentation on their
Functional Cost Reporting System.




Page 19                                            GAO/RCED-99-139 Superfund
Appendix II

Comments From the Environmental
Protection Agency




              Page 20             GAO/RCED-99-139 Superfund
Appendix II
Comments From the Environmental
Protection Agency




Page 21                           GAO/RCED-99-139 Superfund
Appendix III

Major Contributors to This Report


                       Chuck Barchok, Assistant Director
Resources,             Patricia J. Manthe, Evaluator-in-Charge
Community, and         Donald J. Sangirardi, Evaluator
Economic               Curtis Groves, Operations Research Analyst
Development Division
                       Richard P. Johnson, Senior Attorney
Office of General
Counsel




(160459)               Page 22                                      GAO/RCED-99-139 Superfund
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