By Lynn L. Bergeson and Carla N. Hutton
 
On December 29, 2022, the U.S. Environmental Protection Agency (EPA) Office of Inspector General (OIG) published a report entitled The EPA’s Fiscal Years 2020 and 2019 Toxic Substances Control Act Service Fee Fund Financial Statements. The Frank R. Lautenberg Chemical Safety for the 21st Century Act (Lautenberg Act) requires EPA to prepare and OIG to audit the Toxic Substances Control Act (TSCA) Service Fee Fund financial statements each year. According to OIG, its primary objectives were to determine whether:

• The financial statements were fairly stated in all material respects;
• EPA’s internal controls over financial reporting were in place; and
• EPA management complied with laws and regulations.

TSCA requires that the fees EPA charges be sufficient and not more than reasonably necessary to defray approximately 25 percent of the costs of administering specific sections of TSCA.
 
OIG rendered a “qualified opinion” on EPA’s fiscal years (FY) 2020 and 2019 TSCA Service Fee Fund financial statements, “meaning that, except for material errors in expenses and income from other appropriations, the fiscal years 2020 and 2019 financial statements were fairly presented.” OIG notes one material weakness, stating that “EPA materially understated the fiscal year 2019 ‘Expenses from Other Appropriations’ line item of the financial statements by nearly $25 million.” OIG did not identify any instances of noncompliance that would result in a material misstatement to the audited financial statements.
 
OIG notes that during its user fee analysis, it found that the TSCA fee structure in the fees rule during FYs 2020 and 2019 “appeared reasonable based on the data available when the EPA developed the fees rule.” The TSCA fees collected did not adequately offset the FYs 2020 and 2019 actual or projected costs of administering certain provisions of TSCA, however, “primarily because there were fewer fee-triggering activities than the EPA had projected for that period.”
 
OIG recommends that the chief financial officer correct the methodology for accounting for TSCA direct and indirect expenses from other appropriations to ensure that all costs for administering TSCA Sections 4 and 5, parts of Section 6, and Section 14 “are properly recorded and reported in the financial statements.” OIG states that EPA agreed with its recommendation and provided acceptable planned corrective actions. According to OIG, the recommendation is resolved with corrective actions pending.

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By Lynn L. Bergeson and Carla N. Hutton
 
Under the Reports Consolidation Act of 2000, each agency’s inspector general must prepare an annual statement summarizing what the inspector general considers to be “the most serious management and performance challenges facing the agency” and to assess briefly the agency’s progress in addressing those challenges. On November 29, 2022, the U.S. Environmental Protection Agency (EPA) Office of Inspector General (OIG) released its report regarding EPA’s fiscal year (FY) 2023 top management challenges. According to the report, the eight top management challenges for EPA in FY 2023 include:

• Providing for the Safe Use of Chemicals: The public must be able to depend on the EPA’s ability to conduct credible and timely assessments of the risks posed by pesticides, toxic chemicals, and other environmental chemicals.

OIG states in its full report that it conducted an evaluation in 2020 of EPA’s progress toward meeting deadlines established by the Toxic Substances Control Act (TSCA) as amended by the Frank R. Lautenberg Chemical Safety for the 21st Century Act (Lautenberg Act), focusing primarily on TSCA’s existing chemicals program. OIG recommended that the Office of Chemical Safety and Pollution Prevention (OCSPP) assistant administrator publish the annual existing chemicals plan, including the anticipated implementation efforts and required resources; conduct a workforce analysis to assess the Office of Pollution Prevention and Toxics’ (OPPT) capability to implement TSCA; and specify what skill gaps had to be filled in FY 2021 to meet the TSCA requirements. According to OIG, on February 7, 2022, OCSPP certified that it had completed all corrective actions for the recommendations in its report. More information on OIG’s 2020 report is available in our August 18, 2020, blog item.
 
OIG notes that an audit of TSCA’s New Chemicals Review Process is currently ongoing as part of its FY 2022 Oversight Plan. According to OIG, the objective of that review is to determine the extent to which EPA is using and complying with applicable records-management and quality-assurance requirements and employee performance standards to review and approve new chemicals under TSCA to manage human health and environmental risks.
 
