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.