SuperfundEPA Has Opportunities to Increase Recoveries of Costs Gao ID: RCED-94-196 September 28, 1994
The Environmental Protection Agency's (EPA) efforts to force responsible parties to clean up hazardous waste sites have been successful. In fiscal year 1993, EPA entered into settlements with responsible parties for cleanups valued at $910 million. However, the agency's attempts to recover costs from responsible parties when it has already cleaned up a site have not been as productive. EPA has reached agreements with responsible parties to recover only $1.2 billion of the $8.7 billion it spent on the Superfund program through fiscal year 1993. Several factors account for EPA's low rate of cost recovery. First, EPA has defined recoverable indirect costs narrowly, thus excluding from its recovery efforts $2.9 billion of the money it spent. Second, EPA has not set goals for taking prompt action on cost recovery cases or for recovering a specified percentage of its costs. In addition EPA has not developed information that would lead to better program management, such as data on cost recovery efforts and negotiation results. In addition, to recovering a larger portion of its costs, EPA could charge higher interest rates on the costs it recovers if the law were changed. EPA is now losing millions of dollars annually because of caps on the interest that EPA can charge.
GAO found that: (1) EPA efforts to compel responsible parties to clean up hazardous waste sites have been successful; (2) in 1993, EPA settlements with responsible parties for cleanup actions totalled $910 million; (3) EPA has recovered only $1.2 billion of the $8.7 billion it expended to clean up hazardous waste sites; (4) EPA recovers only a small amount of its costs because its definition of recoverable indirect costs is too narrow; (5) EPA has not established goals for taking timely action on cost recovery cases or recovering a specified percentage of its costs, and has not developed information to help it better manage the program; (6) by excluding some indirect costs, including research, development, and site assessment costs, EPA has lost $2.9 billion of the $8.7 billion it spent on cleanup actions; (7) although EPA is considering broadening its definition of recoverable indirect costs, it has not set a date for adopting a final rule; (8) EPA needs to develop better management information so that it can track progress and identify areas that need improvement; and (9) EPA could collect millions annually in interest if legislation were modified to allow it to charge responsible parties higher interest rates on recovery costs.Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.Director: Team: Phone: