Environmental Protection Agency
Management Challenges and Budget Observations Gao ID: GAO-12-149T October 12, 2011The Environmental Protection Agency (EPA) faces a number of management and budgetary challenges, which are particularly important as Congress seeks to decrease the cost of government while improving its performance. EPA operates in a highly complex and controversial regulatory arena, and its policies and programs affect virtually all segments of the economy, society, and government. From fiscal years 2000 through 2010, the agency's budget rose in nominal terms from $7.8 billion to $10.4 billion, but has remained relatively flat over this period in real terms. This testimony highlights some of the major management challenges and budgetary issues facing a range of EPA programs and activities today. This testimony focuses on (1) management of EPA's workload, workforce, and real property; (2) coordination with other agencies to more effectively leverage limited resources; and (3) observations on the agency's budget justifications. This testimony is based on prior GAO products and analysis.
Recent GAO work has identified challenges with EPA's efforts to manage its workload, workforce, and real property and made recommendations to address these challenges. In 2010, GAO reported that EPA had not comprehensively analyzed its workload and workforce since the late 1980s to determine the optimal numbers and distribution of staff agencywide. GAO recommended, among other things, that EPA link its workforce to its strategic plan and establish mechanisms to monitor and evaluate their workforce planning efforts. A 2011 review of EPA's efforts to control contamination at hazardous waste sites found that the program was making progress toward its goals but that EPA had not performed a rigorous analysis of its remaining workload to help inform budget estimates and requests in line with program needs. Regarding real property management--an area that GAO has identified as part of its high-risk series--GAO reported that EPA operated a laboratory enterprise consisting of 37 laboratories housed in 170 buildings and facilities in 30 cities. GAO found that EPA did not have accurate and reliable information on its laboratories to respond to a presidential memorandum directing agencies to accelerate efforts to identify and eliminate excess properties. The report recommended that EPA address management challenges, real property planning decisions, and workforce planning. GAO has reported on opportunities for EPA to better coordinate with other federal and state agencies to help implement its programs. Given the federal deficit and the government's long-term fiscal challenges, it is important that EPA improve its coordination with these agencies to make efficient use of federal resources. In a September 2011 report on the Chesapeake Bay, GAO found that federal and state agencies were not working toward the same strategic goals and recommended that EPA establish a working group or formal mechanism to develop common goals and clarify plans for assessing progress. In a 2009 report on rural water infrastructure, GAO reported that EPA and six other federal agencies had funded water and wastewater projects in the U.S.-Mexico border region. GAO suggested that Congress consider establishing an interagency task force to develop a plan for coordinating this funding. These findings were included in GAO's March 2011 report to Congress in response to a statutory requirement for GAO to identify federal programs with duplicative goals or activities. Periodic GAO reviews of EPA's budget justifications have led to two recurring observations. First, with respect to proposals for new or expanded funding that GAO has examined, EPA has not consistently provided clear justification for the amount of funding requested or information on the management controls that the agency would use to ensure the efficient and effective use of requested funding. Second, GAO's reviews have found that EPA's budget justification documents do not provide information on funds from appropriations in prior years that were not expended and are available for new obligations. Such information could be useful to Congress because these funds could partially offset the need for new funding. The work cited in this testimony made a number of recommendations intended to address management and related budget challenges, including improving the agency's workforce and workload planning, as well as its coordination with other federal agencies. EPA generally agreed with these recommendations.
GAO-12-149T, Environmental Protection Agency: Management Challenges and Budget Observations
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United States Government Accountability Office:
GAO:
Testimony:
Before the Subcommittee on Oversight and Investigations, Committee on
Energy and Commerce, House of Representatives:
For Release on Delivery:
Expected at 10:30 a.m. EDT:
Wednesday, October 12, 2011:
Environmental Protection Agency:
Management Challenges and Budget Observations:
Statement of David C. Trimble, Director:
Natural Resources and Environment:
GAO-12-149T:
GAO Highlights:
Highlights of GAO-12-149T, a testimony before the Subcommittee on
Oversight and Investigations, Committee on Energy and Commerce, House
of Representatives.
Why GAO Did This Study:
The Environmental Protection Agency (EPA) faces a number of management
and budgetary challenges, which are particularly important as Congress
seeks to decrease the cost of government while improving its
performance. EPA operates in a highly complex and controversial
regulatory arena, and its policies and programs affect virtually all
segments of the economy, society, and government. From fiscal years
2000 through 2010, the agency‘s budget rose in nominal terms from $7.8
billion to $10.4 billion, but has remained relatively flat over this
period in real terms.
This testimony highlights some of the major management challenges and
budgetary issues facing a range of EPA programs and activities today.
This testimony focuses on (1) management of EPA‘s workload, workforce,
and real property; (2) coordination with other agencies to more
effectively leverage limited resources; and (3) observations on the
agency‘s budget justifications. This testimony is based on prior GAO
products and analysis.
What GAO Found:
Recent GAO work has identified challenges with EPA‘s efforts to manage
its workload, workforce, and real property and made recommendations to
address these challenges. In 2010, GAO reported that EPA had not
comprehensively analyzed its workload and workforce since the late
1980s to determine the optimal numbers and distribution of staff
agencywide. GAO recommended, among other things, that EPA link its
workforce to its strategic plan and establish mechanisms to monitor
and evaluate their workforce planning efforts. A 2011 review of EPA‘s
efforts to control contamination at hazardous waste sites found that
the program was making progress toward its goals but that EPA had not
performed a rigorous analysis of its remaining workload to help inform
budget estimates and requests in line with program needs. Regarding
real property management”an area that GAO has identified as part of
its high-risk series”GAO reported that EPA operated a laboratory
enterprise consisting of 37 laboratories housed in 170 buildings and
facilities in 30 cities. GAO found that EPA did not have accurate and
reliable information on its laboratories to respond to a presidential
memorandum directing agencies to accelerate efforts to identify and
eliminate excess properties. The report recommended that EPA address
management challenges, real property planning decisions, and workforce
planning.
GAO has reported on opportunities for EPA to better coordinate with
other federal and state agencies to help implement its programs. Given
the federal deficit and the government‘s long-term fiscal challenges,
it is important that EPA improve its coordination with these agencies
to make efficient use of federal resources. In a September 2011 report
on the Chesapeake Bay, GAO found that federal and state agencies were
not working toward the same strategic goals and recommended that EPA
establish a working group or formal mechanism to develop common goals
and clarify plans for assessing progress. In a 2009 report on rural
water infrastructure, GAO reported that EPA and six other federal
agencies had funded water and wastewater projects in the U.S.-Mexico
border region. GAO suggested that Congress consider establishing an
interagency task force to develop a plan for coordinating this
funding. These findings were included in GAO‘s March 2011 report to
Congress in response to a statutory requirement for GAO to identify
federal programs with duplicative goals or activities.
Periodic GAO reviews of EPA‘s budget justifications have led to two
recurring observations. First, with respect to proposals for new or
expanded funding that GAO has examined, EPA has not consistently
provided clear justification for the amount of funding requested or
information on the management controls that the agency would use to
ensure the efficient and effective use of requested funding. Second,
GAO‘s reviews have found that EPA‘s budget justification documents do
not provide information on funds from appropriations in prior years
that were not expended and are available for new obligations. Such
information could be useful to Congress because these funds could
partially offset the need for new funding.
What GAO Recommends:
The work cited in this testimony made a number of recommendations
intended to address management and related budget challenges,
including improving the agency‘s workforce and workload planning, as
well as its coordination with other federal agencies. EPA generally
agreed with these recommendations.
View [hyperlink, http://www.gao.gov/products/GAO-12-149T]. For more
information, contact David Trimble at (202) 512-3841 or
trimbled@gao.gov.
[End of section]
Chairman Stearns, Ranking Member DeGette, and Members of the
Subcommittee:
I am pleased to be here today to discuss management challenges and
budget considerations at the Environmental Protection Agency (EPA).
