Managing for Results: EPA's Efforts to Implement Needed Management Systems and Processes

Published by the Government Accountability Office on 1997-04-08.

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

                    United States General Accounting Office

GAO                 Testimony
                    Before the Subcommittee on VA, HUD,
                    and Independent Agencies,
                    Committee on Appropriations,
                    U.S. Senate

For Release
on Delivery
Expected at
                    MANAGING FOR RESULTS
9:30 a.m. EDT
April 8, 1997
                    EPA’s Efforts to Implement
                    Needed Management
                    Systems and Processes
                    Statement for the Record by
                    Peter F. Guerrero, Director,
                    Environmental Protection Issues,
                    Resources, Community, and Economic
                    Development Division

    Mr. Chairman and Members of the Subcommittee:

    We appreciate the opportunity to present this statement for the record,
    which discusses the Environmental Protection Agency’s (EPA) efforts to
    improve its methods of establishing priorities, allocating resources, and
    measuring performance. As you know, EPA is currently developing a new
    approach for managing its strategic planning, budgeting, and
    accountability processes. The new approach, known as the planning,
    budgeting, and accountability system, responds to the National Academy
    of Public Administration’s (NAPA) April 1995 recommendation that EPA
    improve and integrate its management processes.1

    In response to this Subcommittee’s continuing interest in how EPA sets
    priorities and helps to manage the nation’s environment, we reviewed the
    status of EPA’s efforts to (1) establish an Office of Planning, Analysis, and
    Accountability to develop and implement an integrated planning,
    budgeting, and accountability system and (2) ensure that the agency has
    comprehensive scientific and environmental data and appropriate
    environmental measures of progress in carrying out its strategic planning,
    budgeting, and accountability processes. Our testimony today is based on
    the preliminary results of our ongoing work for the Subcommittee. A final
    report on our work will be provided to the Subcommittee this summer.

    In summary, our preliminary findings are as follows:

•   In March 1996, the EPA Administrator announced plans to create a new
    Office of Planning, Analysis, and Accountability. The office was
    established in January 1997. In the interim, an EPA work group composed
    of employees on temporary assignment started to develop the new
    planning, budgeting, and accountability system. However, the work group
    was not fully staffed, and the development of the new system is still in the
    early stages. The new Office of Planning, Analysis, and Accountability will
    not be fully staffed before July 1997.
•   EPA faces long-term challenges to obtain the scientific and environmental
    data needed to fully support its new system. Although much
    environmental information has already been collected, many gaps exist
    and the data are often difficult to compile because divergent data
    collection methods have been used. Likewise, much effort is still required
    to identify, develop, and agree on a comprehensive set of environmental
    measures to link the agency’s activities to changes in environmental
    conditions. Without environmental measures, EPA has to rely solely on

     Setting Priorities, Getting Results: A New Direction for EPA, NAPA (Apr. 1995).

    Page 1                                                                             GAO/T-RCED-97-116
             administrative measures, such as the number of permits issued or
             inspections made, to measure its performance or success.

             In an April 1995 report, the National Academy of Public Administration
Background   recommended that EPA establish specific environmental goals and
             strategies to attain them, and use comparative risk analyses to select
             priorities and develop strategies for specific programs. NAPA also said that
             EPA should consolidate its planning and budgeting functions, use the
             budget process to allocate resources to the agency’s priorities, and
             establish accountability by setting and tracking benchmarks and
             evaluating performance. The NAPA study’s recommendations are similar to
             the requirements for federal agencies established by the Government
             Performance and Results Act of 1993 (GPRA). Under GPRA, agencies must
             establish strategic plans by September 30, 1997. GPRA also requires
             agencies to submit to the Office of Management and Budget, beginning for
             fiscal year 1999, annual performance plans, including annual performance
             goals and performance measures. The first annual performance plans are
             to be submitted in the fall of 1997.

             In response to NAPA’s recommendations, in July 1995, EPA created a task
             force to study ways to improve the agency’s management processes. In its
             report, the task force recommended an integrated system composed of
             strategic planning, budgeting, and accountability processes. In the
             planning process, EPA was to develop a strategic plan that would be based
             on the agency’s goals. During the budgeting process, each goal in the
             strategic plan would be considered, and an annual performance plan
             would be prepared showing the agency’s progress to date and plans for
             future expenditures. During the accountability process, EPA would
             determine progress under the annual plans and use the data on progress to
             make corrections in the strategic and annual performance plans.

             In March 1996, the EPA Administrator and Deputy Administrator endorsed
             the task force’s recommendations for developing an integrated planning,
             budgeting, and accountability system and directed that the
             recommendations be implemented. In making a commitment to
             substantially revise the agency’s management systems, EPA officials
             recognized that the effort would take several years to complete. The EPA
             Administrator and Deputy Administrator also announced plans to create a
             new office by January 1997 to consolidate the agency’s planning,
             budgeting, and accountability processes. In the interim, a work group

             Page 2                                                     GAO/T-RCED-97-116
                        composed of employees on temporary assignment was established to
                        begin developing the new system.

