Superfund
Funding and Reported Costs of Enforcement and Administration Activities Gao ID: GAO-08-841R July 18, 2008The Environmental Protection Agency (EPA) estimates that one in four Americans lives within 3 miles of a hazardous waste site. To clean up these highly contaminated sites, the Congress established the Superfund program under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) in 1980. EPA, the principal agency responsible for administering the Superfund program, has since identified more than 47,000 hazardous waste sites potentially requiring cleanup actions and has placed some of the most seriously contaminated sites on its National Priorities List (NPL). Through the end of fiscal year 2007, EPA had classified 1,569 sites as NPL sites. Cleanup efforts at NPL sites are typically expensive and can take many years. There are two basic types of cleanup actions: (1) removal actions--generally short-term or emergency cleanups to mitigate threats--and (2) remedial actions--generally long-term cleanup activities. Among other efforts, EPA may respond to and provide technical support for emergency actions, collect and analyze site data, and design and construct remedies, or oversee the work of others. However, the parties responsible for contributing to the contamination of a hazardous waste site are also primarily responsible for conducting or paying for the cleanup of the site. Responsible parties include current or former owners or operators of a site or the generators and transporters of the hazardous substances. CERCLA authorizes EPA to compel the responsible parties to clean up contaminated sites and also allows EPA to conduct cleanups and then seek reimbursement from the responsible parties. One of EPA's goals is ensuring that, to the extent possible, parties who are responsible for the contamination perform or pay for cleanup actions. In some cases, however, parties cannot be identified or may be unwilling or financially unable to perform the cleanup; we previously found that the number of NPL sites without viable responsible parties may be increasing. In these cases, EPA can assume responsibility for site cleanup and seek reimbursement from any responsible parties that can be identified. The states may also play a significant role in cleaning up hazardous waste sites. Most states have established programs to help address hazardous waste sites, although many states have limited capacity to address costly and complex sites. To fund program activities, CERCLA established a trust fund that was financed primarily by taxes on crude oil and certain chemicals, as well as an environmental tax assessed on corporations based upon their taxable income. Although the authority for these taxes expired in 1995, some tax revenues have continued to accrue to the fund as audits of past years' tax returns have led to the recovery of Superfund taxes previously owed by companies. In addition, the trust fund continued to receive revenue--also referred to as receipts--from various other sources, including appropriations from the general fund. EPA receives annual appropriations from the trust fund for program activities; since 1981, Superfund appropriations have totaled over $32 billion in nominal dollars, or about $1.2 billion annually. CERCLA authorizes EPA to use its Superfund appropriation to conduct cleanup actions, and the agency's Office of Solid Waste and Emergency Response (OSWER) is accountable for achieving Superfund's cleanup goals. In this context, Congress asked us to examine the (1) sources of funding for the Superfund trust fund and (2) allocation of these resources to Superfund program activities, particularly enforcement and administration.
The Superfund trust fund has received revenue from four major sources: taxes on crude oil and certain chemicals, as well as an environmental tax assessed on corporations based upon their taxable income; appropriations from the general fund; fines, penalties, and recoveries from responsible parties; and interest accrued on the balance of the fund. The contribution of each of these sources changes from year to year, although trends are evident when comparing the composition of trust fund revenue during the periods before and after the expiration of Superfund's taxes. For fiscal years 1981 through 1995, after which Superfund-related taxing authority expired, taxes accounted for about 68 percent of trust fund revenues; appropriations from the general fund for 17 percent; interest for 9 percent; and fines, penalties, and recoveries for 6 percent. In contrast, from fiscal years 1996 through 2007, taxes accounted for about 6 percent of trust fund revenues; appropriations from the general fund for about 59 percent; interest for about 16 percent; and fines, penalties, and recoveries for about 19 percent. Each year, appropriations laws stipulate the level of the annual EPA Superfund program appropriation from the trust fund, and, regardless of the balance of the fund, EPA can only expend what is appropriated. For fiscal years 1981 through 2007, the Congress appropriated an annual average of $1.2 billion in nominal terms to EPA's Superfund program, although the annual level of appropriated funds has declined in recent years when adjusted for inflation. The balance of the trust fund also declined from $4.7 billion at the start of fiscal year 1997 to $173 million at the start of fiscal year 2007. In addition to setting an overall level of funds available for EPA's Superfund program, the Congress has transferred portions of EPA's Superfund appropriation to other agencies or programs that support site cleanup. For fiscal years 1999 through 2007, EPA spent 77 percent of its Superfund monies on remedial and removal activities and almost all of the rest on enforcement and administration activities. During this period, overall program expenditures declined nearly 30 percent in constant dollars, from $1.8 billion in fiscal year 1999 to $1.3 billion in fiscal year 2007, mostly due to a decline in expenditures for remedial activities. Enforcement expenditures made up the largest portion of expenditures after site cleanup activities for fiscal years 1999 through 2007. EPA's annual enforcement expenditures fell from $243 million to $187 million over this period, but they consistently accounted for between 13 percent and 15 percent of total Superfund expenditures. Superfund program administration costs also declined from fiscal year 1999 through fiscal year 2007, from $143 million to $132 million. Although declining in constant dollars, these costs increased from 8 percent to 10 percent of total Superfund expenditures during this period.
GAO-08-841R, Superfund: Funding and Reported Costs of Enforcement and Administration Activities
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GAO-08-841R:
July 18, 2008:
Congressional Requesters:
Subject: Superfund: Funding and Reported Costs of Enforcement and
Administration Activities:
The Environmental Protection Agency (EPA) estimates that one in four
Americans lives within 3 miles of a hazardous waste site. To clean up
these highly contaminated sites, the Congress established the Superfund
program under the Comprehensive Environmental Response, Compensation,
and Liability Act (CERCLA) in 1980. EPA, the principal agency
responsible for administering the Superfund program, has since
identified more than 47,000 hazardous waste sites potentially requiring
cleanup actions and has placed some of the most seriously contaminated
sites on its National Priorities List (NPL). Through the end of fiscal
year 2007, EPA had classified 1,569 sites as NPL sites.[Footnote 1]
Cleanup efforts at NPL sites are typically expensive and can take many
years. There are two basic types of cleanup actions: (1) removal
actions--generally short-term or emergency cleanups to mitigate
threats--and (2) remedial actions--generally long-term cleanup
activities. Among other efforts, EPA may respond to and provide
technical support for emergency actions, collect and analyze site data,
and design and construct remedies, or oversee the work of others.
However, the parties responsible for contributing to the contamination
of a hazardous waste site are also primarily responsible for conducting
or paying for the cleanup of the site. Responsible parties include
current or former owners or operators of a site or the generators and
transporters of the hazardous substances. CERCLA authorizes EPA to
compel the responsible parties to clean up contaminated sites and also
allows EPA to conduct cleanups and then seek reimbursement from the
responsible parties. One of EPA's goals is ensuring that, to the extent
possible, parties who are responsible for the contamination perform or
pay for cleanup actions. In some cases, however, parties cannot be
identified or may be unwilling or financially unable to perform the
cleanup; we previously found that the number of NPL sites without
viable responsible parties may be increasing.[Footnote 2] In these
cases, EPA can assume responsibility for site cleanup and seek
reimbursement from any responsible parties that can be identified. The
states may also play a significant role in cleaning up hazardous waste
sites. Most states have established programs to help address hazardous
waste sites, although many states have limited capacity to address
costly and complex sites.
To fund program activities, CERCLA established a trust fund that was
financed primarily by taxes on crude oil and certain chemicals, as well
as an environmental tax assessed on corporations based upon their
taxable income. Although the authority for these taxes expired in 1995,
some tax revenues have continued to accrue to the fund as audits of
past years' tax returns have led to the recovery of Superfund taxes
previously owed by companies. In addition, the trust fund continued to
receive revenue--also referred to as receipts--from various other
sources, including appropriations from the general fund.[Footnote 3]
EPA receives annual appropriations from the trust fund for program
activities; since 1981, Superfund appropriations have totaled over $32
billion in nominal dollars, or about $1.2 billion annually.[Footnote 4]
CERCLA authorizes EPA to use its Superfund appropriation to conduct
cleanup actions, and the agency's Office of Solid Waste and Emergency
Response (OSWER) is accountable for achieving Superfund's cleanup
goals. [Footnote 5]
CERCLA also authorizes EPA to use its Superfund appropriation for
activities that support site cleanup. EPA's Office of Enforcement and
Compliance Assurance (OECA) is responsible for enforcement actions,
such as identifying responsible parties, compelling them to clean up
the site, and recovering cleanup costs. Other EPA support offices, such
as the Office of Administration and Resources Management and the Office
of the Chief Financial Officer, help administer and manage the program.
EPA has been criticized for the percentage of the total Superfund
appropriation that it spends on support activities rather than directly
to clean up sites on the NPL.
In this context, you asked us to examine the (1) sources of funding for
the Superfund trust fund and (2) allocation of these resources to
Superfund program activities, particularly enforcement and
administration.
To determine the sources of funding that support the Superfund trust
fund, we reviewed the President's Budget Appendices. We also reviewed
annual appropriations laws and related committee reports. We analyzed
the data in these documents and discussed our findings with EPA budget
experts. To evaluate the costs of program activities, we obtained EPA
data on overall Superfund program expenditures--also referred to as
outlays--for fiscal years 1999 through 2007, as well as more detailed
data on enforcement and administration expenditures. We also analyzed
EPA data on the outcomes of its enforcement activities--specifically
EPA's estimated value of these outcomes--for fiscal years 1979 through
2007, although we did not verify the accuracy of these estimates. In
its response to a draft of this report, EPA indicated that the agency
continually corrects and updates its historical Superfund enforcement
outcome data, and therefore provided us with updated data through June
2008, which we have incorporated into the report. However, because
changes to EPA's data are on-going, future analyses of this database
may not match our results. In addition, we reviewed relevant documents,
such as the Superfund Program Implementation Manual and prior
evaluations of the Superfund program, and interviewed agency officials
in OSWER, OECA, and the Office of the Chief Financial Officer. Finally,
we conducted detailed evaluations of the reliability of the data used
in our analyses and concluded that these data were sufficiently
reliable for our purposes; where necessary in the report, we note
potential limitations of these data. We converted all dollar figures
into constant 2007 dollars, except when we refer to dollars in
appropriations documents; for those dollar figures, we use nominal
dollars, in accordance with our policy to report the dollars that have
actually been appropriated. For more detailed information on our scope
and methodology, see enclosure I.
We conducted this performance audit from July 2007 to July 2008 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
Results in Brief:
The Superfund trust fund has received revenue from four major sources:
taxes on crude oil and certain chemicals, as well as an environmental
tax assessed on corporations based upon their taxable income;
appropriations from the general fund; fines, penalties, and recoveries
from responsible parties; and interest accrued on the balance of the
fund. The contribution of each of these sources changes from year to
year, although trends are evident when comparing the composition of
trust fund revenue during the periods before and after the expiration
of Superfund's taxes. For fiscal years 1981 through 1995, after which
Superfund-related taxing authority expired, taxes accounted for about
68 percent of trust fund revenues; appropriations from the general fund
for 17 percent; interest for 9 percent; and fines, penalties, and
recoveries for 6 percent. In contrast, from fiscal years 1996 through
2007, taxes accounted for about 6 percent of trust fund revenues;
appropriations from the general fund for about 59 percent; interest for
about 16 percent; and fines, penalties, and recoveries for about 19
percent. Each year, appropriations laws stipulate the level of the
annual EPA Superfund program appropriation from the trust fund, and,
regardless of the balance of the fund, EPA can only expend what is
appropriated. For fiscal years 1981 through 2007, the Congress
appropriated an annual average of $1.2 billion in nominal terms to
EPA's Superfund program, although the annual level of appropriated
funds has declined in recent years when adjusted for inflation. The
balance of the trust fund also declined from $4.7 billion at the start
of fiscal year 1997 to $173 million at the start of fiscal year 2007.