These challenges are particularly important as Congress and the
administration seek to decrease the cost of government while improving
its performance and accountability. EPA operates in a highly complex
and controversial regulatory arena, and its policies and programs
affect virtually all segments of the economy, society, and government.
EPA conducts its work under an array of environmental laws, including
the Clean Air and Clean Water Acts.[Footnote 1] Structurally, EPA
comprises headquarters offices largely aligned with its primary
authorizing statutes and 10 regional offices that help implement these
statutes. From fiscal years 2000 through 2010, the agency's budget
rose in nominal terms from $7.8 billion to $10.4 billion, but has
remained relatively flat over this period in real terms.[Footnote 2]
The four major categories of EPA spending in fiscal year 2010 were:
* operating budget ($3.9 billion) for basic regulatory, research, and
enforcement activities;
* infrastructure grants ($3.9 billion) providing financial assistance
to states, municipalities, interstate commissions, and tribal
governments to fund a variety of drinking water, wastewater, air, and
other environmental projects;
* trust funds ($1.4 billion) from appropriations to pay for, among
other things, Superfund and leaking underground storage tank hazardous
waste cleanup when responsible parties are not available to pay; and;
* categorical grants ($1.1 billion) to states, tribes, nonprofit
organizations, and others for specific environmental programs,
including air and radiation, water, drinking water, hazardous waste,
and pesticides and toxic chemicals.
Thus, a substantial portion of the agency's budget consists of grants
to state, local, tribal, and other partners.
My testimony today draws on our recent work, including our March 2011
testimony on EPA's major management challenges,[Footnote 3] and
observations from our periodic reviews of EPA's budget justification.
Many of our prior reports have included recommendations intended to
improve the management of EPA's programs. EPA has generally agreed
with our recommendations. I will focus my remarks today on several key
management and budget issues at EPA, including (1) management of EPA's
workload, workforce, and real property; (2) coordination with other
agencies to more effectively leverage limited resources; and (3)
observations on the agency's budget justifications.
The first two sections of this statement are based on prior GAO work
issued from 2009 to 2011. We conducted the underlying performance
audits in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform audits 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. The third
section of this statement is based on the results of our reviews of
EPA budget justifications conducted in 2010 and 2011. The objective of
our budget justification reviews is to provide pertinent and timely
information that Congress can use during budget deliberations by
raising questions about specific programs in the President's proposed
budget. We conducted our work in accordance with all sections of GAO's
Quality Assurance Framework that were relevant to our objectives. The
framework requires that we plan and perform the engagement to meet our
stated objectives and to discuss any limitations in our work. We
believe that the information and data obtained, and the analysis
conducted, provide a reasonable basis for findings and conclusions in
this product.
Management of EPA's Workload, Workforce, and Real Property:
With respect to its workload and workforce, EPA has struggled for
years to identify its human resource needs and to deploy its staff
throughout the agency in a manner that would do the most good. In
2010, we reported that rather than establishing a process for
budgeting and allocating human resources that fully considered the
agency's workload, EPA requested funding and staffing through
incremental adjustments based largely on historical precedent.
[Footnote 4] We noted that the agency had not comprehensively analyzed
its workload and workforce since the late 1980s to determine the
optimal numbers and distribution of staff agencywide. Moreover, EPA's
human capital management systems had not kept pace with changing
legislative requirements and priorities, changes in environmental
conditions in different regions of the country, and the much more
active role that states now play in carrying out the day-to-day
activities of federal environmental programs. We recommended, among
other things, that EPA link its workforce plan to its strategic plan
and establish mechanisms to monitor and evaluate its workforce
planning efforts. EPA generally agreed with these recommendations.
Our recent work has also identified additional challenges related to
workload and workforce management. For example, in July 2011, we
reported that EPA had made considerable progress in meeting goals to
contain and control contamination at high-risk hazardous waste sites.
[Footnote 5] We also reported, however, that EPA had not rigorously
analyzed its remaining workload or the resources it needed to meet its
cleanup goals. We recommended that EPA assess its remaining cleanup
workload, determine whether the program has adequate resources, and
take steps to reallocate its resources or revise its goals. An
assessment could also help EPA develop budget estimates and requests
that align with program needs. EPA agreed with the recommendation.