According to OIG, per EPA, “an increased workload and the need for resources -- especially staff trained in specific science skills -- are major factors in not being on track to meet many of the EPA’s statutory deadlines.” Citing a trade press article, OIG states that “[s]pecifically, the OCSPP stated that it does not have the resources to address statutory requirements. The OCSPP also stated that it has not received the necessary funding to complete its mission.” For example, OCSPP reports that it has approximately 310 full-time equivalent staff but estimates that it needs about 500 full-time equivalents for its mission. EPA also cited a lack of resources for its failure to post publicly the risk reports for 1,240 new chemicals.
 
In FY 2022, EPA requested an additional $15 million and 87.6 full-time equivalents -- a 35 percent increase from the FY 2021 enacted full-time equivalent level -- to meet the increased responsibilities from the Lautenberg Act. The FY 2022 enacted budget provided for 25.6 full-time equivalents for TSCA programs, however. Furthermore, according to OIG, OCSPP conducted a recent assessment that recommended that the office hire more staff, mitigate the workload to manage the workforce’s daily stress, modernize information technology (IT) systems, and eliminate the use of multiple tracking systems.
 
OIG concludes that many of the Biden Administration’s top priorities rely on the work of the OCSPP. Both EPA OIG and EPA have noted that key OCSPP programs face a steep staffing shortage and a lack of planning that could negatively impact critical chemical work, however. Absent the resources OCSPP needs for its TSCA programs, EPA “will remain challenged with meeting its statutory deadlines.” OIG states that if OCSPP is unable to balance the workload with its resource needs, EPA “will continue to face the key challenge of ensuring the safety of chemicals.”

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By Lynn L. Bergeson and Carla N. Hutton
 
On July 7, 2022, the U.S. Environmental Protection Agency (EPA) Office of Inspector General (OIG) released a report entitled “The EPA Was Not Transparent About Changes Made to a Long-Chain PFAS Rule After Administrator Signature.” OIG evaluated the extent to which EPA followed applicable policies, procedures, and guidance for the changes made to the long-chain perfluoroalkyl carboxylate and perfluoroalkyl sulfonate chemical substances (LCPFAC) significant new use rule (SNUR) between the EPA Administrator’s signing of the final rule on June 22, 2020, and the publication of the final rule in the Federal Register on July 27, 2020. OIG states that it initiated the evaluation based on a Congressional request. OIG notes that the substances in question are types of per- and polyfluoroalkyl substances (PFAS), which are manufactured chemicals widely used in industry and consumer products. SNURs require that EPA be notified before regulated chemical substances are used in new ways that might cause environmental or human health concerns.
 
According to OIG, EPA did not follow all applicable policies, procedures, and guidance when making changes to the LCPFAC SNUR after the Administrator signed it and before it was published in the Federal Register. Specifically:

• Although EPA identified changes made to the SNUR in a post-signature change memorandum, which was signed by the Administrator, as required by EPA’s Changes to Rule Documents Prepared for the Administrator’s Signature procedures, EPA did not docket that memorandum, as stipulated in EPA’s Creating and Managing Dockets: Frequently Asked Questions for EPA Action Developers guidance.
   
• OIG states that because the request for changes was communicated via telephone, it could not identify the origin of the requested changes and could not determine whether EPA complied with the transparency provisions of Executive Order 12866, Regulatory Planning and Review.

OIG states that by not following all docketing procedures, EPA did not meet transparency expectations and risked compromising the public’s trust in the rulemaking process. OIG notes that EPA followed the Office of the Federal Register’s Document Drafting Handbook guidance for requesting changes to the final rule, however.
 
OIG recommends that the Assistant Administrator for Chemical Safety and Pollution Prevention update the LCPFAC SNUR docket by posting the post-signature change memorandum that outlines the changes made to the final rule after the Administrator signed it but before it was published in the Federal Register. OIG also makes two recommendations to the Associate Administrator for Policy, which include updating the applicable policies, procedures, and guidance regarding making changes to a regulatory action after it is submitted to the Office of Information and Regulatory Affairs for review and before it is published in the Federal Register. OIG states that EPA agreed with its first two recommendations and provided acceptable corrective actions. The first recommendation is completed, and the second is resolved with corrective actions pending. EPA disagreed with OIG’s third recommendation, and it remains unresolved. More information on the LCPFAC SNUR is available in our July 27, 2020, memorandum.