In addition to setting an overall level of funds available for EPA's
Superfund program, the Congress has transferred portions of EPA's
Superfund appropriation to other agencies or programs that support site
cleanup.
For fiscal years 1999 through 2007, EPA spent 77 percent of its
Superfund monies on remedial and removal activities and almost all of
the rest on enforcement and administration activities. During this
period, overall program expenditures declined nearly 30 percent in
constant dollars, from $1.8 billion in fiscal year 1999 to $1.3 billion
in fiscal year 2007, mostly due to a decline in expenditures for
remedial activities. Enforcement expenditures made up the largest
portion of expenditures after site cleanup activities for fiscal years
1999 through 2007. EPA's annual enforcement expenditures fell from $243
million to $187 million over this period, but they consistently
accounted for between 13 percent and 15 percent of total Superfund
expenditures. Based on our analysis of EPA's data, agency enforcement
activities at NPL sites through fiscal year 2007 have cumulatively
provided benefits valued at $29.9 billion to the program, mostly from
commitments from responsible parties to conduct cleanup actions.
Superfund program administration costs also declined from fiscal year
1999 through fiscal year 2007, from $143 million to $132 million.
Although declining in constant dollars, these costs increased from 8
percent to 10 percent of total Superfund expenditures during this
period. EPA's data on Superfund program administration costs include
the costs of activities undertaken by its support offices, such as
efforts by the Office of the Chief Financial Officer to operate the
agency's financial management system, which processes and documents
Superfund program expenditures, data which is necessary to recoup
cleanup and oversight costs. However, we identified inconsistencies in
the data received for this report when compared to estimates of
Superfund administration costs in previous reports published by the
agency's Inspector General and others. These inconsistencies stem from,
in part, differences in how administration costs are defined and
classified. Moreover, some previous reports also identified potential
inaccuracies in EPA's administration costs, including outdated
information on the number of staff performing Superfund work, which is
used in EPA's calculation of these costs. These inconsistencies and
inaccuracies make it difficult to reliably estimate trends in Superfund
administration costs over time.
We provided a draft of our report to EPA and the Department of Justice
for comment. EPA generally agreed with the report's descriptions of
Superfund funding sources, and stated that the report provided a sound
historical representation of trust fund balances and revenue and an
accurate description of the program. The agency also provided some
specific suggestions and technical clarifications, which we
incorporated into the report as appropriate. EPA's comments are
reprinted in enclosure II. The Department of Justice did not comment on
the draft, but provided a technical clarification, which we
incorporated into the report.
Background:
The Superfund cleanup process begins with the discovery of a
potentially hazardous site or the notification to EPA of possible
releases of hazardous substances that may threaten human health or the
environment. Citizens, state agencies, EPA regional offices, and others
may alert the agency to such threats. EPA regional offices use a
screening system to numerically assess the potential of sites to pose a
threat to human health and the environment; those sites that score
sufficiently high are eligible for proposal to the NPL. EPA publishes a
list of proposed sites in the Federal Register; the list is subject to
a period of public comment. Those proposed sites that are later listed
on the NPL are known as "final" NPL sites. Cleanups at NPL sites
progress through several steps: investigation and study, remedy
selection and design, and remedial action. When all physical
construction at a site is complete, all immediate threats have been
addressed, and all long-term threats are under control, EPA generally
considers the site to be "construction complete." Most sites then enter
into an operation and maintenance phase when the responsible party or
the state ensures that the remedy continues to protect human health and
the environment. EPA may have further responsibilities at a site after
construction is completed, such as continuing groundwater restoration
efforts or monitoring the sites to ensure that the remedy remains
protective of human health and the environment. Eventually, when EPA
and the state determine that no further site response is needed, EPA
deletes the site from the NPL. Figure 1 illustrates the number of sites
at each stage of the NPL process since the Superfund program began. By
the end of fiscal year 2007, EPA had proposed 66 sites that it either
decided not to list or had not yet determined whether to list on the
NPL. Moreover, of the 1,569 NPL sites, (1) 321 were deleted because
they no longer posed threats to human health or the environment; (2)
713 were declared construction complete, but not yet deleted; and (3)
535 were not yet construction complete by the end of fiscal year 2007.
[Footnote 6]
Figure 1: Status of Proposed, Final, and Deleted NPL Sites, by Fiscal
Year:
[See PDF for image]
This figure is a stacked multiple line graph depicting the following
data:
Year: 1981;
Proposed: 0 sites;
Final (not construction complete): 0 sites;
Construction complete: 0 sites;
Deleted: 0 sites.
Year: 1982;
Proposed: 4 sites;
Final (not construction complete): 0 sites;
Construction complete: 0 sites;
Deleted: 0 sites.
Year: 1983;
Proposed: 139 sites;
Final (not construction complete): 400 sites;
Construction complete: 0 sites;
Deleted: 5 sites.
Year: 1984;
Proposed: 7 sites;
Final (not construction complete): 532 sites;
Construction complete: 0 sites;
Deleted: 5 sites.
Year: 1985;
Proposed: 257 sites;
Final (not construction complete): 532 sites;
Construction complete: 3 sites;
Deleted: 5 sites.
Year: 1986;
Proposed: 129 sites;
Final (not construction complete): 694 sites;
Construction complete: 3 sites;
Deleted: 13 sites.
Year: 1987;
Proposed: 93 sites;
Final (not construction complete): 790 sites;
Construction complete: 6 sites;
Deleted: 13 sites.
Year: 1988;
Proposed: 319 sites;
Final (not construction complete): 778 sites;
Construction complete: 13 sites;
Deleted: 18 sites.
Year: 1989;
Proposed: 281 sites;
Final (not construction complete): 869 sites;
Construction complete: 13 sites;
Deleted: 28 sites.
Year: 1990;
Proposed: 11 sites;
Final (not construction complete): 1154 sites;
Construction complete: 20 sites;
Deleted: 29 sites.
Year: 1991;
Proposed: 25 sites;
Final (not construction complete): 1148 sites;
Construction complete: 23 sites;
Deleted: 38 sites.
Year: 1992;
Proposed: 53 sites;
Final (not construction complete): 1060 sites;
Construction complete: 109 sites;
Deleted: 40 sites.
Year: 1993;
Proposed: 67 sites;
Final (not construction complete): 1025 sites;
Construction complete: 165 sites;
Deleted: 52 sites.
Year: 1994;
Proposed: 58 sites;
Final (not construction complete): 1007 sites;
Construction complete: 213 sites;
Deleted: 65 sites.
Year: 1995;
Proposed: 35 sites;
Final (not construction complete): 970 sites;
Construction complete: 256 sites;
Deleted: 90 sites.
Year: 1996;
Proposed: 45 sites;
Final (not construction complete): 919 sites;
Construction complete: 286 sites;
Deleted: 124 sites.
Year: 1997;
Proposed: 47 sites;
Final (not construction complete): 848 sites;
Construction complete: 342 sites;
Deleted: 156 sites.
Year: 1998;
Proposed: 64 sites;
Final (not construction complete): 778 sites;
Construction complete: 409 sites;
Deleted: 176 sites.
Year: 1999;
Proposed: 56 sites;
Final (not construction complete): 736 sites;
Construction complete: 471 sites;
Deleted: 199 sites.
Year: 2000;
Proposed: 58 sites;
Final (not construction complete): 687 sites;
Construction complete: 539 sites;
Deleted: 218 sites.
Year: 2001;
Proposed: 74 sites;
Final (not construction complete): 669 sites;
Construction complete: 556 sites;
Deleted: 248 sites.
Year: 2002;
Proposed: 64 sites;
Final (not construction complete): 646 sites;
Construction complete: 581 sites;
Deleted: 265 sites.
Year: 2003;
Proposed: 58 sites;
Final (not construction complete): 626 sites;
Construction complete: 612 sites;
Deleted: 274 sites.
Year: 2004;
Proposed: 73 sites;
Final (not construction complete): 597 sites;
Construction complete: 635 sites;
Deleted: 291 sites.
Year: 2005;
Proposed: 67 sites;
Final (not construction complete): 575 sites;
Construction complete: 658 sites;
Deleted: 308 sites.
Year: 2006;
Proposed: 66 sites;
Final (not construction complete): 546 sites;
Construction complete: 691 sites;
Deleted: 315 sites.
Year: 2007;
Proposed: 71 sites;
Final (not construction complete): 534 sites;
Construction complete: 708 sites;
Deleted: 322 sites.
Source: GAO analysis of EPA data.
Note: Although the Superfund program began in 1981, no sites were
listed on the NPL until 1982. Most of the deleted sites shown were also
classified as construction complete. However, for purposes of depicting
the status of cleanup of sites on the NPL, we chose to include in the
construction complete category only those sites that EPA had declared
construction complete but had not yet deleted from the NPL.
[End of figure]
EPA also conducts removal actions, which are often short-term cleanups
or preventive actions at sites that pose immediate threats to human
health or the environment. Removal actions may include, for example,
excavating contaminated soil, erecting a security fence, stabilizing a
dike or impoundment, or taking abandoned drums to a proper disposal
facility to prevent the release of hazardous substances into the
environment. CERCLA limits removals conducted by EPA to a 1-year effort
and $2 million in expenditures, although some removal actions may
qualify for exemptions to these limits.
CERCLA established a liability scheme that holds certain parties
responsible for the release or threat of release of hazardous
substances. Furthermore, courts have interpreted responsible-party
liability under Superfund to be strict, joint and several, and
retroactive. Under strict liability, a party may be liable for cleanup
even though its actions were not considered negligent when it disposed
of the wastes. Because liability is joint and several, when the harm
done is indivisible, one party can be held responsible for the full
cost of the remedy even though that party may have disposed of only a
portion of the hazardous substances at the site. Retroactive liability
means that liability applies to actions that took place before CERCLA
was enacted.
Early in the cleanup process, EPA conducts a search to find all of the
potentially responsible parties. It collects evidence to support the
identification of individual parties by issuing information requests
(under CERCLA's authority); reviewing documents, such as shipping
records; conducting interviews; and performing other research. As part
of this process, EPA not only determines parties' involvement at the
site but also potential legal defenses or exemptions from liability.
CERCLA provided EPA with several mechanisms to compel identified
parties to assume responsibility for cleaning up Superfund sites. If
EPA has already conducted work at a site--including investigating a
potential Superfund site or monitoring the work of others--the agency
can recover the costs of these activities, as well as related support
costs. Moreover, EPA can order, or ask a court to order, responsible
parties to conduct the work directly. If the responsible parties do not
comply with EPA's orders, they may be liable for fines accrued each day
of noncompliance as well as damages of up to three times the amount
spent by EPA as a result of the parties' noncompliance--in addition to
the costs of cleanup--creating a substantial incentive for compliance.
Other Superfund enforcement authorities include, for example, receiving
reimbursement for the costs of overseeing responsible parties' efforts.
Since 1990, EPA and the Department of Justice have pursued a policy of
"enforcement first," which emphasizes that responsible parties should
clean up Superfund sites when possible. Moreover, these agencies prefer
to induce parties to clean up sites through settlement rather than by
ordering parties to conduct such work or bringing lawsuits against
them. EPA has previously reported that, if the agency has funds
available to conduct cleanup actions at a site, responsible parties may
be more likely to take responsibility for the cleanup because they may
believe that delaying settlement could lead EPA to proceed with the
cleanup, and fighting and losing a cost recovery lawsuit would be more
expensive than undertaking the cleanup themselves.[Footnote 7]
Additionally, several CERCLA provisions and EPA procedures assist in
the settlement process with certain types of parties. For example, EPA
may assume responsibility for a portion of the response costs in cases
where one or more responsible parties are unable to contribute, so as
to reduce the liability of other parties. In the case of some small
contributors--known as de minimis parties--EPA attempts to achieve an
early settlement in exchange for protection from further enforcement
action.
