oversight

Environmental Protection Agency: Difficulties in Comparing Annual Budgets for Science and Technology

Published by the Government Accountability Office on 1999-03-18.

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

                    United States General Accounting Office

GAO                 Testimony
                    Before the Subcommittee on Energy and Environment,
                    Committee on Science, House of Representatives




For Release
on Delivery
Expected at
                    ENVIRONMENTAL
11:30 a.m. EST
Thursday            PROTECTION AGENCY
March 18, 1999



                    Difficulties in Comparing
                    Annual Budgets for Science
                    and Technology
                    Statement of David G. Wood, Associate Director,
                    Environmental Protection Issues,
                    Resources, Community, and Economic
                    Development Division




GAO/T-RCED-99-120
    Mr. Chairman and Members of the Subcommittee:

    I am here to discuss the Environmental Protection Agency’s (EPA) budget
    justification for the Science and Technology account and certain changes
    that we observed among the justifications for fiscal years 1998, 1999, and
    2000. For fiscal year 2000, EPA seeks $642 million for the Science and
    Technology account, an amount representing 9 percent of the agency’s
    total budget request of $7.2 billion.

    Each year, EPA provides to the congressional appropriations committees a
    budget justification for requested appropriations for the forthcoming fiscal
    year. This justification supplements the President’s budget submitted to
    the Congress by providing additional details and shows funding levels for
    the previous fiscal year. This committee and others use the justification in
    deliberating EPA’s budget, programs, and activities. EPA’s budget
    justifications for fiscal years 1999 and 2000 differed significantly from its
    justifications for fiscal year 1998 and the prior year because they were
    organized according to the agency’s strategic goals and objectives (e.g.,
    Clean Air: Reduce Emissions of Air Toxics). These goals and objectives
    were established in the strategic plan EPA prepared to meet the
    requirements of the Government Performance and Results Act. In
    contrast, the fiscal year 1998 budget justification was organized according
    to EPA’s program offices and components (e.g., Office of Air and Radiation:
    Air Toxics).

    My statement today discusses the findings from our recent report on EPA’s
    Science and Technology funds requested for fiscal year 1999 and on our
    limited review of EPA’s fiscal year 2000 budget justification.1 Specifically, I
    will discuss (1) difficulties experienced in comparing EPA’s Science and
    Technology budget justification for fiscal year 1999 with those of previous
    years and (2) actions that EPA planned and implemented in order to
    improve the clarity and comparability of the fiscal year 2000 justification,
    and items that need further clarification. In summary we found the
    following:

•   EPA’s budget justification for fiscal year 1999 could not be readily
    compared to amounts requested or enacted for fiscal year 1998 and prior
    years because the justification did not show how the budget would be
    distributed among program offices or program components—information
    needed to link to the prior years’ justifications. The Office of Management
    and Budget does not require EPA to provide information to compare the

    1
     Environmental Protection: EPA’s Science and Technology Funds (GAO/RCED-99-12, Oct. 30, 1998).



    Page 1                                                                     GAO/T-RCED-99-120
                            justifications when the format changes. However, to facilitate such
                            comparisons, agency officials provided supplemental information to
                            congressional committees. This information included tables that linked the
                            amounts for specific program components used in prior justifications to
                            the agency’s various strategic goals and objectives. Because EPA did not
                            maintain financial records by both program components and strategic
                            goals and objectives for all enacted Science and Technology funds for
                            fiscal year 1998, it could not readily provide information for all amounts.
                            At our request, EPA estimated the 1998 enacted amounts so that the 1998
                            budget could be compared with the fiscal year 1999 request.
                        •   EPA implemented several changes to its fiscal year 2000 justification to
                            solve problems experienced in comparing the 1998 and 1999 budget
                            justifications. To improve the clarity of its budget justification for fiscal
                            year 2000, EPA included tables that detail, for each objective, how
                            requested amounts are allocated among key programs. Backup
                            information is also available that shows the program offices that will be
                            administering the requested funds. The agency also implemented a new
                            accounting system that records budget data by goals and objectives, which
                            enhances reporting financial data by goals and objectives. While the
                            budget justification followed the basic format reflecting the agency’s
                            strategic goals and objectives, EPA made changes to the objectives without
                            explanations or documentation to link the changes to the fiscal year 1999
                            budget justification. For example, funds were allocated from one objective
                            to other objectives without identifying the objectives or amounts, funds
                            that included money transferred from another account were shown as
                            Science and Technology funds, and changes were made to the number or
                            wording of objectives without explanations. As a result, the fiscal year
                            2000 budget justification cannot be completely compared with the fiscal
                            year 1999 justification without supplemental information.