Also in July 2011, we identified challenges EPA faces in managing its
laboratories and its related workforce.[Footnote 6] EPA operates a
laboratory enterprise consisting of 37 laboratories housed in 170
buildings and facilities located in 30 cities across the nation. We
reported that EPA had not fully addressed findings and recommendations
of independent evaluations of its science activities dating back to
1992 and that its laboratory activities were largely uncoordinated. We
also found that, consistent with our 2010 report on workforce
planning, EPA did not use a comprehensive planning process for
managing its laboratories' workforce. Specifically, we reported that
EPA did not have basic information on its laboratory workload and
workforce, including demographic data on the number of federal and
contract employees working in its laboratories. Without such
information, we reported, EPA could not successfully undertake
succession planning and management to help the organization adapt to
meet emerging and future needs. Because of the challenges identified
in this report, we made recommendations to address workforce and
workload planning decisions. EPA generally agreed with our findings
and recommendations.
In September 2010, we reported on EPA's library network and found that
EPA had not completed a plan identifying an overall strategy for its
libraries, implementation goals, or a timeline.[Footnote 7] EPA had
developed a draft strategic plan, but it did not describe how funding
decisions were made. We reported that setting out details for such
decisions, to ensure that they are informed and transparent, was
especially important because of the decentralized nature of the
library network. We recommended, among other things, that EPA complete
its strategic plan for the library network, including implementation
goals and timelines. As part of this effort, we recommended that EPA
outline details for how funding decisions were to be made to ensure
they are informed and transparent. EPA concurred with our
recommendations.
Finally, our July 2011 report on EPA laboratories also identified
challenges related to EPA's management of its real property. Federal
real property management is an area we have identified as part of our
high-risk series because of long-standing problems with over reliance
on leasing, excess and underused property, and protecting federal
facilities.[Footnote 8] The need to better manage federal real
property was underscored in a June 2010 presidential memorandum that
directed agencies to accelerate efforts to identify and eliminate
excess properties to help achieve a total of $3 billion in cost
savings by 2012. In July 2010 EPA reported to the Office of Management
and Budget (OMB) that it did not anticipate the disposal of any of its
owned laboratories and major assets in the near future because these
assets were fully used and considered critical for the mission of the
customer and agency as a whole. However, we found that EPA did not
have accurate and reliable information called for by OMB on (1) the
need for facilities, (2) property use, (3) facility condition, and (4)
facility operating efficiency, to inform such a determination. We made
several recommendations for EPA to improve its physical infrastructure
and real property planning, including improving the completeness and
reliability of operating-cost and other data needed to manage its real
property and report to external parties. EPA concurred with the
recommendations.
Coordination with Other Agencies to More Effectively Leverage Limited
Resources:
EPA relies on other federal and state agencies to help implement its
programs. Given the federal deficit and the government's long-term
fiscal challenges, it is important that EPA improve coordination with
its federal and state partners to reduce administrative burdens,
redundant activities, and inefficient uses of federal resources. We
have identified key practices for enhancing and sustaining
collaboration among federal agencies, such as establishing the roles
and responsibilities of collaborating agencies; leveraging their
resources; and establishing a process for monitoring, evaluating, and
reporting to the public on the results of collaborative efforts.
In a September 2011 report on Chesapeake Bay restoration efforts, for
example, we found that federal and state agencies were not working
toward the same strategic goals.[Footnote 9] We also surveyed federal
officials who said that some form of collaboration was necessary to
achieve the goals of a strategy for protecting and restoring the
Chesapeake Bay watershed. This collaboration could be between federal
agencies, federal and state agencies, or federal agencies and other
entities. We recommended, among other things, that EPA work with
federal and state stakeholders to develop common goals and clarify
plans for assessing progress. EPA generally agreed with the
recommendations.