Superfund Trust Fund Revenue Has Decreased and the Funding Sources'
Relative Contributions Have Changed over Time:
The Superfund trust fund has received revenue from four major sources:
(1) taxes on crude oil and certain chemicals, as well as an
environmental tax assessed on corporations based upon their taxable
income; (2) appropriations from the general fund; (3) fines, penalties,
and recoveries from responsible parties; and (4) interest accrued on
the balance of the fund. The contribution that each of these sources
has provided to funding the Superfund program has varied over time,
particularly since the expiration of Superfund's taxes in 1995. Each
year, the Congress decides how much money to appropriate for EPA's
Superfund program from the trust fund and provides direction on how the
funds should be spent. The annual level of appropriations to EPA's
Superfund program has declined over time.
Four Major Revenue Sources Support the Superfund Program, the Largest
of Which Is Now Appropriations from the General Fund:
Figure 2 shows the contribution of the four principal sources of trust
fund revenue since the program's inception in fiscal year 1981.
Figure 2: Major Sources of Revenue for the Superfund Trust Fund, Fiscal
Years 1981 through 2007 (constant 2007 dollars in millions):
[See PDF for image]
This figure is a stacked multiple line graph depicting the following
data:
Year: 1981;
Appropriations from the general fund: $32 million;
Receipts from dedicated taxes: $260 million;
Interest: $19 million;
Fines, penalties, and recoveries: 0.
Year: 1982;
Appropriations from the general fund: $51 million;
Receipts from dedicated taxes: $463 million;
Interest: $129 million;
Fines, penalties, and recoveries: $4 million.
Year: 1983;
Appropriations from the general fund: $73 million;
Receipts from dedicated taxes: $419 million;
Interest: $111 million;
Fines, penalties, and recoveries: $1 million.
Year: 1984;
Appropriations from the general fund: $77 million
Receipts from dedicated taxes: $458 million;
Interest: $137 million;
Fines, penalties, and recoveries: $6 million.
Year: 1985;
Appropriations from the general fund: $75 million;
Receipts from dedicated taxes: $464 million;
Interest: $93 million;
Fines, penalties, and recoveries: $14 million.
Year: 1986;
Appropriations from the general fund: $329 million;
Receipts from dedicated taxes: $25 million;
Interest: $69 million;
Fines, penalties, and recoveries: $26 million.
Year: 1987;
Appropriations from the general fund: $867 million;
Receipts from dedicated taxes: $1344 million;
Interest: $27 million;
Fines, penalties, and recoveries: $31 million.
Year: 1988;
Appropriations from the general fund: $375 million;
Receipts from dedicated taxes: $1587 million;
Interest: $97 million;
Fines, penalties, and recoveries: $87 million.
Year: 1989;
Appropriations from the general fund: $227 million;
Receipts from dedicated taxes: $1774 million;
Interest: $180 million;
Fines, penalties, and recoveries: $101 million.
Year: 1990;
Appropriations from the general fund: 0;
Receipts from dedicated taxes: $1862 million;
Interest: $219 million;
Fines, penalties, and recoveries: $153 million.
Year: 1991;
Appropriations from the general fund: $1208 million;
Receipts from dedicated taxes: $1966 million;
Interest: $278 million;
Fines, penalties, and recoveries: $119 million.
Year: 1992;
Appropriations from the general fund: $320 million;
Receipts from dedicated taxes: $1639 million;
Interest: $258 million;
Fines, penalties, and recoveries: $254 million.
Year: 1993;
Appropriations from the general fund: $335 million;
Receipts from dedicated taxes: $1947 million;
Interest: $184 million;
Fines, penalties, and recoveries: $248 million.
Year: 1994;
Appropriations from the general fund: $328 million;
Receipts from dedicated taxes: $1912 million;
Interest: $212 million;
Fines, penalties, and recoveries: $265 million.
Year: 1995;
Appropriations from the general fund: $321 million;
Receipts from dedicated taxes: $1898 million;
Interest: $399 million;
Fines, penalties, and recoveries: $326 million.
Year: 1996;
Appropriations from the general fund: $315 million;
Receipts from dedicated taxes: $801 million;
Interest: $437 million;
Fines, penalties, and recoveries: $317 million.
Year: 1997;
Appropriations from the general fund: $309 million;
Receipts from dedicated taxes: $93 million;
Interest: $411 million;
Fines, penalties, and recoveries: $391 million.
Year: 1998;
Appropriations from the general fund: $307 million;
Receipts from dedicated taxes: $97 million;
Interest: $399 million;
Fines, penalties, and recoveries: $397 million.
Year: 1999;
Appropriations from the general fund: $392 million;
Receipts from dedicated taxes: $25 million;
Interest: $250 million;
Fines, penalties, and recoveries: $391 million.
Year: 2000;
Appropriations from the general fund: $828 million;
Receipts from dedicated taxes: $6 million;
Interest: $267 million;
Fines, penalties, and recoveries: $275 million.
Year: 2001;
Appropriations from the general fund: $732 million;
Receipts from dedicated taxes: $7 million;
Interest: $110 million;
Fines, penalties, and recoveries: $236 million.
Year: 2002;
Appropriations from the general fund: $767 million;
Receipts from dedicated taxes: $8 million;
Interest: $203 million;
Fines, penalties, and recoveries: $282 million.
Year: 2003;
Appropriations from the general fund: $702 million;
Receipts from dedicated taxes: 0;
Interest: $132 million;
Fines, penalties, and recoveries: $167 million.
Year: 2004;
Appropriations from the general fund: $1363 million;
Receipts from dedicated taxes: $1 million;
Interest: $41 million;
Fines, penalties, and recoveries: $83 million.
Year: 2005;
Appropriations from the general fund: $1312 million;
Receipts from dedicated taxes: $4 million;
Interest: $51 million;
Fines, penalties, and recoveries: $68 million.
Year: 2006;
Appropriations from the general fund: $1213 million;
Receipts from dedicated taxes: $1 million;
Interest: $105 million;
Fines, penalties, and recoveries: $63 million.
Year: 2007;
Appropriations from the general fund: $1040 million;
Receipts from dedicated taxes: $3 million;
Interest: $138 million;
Fines, penalties, and recoveries: $235 million.
Source: GAO analysis of data from the President's Budget Appendices.
Note: In fiscal year 1981, the trust fund received an appropriation
from the Pollution Fund. We have included this money under the category
of appropriations for ease of presentation. We did not include revenue
from offsetting collections, as these data were only available for
selected years.
[End of figure]
For fiscal years 1981 through 2007, taxes constituted, on average,
about 45 percent of revenue for the Superfund trust fund, while
appropriations from the general fund made up about 33 percent. Accrued
interest and fines, penalties, and recoveries constituted smaller
portions of trust fund revenue, at about 12 percent and 11 percent,
respectively.[Footnote 8]
These overall numbers mask changes over time in the composition of the
Superfund trust fund. In particular, the expiration of the Superfund
taxes in 1995 significantly changed the relative contributions of the
key sources of trust fund revenue. For fiscal years 1981 through 1995,
Superfund's taxes accounted for approximately 68 percent of trust fund
revenue. In recent years, however, the trust fund has increasingly
relied on appropriations from the general fund. From fiscal year 1996
through 2007, appropriations from the general fund accounted for nearly
60 percent of trust fund revenue. Table 1 compares trust fund revenue
from the period before and after the taxes expired.
Table 1: Trust Fund Revenue in the Periods before and after the
Superfund Taxes Expired:
Constant 2007 dollars in millions.
Revenue source[A]: Receipts from dedicated taxes[B];
Fiscal years 1981-1995 (percent of total revenues): $18,018 (67.5%);
Fiscal years 1996-2007 (percent of total revenues): $936 (6.0%).
Revenue source[A]: Appropriations from the general fund[C];
Fiscal years 1981-1995 (percent of total revenues): $4,616 (17.3);
Fiscal years 1996-2007 (percent of total revenues): $9,281 (59.2).
Revenue source[A]: Interest;
Fiscal years 1981-1995 (percent of total revenues): $2,412 (9.0);
Fiscal years 1996-2007 (percent of total revenues): $2,543 (16.2).
Revenue source[A]: Fines, penalties, and recoveries;
Fiscal years 1981-1995 (percent of total revenues): $1,634 (6.1);
Fiscal years 1996-2007 (percent of total revenues): $2,906 (18.6).
Total:
Fiscal years 1981-1995 (percent of total revenues): $26,680 (100%);
Fiscal years 1996-2007 (percent of total revenues): $15,667 (100%).
Source: GAO analysis of data from the President's Budget Appendices.
Notes: Percents and totals may not add due to rounding.
[A] We did not include revenue from offsetting collections, as these
data were only available for selected years.
[B] The Superfund program continued to collect some taxes after the
authority expired as a result of adjustments to prior years corporate
tax returns based on audits conducted by the Internal Revenue Service.
[C] In fiscal year 1981, the trust fund received an appropriation from
the Pollution Fund. We have included this money under the category of
appropriations for ease of presentation.
[End of table]
The Superfund Trust Fund Balance Has Decreased Since the Expiration of
the Taxes:
The balance of the trust fund has varied over time, largely depending
on the government's ability to collect taxes to support the Superfund
program. For example, when the balance of the trust fund fell in the
mid-1980s, the Superfund Amendments and Reauthorization Act of 1986
extended the Superfund taxes and provided additional taxing authority.
In 1995, the authority for the taxes expired, and it has not been
reinstated. Shortly after the expiration of the taxes, at the start of
fiscal year 1997, the trust fund balance reached its peak at $4.7
billion; in 1998, the trust fund balance began decreasing. Figure 3
shows changes in the balance of the Superfund trust fund for fiscal
years 1981 through 2007. At the start of fiscal year 2007, the trust
fund had a balance of $173 million.
Figure 3: Balance of the Superfund Trust Fund at the Start of Each
Fiscal Year:
Constant 2007 dollars in millions.
[See PDF for image]
This figure is a vertical bar graph depicting the following data:
Year: 1981;
Balance, start of year: 0.
Year: 1982;
Balance, start of year: $148.69 million.
Year: 1983;
Balance, start of year: $416.7 million.
Year: 1984;
Balance, start of year: $614.98 million.
Year: 1985;
Balance, start of year: $471 million.
Year: 1986;
Balance, start of year: 0.
Year: 1987;
Balance, start of year: $14.62 million.
Year: 1988;
Balance, start of year: 0.
Year: 1989;
Balance, start of year: $362.24 million.
Year: 1990;
Balance, start of year: $495.58 million.
Year: 1991;
Balance, start of year: $469 million.
Year: 1992;
Balance, start of year: $1720.55 million.
Year: 1993;
Balance, start of year: $2276.58 million.
Year: 1994;
Balance, start of year: $2802.59 million.
Year: 1995;
Balance, start of year: $3484.34 million.
Year: 1996;
Balance, start of year: $4602.46 million.
Year: 1997;
Balance, start of year: $4738.74 million.
Year: 1998;
Balance, start of year: $3269.63 million.
Year: 1999;
Balance, start of year: $2599.82 million.
Year: 2000;
Balance, start of year: $1773.36 million.
Year: 2001;
Balance, start of year: $1458.6 million.
Year: 2002;
Balance, start of year: $975.29 million.
Year: 2003;
Balance, start of year: $626.92 million.
Year: 2004;
Balance, start of year: 0.
Year: 2005;
Balance, start of year: 0.