                            In 1998, we reported that difficulties in comparing EPA’s fiscal year 1999
Prior Difficulties in       and 1998 budget justifications arose because the 1999 budget justification
Comparing Budget            was organized according to the agency’s strategic goals and objectives,
Justifications              whereas the 1998 justification was organized according to EPA’s program
                            offices and components. Funds for EPA’s Science and Technology account
                            were requested throughout the fiscal year 1999 budget justification for all
                            10 of the agency’s strategic goals and for 25 of its 45 strategic objectives.
                            As shown in table 1, two strategic goals—Sound Science and Clean




                            Page 2                                                      GAO/T-RCED-99-120
                                     Air—accounted for 71 percent of the funds requested for Science and
                                     Technology.2

Table 1: Science and Technology
Funds Requested for EPA’s 10                                                                                                 Percentage
Strategic Goals and 25 Objectives,                                                          Number of Fiscal year                of total
Fiscal Year 1999                     Strategic goal                                         objectives 1999 request             request
                                     Sound science, improved understanding of
                                     environmental risks, and greater innovation
                                     to address environmental problems                                 5 $312,955,700                    49.4%
                                     Clean air                                                         4    137,154,200                  21.7%
                                     Reduction of global and
                                     cross-environmental risks                                         1     67,406,500                  10.6%
                                     Clean and safe water                                              3     55,335,700                  8.7%
                                     Expansion of American’s right to know about
                                     their environment                                                 1     18,648,300                  2.9%
                                     Preventing pollution and reducing risks in
                                     communities, homes, workplaces, and
                                     ecosystems                                                        3     14,383,600                  2.3%
                                     Better waste management, restoration of
                                     contaminated sites, and emergency
                                     response                                                          3     14,139,300                  2.2%
                                     A credible deterrent to pollution and greater
                                     compliance with the law                                           2      8,760,700                  1.4%
                                     Safe food                                                         2      4,450,000                  0.7%
                                     Effectivement management                                          1        226,000              <0.1%
                                     Total                                                            25 $633,460,000               100.0%
                                     Source: GAO’s analysis of EPA’s fiscal year 1999 Justification of Appropriation Estimates for the
                                     Committees on Appropriations and data provided by EPA.



                                     In its fiscal year 1999 budget justification, EPA did not show how the funds
                                     requested for each goal and objective would be allocated among its
                                     program offices or components. To be able to compare EPA’s requested
                                     fiscal year 1999 funds for Science and Technology to the previous fiscal
                                     year’s enacted funds, EPA would have had to maintain financial records in
                                     two different formats—by program components and by strategic goals and
                                     objectives—and to develop crosswalks to link information between the
                                     two. EPA maintained these two formats for some of the Science and
                                     Technology funds but not for others. Guidance from the Office of
                                     Management and Budget (OMB) does not require agencies to develop or
                                     provide crosswalks in their justifications when a budget format changes.


                                     2
                                      Strategic goals and objectives for Sound Science and Clean Air were also funded by other
                                     appropriations.



                                     Page 3                                                                         GAO/T-RCED-99-120
However, OMB examiners or congressional committee staff may request
crosswalks during their analyses of a budget request.

Two of EPA’s program offices—Research and Development and Air and
Radiation—accounted for over 97 percent of the Science and Technology
funds that were requested for fiscal year 1999. The offices maintained their
financial records differently. The Office of Research and Development
maintained the enacted budget for fiscal year 1998 by program
components (the old format) and also by EPA’s strategic goals and
objectives (the new format). With these two formats of financial data, the
Office of Research and Development could readily crosswalk, or provide
links, to help compare the 1998 enacted funds, organized by program
components, to the fiscal year 1999 budget justification, organized
according to EPA’s strategic goals and objectives.

In contrast, the Office of Air and Radiation maintained its financial records
for fiscal year 1998 under EPA’s new strategic goals and objectives format
but did not also maintain this information under the old format. Therefore,
the Office of Air and Radiation could only estimate how the fiscal year
1998 enacted funds would have been allocated under the old format. For
example, EPA estimated that the Office of Air and Radiation’s program
component for radiation had an enacted fiscal year 1998 budget of
$4.6 million. While the activities of this program component continued in
fiscal year 1999, they were subsumed in the presentation of the budget for
EPA’s strategic goals and objectives. Therefore, because the radiation
program could not be readily identified in the fiscal year 1999 budget
justification, congressional decisionmakers could not easily compare
funds for it with the amount that had been enacted for fiscal year 1998. At
our request, the Office of Air and Radiation estimated its enacted budget
for fiscal year 1998 by program components and then developed a
crosswalk to link those amounts with EPA’s strategic goals and objectives.

