Compliance Problems Undermine EPA's Drinking Water Program

Published by the Government Accountability Office on 1990-08-03.

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

                   United   States General   Accounting    OfTice

For Release         Compliance   Problems Undermine       EPA's
on Delivery         Drinking   Water Program
Expected at
9:30 a.m. EDT
August 3, 1990

                    Statement     of
                    Richard L. Hembra, Director
                    Environmental     Protection Issues
                    Resources,     Community, and Economic        Development     Division

                     Before the
                     Environment, Energy, and Natural   Resources          Subcommittee
                     Committee on Government Operations
                   -House of Representatives

                                                                                GAO Form 160 (12187)
Mr.   Chairman    and Members of the Subcommittee:

        We appreciate       the opportunity     to be here today to discuss our
report    on implementation         of the Safe Drinking     Water Act program by
the Environmental         Protection     Agency (EPA), the states,     and the
nation's     public     water supply systems.1         The report examined (1) the
extent    to which community water systems have complied with
requirements        for monitoring      water supplies    and meeting drinking
water standards,         (2) the effectiveness       of state and EPA enforcement
efforts     to ensure compliance         with these requirements,     and (3) the
impacts of new drinking            water requirements,     mandated by the 1986
amendments to the Safe Drinking              Water Act.

        In summary, Mr. Chairman, we found that many water systems,
particularly       smaller     systems, are violating           requirements       for
monitoring      water quality         and meeting drinking         water standards.
Based on our detailed            review of enforcement          cases in six states,           we
found that states'          and EPA's enforcement          actions,      intended      to deter
such violations         and return      systems to compliance,           often fall      short
of EPA's program requirements               and are frequently         ineffective       in
achieving     their     objectives.        The implementation         of new and more
stringent     regulatory        requirements     stemming from the 1986 amendments
probably     will    make compliance        more difficult        to achieve and
enforcement       problems more difficult           to resolve.

        The remainder    of my statement           discusses  our findings  in more
detail.     However, before     I begin,          I would like to briefly  provide
some background       about the nation's           drinking  water and EPA's Safe
Drinking    Water Act program.

1Drinking     Water:  Compliance Problems Undermine EPA Program As New
Challenges     Emerge (GAO/RCED-90-127,  June 8, 1990).

         Most Americans     take the availability       of safe drinking        water
supplies     for granted.        However, al though improved treatment
practices      and drinking     water regulations      have virtually      eliminated
such diseases      as typhoid      and cholera    and have reduced the incidence
of other debilitating          diseases,   some waterborne      disease outbreaks
continue     to occur.      In addition,    public   health and environmental
officials      have become increasingly        concerned about a proliferation
of man-made chemical          contaminants    found in drinking       water supplies.
Many of these contaminants            have been linked     to cancer,     birth
defects,     and other serious health         problems.

        To protect    the public    from these risks,         the Safe Drinking
Water Act, enacted in 1974, required               EPA to establish       (1) water
quality     standards    or treatment      techniques     for contaminants         that
could adversely       affect   human health and (2) requirements               for
monitoring      the quality    of drinking       water supplies    and for ensuring
the proper operation         and maintenance       of water systems.         In 1986
Congress amended the act to significantly                 increase    the number of
contaminants       to be regulated,       strengthen   EPA's enforcement
authority,      and establish     various     other requirements.        All but two
states     have assumed "primacy,"         or responsibility,       for managing the
program at the local level.

        In implementing     the program,       EPA and the states        rely heavily
on community water systems to demonstrate                compliance      with the
program's    requirements      by periodically      collecting       water samples and
having them tested        in an approved laboratory.             The test results      are
then reported      to the state,     which analyzes the data to determine
the water systems'        compliance    with monitoring        requirements        and
water quality      standards.      The state,     in turn,     reports     identified
violations     to EPA.
         If a violation   occurs,     the state is responsible      for taking
enforcement      action  against    the water system.       The state gives
priority     to systems in "significant        noncompliance*'--a     designation
based on the frequency         and/or magnitude     of violations.      EPA is
responsible      for enforcing     cases when the state does not act.


       While EPA reports       generally     show that community water systems
are complying    with drinking        water requirements,      we found that the
extent    of compliance      is considerably     overstated.       Deficiencies
exist   in how violations       are detected     and reported      at each level    in
the regulatory      process,    from the time a system samples its water
supply to the time EPA records the system's                compliance     status in
its national    data base.