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By Lynn L. Bergeson and Carla N. Hutton
 
The U.S. Environmental Protection Agency (EPA) Office of Inspector General (OIG) released on June 30, 2022, a report entitled “Additional Internal Controls Would Improve the EPA’s System for Electronic Disclosure of Environmental Violations.” OIG conducted the evaluation to determine whether EPA’s process for screening self-reported violations through its electronic disclosure, or eDisclosure, system is effective and ensures that significant concerns, such as criminal conduct and potential imminent hazards, are addressed by the Office of Enforcement and Compliance Assurance (OECA). According to OIG’s report, the goal of the eDisclosure system is to provide an efficient mechanism for regulated entities to self-disclose violations of federal environmental laws and regulations. Self-disclosed violations are automatically processed under the EPA’s audit policies. EPA subsequently screens certain eDisclosure submissions to ensure that significant concerns, such as criminal conduct and potential imminent hazards, are properly addressed.
 
OIG states that the eDisclosure system does not have adequate internal controls in place to ensure that EPA’s screening process is effective and that significant concerns, such as criminal conduct and potential imminent hazards, are identified and addressed by OECA and the EPA regions. OIG notes that there is no formal, written national guidance or eDisclosure-specific training available on how EPA staff should conduct screening or delineate staff responsibilities. According to OIG, as a result, most regions inconsistently screen for significant concerns or do not screen at all because they believe OECA is responsible for that task, do not have access to the eDisclosure system, or have other resource limitations. Further, EPA does not have performance measures and does not systematically track eDisclosure system data. Finally, OIG states the eDisclosure system’s reporting tool “does not allow staff to effectively or robustly use or track eDisclosure submissions.” OIG concluded that without national screening guidance, training, effective monitoring, and Central Data Exchange improvements, there is a risk that significant concerns are not being addressed and that the impacts of the EPA’s eDisclosure system will remain limited and unknown.
 
OIG recommends that the OECA Assistant Administrator develop national guidance that includes a process for screening eDisclosure submissions for significant concerns; provide eDisclosure-specific training to EPA headquarters and regions to clarify expectations, establish staff responsibilities, and communicate best practices; develop performance measures for the eDisclosure system, as well as a monitoring plan to track its effectiveness; and assess eDisclosure system functionality to identify and implement improvements. According to OIG, OECA agreed with all four of its recommendations and proposed acceptable corrective actions and estimated completion dates. All recommendations are resolved with corrective actions pending. Where appropriate, OIG revised the report based on technical comments provided by OECA.

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By Lynn L. Bergeson and Carla N. Hutton
 
The U.S. Environmental Protection Agency (EPA) Office of Inspector General (OIG) announced the availability of its fiscal year (FY) 2022 oversight plan on December 14, 2021. According to OIG, the plan reflects the priority work that the OIG believes is necessary to keep EPA, the U.S. Chemical Safety and Hazard Investigation Board (CSB), and Congress fully informed about issues relating to the administration of EPA programs and operations. The planned oversight projects concerning Ensuring the Safe Use of Chemicals include:

• Audit of EPA’s Management of New Chemical Risk Assessments Conducted under the Toxic Substances Control Act (TSCA): Determine the extent to which EPA is using and complying with applicable records-management and quality-assurance requirements and employee performance standards to review and approve new chemicals under TSCA to manage human health and environmental risks;
   
• Evaluation of EPA Regions’ Oversight Responsibilities for State and Tribal Drinking Water Certification Programs: Determine whether select EPA regions are fulfilling oversight responsibilities for drinking water certification programs in states and tribal nations;
   
• Evaluation of EPA’s Use of Pesticide Incident-Reporting Data: Determine whether EPA uses pesticide incident-reporting data to prevent unreasonable adverse effects on human health and the environment;
   
• Evaluation of Implementation of EPA’s Federal Certification for Applicators and Dealers of Restricted-Use Pesticides within Indian Country: Determine how EPA monitors and enforces the requirements for restricted-use pesticide applicators (private and commercial) and restricted-use pesticide dealers in Indian Country;
   
• Evaluation of EPA’s Progress toward Providing States with Clear Benchmarks to Address Per- and Polyfluoroalkyl Substances (PFAS) in Drinking Water: Determine why EPA has not established a mandatory limit for PFAS in drinking water; what challenges may prevent EPA from setting such a limit; and what EPA’s plan -- if one exists -- is for implementing such a limit; and
   
• Evaluation of EPA’s Progress to Identify Key Regulatory Stakeholders for TSCA Existing Chemical Risk Management: Determine whether EPA identified and partnered with key regulatory stakeholders and developed a process to coordinate the regulation of occupational exposures from existing chemicals under TSCA.