The remaining 3 percent of the requested funds for Science and
Technology is administered by the Office of Water; the Office of
Administration and Resources Management; the Office of Prevention,
Pesticides, and Toxic Substances; and the Office of Enforcement and
Compliance Assurance. Two of these offices—the Office of Prevention,
Pesticides, and Toxic Substances and the Office of Enforcement and
Compliance Assurance—did not format financial information by program
components. These offices estimated how the 1998 enacted funds would
be classified under their various program components.




Page 4                                                     GAO/T-RCED-99-120
                        For fiscal year 2000, EPA made several changes to improve the clarity of its
EPA’s Changes           budget justification. According to EPA officials, they planned to provide
Improved the Clarity    tables for each goal and objective to show the amounts of funds requested
of the Budget           for key programs, starting with the agency’s fiscal year 2000 budget
                        justification.3 The justification for fiscal year 2000 does contain additional
Justification, but      information, in the form of tables for each objective, that details some of
Additional              the requested amounts by key programs. For example, under the objective
                        Research for Human Health Risk, part of the Sound Science goal, the
Information Is Needed   $56 million requested for the objective is divided into two key programs:
                        Human Health Research and Endocrine Disruptor Research.

                        According to EPA officials, they did not plan to identify in the fiscal year
                        2000 budget justification the program offices that would be administering
                        the requested funds. However, they intended to make available backup
                        information to show the program offices that would be administering the
                        requested funds. Such information is available for the fiscal year 2000
                        budget request and was provided to this Committee.

                        According to EPA officials and an EPA draft policy on budget execution, the
                        agency’s Planning, Budgeting, Analysis, and Accountability System would
                        record budget data by goals, objectives, subobjectives, program offices,
                        and program components. EPA expected that this system would be fully
                        implemented on October 1, 1998. According to EPA officials, the new
                        Planning, Budgeting, Analysis, and Accountability System was
                        implemented on this date; accordingly, EPA can provide information
                        showing how the agency’s requested funds would be allocated according
                        to any combination of goals, objectives, subobjectives, program offices,
                        and key programs.

                        EPA  also planned to submit future budget justifications in the format of its
                        strategic goals and objectives, as it had done for fiscal year 1999. That way,
                        the formats for fiscal year 2000 and beyond would have been similar to
                        those for the fiscal year 1999 justification, facilitating comparisons in
                        future years. According to EPA officials, the strategic goals and objectives
                        in EPA’s fiscal year 2000 justification for Science and Technology would be
                        the same as those in its fiscal year 1999 justification. However, beginning
                        in fiscal year 1999, the agency has begun to reassess its strategic goals and
                        objectives, as required by the Government Performance and Results Act.
                        This assessment was meant to involve EPA’s working with state
                        governments, tribal organizations, and congressional committees to

                        3
                         On September 30, 1998, EPA issued guidance requiring the use of the term “key programs” for future
                        budget requests.



                        Page 5                                                                        GAO/T-RCED-99-120
                              evaluate its goals and objectives to determine if any of them should be
                              modified. Upon completion of this assessment, if any of EPA’s goals or
                              objectives change, the structure of the agency’s budget justification would
                              change correspondingly. Changes to the strategic goals and objectives in
                              the budget justifications could also require crosswalks and additional
                              information to enable consistent year-to-year comparisons.

                              EPA  did maintain, as planned, the strategic goals and objectives format for
                              its fiscal year 2000 budget justification. However, for the objectives that
                              rely on Science and Technology funds, EPA made several changes without
                              explanations or documentation to link the changes to the fiscal year 1999
                              budget justification. EPA (1) acknowledged that funds from one objective
                              were allocated to several other objectives but did not identify the
                              objectives or amounts, (2) did not identify funds in Science and
                              Technology amounts that were transferred from Hazardous Substances
                              Superfund, and (3) made other changes to the number or wording of
                              objectives that rely on Science and Technology funds.

                              The specific changes to objectives involving funds for Science and
                              Technology are as follows:

Funds Allocated but Not   •   In the fiscal year 1999 budget justification, under the strategic goal Sound
Identified                    Science, Improved Understanding of Environmental Risk, and Greater
                              Innovation to Address Environmental Problems, EPA requested
                              $86.6 million for the fifth objective: Enable Research on Innovative
                              Approaches to Current and Future Environmental Problems; and the 1998
                              fiscal year enacted amount was listed as $85.0 million. In the fiscal year
                              2000 budget justification, EPA marked this objective as “Not in Use.” The
                              justification stated that the fiscal year 1999 request included the amounts
                              for operating expenses and working capital for the Office of Research and
                              Development under the same objective in the Sound Science goal. In the
                              fiscal year 2000 budget justification, EPA allocated the amounts requested
                              for this objective among the other goals and objectives to more properly
                              reflect costs of the agency’s objectives. However, the fiscal year 2000
                              justification did not identify the specific objectives for either the
                              $85.0 million enacted for fiscal year 1998 nor the $86.6 million requested
                              for fiscal year 1999. The allocation of funds was not specifically identified
                              in the justification because EPA does not prepare crosswalks unless asked
                              to by OMB or congressional committees. Therefore, a clear comparison of
                              1999 and 2000 budget justifications cannot be made.