        At the water system level,    some violations  are probably    going
undetected    because of sampling errors     by water system operators.
In addition,     EPA and state program managers identified     instances     of
intentional    falsification   of test results.

        Sampling errors       occur when water system operators          either    take
or test water samples incorrectly.               Sample collectors     must follow
specific    detailed      procedures    to obtain accurate      test results.
However, EPA and state program managers expressed                  concern about
the sampling       technique     of operators    and the accuracy of the test
results.      For the most part,        the program managers attributed
potential     problems     to the inadequate      training   of operators,      the
lack of full-time         operators,    or the high turnover       among operators
at small water systems.             For example, according      to one EPA manager
from a region where approximately             75 percent   of the water systems
serve 500 people or fewer,            small systems have the most difficulty
attracting      trained    operators    and all too often,      the person who
takes the samples         and performs      other    tasks    is   "whoever     happens    to
be around."

        EPA and state officials      also cited as a cause of sampling
errors    by operators   the increasingly      technical    drinking-water
regulations     and sample collection      procedures.      The officials
indicated    that sampling     errors will    probably   increase     as more
contaminants     are regulated     under the 1986 amendments to the Safe
Drinking    Water Act.

      A second problem at the water system level              is the potential
for deliberate     falsification       of compliance     data or manipulation      of
the test itself      to produce the desired        result.    While the extent of
this problem is unknown, we found that falsifying                data and
manipulating    test results        are relatively    easy to accomplish,      and
ample evidence     exists      that the practices     are occurring.

        One way to falsify         compliance         data is to ensure "good" test
results      by taking      samples from sources known to be free of
contamination.           Another technique          is to eliminate      any
contamination        before    the sample is tested.              For example,      in the
case of microbiological            tests,      boiling      or microwaving     the sample
will    kill   bacteria,      as will     rinsing       the container    with chlorine
prior     to collection       of the sample.           Where system operators         are
responsible       for testing      the sample in addition             to collecting      it,
as in the case of turbidity,                they can simply write          in plausible
test results        without    ever actually          testing   their   water.

        While most EPA and state officials         we interviewed       stated they
do not believe      data falsification    is extensive,        they all cited
cases in which such activities         had been detected         or were strongly
suspected.      For example, program managers in all six states we
visited     had identified    cases in which reported        turbidity     results
were questionable.         When Oklahoma officials      investigated       one such
case, the water system operator         admitted    that he was not testing
the water as required;     he said that his predecessor     told him to
take a water sample,     "hold it up to the light,    and if it looks
pretty   clear,  give it a .3."    He was also told not to report,      under
any circumstances,    a result   over 1, the drinking   water standard.

        How often data falsification          occurs is unclear        because most
states do not actively          seek it out.      While some states        have
undertaken       modest efforts     to detect such problems,          few have a
systematic       program to identify       and investigate      potential     data
falsification.         We believe     that EPA needs to encourage          these types
of efforts       because the incentives       for falsifying       data will
increase       as water systems are required         to comply with the broader
and more stringent        requirements      in the 1986 amendments to the Safe
Drinking       Water Act.    Our report recommends that EPA evaluate               the
extent of data falsification             and provide    guidance    to the states on
how best to discourage          these practices      and on how to detect them
when they do occur.

        At the state      level,     EPA studies,       based on regional          offices'
periodic     assessments       of the accuracy with which states                 report
violations,      disclosed       that (1) some identified           violations         are not
reported     to EPA and (2) some states have adopted policies
suspending      or restricting        certain      EPA monitoring        requirements.          In
our review of the studies --conducted                  by all 10 EPA regional             offices
covering     38 states,      Puerto Rico, and the Virgin               Islands--we        found
that to the extent          EPA identified         reporting    errors      by the states,
an overwhelming        proportion       involved      the underreporting         of
violations.        For example,       in 25 states,         over 75 percent        of all
microbiological        reporting      errors     involved     underreporting.