Year: 2006;
Balance, start of year: $96.9 million.
Year: 2007;
Balance, start of year: $173 million.
Source: GAO analysis of data from the President's Budget Appendices.
[End of figure]
The Congress Guides EPA's Use of Its Superfund Appropriation:
Although the trust fund supports the Superfund program, EPA does not
have the authority to use the fund without appropriations from the
Congress. Since fiscal year 1981, the annual appropriation to EPA's
Superfund program has averaged approximately $1.2 billion in nominal
dollars.[Footnote 9] In many years, the appropriation constituted only
a portion of the total dollars available in the trust fund. For
example, the trust fund had a balance of $3.8 billion at the start of
fiscal year 1997, and the appropriation to EPA's Superfund program was
$1.4 billion. In recent years, however, congressional appropriations
have declined when adjusted for inflation. Figure 4 shows appropriation
levels in nominal and constant dollars since fiscal year 1981.
Figure 4: EPA's Superfund Program Appropriation, Fiscal Years 1981
through 2007:
[See PDF for image]
This figure is a stacked vertical bar graph depicting the following
data:
Year: 1981;
Nominal appropriation: $70 million;
Appropriation in 2007 dollars: $68 million.
Year: 1982;
Nominal appropriation: $200 million;
Appropriation in 2007 dollars: $180 million.
Year: 1983;
Nominal appropriation: $219 million;
Appropriation in 2007 dollars: $179 million.
Year: 1984;
Nominal appropriation: $410 million;
Appropriation in 2007 dollars: $309 million.
Year: 1985;
Nominal appropriation: $620 million;
Appropriation in 2007 dollars: $433 million.
Year: 1986;
Nominal appropriation: $900 million;
Appropriation in 2007 dollars: $594 million.
Year: 1987;
Nominal appropriation: $1411 million;
Appropriation in 2007 dollars: $872 million.
Year: 1988;
Nominal appropriation: $1128 million;
Appropriation in 2007 dollars: $642 million.
Year: 1989;
Nominal appropriation: $1410 million;
Appropriation in 2007 dollars: $710 million.
Year: 1990;
Nominal appropriation: $1575 million;
Appropriation in 2007 dollars: $718 million.
Year: 1991;
Nominal appropriation: $1616 million;
Appropriation in 2007 dollars: $652 million.
Year: 1992;
Nominal appropriation: $1600 million;
Appropriation in 2007 dollars: $590 million.
Year: 1993;
Nominal appropriation: $1574 million;
Appropriation in 2007 dollars: $532 million.
Year: 1994;
Nominal appropriation: $1467 million;
Appropriation in 2007 dollars: $455 million.
Year: 1995;
Nominal appropriation: $1435 million;
Appropriation in 2007 dollars: $406 million.
Year: 1996;
Nominal appropriation: $1313 million;
Appropriation in 2007 dollars: $340 million.
Year: 1997;
Nominal appropriation: $1394 million;
Appropriation in 2007 dollars: $331 million.
Year: 1998;
Nominal appropriation: $1500 million;
Appropriation in 2007 dollars: $334 million.
Year: 1999;
Nominal appropriation: $1492 million;
Appropriation in 2007 dollars: $309 million.
Year: 2000;
Nominal appropriation: $1400 million;
Appropriation in 2007 dollars: $256 million.
Year: 2001;
Nominal appropriation: $1273 million;
Appropriation in 2007 dollars: $198 million;
Year: 2002;
Nominal appropriation: $1309 million;
Appropriation in 2007 dollars: $176 million.
Year: 2003;
Nominal appropriation: $1265 million;
Appropriation in 2007 dollars: $141 million.
Year: 2004;
Nominal appropriation: $1258 million;
Appropriation in 2007 dollars: $105 million.
Year: 2005;
Nominal appropriation: $1247 million;
Appropriation in 2007 dollars: $64 million.
Year: 2006;
Nominal appropriation: $1254 million;
Appropriation in 2007 dollars: $25 million.
Year: 2007;
Nominal appropriation: $1252 million;
Appropriation in 2007 dollars: 0.
Source: GAO analysis of data from the President's Budget Appendices.
[End of figure]
Over time, with congressional approval, the source of funding for some
activities has shifted from EPA's Superfund program appropriation to
other funding sources, which affects the comparison of appropriation
levels in some years. For example, historically, funds for Superfund-
related activities at the Agency for Toxic Substances and Disease
Registry and the National Institute of Environmental Health Sciences
came from EPA's Superfund appropriation. For fiscal year 2000, these
agencies--which conduct health assessments at hazardous waste sites,
among other things--received $130 million through EPA's Superfund
appropriation. For fiscal year 2001, the Congress began providing these
two agencies with funds for such activities through their own
appropriations. Similarly, beginning in fiscal year 2003, the Congress
used a separate EPA appropriation to provide funds for the Brownfields
program, which supports the redevelopment of sites that are potentially
contaminated. For fiscal years 1999 through 2002, congressional
committees recommended that EPA allocate more than $90 million annually
for the Brownfields program from its Superfund funding.
While the annual appropriation determines how much of the Superfund
trust fund EPA can spend each year, the Congress provides direction on
how EPA should use its appropriation. For example, for fiscal year
2005, the Congress directed that $13 million be transferred to the
Inspector General appropriation to fund Superfund-related audits.
Additionally, $36 million was transferred to the Science and Technology
appropriation for related research efforts. Congressional committees
also direct EPA to allocate money from the Superfund appropriation to
other federal agencies. In many years, committee reports directed funds
to the Department of Justice to support EPA's enforcement efforts; for
fiscal year 2005, for example, the reports recommended that EPA
allocate more than $27 million to the department. At the recommendation
of congressional committees, EPA also provides support to other
agencies, including the Department of the Interior, which supports
EPA's ability to prepare for hazardous waste releases; the National
Oceanic and Atmospheric Administration, which provides technical
support for coastal remediation projects; and the United States Coast
Guard, which directly conducts some removals in coastal areas.
Congressional committees recommended funding of nearly $11 million from
the Superfund appropriation for fiscal year 2005 for these and other
federal agencies' activities.
Within EPA's Superfund program, the agency also receives direction from
congressional committees about how to allocate its resources to
different priorities. From fiscal year 1996 to fiscal year 2006,
committees directed program appropriations into three broad categories-
-response and cleanup, enforcement, and management and support.
Starting in 2006, however, the committees began providing direction
using a total of 39 more narrowly defined categories. For example,
instead of directing an overall amount for management and support, one
of the three broader categories, congressional committees now direct
funds for these activities to 11 of the narrowly defined categories.
Congressional committees provide much of this direction through reports
prepared to accompany the appropriations laws. As a matter of law,
instructions in committee reports and other legislative history about
how funds should be spent do not impose any legal requirements on
federal agencies. However, as the Supreme Court has pointed out in the
past, agency decisions to ignore congressional expectations may expose
them to grave political consequences.[Footnote 10] As a matter of
policy, EPA generally abides by the language in reports that accompany
appropriations laws.
Enforcement and Administration Costs as a Percent of Superfund
Expenditures Increased from Fiscal Year 1999 through Fiscal Year 2007:
For fiscal years 1999 through 2007, remedial and removal activities
constituted the majority of EPA's Superfund expenditures. EPA spent
most of the remaining Superfund expenditures on enforcement and
administration. Enforcement activities provide monetary and other
benefits to the Superfund program. Superfund program administration
costs, which consist of expenditures by several agency support offices,
are primarily used for facilities, operations, and security and
accounted for approximately 9 percent of costs throughout the period.
These activities include, for example, operating the agency's financial
management system, which provides important benefits to the Superfund
program. However, the classification of costs as administration-related
has varied.
EPA Uses the Majority of Superfund Expenditures for Remedial and
Removal Activities, but Total Expenditures Declined Nearly 30 Percent:
For fiscal years 1999 through 2007, EPA used approximately 77 percent
of its Superfund expenditures for site cleanup activities, namely
remedial and removal actions; most of the remainder was spent for
enforcement and administration-related activities.[Footnote 11] Over
the period, the overall level of Superfund expenditures fell from $1.8
billion to $1.3 billion, or approximately 29 percent. Expenditures on
the remedial program account for the majority of this decline (see fig.
5). However, expenditures for removals and nonsite cleanup activities
also declined during this period.
Figure 5: EPA Superfund Expenditures, Fiscal Years 1999 through 2007
(Constant 2007 dollars in millions):
[See PDF for image]
This figure is a stacked line graph depicting the following data:
Year: 1999;
Remedial: $1119 million;
Removal: $285 million;
Activities other than site cleanup: $387 million.
Year: 2000;
Remedial: $1086 million;
Removal: $268 million;
Activities other than site cleanup: $363 million.
Year: 2001;
Remedial: $973 million;
Removal: $240 million;
Activities other than site cleanup: $345 million.
Year: 2002;
Remedial: $853 million;
Removal: $247 million;
Activities other than site cleanup: $347 million.
Year: 2003;
Remedial: $874 million;
Removal: $248 million;
Activities other than site cleanup: $346 million.
Year: 2004;
Remedial: $838 million;
Removal: $275 million;
Activities other than site cleanup: $350 million.
Year: 2005;
Remedial: $750 million;
Removal: $259 million;
Activities other than site cleanup: $339 million.
Year: 2006;
Remedial: $722 million;
Removal: $215 million;
Activities other than site cleanup: $321 million.
Year: 2007;
Remedial: $707 million;
Removal: $250 million;
Activities other than site cleanup: $319 million.
Source: GAO analysis of EPA data.
Note: These data exclude reimbursable expenditures and other
expenditures related to the Brownfields program, transfers to other EPA
appropriations, and the 2002 Homeland Security Supplemental
appropriation. Other Superfund expenditures related to homeland
security are included in various categories. The level of expenditures
in each category--but not the total--could vary based on whether
certain costs are classified as administration-related.
[End of figure]
EPA funds a variety of activities under the remedial category,
including:
* collecting and analyzing site data to determine the potential effects
of contaminants on human health and the environment,
* conducting or overseeing investigations to select appropriate
remedies,
* constructing or overseeing the construction of remedies, and:
* ensuring long-term protectiveness by overseeing maintenance
activities and conducting 5-year reviews of sites.
Similarly, EPA funds many activities related to removal actions,
including:
* assessing the threats of hazardous waste releases to determine
whether removal actions are necessary;
* responding to the release of hazardous waste at sites that pose an
immediate threat to public health or the environment;
* developing and maintaining the infrastructure necessary to respond
effectively to releases, whether they are accidental, intentional, or a
result of a natural disaster; and:
* coordinating with the Department of Homeland Security and other
federal agencies during natural disasters and other major environmental
incidents.
Superfund Enforcement Expenditures Support a Variety of Activities That
EPA Data Indicate Have Provided Almost $30 Billion in Value to the
Program:
In fiscal year 2007, Superfund enforcement expenditures totaled
approximately $187 million, which represents a decrease of more than 23
percent from fiscal year 1999. However, the proportion of total program
expenditures going to enforcement has remained relatively consistent,
at around 14 percent, because overall program funding also decreased
during this period. EPA's enforcement expenditures--which accounted for
the majority of expenditures not related to site cleanup--fund four
major categories of activities: (1) identifying responsible parties,
(2) negotiating with these parties, (3) litigating against some
parties, and (4) supporting EPA's enforcement work.[Footnote 12] Within
these categories, EPA uses action codes to identify the specific type
of activity funded by each expenditure. EPA also provides funding to
the Department of Justice for assistance with enforcement work. See
figure 6 for an analysis of enforcement expenditures over time.
Figure 6: Superfund Enforcement Expenditures, Fiscal Years 1999 through
2007 (Constant 2007 dollars in millions):
[See PDF for image]
This figure is a stacked line graph depicting the following data:
Year: 1999;
Identification of responsible parties: $15 million;
Negotiation: $5 million;
Litigation: $50 million;
Enforcement Support: $143 million;
Other: $26 million;.