Ongoing projects concerning Ensuring the Safe Use of Chemicals include:

• Evaluation of EPA’s Cancer Assessment Review for Pesticide 1,3-Dichloropropene: Evaluate the extent to which EPA followed policies and procedures in developing the cancer assessment for the 1,3-dichloropropene pesticide registration review decision to prevent unreasonable adverse effects on human health; and
   
• Evaluation of EPA’s Overdue Residual Risk and Technology Reviews: Evaluate whether EPA has conducted residual risk and technology reviews in a timely manner, as required for EPA to revise standards, as needed, to protect the public from air toxics emitted by stationary sources.

Planned and ongoing projects concerning Safeguarding Scientific Integrity Principles include:

• Congressional Request: Evaluation of EPA’s Changes to Final Perfluoroalkyl Carboxylate and Perfluoroalkyl Sulfonate Significant New Use Rule (SNUR): Determine the extent to which EPA followed applicable policies, procedures, and guidance for the changes made to the Long-Chain Perfluoroalkyl Carboxylate and Perfluoroalkyl Sulfonate Chemical Substances SNUR between the EPA Administrator’s signing of the final SNUR on June 22, 2020, and the publication of the final SNUR in the Federal Register on July 27, 2020; and
   
• Evaluation of EPA’s January 2021 Perfluorobutane Sulfonic Acid (PFBS) Toxicity Assessment: Determine whether EPA’s Office of Research and Development (ORD) and Office of Chemical Safety and Pollution Prevention (OCSPP) followed applicable policies and procedures in the development and publication of the January 19, 2021, PFBS toxicity assessment.

OIG states that it is important to note that its planning efforts “are not static and that the projects included herein may be modified throughout the year as challenges and risks for the EPA and the CSB evolve and emerge.”

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By Lynn L. Bergeson and Carla N. Hutton

On November 15, 2021, the U.S. Environmental Protection Agency (EPA) Office of Inspector General (OIG) announced the availability of its annual report summarizing what OIG considers the “most serious management and performance challenges facing the agency.” According to OIG, EPA’s top management challenges in fiscal year (FY) 2022 include:

• Mitigating the Causes and Adapting to the Impacts of Climate Change: EPA must take a leadership role in limiting climate change and mitigating its effect on human health and the environment;
   
• Integrating and Leading Environmental Justice across EPA and the Government: As part of its effort to integrate environmental justice across its programs, EPA must address the environmental hazards and cumulative risk facing at-risk communities and effectively communicate that risk to those communities;
   
• Ensuring the Safe Use of Chemicals: OIG states that to protect effectively public health and the environment, EPA must be able to depend on its ability to conduct credible and timely assessments of the risks posed by pesticides, toxic chemicals, and other environmental chemical risks. According to OIG, the 2016 expansion of EPA’s regulatory authority under the Toxic Substances Control Act (TSCA) has increased the need for conducting rapid and accurate risk assessments. OIG notes that EPA must also continue to conduct registration and reregistration of “hundreds of pesticides per year, as well as assure that it is setting appropriate exposure levels for contaminants in drinking water.” Without appropriate resource and implementation plans in place to demonstrate that EPA can accomplish this work, and without the ability to conduct scientifically sound risk assessments accurately, the public’s trust and confidence in EPA’s ability to accomplish its mission of protecting human health and the environment will be at risk;
   
• Safeguarding Scientific Integrity Principles: Science-based decisions at EPA must be based on principles of scientific integrity to ensure that human health and the environment are protected by using the best available science. EPA must develop new processes and update its regulations, policies, and guidance to protect scientific integrity. According to OIG, taking these actions will help make EPA decisions more legally defensible and maintain public trust in its decision making;
   
• Ensuring Information Technology and Systems Are Protected against Cyberthreats: Information technology is a fundamental and essential resource for EPA to carry out its mission;
   
• Managing Infrastructure Funding and Business Operations: EPA must effectively oversee the funding and operation of America’s water, wastewater, and other environmental infrastructure; and
   
• Enforcing Environmental Laws and Regulations: Through enforcement, EPA ensures that regulated entities are following environmental laws and will continue to do so, as enforcement actions effectively deter future noncompliance. According to OIG, considering EPA’s limited resources, and despite potential funding increases in FY 2022, “EPA is challenged to assess its resource requirements for the enforcement program and identify innovative and cost-effective means of detecting and deterring noncompliance in the future.”