        According      to the studies,       a major factor        contributing       to
underreporting         is state and regional         policies      that revise or
suspend certain          monitoring    requirements.         As a result        of these
policies,     water systems are not performing                all required        tests,      and
monitoring      violations        are not being reported         to EPA. In some
instances,       states     may present    a compelling      case why such policies
are warranted.           Nevertheless,     such policies       undermine a program
that relies       primarily      on adherence     to published       regulatory
requirements.           In addition     to encouraging      noncompliance,      these
policies     also lead to statistics           that mislead      EPA managers and the
public    into believing         that required     monitoring      is being conducted
and that compliance           is being achieved.        To correct       the problem,     our
report    recommends that EPA evaluate              the policies      and determine,
within    the constraints          of the Safe Drinking       Water Act, whether
existing     regulations        should be modified.         Once EPA evaluates        the
policies,      it should ensure that the states              enforce     the regulations.

       At the federal         level,    EPA lacks key data needed to determine
water systems'         compliance.       In addition     to identifying      reporting
problems,     the aforementioned           EPA studies    disclosed     that some
states did not have systems to track compliance                     with some
monitoring      requirements         and thus could not determine          whether
monitoring      violations       had occurred.       Without    this information,      EPA
is unable to determine            accurate    compliance     rates for many


       States employ a variety          of quality    assurance activities
designed     to improve water system operations            and compliance   with the
Safe Drinking        Water Act.     We looked at two such activities--
operator    certification       programs and sanitary        surveys--and  found
that they are not fully           implemented.      Moreover,    financial
constraints      are leading     many states      to cut back on sanitary     surveys
and other quality         assurance activities.

       Operator    certification       programs can help ensure that water
systems are operated           and maintained    by qualified      individuals,
sampling    techniques       are properly     employed,    and drinking      water
regulations         are met.      Although    EPA does not require    states to have
operator       certification        programs,   45 states   have mandatory operator
certification           programs,     and 2 others have voluntary     programs,
according       to information         from the Association     of Boards of
Certification.             However, we identified       two major problems
concerning        the applicability        of and compliance     with state operator
certification           requirements.

         Data collected      by the association       and EPA indicate          that (1)
at least     11 states      exempt systems serving        500 people or fewer from
having certified         operators    and (2) other states        use different
criteria,     such as the number of service            connections,        to exempt
small water systems.            These exemptions      are significant         because over
60 percent     of all community water systems nationwide                   serve 500
people or fewer.          On the basis of our interviews            with state program
managers,     water systems'       compliance     with operator       certification
requirements       varies    considerably     from state     to state.         For example,
in both Oklahoma and Washington,              state officials       told us that over
90 percent     of the community water systems have certified                      operators,
while     in Vermont,     the state program manager estimates                that fewer
than 5 percent        have certified      operators.

        Another     important    quality    assurance     tool is a comprehensive
inspection       of a water system called          a sanitary     survey.     In
addition      to being overall        reviews of the facilities          and their
operations,        sanitary   surveys provide       states     an opportunity     to
reduce the potential          for sampling      error by operators        and falsified
test    results.       For example, states may sample and test the water,
observe the system operators*              sampling and testing        procedures,
and/or     review sample collection          procedures      to ensure the operators
understand       them.

      EPA regulations       require  states  to have a program for
conducting     sanitary    surveys in order to obtain   primacy.   Despite
this   requirement      and the acknowledged   benefits of the surveys, we
found that state       sanitary      survey programs vary widely           in both
frequency     and content     and that resource        constraints     are
substantially     affecting      many of these programs.           While some states
appear to have comprehensive             sanitary    survey programs,        other
states have programs that are either               less comprehensive         or that
have been discontinued          altogether      as a result     of recent cutbacks
in resources     and the additional          work load stemming from the 1986
amendments to the Safe Drinking              Water Act.

       Our review suggests that better             compliance        by water systems
could be achieved        through more consistent            implementation     of
operator   certification       and sanitary       survey programs.          Our report
recommends that EPA promote the use of these and other quality
assurance programs.          Specifically,       we believe      that EPA should
provide minimum criteria          for state operator          certification     programs
and, in the case of sanitary             surveys,   clarify      its ambiguous policy
on whether such surveys are required               and encourage states         to
implement survey programs more consistently.