Year: 2000;
Identification of responsible parties: $28 million;
Negotiation: $5 million;
Litigation: $11 million;
Enforcement Support: $167 million;
Other: $9 million.
Year: 2001;
Identification of responsible parties: $25 million;
Negotiation: $5 million;
Litigation: $46 million;
Enforcement Support: $113 million;
Other: $6 million.
Year: 2002;
Identification of responsible parties: $29 million;
Negotiation: $5 million;
Litigation: $32 million;
Enforcement Support: $121 million;
Other: $11 million.
Year: 2003;
Identification of responsible parties: $23 million;
Negotiation: $5 million;
Litigation: $19 million;
Enforcement Support: $134 million;
Other: $15 million.
Year: 2004;
Identification of responsible parties: $22 million;
Negotiation: $5 million;
Litigation: $26 million;
Enforcement Support: $134 million;
Other: $11 million.
Year: 2005;
Identification of responsible parties: $20 million;
Negotiation: $5 million;
Litigation: $16 million;
Enforcement Support: $142 million;
Other: $8 million.
Year: 2006;
Identification of responsible parties: $15 million;
Negotiation: $5 million;
Litigation: $9 million;
Enforcement Support: $137 million;
Other: $13 million.
Year: 2007;
Identification of responsible parties: $16 million;
Negotiation: $4 million;
Litigation: $25 million;
Enforcement Support: $126 million;
Other: $9 million.
Source: GAO analysis of EPA data.
[End of figure]
In fiscal year 1999, costs related to identifying responsible parties
were $15 million, or 6 percent of total enforcement expenditures. In
fiscal year 2007, these costs increased slightly to $16 million,
representing 9 percent of enforcement expenditures. However, the costs
of these activities peaked at $29 million in fiscal year 2002,
constituting nearly 15 percent of expenditures. EPA conducts the
activities in this category to develop an enforcement case; specific
activities include interviewing responsible parties, as well as
preparing and reviewing relevant documents. Other components of this
category include maintenance of enforcement and administrative records,
which are necessary to the enforcement process, and laboratory
analyses, which primarily supports analyses done to link a responsible
party to a site contaminant.
The costs of negotiating with responsible parties were relatively
stable during this period--$5 million in fiscal year 1999 and just over
$4 million in fiscal year 2007. Moreover, negotiation costs were
consistently about 2 percent of enforcement expenditures. Most
expenditures in this category are classified under a generic
negotiation category, though some expenditures are characterized by a
specific type of negotiation.[Footnote 13]
As figure 7 shows, expenditures related to litigation and enforcement
support varied during this period.
Figure 7: EPA Expenditures for Litigation and Enforcement Support
Activities, Fiscal Years 1999 to 2007 (Constant 2007 dollars in
millions):
[See PDF for image]
This figure is a multiple line graph depicting the following data:
Year: 1999;
Enforcement Support: $143 million;
Litigation: $50 million.
Year: 2000;
Enforcement Support: $167 million;
Litigation: $11 million.
Year: 2001;
Enforcement Support: $113 million;
Litigation: $46 million.
Year: 2002;
Enforcement Support: $121 million;
Litigation: $32 million.
Year: 2003;
Enforcement Support: $134 million;
Litigation: $19 million.
Year: 2004;
Enforcement Support: $134 million;
Litigation: $26 million.
Year: 2005;
Enforcement Support: $142 million;
Litigation: $16 million.
Year: 2006;
Enforcement Support: $137 million;
Litigation: $9 million.
Year: 2007;
Enforcement Support: $125 million;
Litigation: $25 million.
Source: GAO analysis of EPA data.
[End of figure]
Litigation expenditures were just over $50 million in fiscal year 1999
and fell to $25 million in fiscal year 2007. However, the proportion of
enforcement expenditures categorized as litigation ranged from a low of
5 percent in fiscal year 2000 to a high of 23 percent in fiscal year
2001. Litigation expenditures are largely site-specific and can vary
depending on the particular site litigation activities. Moreover, a
small number of sites can raise the overall level of spending on
litigation. Specific litigation activities include establishing EPA's
Superfund claims when a responsible party files for bankruptcy, filing
a judicial action charging criminal violation of CERCLA, preparing a
case for referral to the Department of Justice, and assisting the
department in pursuing cases against responsible parties.[Footnote 14]
Enforcement support activities constituted the majority of enforcement
expenditures. As the figure shows, in fiscal year 1999, expenditures on
enforcement support were $143 million, which was 49 percent of
enforcement expenditures; in fiscal year 2007, although expenditures
fell slightly to $125 million, these activities constituted 64 percent
of enforcement expenditures. However, as with litigation expenditures,
the level of spending on enforcement support activities varied during
this period. According to EPA data, nearly 60 percent of all
enforcement expenditures were classified using the action code "general
enforcement," one of the main components of this category. These costs
were $117 million in fiscal year 1999 and $114 million in fiscal year
2007, although they ranged from a low of $95 million in fiscal year
2001 to a high of $142 million in fiscal year 2000. EPA defines general
enforcement activities as supporting the management and evaluation of
the Superfund program. Other activities in the enforcement support
category include reviewing program and technical site documents,
preparing and reviewing administrative records, attending public
meetings concerning a site, and maintaining enforcement databases.
Our analysis of EPA data showed that the agency's enforcement
expenditures at NPL sites alone have returned benefits valued at an
estimated $29.9 billion to the Superfund program through fiscal year
2007.[Footnote 15] EPA takes enforcement actions at other hazardous
waste sites not on the NPL; however, we limited our analysis to the
results of EPA's enforcement actions at proposed, final, and deleted
sites. According to EPA officials, the agency's enforcement priority is
for parties to accept responsibility for cleanup actions; a substantial
majority (over 75 percent) of the total monetary value of enforcement
activities at NPL sites represents EPA's estimated value of commitments
by responsible parties to conduct work at sites.[Footnote 16] Other
monetary outcomes of EPA's Superfund enforcement activities include the
recovery of costs EPA previously spent at sites, payment for future
site costs, and penalties assessed to responsible parties. Table 2
shows the results of EPA's enforcement activities for fiscal years 1979
through 2007.
Table 2: Estimated Value of Superfund Enforcement Activities at NPL
Sites, Fiscal Years 1979 through 2007:
Constant 2007 dollars in millions.
Type of value: Past costs recovered;
Amount: $5,104.5.
Type of value: Future costs obtained;
Amount: $2,222.9.
Type of value: Estimated value of responsible party work commitments;
Amount: $22,525.6.
Type of value: Penalties assessed;
Amount: $50.7.
Type of value: Total;
Amount: $29,903.7.
Source: GAO analysis of EPA data.
Note: According to EPA, past costs recovered and future costs obtained
include both federal and state costs. Penalties include both statutory
and stipulated penalties. We did not evaluate the accuracy of these
estimates. Enforcement activity outcome values were adjusted to
constant 2007 dollars based on the completion date of the activity
outcome, not the date the amount was paid or the work conducted.
[End of table]
According to OSWER and OECA officials, EPA typically takes multiple
enforcement actions that result in settling responsibility with parties
for the costs of work at a Superfund site. The officials said that EPA
often pursues responsible parties for the costs (or work) related to
investigating the site and studying the feasibility of various remedial
alternatives first. EPA then pursues responsible parties for the costs
(or work) related to designing and implementing the remedial action at
a later date. Moreover, the officials said that EPA's enforcement
actions may result in separate agreements with different parties
concerning their responsibility for the costs of cleaning up a site.
For fiscal years 1999 through 2007, EPA's total enforcement
expenditures have averaged about $199.2 million each year. Over this
same period, EPA's recoveries of costs previously spent by the agency
at NPL sites--as well as payments by parties to fund future site costs-
-averaged $302.5 million annually, with a high of $568.5 million in
fiscal year 1999 and a low of $161.3 million in fiscal year 2006. These
amounts represent (1) recoveries of money which help replenish the
trust fund and (2) payments for future site costs that may allow EPA to
use its appropriation for work at other sites. EPA's return on its
enforcement expenditures is greater when considering the value of work
commitments. Including the commitments of responsible parties and other
returns on enforcement activities, such as penalties, the estimated
value of all EPA enforcement outcomes at NPL sites averaged just over
$1 billion per year for fiscal years 1979 through 2007. However, as
figure 8 shows, the return has varied from year to year, with a high of
over $2.6 billion in fiscal year 1992 and a low of $0 in fiscal year
1980.
Figure 8: Estimated Value of Enforcement Outcomes at NPL Sites,
Including Commitments from Responsible Parties, Cost Recoveries,
Payment for Future Site Costs, and Penalties, Fiscal Years 1979 through
2007:
[See PDF for image]
This figure is a line graph depicting the following data:
Year: 1979;
Total: $0.01 million.
Year: 1980;
Total: 0.
Year: 1981;
Total: $119.72 million.
Year: 1982;
Total: $34.65 million.
Year: 1983;
Total: $185.75 million.
Year: 1984;
Total: $271.67 million.
Year: 1985;
Total: $291.21 million.
Year: 1986;
Total: $1112.17 million.
Year: 1987;
Total: $396.16 million.
Year: 1988;
Total: $784.77 million.
Year: 1989;
Total: $1439.76 million.
Year: 1990;
Total: $1674.63 million.
Year: 1991;
Total: $2456.99 million.
Year: 1992;
Total: $2620.04 million.
Year: 1993;
Total: $2097.87 million.
Year: 1994;
Total: $1706.51 million.
Year: 1995;
Total: $1637.65 million.
Year: 1996;
Total: $1319.57 million.
Year: 1997;
Total: $1184.99 million.
Year: 1998;
Total: $1285.71 million.
Year: 1999;
Total: $1045.46 million.
Year: 2000;
Total: $987.08 million.
Year: 2001;
Total: $2524.36 million.
Year: 2002;
Total: $1251.21 million.
Year: 2003;
Total: $801.1 million.
Year: 2004;
Total: $620.76 million.
Year: 2005;
Total: $787.6 million.
Year: 2006;
Total: $542.29 million.
Year: 2007;
Total: $723.99 million.
Source: GAO analysis of EPA data.
Note: We did not evaluate the accuracy of these estimates. Enforcement
activity outcome values were adjusted to constant 2007 dollars based on
the completion date of the activity outcome, not the date the amount
was paid or the work conducted.
[End of figure]
Owing to the nature of the enforcement process, enforcement
expenditures in any particular year do not necessarily relate to
enforcement outcomes in that year because some enforcement actions take
years to resolve. For example, in March 2008, EPA and the Department of
Justice reached a $250 million settlement with a responsible party at
one Superfund site that included reimbursement of federal costs for
investigation and cleanup of the site, as well as future cleanup costs.
Although this enforcement outcome will be recorded in fiscal year 2008,
it was the result of actions over a number of years; the Department of
Justice initially filed suit against the responsible party in March
2001.
Total estimated enforcement values at individual sites with at least
one monetary outcome ranged from a low of $2 at one site to a high of
over $1 billion at another, with an average of almost $26 million per
site. Table 3 provides a more detailed analysis of the total estimated
enforcement values achieved at sites for fiscal years 1979 through
2007.
Table 3: Estimated Value of Superfund Enforcement Activities at NPL
Sites for Fiscal Years 1979 through 2007 (Constant 2007 dollars in
millions):
Estimated value of enforcement activities at sites: Less than $100,000;
Number of sites (percent of total): 28 (2.5%);
Total enforcement value (percent of total): $0.9 (0.0%).