                        In January 1997, the EPA Administrator approved the structure and staffing
EPA Is in the Process   plans for the new office, called the Office of Planning, Analysis, and
of Staffing Its New     Accountability. The interim work group that had been assigned to develop
Office                  the new system was detailed to the new office to continue its work. The
                        work group has 21 employees, fewer than half the number that EPA had
                        planned for the group.

                        The new office is authorized 49 employees. As of the end of March 1997,
                        EPA had published job announcements to fill 26 of the new positions. EPA
                        officials told us that these announced positions, which are open only to
                        current EPA employees, will be filled in May 1997. The remaining positions,
                        which are to be announced governmentwide, are not likely to be filled
                        before July 1997. The officials told us that the office was not fully staffed
                        when it was established because time was required to determine the most
                        appropriate types of skills and work experiences needed and to implement
                        a competitive process for selecting staff.

                        Given the office’s limited staffing, the development of an integrated system
                        is in the early stages. For example, EPA is reviewing the agency’s former
                        accountability process to find out what did and did not work well,
                        contacting other federal agencies to determine how they account for
                        progress in meeting their goals, and examining reporting systems in the
                        agency’s program offices to identify their potential use in the new system.
                        EPA hopes to have the accountability component in place by
                        September 1999. According to EPA officials, the development of the new
                        budgeting component will begin after the agency completes its strategic
                        plan in September 1997. They said that EPA’s fiscal year 1999 budget will be
                        structured along the lines of the goals in the strategic plan.

                        Thus far, the work group members have spent most of their time
                        developing a strategic plan, which is required by September 30, 1997,
                        under GPRA. An important part of the new strategic planning process is the
                        selection of goals and objectives that can be used to guide the agency’s
                        actions and to measure its performance. Although EPA is making progress
                        toward developing its strategic plan, it has not completed two studies that
                        are intended to identify the most appropriate goals for the agency and to

                        Page 3                                                     GAO/T-RCED-97-116
                           provide the latest scientific information on environmental risk.2 EPA
                           officials told us that the September 30, 1997, strategic plan will be updated,
                           as appropriate, to reflect the final results of these studies, which are likely
                           to be completed in late 1997 or early 1998.

                           Although EPA continues to expand and improve the environmental data it
EPA Must Overcome          compiles, it still needs to fill data gaps; improve the quality of its data;
Information                integrate information systems; and build the capability to compile,
Challenges to              organize, and analyze the data in ways useful to EPA managers and
                           stakeholders. In addition to the measures of outputs or program activities
Implement Its New          that it currently relies on to assess its performance, EPA is working to
System                     develop environmental measures that enable the agency to evaluate the
                           impact of its programs on the environment and determine whether they
                           are achieving the desired results.

EPA’s Environmental Data   The need to assess EPA’s performance in terms of changes in
and Systems Need to Be     environmental conditions substantially increases the demand for
Improved                   high-quality environmental data. Such data are also needed to identify
                           emerging problems so that they can be addressed before significant
                           damage is done to the environment. Despite EPA’s efforts to improve the
                           quality of its data, these data are often unreliable, and the agency’s many
                           disparate information systems are not integrated. These shortcomings
                           have been raised in various external and internal reports on EPA, including
                           the Vice President’s report on reinventing government.3

                           In its April 1995 report, NAPA also identified the lack of high-quality data on
                           environmental conditions as a particularly important problem for EPA. NAPA
                           specifically noted the limited amount of information based on the
                           real-time monitoring of environmental conditions. Without monitoring
                           data, EPA must rely on estimates and limited, site-specific data. NAPA also
                           concluded that much remains to be done to improve the overall
                           management of environmental information in the agency. It noted that EPA
                           had over 500 information systems and that program offices, which are
                           responsible for their own data, use different methods and definitions to
                           gather data. Furthermore, EPA relies on data compiled by other federal

                            One of the studies, EPA’s National Environmental Goals Project, is being performed to establish a set
                           of long-range national environmental goals with realistic and measurable milestones for the year 2005.
                           The other study, the Integrated Risk Project, is being performed to rank the relative risk of
                           environmental problems, and to develop methodologies that EPA can use to make future risk rankings.
                            Reinventing Environmental Regulation, National Performance Review (Mar. 16, 1995).