        EPA counts on enforcement           as a primary      means of deterring
program violations        and returning       violating      systems to compliance.
EPA policy     requires     states to take "timely           and appropriate"
enforcement      action   against   significant         noncompliers      (SNC) and, to
that end, has established          criteria      for determining        appropriate
actions    and time frames.        In reviewing         95 SNC enforcement        cases,
involving     75 water systems       in six states,         we found that states
took timely      and appropriate       action    about 25 percent        of the time.
More importantly,        state enforcement         actions     were often ineffective
in returning      SNCs to compliance,         or did so only after          lengthy
delays.     Indeed,     one of the more striking            observations      to be made
about the 95 enforcement          cases we reviewed          is the length      of time
many of the water systems have remained in significant
noncompliance.      In 46 of the cases, systems had been in
significant    noncompliance   for over 4 years, and in 31 of                       these   46
cases, systems remained so as of February       1990.

        There is no single          explanation         for why some water systems
remain in significant            noncompliance          for years.         However,
ineffective       enforcement       by states        and EPA is clearly            an important
contributing       factor      in the delays in resolving                 some of these cases.
In some instances,           the states       postponed appropriate              enforcement
action      until  long after       serious       compliance       problems were first
identified.        For example, one system had not tested                        its water for
any contaminants          since June 1980, but the state's                   first     enforcement
action      did not occur until          October 1987.           Of greater        concern,    a
number of enforcement            actions       that did meet the EPA criteria                 had
little      or no effect       in returning         systems to compliance.              We found
this to be particularly             true for civil          referrals,       which EPA counts
as appropriate        regardless       of whether they are filed                 in court.
Seven of the 12 civil            referrals        in our enforcement           case reviews had
not been filed        as of September 1989.                Significantly,          in only one of
the 7 cases where referrals                were not filed          had the water system
returned       to compliance.         Finally,       when state actions            were delayed
or ineffective,         EPA rarely       stepped in and exercised                its own
enforcement       authority.

       Our report makes a number of recommendations                 to improve EPA's
and states'    enforcement.       For example, to increase            the prospect
that state enforcement       actions   will    return   violating        systems to
compliance,    we recommended that the Administrator               direct       EPA
regions    to examine whether states        relying    on civil       referrals     have
the resources     and commitment needed within          the state drinking           water
program office     and the attorney      general's     office     to ensure that
such referrals     will  be acted upon.        We also     recommended that EPA
expand its enforcement       efforts    when states do not act, or when
state actions     are ineffective     in achieving      compliance.

        Nevertheless,        while improving         enforcement      will      address some of
the long-term         compliance      problems in the drinking               water program,
this is by no means a complete solution.                        Some SNCs present
intractable       problems      that an enforcement           action    may not cure--
regardless       of whether the action meets EPA enforcement                         criteria.
For one thing,         enforcement       does not alleviate          problems in financing
corrective       actions,     particularly        for small      water systems.             For
example,     in one of our review cases, a water system serving                               125
people had to make major improvements                    costing     over      $200,000       to
comply with state and federal                drinking      water regulations.
According      to the state program manager, although                      the system
received     partial      funding     from the Farmers Home Administration,                       its
financial      condition      was such that three members of the water board
had to take out a personal               loan to pay for the $2,000 construction
permit.      Another difficult           issue, found primarily              at small       water
systems,     arises     when state regulators            cannot identify            a system
owner against         whom to take enforcement             action    and system users are
unwilling      to take responsibility.


        As problematic      as compliance     and enforcement        already     are, they
may become more so in coming years as EPA establishes                      new standards
and other requirements         for water systems.          As required       by the 1986
amendments to the Safe Drinking             Water Act, EPA has issued or
proposed many new regulations            that will    significantly        increase
program responsibilities          for states     and nearly      all of the nation's
58,000 community water systems.              Although    the actual       impacts of the
new requirements       will   not be known until        all new regulations          become
effective,     states   and water systems are expected              to incur enormous
financial     costs and face difficult          new challenges        in achieving
compliance     and enforcing      requirements.

         Under the 1986 amendments, water systems must adhere to more
stringent        requirements       for water treatment,             monitoring,         and
reporting.          According     to EPA officials,           many systems will             have to
install      new equipment        or modernize         their    infrastructure           (i.e.,
their     distribution,        storage,    treatment,         laboratory,        and monitoring
facilities)         to comply with some of the new standards,                        particularly
the new filtration            requirement.         EPA estimates          that compliance          will
cost water systems about $2.5 billion                       annually.        Although
compliance         with the new drinking           water requirements             is expected to
affect      water systems of all sizes,                small systems,         which already
account for more than 90 percent                   of current        drinking       water
violations,         will   have greater      difficulties          because they lack the
necessary        financial      and technical       resources.          EPA officials           expect
that the addition           of new drinking         water requirements              will     only
exacerbate         compliance     problems for small systems.