Estimated value of enforcement activities at sites: $100,000 to
$999,999;
Number of sites (percent of total): 159 (13.9);
Total enforcement value (percent of total): $72.8 (0.2).
Estimated value of enforcement activities at sites: $1,000,000 to
$9,999,999;
Number of sites (percent of total): 431 (37.8);
Total enforcement value (percent of total): $1,971.3 (6.6).
Estimated value of enforcement activities at sites: $10,000,000 to
$99,999,999;
Number of sites (percent of total): 472 (41.4);
Total enforcement value (percent of total): $15,151.6 (50.7).
Estimated value of enforcement activities at sites: $100,000,000 and
over;
Number of sites (percent of total): 51 (4.5);
Total enforcement value (percent of total): $12,707.1 (42.5).
Estimated value of enforcement activities at sites: Total;
Number of sites (percent of total): 1,141 (100%);
Total enforcement value (percent of total): $29,903.7 (100%).
Source: GAO analysis of EPA data.
Note: We did not evaluate the accuracy of these estimates. Enforcement
activity outcome values were adjusted to constant 2007 dollars based on
the completion date of the activity outcome, not the date the amount
was paid or the work conducted. Percents may not to 100 add due to
rounding.
[End of table]
While the vast majority of sites for which EPA provided enforcement
outcome data (1,141 out of 1,160) had at least one monetary outcome,
EPA took enforcement actions at 243 NPL sites that did not result in a
monetary outcome. Nevertheless, nonfinancial outcomes are important for
the Superfund program. For example, in some cases EPA has to undertake
an enforcement action in order to gain access to a site (or to gain
access for responsible parties conducting work at sites). In such
instances, EPA's enforcement activities play an important role in
allowing the cleanup to continue.
Facilities, Operations, and Security Expenditures Constitute Half of
All Administration Costs, but the Classification of These Costs Varies:
According to EPA data, from fiscal year 1999 through fiscal year 2007,
administration expenditures decreased by 7 percent, from $143 million
to approximately $132 million. The agency used half of these
expenditures to pay for rent, utilities, security, and related expenses
that are attributed to the Superfund program, including expenditures at
EPA's headquarters and regional offices. However, because overall
Superfund expenditures decreased at a greater rate during this period,
EPA's administration costs constituted a greater share of total
Superfund expenditures by fiscal year 2007--from 8 percent to more than
10 percent. EPA officials pointed out that many costs related to
administration, such as rent, are somewhat fixed and not necessarily
related to changes in the level of expenditures on cleanup activities
in the short term. Therefore, these administration costs may not change
as quickly as other expenditures.
Although we did not collect detailed data for this entire period, table
4 provides additional information on the types of expenses and
activities funded by EPA's administration expenditures during fiscal
year 2007.
Table 4: EPA Superfund Expenditures for Administration Activities in
Fiscal Year 2007 (Dollars in millions):
Program/selected activities: Facilities, operations, and security--
paying for rent, utilities, and security; ensuring property management;
providing mail and transportation services; and supplying occupational
health benefits;
Expenditure: $65.41.
Program/selected activities: Planning, budgeting, and finance--managing
the budget process, including formation and execution; and billing
responsible parties for EPA oversight work;
Expenditure: $21.03.
Program/selected activities: Acquisition management--managing
contracts; and fostering relationships with state and local
governments;
Expenditure: $18.52.
Program/selected activities: Information technology infrastructure and
data management--providing agency information technology
infrastructure; supporting the collection, management, and analysis of
EPA data; protecting confidentiality, availability, and integrity of
EPA data; and ensuring the security of classified information;
Expenditure: $16.53.
Program/selected activities: Human resources management--providing
training; managing workforce and succession planning; and participating
in interagency councils and improvement initiatives;
Expenditure: $5.19.
Program/selected activities: Grants and interagency agreement
management--ensuring grants produce measurable environmental results;
and meeting fiduciary standards for grants and interagency agreements;
Expenditure: $2.69.
Program/selected activities: Alternative dispute resolution & legal
advice--supporting the use of alternative dispute resolution in
negotiations with responsible parties; and providing legal advice
during negotiations with responsible parties and other entities;
Expenditure: $1.40.
Program/selected activities: Information exchange--maintaining
intergovernmental network of environmental data; and issuing monthly
enforcement alerts;
Expenditure: $1.37.
Source: GAO analysis of EPA data.
[End of table]
EPA officials told us that the administration expenditures in table 4
represent the activities of the agency's support offices. These four
offices and their primary responsibilities include the following:
* Office of Administration and Resources Management--human resource
management, facilities management, and contracts and grants management.
* Office of the Chief Financial Officer--annual budget process,
performance management, strategic planning, and financial payment and
support services.
* Office of Environmental Information--collection and management of
agency environmental data, including ensuring the accuracy and
reliability of such data and developing tools to access and analyze
these data.
* Office of General Counsel--legal support for agency rules, policies,
and litigation undertaken with Department of Justice attorneys.
In addition to providing funding for the offices and lab spaces where
EPA conducts work, EPA's administration support activities provide a
variety of benefits to the Superfund program. For example, the
Superfund program relies upon the contract management activities of the
Office of Administration and Resources Management, because contractors
conduct many Superfund activities, including searching for responsible
parties and cleaning up hazardous waste sites. Attorneys in EPA's
Office of General Counsel provide legal advice and counsel program
staff on federal laws, as well as executive orders, regulations,
policies, guidelines, case decisions, state laws, and local ordinances
that may affect the program or specific hazardous waste sites.
Additionally, the Office of the Chief Financial Officer operates the
agency's financial management system, which processes and documents
Superfund program expenditures. The accuracy of this documentation is
crucial for Superfund cost recovery claims; according to EPA data, this
work allowed the agency to recover costs of over $190 million in fiscal
year 2007.
In the past, we, EPA, the agency's Inspector General, and others have
published different amounts of spending on administration activities
for fiscal years 1999 through 2003. For example, in 2003, we reported
that EPA used 22 percent of its Superfund expenditures, or $334
million, in fiscal year 2002 for "management and administration," which
included nonsite-specific costs, such as program management and
budgeting, policy development and implementation, emergency
preparedness activity, contract and information management, training,
and general support.[Footnote 17] Table 5 presents the data EPA
provided to us for administration costs and the amounts reported
previously.
Table 5: Comparison of Published Data on EPA Administration
Expenditures (Constant 2007 dollars in millions):
Fiscal year: 1999;
GAO, 2008 (percent of total Superfund expenditures): $143 (8%);
EPA Inspector General, 2006[A]; (percent of total Superfund
expenditures): $438 (23%);
National Advisory Council for Environmental Policy and Technology,
2004[B] (percent of total Superfund expenditures): $417 (25%);
GAO, 2003[C] (percent of total Superfund expenditures): [Empty];
Resources for the Future, 2001[D] (percent of total Superfund
expenditures): $652 (35%).
Fiscal year: 2000;
GAO, 2008 (percent of total Superfund expenditures): $132 (8);
EPA Inspector General, 2006[A]; (percent of total Superfund
expenditures): $439 (23);
National Advisory Council for Environmental Policy and Technology,
2004[B] (percent of total Superfund expenditures): [Empty];
GAO, 2003[C] (percent of total Superfund expenditures): [Empty];
Resources for the Future, 2001[D] (percent of total Superfund
expenditures): [Empty].
Fiscal year: 2001;
GAO, 2008 (percent of total Superfund expenditures): $138 (9);
EPA Inspector General, 2006[A]; (percent of total Superfund
expenditures): $436 (25);
National Advisory Council for Environmental Policy and Technology,
2004[B] (percent of total Superfund expenditures): [Empty];
GAO, 2003[C] (percent of total Superfund expenditures): [Empty];
Resources for the Future, 2001[D] (percent of total Superfund
expenditures): [Empty].
Fiscal year: 2002;
GAO, 2008 (percent of total Superfund expenditures): $135 (9);
EPA Inspector General, 2006[A]; (percent of total Superfund
expenditures): $441 (26);
National Advisory Council for Environmental Policy and Technology,
2004[B] (percent of total Superfund expenditures): [Empty];
GAO, 2003[C] (percent of total Superfund expenditures): $334 (22%);
Resources for the Future, 2001[D] (percent of total Superfund
expenditures): [Empty].
Fiscal year: 2003;
GAO, 2008 (percent of total Superfund expenditures): $135 (9);
EPA Inspector General, 2006[A]; (percent of total Superfund
expenditures): $492 (28);
National Advisory Council for Environmental Policy and Technology,
2004[B] (percent of total Superfund expenditures): $497 (35);
GAO, 2003[C] (percent of total Superfund expenditures): [Empty];
Resources for the Future, 2001[D] (percent of total Superfund
expenditures): [Empty].
Sources: GAO analysis of EPA, National Advisory Council for
Environmental Policy and Technology, and Resources for the Future data.
Notes: We provided the data that were available in each report.
Although the National Advisory Council for Environmental Policy and
Technology report showed a figure for the years between fiscal year
1999 and fiscal year 2003, the report only provided exact amounts,
which are necessary to make comparisons, for the beginning and end of
the period.
[A] EPA, Office of Inspector General, EPA Can Better Manage Superfund
Resources, 2006-P-00013 (Washington, D.C.: Feb. 28, 2006).
[B] National Advisory Council for Environmental Policy and Technology,
Final Report, (Washington, D.C.: Apr. 12, 2004).
[C] GAO-03-850.
[D] Resources for the Future, Superfund's Future: What Will it Cost?,
(Washington, D.C.: 2001).
[End of table]
These reports used varying methodologies to obtain and analyze EPA's
expenditure data.
For this report, EPA provided us with data in four broad categories:
remedial, removal, enforcement, and administration. As mentioned, to
illustrate administration expenditures, EPA officials included all
Superfund-related costs of the agency's support offices. Officials also
explained that their goal in categorizing administration expenditures
was to be consistent with how funds were appropriated to EPA.
* In the Inspector General's 2006 report, officials obtained data from
EPA and used the agency's official definition of administrative and
programmatic costs to categorize these data.[Footnote 18]
* The National Advisory Council for Environmental Policy and
Technology's information comes directly from EPA data provided to the
council, which identified programmatic and administrative funds.
* In our 2003 report, we also relied on EPA to determine what
activities it considered to be administrative.
* Resources for the Future conducted its own analyses of EPA
expenditure data to identify expenditures related to program support
and administration. Unlike the other publications, this report used its
own definition of administration costs.
Underlying the differences in the data presented in these reports, one
of the more important differences was variation in the categorization
of agency payroll costs. The only payroll costs that were categorized
as administration in this study were those associated with the agency's
support offices. In general, EPA categorized payroll costs according to
the activities with which these costs were associated. For example, EPA
categorized all OECA payroll costs as enforcement-related expenditures.
In contrast, some previous reports included all Superfund program
payroll costs in the administration category. Several reports cited
concerns with this approach, however. In the Inspector General's
report, for example, OSWER officials disputed the agency's official
definition of administration costs (which includes all payroll costs),
maintaining that some payroll costs should be categorized as
programmatic, such as when staff are performing site-specific cleanup
activities. The National Advisory Council for Environmental Policy and
Technology also noted that, by including all payroll costs in the
definition of administration costs, most enforcement costs were
categorized as administrative. Other reports, such as our 2003 report
and the Resources for the Future report, included some payroll costs in
the administration category and others in programmatic categories. EPA
officials told us that different definitions of administration costs
may be necessary for different analyses, such as developing EPA's
budget or calculating indirect costs, which--along with site-specific
costs--can be recovered from responsible parties.
By removing all OSWER and OECA payroll costs from the administration
category, EPA may have addressed the concerns raised by OSWER and the
National Advisory Council for Environmental Policy and Technology.