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By Lynn L. Bergeson and Carla N. Hutton
 
According to an October 26, 2021, project notification memorandum, the U.S. Environmental Protection Agency (EPA) Office of Inspector General (OIG) plans to begin fieldwork on an audit of EPA’s process for conducting reviews of new chemicals under the Toxic Substances Control Act (TSCA). The memorandum states that the audit “is self-initiated based on OIG’s oversight plan for fiscal year [(FY)] 2022 and to address complaints submitted to the OIG Hotline.” The audit also addresses the following FY 2022 top management challenge for EPA: ensuring safe use of chemicals.
 
OIG states that its objective is to determine the extent to which EPA uses and complies with applicable records management requirements, quality assurance requirements, and employee performance standards to review and approve new chemicals under TSCA to manage human health and environmental risks. OIG plans to conduct work with the Office of Chemical Safety and Pollution Prevention (OCSPP) in EPA headquarters. According to OIG, the anticipated benefits of the audit are “improved operational efficiency and greater human health and environmental protections.”
 
To expedite the audit, OIG asks that OSCPP provide the following information:

• Any training materials, handbooks, or other materials related to the review of new chemicals;
• Resource allocations for the New Chemicals Review Program for FYs 2018 through 2021;
• Scopes of work for any contracts related to the new chemicals review process;
• Any OCSPP guidance under which products developed during the review of new chemicals would constitute records and how the records should be managed; and
• New Chemicals Review Program organization charts before and after the October 2020 reorganization.

As reported in our October 28, 2021, memorandum, “House Committee Holds Hearing on ‘TSCA and Public Health: Fulfilling the Promise of the Lautenberg Act,’” Dr. Michal Ilana Freedhoff, OCSPP Assistant Administrator, has let OIG know that OCSPP will cooperate fully with its investigation.

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By Lynn L. Bergeson and Carla N. Hutton
 
The U.S. Environmental Protection Agency’s (EPA) Office of Inspector General (OIG) published on September 30, 2020, its audit of EPA’s Toxic Substances Control Act (TSCA) Service Fee Fund financial statements for the period from Inception (June 22, 2016) through September 30, 2018.  The Frank R. Lautenberg Chemical Safety for the 21st Century Act (Lautenberg Act) requires EPA to prepare and OIG to audit the TSCA Service Fee Fund financial statements each year.  OIG states that its primary objectives were to determine whether the financial statements were fairly stated in all material respects; EPA’s internal controls over financial reporting were in place; and EPA management complied with laws and regulations.  OIG notes that the TSCA Service Fee Fund has been designed to defray up to 25 percent of the costs associated with implementing key TSCA provisions.  According to OIG, EPA overstated expenses from other appropriations by $8.4 million.  OIG states it found that EPA made errors in multiple iterations of its calculation for expenses from other appropriations.  No significant matters involving compliance with applicable laws and regulations, contracts, and grant agreements came to OIG’s attention during the course of the audit.
 
OIG recommends that the chief financial officer:  (1) improve the management review process for calculating expenses from other appropriations to be consistent with EPA component financial statement audits and to ensure that costs support the TSCA Service Fee Fund activities; and (2) establish written policies and procedures so that expenses from other appropriations in component audits reflect actual costs.  According to OIG, EPA concurred with its recommendations and provided “acceptable corrective actions and estimated completion dates.”  OIG states that it considers the recommendations resolved with corrective actions pending.