                           Page 4                                                                         GAO/T-RCED-97-116
                         agencies and the states. According to NAPA, these agencies and the states
                         also use divergent methods of collecting data.4

                         More recently, a 1996 EPA report concluded that the agency needs to
                         redesign its many disparate fiscal and environmental data systems so that
                         it and others can measure its success in meeting environmental goals and
                         determine the costs of doing so.5 The agency’s difficulty in demonstrating
                         its performance or the impact of its actions is illustrated by the findings of
                         a team of agency personnel, which was formed in 1995 to evaluate the
                         agency’s needs for environmental information. The team identified various
                         problems with the information needed to report on environmental goals,
                         such as gaps in the data and inconsistencies in the methods of collecting
                         and/or reporting data across states or federal agencies. Specific examples
                         include the lack of (1) national reporting on risk reduction at waste sites,
                         (2) reliable data on the nature and cause of pesticide poisonings,
                         (3) effective reporting on progress in improving the nation’s water quality,
                         and (4) complete data on air pollutants.

Efforts to Develop       EPA and the states are devoting considerable attention to developing
Environmental Measures   environmental indicators or measures for use in assessing programs’
Need Focus               performance and better informing the public about environmental
                         conditions and trends. Some efforts are just starting, while some of the
                         agency’s program and regional offices and some states have begun to use
                         these measures in reporting on their programs’ performance. Although EPA
                         and state officials believe that environmental measures are more useful
                         than measures of activities for assessing programs’ performance, they
                         recognize that scientific and technical issues have to be addressed before
                         indicators that really measure environmental conditions and trends can be
                         widely used. Developing and using environmental indicators for an entire
                         program presents significant challenges.

                         The scientific and technical challenges include identifying (1) a range of
                         health or environmental conditions that can be measured and (2) changes
                         in these conditions that can be linked to a program’s activities. These tasks
                         are especially difficult because natural causes, such as changes in weather
                         patterns, and other factors outside a program’s control can affect
                         environmental conditions. In some cases, data or indicators are not

                          In Environmental Protection: EPA’s Problems With Collection and Management of Scientific Data and
                         Its Efforts to Address Them (GAO/T-RCED-95-174, May 12, 1995), we testified that our previous
                         reports had identified long-standing data quality and data management problems at EPA.
                          Managing for Results, EPA’s Planning, Budgeting, and Accountability Task Force (Feb. 23, 1996).

                         Page 5                                                                        GAO/T-RCED-97-116
available for a specific aspect of the environment because of high costs or
technical difficulties. Thus, it could be some time before EPA is able to
develop and use a set of environmental indicators that accurately reflect
the impact of its programs or their results.

According to EPA officials, the agency’s and the states’ efforts to develop
and use environmental measures have been valuable but disparate.
Furthermore, at a conference convened by EPA in September 1996 to better
coordinate these efforts, as well as in interviews conducted by EPA staff to
prepare for the conference, regional and state representatives cited several
concerns. They said, for example, that (1) clarification is needed on EPA’s
and the states’ direction in developing goals and indicators, (2) the
qualities of a good indicator are not well understood, and (3) determining
whether the best indicators have been chosen will take many years. The
representatives also believed that the data and resources needed to
develop and use environmental indicators are inadequate.

An additional challenge will be to reach agreement within EPA and among
its stakeholders on the specific environmental indicators that will be used
to measure performance. A consensus may be difficult to reach because of
the potential for debate on what is important about individual programs
and whether a relatively small number of measures can adequately reflect
the effects of an agency’s or a program’s activities. EPA will need a set of
measures common to all the states to report to the Congress and the
public on the agency’s performance and the state of the nation’s
environment. At the same time, the development of national measures, to
the extent that such measures drive the implementation of environmental
programs, will reduce the states’ flexibility to tailor the programs to meet
local needs and conditions, a major concern of the states. Reporting on
new measures will also increase the states’ costs unless other reporting
requirements are eliminated or reduced.

In May 1995, EPA signed an agreement with state leaders to implement a
new system of federal oversight for state environmental programs. This
new National Environmental Performance Partnership System
fundamentally changes EPA’s working relationship with the states because
it places greater emphasis on the use of environmental goals and
indicators, calls for environmental performance agreements between EPA
and individual states, and provides opportunities for reducing the agency’s
oversight of state programs that exhibit high performance in certain areas.
As of March 1997, about half of the states had signed performance
partnership agreements to participate in the system.

Page 6                                                     GAO/T-RCED-97-116
           EPA’s Office of Regional Operations and State/Local Relations is developing
           a set of core performance measures, including some environmental
           indicators, that the agency’s regional offices are to use in negotiating
           annual work plans and agreements with the states. The core measures are
           to be focused and limited in number, representing measurable priorities
           for each of EPA’s national program managers. They are to serve as the
           minimum measures in performance agreements with the states, which may
           develop additional measures to represent their own environmental or
           programmatic issues. In addition, a particular core measure may not be
           required if a state can demonstrate that the measure does not apply or
           cannot be addressed. According to EPA, its national program managers will
           finalize their core measures in April 1997 and its regional staff will begin
           negotiations with the states to incorporate the measures into the
           agreements for fiscal year 1998. At this point, it is too soon to know how
           extensively EPA’s regional offices will be negotiating measures that reflect
           programs’ direct effects on human health and the environment.

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