However, the new data may understate administration expenditures
because they do not include OSWER and OECA payroll costs that are
administrative in nature. Program management and administration
activities are carried out in each headquarters office as well as each
region. For example, Resources for the Future identified several
categories of activities that OSWER and OECA conduct that the report
included as administration costs: (1) planning, budgeting, and other
analyses carried out by OSWER officials; (2) enforcement planning
activities and public outreach and communication efforts conducted by
OECA officials; and (3) laboratory analyses supporting enforcement
investigations undertaken by the National Enforcement Investigations
Center.
In addition to differences in the definition of administration costs,
the level of these costs may be misstated--EPA's Inspector General and
the agency itself identified concerns with Superfund administration
costs. The Inspector General found that EPA had not included all agency
funds that subsidize Superfund activities in its accounting system.
Each year, the Superfund program--and other programs across the agency-
-receive support from the Environmental Programs and Management
appropriation for a wide range of EPA costs, including those that
cannot be attributed to a specific program.[Footnote 19] These costs
support, among other things, personnel compensation and benefits,
travel, procurement, and contract activities. EPA financial statements
for fiscal years 1998 through 2006--the years for which data are
available--show that the Superfund program received, on average, $74
million in services funded by the Environmental Programs and Management
appropriation.[Footnote 20]
EPA and the Inspector General also noted that the allocation of support
costs to agency programs is based on outdated workforce plans.
According to EPA, the agency's workforce model has not been updated
since the early 1990s, despite many significant changes to the
Superfund program in the intervening years, including increased
homeland security duties and evolving responsibilities as NPL sites
progress through the cleanup process. Because EPA allocates some
support costs on the basis of the number of staff working in a program
area, an outdated workforce plan could have implications for the level
of support costs charged to the Superfund program. EPA's Inspector
General found that 9 of 10 regions redirect some portion of their
Superfund personnel to other regional activities, such as community
involvement, public affairs, or the Regional Administrator's office.
[Footnote 21]
EPA and its Inspector General made several recommendations regarding
the classification of EPA's administration costs and other related
issues. Some of these recommendations, along with EPA's response, are
provided in table 6.
Table 6: Selected Recommendations on Administration Costs and EPA's
Response:
EPA, Superfund: Building on the Past, Looking to the Future (2004):
Report and recommendations:
Collect data each year on the amount of funds spent on cleanup or on
those activities that are necessary to get to the cleanup phase and
communicate those costs more effectively;
EPA's response[A]:
EPA planned no additional action to address this recommendation because
this is an ongoing effort and the information would be reported out on
a regular basis.
Report and recommendations:
Identify ways to simplify the internal budget structure to reduce the
costs of moving money around the agency;
EPA's response[A]:
EPA took no action on this recommendation because it did not believe
the current budget structure constrained the efficient use of
resources.
Report and recommendations:
Evaluate the number of staff doing Superfund work at headquarters and
make every effort to redirect resources to activities that more
directly contribute to site cleanup;
EPA's response[A]:
EPA indicated that its workforce analysis would guide future allocation
of resources.
Report and recommendations:
Consider transferring some or all of Superfund management and support
costs to the Environmental Programs and Management appropriation[B];
EPA's response[A]:
EPA took no action because it determined the option was not feasible.
EPA Inspector General, EPA Can Better Manage Superfund Resources
(2006):
Report and recommendations:
Define costs in a manner that supports management decision making;
EPA's response[A]:
EPA is reviewing the applicability of its current definition of
administration costs and may explore alternative approaches.
Report and recommendations:
Conduct a workforce assessment or develop a workload model;
EPA's response[A]:
EPA is conducting a workforce assessment. The current milestone date
for completion of this project is July 30, 2008.
Report and recommendations:
Declare the accounting for administration and support activities and
the lack of a current workload model as internal control weaknesses;
EPA's response[A]:
Office of Inspector General officials told us they closed this
recommendation because EPA planned to address other recommendations.
Source: EPA.
[A] EPA responses to these recommendations were provided in EPA, The
120-Day Study: Action Plan, (Washington, D.C.: February 2005) and EPA
Office of Inspector General, Congressionally Requested Report on Office
of Inspector General Unimplemented Recommendations (Revised), 08-P-
0123 (Washington, D.C.: Mar. 31, 2008), as well as our interviews with
Inspector General officials.
[B] This suggestion was listed as an option for EPA, rather than a
recommendation.
[End of table]
Agency Comments and Our Evaluation:
We provided EPA with a draft of this report for its review and comment.
The full text of EPA's comments is included in enclosure II. The agency
stated that it generally agreed with the report's descriptions of
funding sources that support the Superfund trust fund, and that the
report provided a sound historical representation of trust fund
balances and revenue, as well as an accurate description of the
programs it supports. EPA also provided suggestions on three specific
sections of our report; our evaluation of their comments is described
below.
EPA requested that we clarify our description of the relationship
between the balance of the trust fund and the funding available to the
agency. Although we believe that we accurately portrayed this
relationship--including specifically pointing out that EPA can only
spend what has been appropriated by the Congress--we revised our report
to more clearly reflect the nature of the relationship between the
trust fund and annual appropriations.
The agency also commented that our description of expenditures, while
factually accurate, was unclear due to our use of both nominal and
constant dollars, and the fact that we presented an analysis of
enforcement and administration expenditures in the same section of the
report. With regard to our use of nominal and constant dollars, we
noted in the report that we present all dollars in constant 2007
dollars, except when we refer to dollars in appropriations documents;
for those dollar figures, we use nominal dollars, in accordance with
our policy to report the amounts that were enacted at the time,
presented in budget documents, or both. Regarding our presentation of
EPA expenditures, we provided information on all EPA Superfund
expenditures as well as detailed descriptions of enforcement and
administration expenditures at the request of the Congress. Although we
provided data on enforcement and administration in the same section,
the focus of the section was not a comparison between these two
categories, but rather a comprehensive description of each.
Finally, EPA stated that the agency's definition of administration
costs was developed at the request of and was approved by the Congress.
We acknowledge in the report that EPA has an official definition of
administration costs. However, EPA has not consistently used this
definition and officials told us they are evaluating whether to revise
the agency's official definition. Furthermore, we and others identified
additional issues potentially impacting the accuracy and consistency of
analyses of EPA's administration costs. As a result of these issues,
published data on administration costs are often not comparable. As EPA
points out, different studies may have different perspectives on the
kinds of costs that should be considered administration-related.
Nevertheless, we believed that it was important to explain why the
numbers presented in this report vary from those presented in other
recent reports.
EPA also provided technical comments, which we have incorporated into
this report as appropriate.
We also provided the Department of Justice with a draft of this report
for review and comment; they did not comment on the draft report but
provided one technical clarification, which we incorporated into the
report.
As agreed with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies to the
Administrator of the EPA, the Attorney General of the United States,
appropriate congressional committees, and other interested parties. We
will also make copies available to others on request. In addition, the
report will be available at no charge on our Web site at [hyperlink,
http://www.gao.gov].
If you or your staffs have any questions about this report, please
contact John B. Stephenson at (202) 512-3841 or stephensonj@gao.gov.
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. Key contributors
to this report are listed in enclosure III.
Signed by:
John B. Stephenson:
Director, Natural Resources and Environment:
Enclosures:
List of Requesters:
The Honorable James M. Inhofe:
Ranking Member:
Committee on Environment and Public Works:
United States Senate:
The Honorable Chuck Hagel:
United States Senate:
The Honorable John Thune:
United States Senate:
The Honorable John Campbell:
House of Representatives:
The Honorable Charles W. Dent:
House of Representatives:
The Honorable Mark Steven Kirk:
House of Representatives:
[End of section]
Enclosure I: Objectives, Scope, and Methodology:
This report provides information about the (1) sources of funding for
the Superfund trust fund and (2) allocation of these resources to
Superfund program activities, particularly enforcement and
administration.
To determine the sources of funding that support the Superfund trust
fund, we reviewed the President's Budget Appendices for fiscal years
1983 through 2009. These documents contain budget information from
fiscal year 1981, the first year of the Superfund program, through
fiscal year 2007. After compiling these data, we reviewed them with
Environmental Protection Agency (EPA) budget experts to confirm their
accuracy. We also reviewed annual appropriations laws and related
conference reports in order to compile information on direction
provided by the Congress for spending.
To analyze the costs of program activities, we obtained EPA data on
overall Superfund program expenditures--also referred to as outlays.
EPA budget staff grouped expenditures into major categories, such as
administration and removal, based on their knowledge of the programs
and provided us with a more detailed breakdown of administration
expenditures for fiscal year 2007. We limited our scope to fiscal years
1999 through 2007 because EPA changed the way it accounted for certain
budget items in fiscal year 1999; this change makes it difficult to
obtain consistent data prior to that year. EPA also updated its system
in fiscal year 2004 and, because of this, EPA budget officials created
a crosswalk between the two time periods to ensure the expenditures
were consistent. EPA provided us with expenditure data for these years;
our comparisons to agency obligation data showed that expenditures and
obligations were somewhat similar for the years in which we had both
sets of data. Specifically, expenditures ranged from 5 percent higher
than obligations to 16 percent lower than obligations during fiscal
years 2004 through 2007.
EPA also provided us with enforcement expenditure data for fiscal years
1999 through 2007 by action code, which EPA uses to identify
expenditures. We grouped action codes into categories in consultation
with EPA officials. These data were also limited in scope to fiscal
years 1999 through 2007 because of constraints similar to those
described above.
Finally, EPA provided us with data on outcomes of enforcement actions
at sites on the National Priorities List (NPL), including past costs
recovered, future costs obtained, estimated value of responsible
parties' work commitments, and penalties. We used these data to
calculate the value of enforcement outcomes, for fiscal years 1979
through 2007, although we did not evaluate the accuracy of EPA's
estimates. In its response to a draft of this report, EPA indicated
that it had made a number of corrections and updates to data on the
outcomes of its enforcement activities; these corrections occurred
after the agency provided us with a version of these data for fiscal
years 1979 through 2007. For example, the agency indicated that in
reviewing enforcement outcomes from the 1980s and 1990s, EPA regions
identified certain outcomes that did not have their full value included
in the agency's data because of the way earlier versions of the
database had been constructed. Due to the number and amount of these
differences, EPA provided us with a more recent version of the dataset,
updated through June 2008, which we analyzed for this report. However,
because EPA continually corrects and updates its historical Superfund
enforcement outcome data, future analyses of this database may not
match our results. We considered data from fiscal year 1979 because the
earliest Superfund enforcement outcome with monetary value was achieved
in this year. Although this outcome occurred before the Superfund
program began, the outcome was related to a site that was later listed
on the NPL, and EPA officials told us that they classified it as a
Superfund enforcement outcome.
We converted all dollar figures into constant 2007 dollars, except when
we refer to dollars in appropriations documents; for those dollar
figures, we use nominal dollars. It is our policy to match what has
actually been enacted or proposed at the time, what is reported in
budget documents, or both.
We also reviewed relevant documents, such as the Superfund Program
Implementation Manual and prior evaluations of the Superfund program,
and interviewed agency officials in the Office of Solid Waste and
Emergency Response (OSWER), the Office of Enforcement and Compliance
Assurance (OECA), and the Office of the Chief Financial Officer. To
determine previous findings related to administration costs, we
reviewed reports from GAO, EPA, the agency's Inspector General, and
others.
To ensure the reliability of the data we used for this report, we
reviewed two relevant EPA databases: (1) the Integrated Financial
Management System, from which our expenditure data were drawn, and (2)
the Comprehensive Environmental Response, Compensation, and Liability
Information System, from which site status and enforcement outcome data
were drawn. For both data sources, we interviewed EPA officials about
the methods used by the agency to ensure data reliability, manually and
electronically reviewed the data, compared data to other published
sources, and followed up with EPA regarding specific questions that we
had as a result of our review. We spoke with officials from OSWER,
OECA, and the Office of the Chief Financial Officer. Based on these
interviews and our own analyses, we concluded that these data were
sufficiently reliable for the purposes of this report. Where necessary
in the report, we note potential limitations of these data.