In an August 2011 report on pharmaceuticals in drinking water, we
found that an interagency work group of eight federal agencies
(including EPA) tasked with developing a better understanding of the
risks from pharmaceuticals in drinking water and identifying areas for
future federal collaboration had disbanded in 2009 without producing a
final report.[Footnote 10] We also reported that EPA coordinated
informally with the Food and Drug Administration and the United States
Geological Survey to collect data that could support regulatory
decisions, but it did not have a formal mechanism for sustaining this
collaboration in the future. We recommended that EPA establish a work
group or formal mechanism to coordinate research on pharmaceuticals in
drinking water. EPA agreed with the recommendation.
In a 2009 report on rural water infrastructure, we reported that, from
fiscal years 2000 through 2008, EPA and six federal agencies obligated
$1.4 billion for drinking water and wastewater projects to assist
communities in the U.S.-Mexico border region.[Footnote 11] We found
that the agencies' efforts to fund these projects were ineffective
because the agencies, except the Indian Health Service, had not
comprehensively assessed the region's needs and did not have
coordinated policies and processes for selecting and building
projects. As a result, we suggested that Congress consider
establishing an interagency task force to develop a plan for
coordinating funding to address the region's most pressing needs.
Related to our findings on interagency coordination issues, our past
and present work seeks to assist Congress and federal agencies in
identifying actions needed to reduce duplication, overlap, and
fragmentation; achieve cost savings; and enhance revenues. In March
2011, we issued our first annual report to Congress in response to a
new statutory requirement that GAO identify federal programs,
agencies, offices, and initiatives”either within departments or
government-wide-”which have duplicative goals or activities.[Footnote
12] The report identified 34 areas where agencies, offices, or
initiatives had similar or overlapping objectives or provided similar
services to the same populations or where government missions were
fragmented across multiple agencies or programs. The report also
identified 47 additional areas”beyond those directly related to
duplication, overlap, or fragmentation”-offering other opportunities
for agencies or Congress to consider taking action that could either
reduce the cost of government operations or enhance revenue to the
Treasury. With respect to EPA, the report included our findings on
rural water infrastructure, as well as the agency's role in
duplicative efforts to support domestic ethanol production.
Related to the statutory requirement that GAO identify and report on
federal programs, agencies, offices, and initiatives with duplicative
goals or activities, we are monitoring developments in the areas
already identified and will address any additional significant
instances of duplication as well as opportunities for cost savings in
future annual reports. We are developing a methodology to ensure that
we conduct a systematic review across the federal government and
report on the most significant instances of duplication, overlap, or
fragmentation through the issuance of annual reports in 2012 and 2013,
as well as the report we issued in March 2011. Our 2012 and 2013
reports will include the results of present and planned work related
to EPA.
Observations on EPAs' Budget Justifications:
In addition to our published work, we periodically assist
appropriations and authorizing committees by reviewing agency budget
justification documents. To this end, we review agencies' budget
requests, conduct selected analyses, and evaluate the support for and
adequacy of agencies' justifications for these requests. We often
review the justification for programs of congressional interest, new
programs and initiatives, and existing programs and practices. We
typically provide the results of our analysis in data sheets or
briefings to appropriating and authorizing committees.
Over the years, our periodic review of EPA's budget justification
documents has led to two recurring observations. First, EPA has not
consistently provided detailed justification for its activities when
requesting new or expanded funding. In some cases, we have noted that
such requests have not included (1) clear justification for the amount
of funding requested or a detailed description of the type and scope
of activities the funding would support, or (2) information on the
management controls, such as a schedule for spending the requested
funds, EPA would use to ensure the efficient and effective use of
requested funding.
Second, our reviews have often focused on the agency's efforts to make
use of unliquidated balances, or those funds that have been
appropriated and properly obligated but not expended. In particular,
this situation results from circumstances where no-year budget
authority was obligated to a contract, grant, or interagency agreement
that has expired with some level of funding remaining unexpended. Over
the years, we have encouraged EPA to recover these unliquidated
amounts through a process known as "deobligation." When EPA
deobligates funds from expired contracts, grants, or interagency
agreements, it can "recertify" and re-use these funds, subject to
certain restrictions, assuming the amounts have not expired and remain
available for new obligations. Use of recertified funds can offset
some need for new funding. Over the years, we have observed that EPA
has made progress in its efforts to recover unliquidated funds from
expired contracts, grants, and interagency agreements. For example, in
2010, EPA deobligated and recertified about $163 million, primarily in
its Superfund, State and Tribal Assistance Grants, and Leaking
Underground Storage Tanks accounts. While we have observed progress in
recovering these funds, we have also observed that EPA's budget
justification documents do not describe the amount of deobligated and
recertified funding available for new obligations. We have also
observed that such information could be useful to Congress because the
availability of recertified amounts could partially offset the need
for new funding.