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By Lynn L. Bergeson and Carla N. Hutton
 
On August 17, 2020, the U.S. Environmental Protection Agency’s (EPA) Office of Inspector General (OIG) published a report entitled Lack of Planning Risks EPA’s Ability to Meet Toxic Substances Control Act Deadlines.  OIG conducted the audit to determine whether EPA met the deadlines already imposed by the Frank R. Lautenberg Chemical Safety for the 21st Century Act (Lautenberg Act) in 2016, which amended the Toxic Substances Control Act (TSCA), and has the staff, resources, and management controls in place to meet future statutory deadlines.  The Lautenberg Act required EPA to develop new rules for chemical prioritization for risk evaluation and risk evaluation for existing chemicals and to review all new chemical submissions and make a regulatory determination.  OIG found that while EPA met several of its TSCA deadlines, it did not complete all ten required existing chemical risk evaluations by the June 19, 2020, deadline.  OIG notes that because of statutory requirements, the number of required existing chemical risk evaluations doubled at the end of 2019, “risking the EPA’s ability to meet TSCA deadlines.”
 
OIG states that EPA’s ability to assess its TSCA workload -- and subsequently estimate the workforce levels necessary to achieve that workload -- “is critically important.”  OIG notes that the Office of Pollution Prevention and Toxics (OPPT) has not publicly identified the additional staff and resources it needs to accomplish all mandated TSCA requirements.  According to OIG, “OPPT’s resource planning is hindered by not complying with the U.S. Office of Personnel Management regulations, which requires developing a workforce plan to manage current and future workforce needs.”
 
OIG states that EPA’s program offices have not conducted a systematic workload analysis or identified workforce needs for budget justification purposes since 1987 and that this is also true for OPPT, which is responsible for implementing the TSCA amendments.  According to OIG, though OPPT expects to hire more staff members to implement the TSCA amendments in fiscal year (FY) 2020, OPPT “lacks a workforce-and-workload analysis to successfully implement and meet the 2016 TSCA deadlines.”  Additionally, OIG states, EPA’s annual plans for risk evaluations “were neither done in a timely manner nor met the statutory requirements to identify the resources needed to initiate or complete the risk evaluations for the year.”
 
OIG recommends that the assistant administrator for Chemical Safety and Pollution Prevention:  (1) publish the annual existing chemical plan including the anticipated implementation efforts and required resources; (2) conduct a workforce analysis to assess OPPT’s capability to implement the TSCA amendments; and (3) specify what skill gaps must be filled in FY 2021 to meet the TSCA requirements.  According to OIG, EPA “provided acceptable corrective actions and estimated milestone dates for all recommendations.” OIG “consider[s] these recommendations resolved with corrective actions pending.”
 

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By Lynn L. Bergeson and Carla N. Hutton
 
As reported in our May 29, 2020, blog item, on May 28, 2020, the U.S. Environmental Protection Agency (EPA) Office of Inspector General (OIG) issued a report entitled EPA Toxic Substances Control Act Consent Orders Need Better Coordination.  OIG conducted the evaluation to determine what actions EPA took to verify compliance with the requirements of a 2009 Toxic Substances Control Act (TSCA) Premanufacture Notice Consent Order.  OIG’s recommendations included that EPA implement a process for the Office of Enforcement and Compliance Assurance (OECA) to review and approve the terms and conditions of TSCA Section 5(e) Consent Orders that it is responsible for verifying during compliance monitoring and enforcement activities.  On August 5, 2020, OIG announced that EPA has provided an update to its response to the OIG report.  EPA states that the Office of Civil Enforcement/Waste and Chemical Enforcement Division (OECA/WCED) and the Office of Pollution Prevention and Toxics/Chemical Control Division (OCSPP/CCD) have developed a TSCA Section 5(e) Order Boilerplate that “clarifies and strengthens the provisions of the Order for New Chemical Substances.”  According to EPA, in 2020, OCSPP/CCD and OECA/WCED established and implemented a Standard Operating Procedure (SOP) to ensure that WCED, the office responsible for compliance monitoring and enforcement activities, reviews and approves the terms and conditions of TSCA Section 5(e) Orders developed by CCD.  EPA notes that the establishment of the SOP is intended to meet OIG’s recommendation.  EPA states that the Review and Approval Protocol “provides sufficient assurance that compliance and enforcement requirements in TSCA 5(e) orders will be reviewed and approved by OCSPP and OECA.”  OIG commented on EPA’s updated response, stating that it now considers this recommendation complete.

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