We conducted this performance audit from July 2007 to July 2008 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
[End of section]
Enclosure II: Comments from the Environmental Protection Agency:
United States Environmental Protection Agency:
Office Of Chief Financial Officer:
[hyperlink, http://www.epa.gov]:
Washington, D.C. 20460:
June 24, 2008:
Mr. John B. Stephenson, Director:
Natural Resources & Environment:
Government Accountability Office:
441 G Street, N.W. Room 2075:
Washington, D.C. 20548:
Dear Mr. Stephenson:
Thank you for the opportunity to comment on the draft report entitled
"Superfund: Reported Costs of Enforcement and Administration Activities
(GAO-08-841R)." We appreciate the collegial working relationship and
dialog with GAO as this report was developed.
Overall, we generally agree with the descriptions contained in this
report on sources of funding that support the Hazardous Substance
Superfund trust fund. This report provides a sound historical
representation of the trust fund balances and revenues, as well as an
accurate depiction of the program these resources support once
appropriated.
However, EPA has identified the following areas in the draft report for
which we provide additional clarification and suggestions.
Relationship of Trust Fund Balances, Appropriated Resources, and Agency
Activities:
EPA requests that the report be modified to more accurately address the
relationship between the balance of the trust fund and funding
available to the Agency. Historically, the available balance of the
trust fund has not impacted the level of resources appropriated to the
Agency for the Superfund program. Through its annual appropriations
bills, Congress transfers money into the trust fund and appropriates
money out of the trust fund to provide the program with the level of
funding that Congress determines is appropriate. Regardless of the
balance of the trust fund, the Agency only has authority to spend
resources that are appropriated from the trust fund by Congress. We
appreciate the difficulty in accurately portraying the relationship of
the trust fund, appropriated resources, and Agency activities, and have
recommended several edits to more accurately explain this relationship
(see enclosure).
Presentation of Expenditures by Category:
The depiction of expenditures in a particular category (e.g., response,
enforcement, administration, etc.), as compared to the total
expenditures of Superfund appropriated resources we believe could be
clarified further in the draft report. While the analysis is factually
accurate, combining certain categories for analysis, and the mixing of
nominal and constant dollars in the text, did not provide a clear
picture of the trend in resources for the categories being discussed.
For example, on page 16 of the draft report, the title "Enforcement and
Administration Costs Increase from 22 to 25 percent of Superfund
expenditures from Fiscal Year 1999 through 2007" and the following
paragraph, while factually correct, could be misleading in that the
reader may have the impression that from fiscal years 1999 to 2007
enforcement expenditures increased. In contrast to the title, on page
18 it is noted that in fiscal year 2007, Superfund enforcement
expenditures totaled approximately $187 million, representing a 23
percent decrease from fiscal year 1999. The draft report also notes
that, "the proportion of total program expenditures going to
enforcement remained relatively consistent, at about 14 percent." These
statements appear to contradict the title and paragraph on page 16 that
combines administrative and enforcement expenditures.
EPA suggests re-titling the section header on page 16 to avoid
inconsistency and perhaps including a chart to depict the categories,
which may provide additional clarification and support the analysis
being discussed.
Discussion on Superfund Administration Expenditures:
The Agency maintains a definition of programmatic and administrative
costs for the purposes of all Agency programs, and this definition
includes payroll as part of administrative costs. The classification of
payroll as administrative can be traced to 1993 when EPA's
Congressional appropriation subcommittees reclassified EPA's account
structure by directing EPA "to develop a single definition of
`administrative' and `programmatic' expenses that can be used across
all accounts/appropriations".[Footnote 22] For FY 1994, EPA submitted a
"Global Expense Definition" and "Appropriation Restructuring and
Implementation Guidebook" for Congressional approval. These reports
described how EPA intended to capture "administrative" and
"programmatic" costs by budget object class, and included payroll under
the definition of "administrative" costs. The Congressional
appropriation subcommittees approved EPA's "Global Expense Definition"
and "Appropriation Restructuring and Implementation Guidebook," and
since that time EPA has operated under this framework.
However, EPA also has the discretion to provide data in a manner that
meets the needs of the requestor. The Agency, first and foremost,
strives to provide financial information in a manner that meets the
needs of the requestor for the study being conducted while maintaining
an accurate representation of the data You note in your draft report
that EPA has provided administration data for the Superfund program
using different definitions of "administrative" costs. This data was
provided to multiple requestors on multiple studies, and EPA worked
with those requestors to determine what information the requestors
sought for the purposes of their respective studies. As evidenced by
your report, different requesters have had different perspectives on
what costs should be considered administrative in nature. We have
suggested several modifications for the discussion on the Agency's
administration expenditures for the Superfund program (see enclosure).
EPA requests that the report be modified to address several additional
technical corrections and edits (see enclosure). In addition to
suggested edits reflecting the items discussed above, we offer
additional clarification on the Superfund remedial and enforcement
process.
Again, we appreciate the opportunity to work with your team on this
review and your consideration of technical corrections. If you have any
other comments or questions about these corrections, please contact
Carol Terris, Acting Director of the Office of Budget at 202-564-0533.
Best wishes,
Signed by:
Lyons Gray:
Chief Financial Officer:
Enclosure:
[End of section]
Enclosure III: GAO Contact and Staff Acknowledgments:
GAO Contact:
John B. Stephenson, (202) 512-3841 or stephensonj@gao.gov.
Staff Acknowledgments:
In addition to the contact named above, Vincent P. Price, Assistant
Director; Tim Bazzle; Krista Loose; Christopher Murray; and Kathleen
Padulchick made key contributions to this report. Elizabeth Beardsley,
Virginia Chanley, Michele Fejfar, Carol Henn, Richard Johnson, and
Carol Herrnstadt Shulman also made important contributions.
[End of section]
Footnotes:
[1] This number includes those sites on the NPL as well as those
deleted from the NPL.
[2] GAO, Superfund Program: Current Status and Future Fiscal
Challenges, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-850]
(Washington, D.C.: July 31, 2003).
[3] The federal budget consists of several types of funds, including,
among others, the general fund, special funds, and trust funds. General
funds are the revenues not designated for specific purposes and fund,
among other things, national defense, interest on the public debt, the
operating expenses of most federal agencies, many grants to state and
local governments, and some entitlements.
[4] Nominal dollars have not been adjusted for inflation.
[5] Only sites on the NPL are eligible for remedial actions financed by
the trust fund; resources from the trust fund may be used to finance
other types of response activities, such as removal actions, at both
NPL and non-NPL sites.
[6] Almost all of the deleted sites were declared construction complete
prior to deletion; however, according to EPA, of the 321 deleted sites,
four sites were deleted and referred to other authorities without being
declared construction complete. Additionally, five sites were proposed
for listing but were deleted before being finalized on the NPL.
[7] EPA, Superfund: Building on the Past, Looking to the Future,
(Washington, D.C.: Apr. 22, 2004).
[8] Totals add to more than 100 percent due to rounding.
[9] Our guidance recommends we present budget numbers in nominal terms
to match what has actually been enacted or proposed at the time, what
is reported in budget documents, or both, rather than adjusting for
inflation. Therefore, throughout this section, we will present all data
in nominal dollars, except where we illustrate trends over time, in
which case we will also provide constant dollars.
[10] Lincoln v. Vigil, 508 U.S. 182, 193 (1993).
[11] Due to changes in EPA's budget structure, EPA was unable to
comparably categorize some expenditures. These expenditures never
accounted for more than 0.2 percent of annual expenditures. Over the
entire period, these other expenditures constituted 0.05 percent of
Superfund expenditures.
[12] Based on EPA documentation and interviews, we developed the four
categories used in this section and confirmed our analysis with EPA
officials. However, we were unable to place 6 percent of enforcement
expenditures into any of these four categories. Most of these
expenditures were attributable to technology projects that were not
related to specific sites. Uncategorized enforcement expenditures also
included activities related to (1) the oversight of responsible
parties, although EPA officials told us these responsibilities are no
longer considered enforcement-related; (2) the development of EPA's
cost recovery claims; and (3) specific steps that are taken as part of
the cleanup process, including site assessment activities, community
relations activities done to address community concerns, and technical
support for remedial actions.
[13] Some negotiation expenditures fund alternative dispute resolution,
in which cost recovery actions are resolved using mediation or
arbitration. Other types of activities classified as negotiation
include (1) removal negotiations, which involve discussions between EPA
and responsible parties over parties' liability and willingness and
ability to implement a removal action; and (2) work done to prepare and
issue administrative orders that can compel responsible parties to
conduct cleanup actions and may also involve cost recovery.
[14] Most Department of Justice activities funded by Superfund are
coded as litigation expenditures in our analysis. The department
provides information to EPA regarding the activities it carries out
related to the Superfund program; however, due to differences in how
EPA and the department code various activities, costs for some
nonlitigation activities, such as the negotiation of settlements, may
be included in this category.
[15] This total represents EPA's estimate--as of June 2008--of the
value of enforcement activities at proposed, final, and deleted
Superfund sites for fiscal years 1979 through 2007. In part, this total
is an estimate because the value of the responsible party work
commitments reported by EPA is an estimated value--or projected cost--
of the activities these parties agree to perform and does not represent
the actual amount of money spent by responsible parties at sites as a
result of EPA's enforcement activities. Also, the total is an
incomplete estimate because these data do not include payments for
future EPA oversight of work conducted by the responsible parties or
interest payments from responsible parties who arrange to pay EPA over
time. Furthermore, EPA may take or assist states in taking enforcement
actions, the results of which are not included in the total we present
in this report. For example, according to an EPA official, in some
instances states take the primary lead in an enforcement action, and
EPA generally plays only an advisory role in these actions. The
official stated that the agency excludes the outcomes of these
enforcement actions from its accomplishment reporting, and, therefore,
we excluded them from our analysis. Also, the EPA official told us that
Superfund enforcement outcomes reported prior to the passage of CERCLA
in 1980 represent outcomes at sites that were ultimately listed on the
NPL, but for which enforcement actions were initiated under the
Resource Conservation and Recovery Act. The Congress passed the Act in
1976 to establish a framework for managing hazardous waste from its
generation to final disposal.
[16] Responsible parties are not required to provide EPA with
information on the actual costs of implementing Superfund site response
actions. Therefore, EPA data on the value of responsible party work
commitments are taken primarily from the estimated cost of response
alternatives as identified in removal documents or Records of Decision
for individual Superfund sites. According to agency guidance, these
estimates are expected to range from -30 percent to +50 percent of the
actual project cost. We did not evaluate the extent to which cost
estimates in Superfund site Records of Decision reflect the actual
costs incurred by responsible parties for implementing the remedial
actions.
[17] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-850].
[18] This definition is provided in EPA's Administrative Control of
Appropriated Funds, which outlines the principles and policies to
control the use of its funds.
[19] The Environmental Programs and Management appropriation is one of
EPA's largest appropriations, funding the work of more than 10,000
agency staff.
[20] In some years, the Superfund program received services funded by
additional EPA appropriations, which are also included in this figure.
[21] Inspector General officials did not verify whether these
activities were related to Superfund.
[22] See FY 1993 Conference Report for the Veterans Affairs and Housing
and Urban Development, and Independent Agencies Appropriations Bill,
1993, dated September 24, 1992 (Report 102-902) and the House of
Representatives Veterans Affairs and Housing and Urban Development, and
Independent Agencies Appropriations Bill 1994, dated June 22, 1993
(Report 103-150).
[End of section]
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