        The 1986 amendments also increased                 responsibilities            for state
drinking      water programs.         Among these new responsibilities                     are (1)
identifying       and classifying       water systems requiring               filtration,       (2)
implementing       a lead.and      copper corrosion          control      program,        (3)
performing       assessments      of systems'       vulnerability         to contamination,
and (4) expanding          laboratory     capabilities         to handle the significant
increase      in regulated       contaminants.         According     to a survey
conducted by EPA and the Association                   of State Drinking            Water
Administrators,        state officials         also expect increased               enforcement
responsibilities         if water systems do not get 'additional                      resources
to implement new and existing              program requirements.

        The survey also concluded       that states will  need over $185
million    between 1987 and 1992 for onetime start-up          costs to begin
implementing     many of the new requirements,       and after    1992, will
need approximately      $152 million      annually.  This is in addition     to a
$34 million     funding  shortfall    that states said they have in trying
to comply with existing        program requirements.

       Faced with resource          shortages     of this magnitude,         some states
may have to shift        their    work priorities       or further     limit      some
program activities--        including      enforcement,     laboratory       testing,    and
sanitary    surveys-- to implement the existing                and new requirements.
Such forecasts      are particularly         disturbing      in light     of our findings
that more consistent          use of such activities           is central      to any
effort   to improve compliance            and better    protect    public      health  from
contaminated     drinking      water.

        Recognizing       the states'      and water systems'         need for increased
resources,       EPA has examined alternative             financing      mechanisms--such
as fees, taxes, bonds, and penalties--as                    a way of generating
additional       revenues for state drinking             water programs.           In
addition,      the agency has developed            a "Mobilization         Strategyā€¯       to
encourage state and local governments,                   water systems,        and private
organizations        to use creative        approaches      to find additional
resources      for state and local drinking              water programs.           The
strategy     includes,       among other things,         helping     operators       of small
systems understand           the new drinking        water requirements,           providing
training     and technical         assistance     through a variety          of existing
networks,      and assisting        the systems in obtaining            additional
resources      from larger       systems and private          organizations.           The
strategy     also encourages          generating     support     for the higher         water
rates needed to pay for system improvements                      by informing        the public
of the health        risks     associated     with contaminated         drinking       water.


        In conclusion,      Mr. Chairman,     we found substantial        evidence
that (1) violations         of drinking     water requirements      are probably
going undetected         and unreported     by water systems and (2) identified
violations    are going unreported          by states   to EPA. Although         states
have a number of quality          assurance measures at their          disposal     that
would alleviate        these compliance      problems,    financial    constraints
are leading     many to curtail        these measures.       We also found that,
for the cases we reviewed,          states'    and EPA's enforcement     actions
have often been ineffective           in deterring   violations    and in
returning   violating      systems to compliance.         Finally,  as the demands
of the drinking       water program increase       under new regulations,
compliance   will     be more difficult      to achieve and enforcement
problems more difficult         to resolve.

       As indicated      in my statement,            our report makes a variety              of
recommendations      to EPA to improve water systems'                      compliance    through
such actions     as (1) encouraging            more consistent            use of state-
sponsored operator         certification         and training          programs in order to
reduce errors      by operators,         (2) improving           internal    controls     to
detect   and deter     intentional        falsification            of sampling     data, and
 (3) encouraging     more consistent            implementation          by states of
sanitary    survey programs.            As stated       earlier,       we also made a number
of recommendations         to improve compliance               through better       enforcement
by the states      and EPA.

       While some of these recommendations                  call for a more efficient
and effective      use of existing          resources,      there is little       question
that additional       resources      will    be needed to increase           water testing,
perform sanitary        surveys,     train     operators,      and perform a variety        of
other activities        needed to ensure the safety               of the nation's
drinking    water.     While EPA's alternative              financing     efforts   are by
no means a complete         solution      to the shortfall          in resources,     our
work suggests      that these efforts           offer     some hope that vital
program activities         can be funded.

      Mr. Chairman,         this concludes   my prepared statement.  I would
be glad to respond          to any questions   that you or members of the
Subcommittee   might        have.