                              Page 6                                                      GAO/T-RCED-99-120
Objectives Do Not Identify          •   Another aspect that made year-to-year comparisons difficult was EPA’s
Superfund and Science and               treatment of funds transferred to Science and Technology from the
Technology Funds                        agency’s Superfund account. In the fiscal year 2000 justification, the
                                        Science and Technology amounts shown as enacted for fiscal year 1999
                                        include $40 million transferred from the Hazardous Substances Superfund.
                                        In contrast, the requested amounts for fiscal year 2000 do not include the
                                        transfer from the Superfund. As a result, amounts enacted for fiscal year
                                        1999 cannot be accurately compared to the amounts requested for fiscal
                                        year 2000. This discrepancy is particularly evident in the objective Reduce
                                        or Control Risks to Human Health, under the goal Better Waste
                                        Management, Restoration of Contaminated Waste Sites, and Emergency
                                        Response. The amounts for Science and Technology as shown in the
                                        budget justification for the objective are shown in table 2.

Table 2: Science and Technology
Funds Requested for the Reduce or                                                                     Fiscal year 2000
Control Risks to Human Health             Fiscal year      Fiscal year 1999        Fiscal year 2000 request vs. fiscal
Objective                               1999 request               enacted                  request year 1999 enacted
                                          $6,761,200             $49,809,400              $8,375,200     ($41,434,200)
                                        Source: EPA’s fiscal year 2000 budget justification.



                                        The $49.8 million shown as enacted for fiscal year 1999 includes a
                                        significant amount of the $40 million transferred from the Superfund
                                        account, according to an EPA official. However, because the specific
                                        amount is not shown, an objective-by-objective comparison of the Science
                                        and Technology budget authority for fiscal years 1999 and 2000 cannot be
                                        accurately made, and it appears that EPA is requesting a significant
                                        decrease for this objective. An EPA official stated that the $40 million was
                                        not separately identified because the congressional guidance on
                                        transferring the funds did not specifically state which objectives these
                                        funds were to support.

Other Changes to Objectives         •   In the fiscal year 1999 budget justification, the strategic goal Better Waste
                                        Management, Restoration of Contaminated Waste Sites, and Emergency
                                        Response had three objectives: (1) Reduce or Control Risks to Human
                                        Health, (2) Prevent Releases by Proper Facility Management, and
                                        (3) Respond to All Known Emergencies. In the fiscal year 1999 budget
                                        request, EPA indicated $6.3 million was enacted for Prevent Releases by
                                        Proper Facility Management in fiscal year 1998 and requested $6.6 million
                                        for fiscal year 1999. EPA indicated $1.6 million was enacted for Respond to
                                        All Known Emergencies in fiscal year 1998 and requested $1.6 for fiscal
                                        year 1999. The fiscal year 2000 budget justification omits these two—the



                                        Page 7                                                                 GAO/T-RCED-99-120
               second and third objectives and does not indicate where the funds
               previously directed to those objectives appear. Therefore, a clear
               comparison of budget requests year to year cannot be made.
           •   In the fiscal year 2000 budget justification, EPA added the second
               objective—Prevent, Reduce and Respond to Releases, Spills, Accidents,
               and Emergencies—to the strategic goal Better Waste Management,
               Restoration of Contaminated Waste Sites, and Emergency Response. EPA
               indicated that $8.8 million had been enacted for this objective in fiscal year
               1999 and requested $9.4 million for this objective for fiscal year 2000. EPA
               did not identify which objectives in the fiscal year 1999 budget included
               the enacted $8.8 million and therefore a comparison to the prior budget
               justification was difficult.

               The other changes to the objectives were made as a result of the program
               offices’ reassessment of and modifications to subobjectives, which in turn
               led to changes in the agency’s objectives. While we do not question EPA’s
               revisions of its goals or objectives, the absence of a crosswalk or
               explanation does not enable a clear comparison of budget requests year to
               year.


               Mr. Chairman, this concludes my prepared statement. I will be pleased to
               respond to any questions that you or the Members of the Subcommittee
               may have.




(160478)       Page 8                                                      GAO/T-RCED-99-120
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