Chairman Stearns, Ranking Member DeGette, and Members of the
Subcommittee, this concludes my prepared statement. I would be pleased
to answer any questions that you may have at this time.
Staff Contact and Acknowledgments:
For further information about this testimony, please contact David
Trimble at (202) 512-3841 or trimbled@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this statement. Contributors to this testimony
include Michael Hix (Assistant Director), Ross Campbell, Ellen W. Chu,
Tim Guinane, Kristin Hughes, Karen Keegan, Felicia Lopez, Jamie
Meuwissen, and Cheryl Peterson.
[End of section]
Footnotes:
[1] Clean Air Act, codified as amended at 42 U.S.C. §§ 7401-7671q
(2011); Clean Water Act, codified as amended at 33 U.S.C. §§ 1251 -
1387 (2011).
[2] In real terms, using 2011 dollars, EPA's budget equated to $9.9
billion in fiscal year 2000 and $10.4 billion in fiscal year 2010.
[3] GA0, Environmental Protection Agency: Major Management Challenges,
[hyperlink, http://www.gao.gov/products/GAO-11-422T] (Washington,
D.C.: Mar. 2, 2011).
[4] GA0, Workforce Planning: Interior, EPA, and the Forest Service
Should Strengthen Linkages to their Strategic Plans and Improve
Evaluation, [hyperlink, http://www.gao.gov/products/GA0-10-413]
(Washington, D.C.:Mar. 31, 2010).
[5] GAO, Hazardous Waste: Early Goals Have Been Met in EPA's
Corrective Action Program, but Resource and Technical Challenges Will
Constrain Future Progress, [hyperlink,
http://www.gao.gov/products/GAO-11-514] (Washington, D.C.: July 22,
2011).
[6] GAO, Environmental Protection Agency: To Better Fulfill Its
Mission, EPA Needs a More Coordinated Approach to Managing Its
Laboratories, [hyperlink, http://www.gao.gov/products/GA0-11-347]
(Washington, D.C.: July 25, 2011).
[7] GAO, Environmental Protection Agency: EPA Needs to Complete a
Strategy for Its Library Network to Meet Users' Needs, [hyperlink,
http://www.gao.gov/products/GA0-10-947] (Washington, D.C.: Sep. 30,
2010).
[8] GA0, High-Risk Series: An Update, [hyperlink,
http://www.gao.gov/products/GA0-11-278] (Washington, D.C.: Feb. 16,
2011).
[9] GAO, Chesapeake Bay: Restoration Effort Needs Common Federal and
State Goals and Assessment Approach, [hyperlink,
http://www.gao.gov/products/GA0-11-802] (Washington, D.C.: Sep. 15,
2011).
[10] GAO, Environmental Health: Action Needed to Sustain Agencies'
Collaboration on Pharmaceuticals in Drinking Water, [hyperlink,
http://www.gao.gov/products/GA0-11-346] (Washington, D.C.: Aug. 8,
2011).
[11] GAO, Rural Water Infrastructure: Improved Coordination and
Funding Processes Could Enhance Federal Efforts to Meet Needs in the
U. S.-Mexico Border Region, [hyperlink,
http://www.gao.gov/products/GA0-10-126] (Washington, D.C.: Dec. 18,
2009).
[12] GA0, Opportunities to Reduce Potential Duplication in Government
Programs, Save Tax Dollars, and Enhance Revenue, [hyperlink,
http://www.gao.gov/products/GAO-11-318SP], (Washington, D.C.: Mar. 1.
2011).
[End of section]
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