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United States Government Accountability Office: 
GAO: 

Report to the Ranking Member, Committee on Environment and Public 
Works, U.S. Senate: 

January 2012: 

Superfund: 

Status of EPA's Efforts to Improve Its Management and Oversight of 
Special Accounts: 

GAO-12-109: 

GAO Highlights: 

Highlights of GAO-12-109, a report to the Ranking Member, Committee on 
Environment and Public Works, U.S. Senate. 

Why GAO Did This Study: 

Under the Superfund program, EPA has the authority to enter into 
agreements with potentially responsible parties for them to conduct a 
cleanup at hazardous waste sites or compel potentially responsible 
parties to do so. EPA can also conduct cleanups itself and then seek 
reimbursement. EPA is authorized to retain and use funds received from 
settlements with these parties in interest-earning, site-specific 
special accounts within the Trust Fund. These accounts provide 
resources in addition to annual appropriations to clean up sites. The 
number of accounts grew slowly until 1995 when EPA encouraged their 
greater use. After 1995, their number and dollar value increased. EPA 
headquarters is responsible for overseeing its regions’ management of 
special accounts. In two reports issued in 2006 and 2009, the EPA IG 
made recommendations to EPA to better manage these accounts. 

As requested, this report examines the (1) status—that is, balances, 
locations, and recent and planned uses—of Superfund special accounts, 
and (2) extent to which EPA’s headquarters and regions have 
implemented processes and policies to improve the monitoring and 
management of these accounts. GAO analyzed EPA Superfund program data, 
guidance, and strategies, and interviewed EPA officials. 

GAO is not making recommendations in this report. GAO provided a draft 
of this report to EPA for review and comment. EPA provided technical 
comments that were incorporated into the report, as appropriate. 

What GAO Found: 

From fiscal year 1990 through October 2010, the Environmental 
Protection Agency’s (EPA) 10 regions collected from potentially 
responsible parties almost $4 billion in funds that were placed in 
special accounts. Nearly half of these funds are still available to be 
obligated for future Superfund cleanup; the remaining funds have 
already been obligated, but not all of these obligated funds have been 
disbursed. According to GAO’s analysis of EPA data, EPA has plans to 
obligate almost all of the available funds in special accounts over 
the next 10 years. However, EPA regional officials told GAO that 
special account funds that are planned to be obligated are estimates 
rather than commitments, and the planned use of funds often changes as 
site circumstances warrant. As of October 2010, of the $1.9 billion 
funds that EPA had obligated for Superfund cleanup expenses, $1.6 
billion had been disbursed. 

According to GAO’s review of EPA documents and interviews with agency 
officials, EPA has taken steps, including implementing strategies and 
guidance, in the last few years to better monitor and manage special 
accounts. EPA took these steps in response to the EPA Inspector 
General’s (IG) findings and recommendations, as well as EPA officials’ 
own recognition that the agency needed to provide better oversight of 
the special accounts process. These steps include the following: 

* processes to better plan for the use of special account funds by 
adding a screen in the agency’s Superfund database that enables EPA 
regions to enter special account planning data into specific data 
fields and create reports, so that officials can monitor the special 
account balances against planned obligations for ongoing and future 
site-specific response activities; 

* increased oversight of special accounts, including designating a 
national special accounts coordinator who, among other things, 
conducts annual and midyear reviews and holds discussions with 
regional staff to evaluate their plans to allocate special account 
funds, and establishing a Special Accounts Senior Management Committee 
that meets semiannually to provide overall management oversight and 
monitor the status of special accounts; and; 

* strategies and guidance on how to plan for using special accounts, 
including an agencywide strategic plan, overall guidance for the 
regions on the proper use and planning of special accounts funds 
throughout the cleanup process, detailed guidance on the 
reclassification process, and a model memorandum for transferring 
funds from a special account to the Hazardous Substance Superfund 
Trust Fund (Trust Fund) and closing out a special account. 

View [hyperlink, http://www.gao.gov/products/GAO-12-109]. For more 
information, contact Carolyn L. Yocom at (202) 512-7114 or 
yocomc@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

About Half of the $3.7 Billion that EPA Has Collected in Special 
Accounts Is Available for Future Superfund Cleanup: 

EPA Has Implemented Processes and Policies in Recent Years to Better 
Monitor and Manage Superfund Special Accounts: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Open Superfund Special Accounts and Sites, Including NPL 
Sites, by EPA Region, as of October 2010: 

Table 2: Open Superfund Special Accounts Grouped in Categories by 
Unobligated Balance, as of October 2010: 

Table 3: Special Accounts Obligations Planned for Fiscal Years 2011-
2070, by Type of Cleanup Activity, Enforcement, and Federal Facilities: 

Table 4: Special Account Funds Planned for Reclassification, Fiscal 
Years 2011-2013, as of October 2010: 

Table 5: Special Account Funds Planned for Transfer to the Trust Fund, 
Fiscal Years 2011-2013, as of October 2010: 

Table 6: Number of Sites with Special Accounts in Each Phase or 
Milestone of the Superfund Cleanup Process, as of October 2010: 

Figures: 

Figure 1: EPA's 10 Regions: 

Figure 2: Phases of the Typical Superfund Site Cleanup Process: 

Figure 3: EPA's National Planned Uses for $1.8 billion in Special 
Account Funds, Beginning Fiscal Year 2011: 

Abbreviations: 

CERCLA: Comprehensive Environmental Response, Compensation, and 
Liability Act: 

CERCLIS: Comprehensive Environmental Response, Compensation, and 
Liability Information System: 

EPA: Environmental Protection Agency: 

IG: Inspector General: 

NPL: National Priorities List: 

PRP: potentially responsible party: 

TCE: Trichloroethylene: 

Trust Fund: Hazardous Substance Superfund Trust Fund: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

January 18, 2012: 

The Honorable James M. Inhofe: 
Ranking Member: 
Committee on Environment and Public Works: 
United States Senate: 

Dear Senator Inhofe: 

The Comprehensive Environmental Response, Compensation, and Liability 
Act (CERCLA) of 1980, commonly referred to as "Superfund," was enacted 
to protect human health and the environment from the effects of 
hazardous substances. Under CERCLA, the Environmental Protection 
Agency (EPA) has the authority to enter into agreements with 
potentially responsible parties (PRP) for them to conduct the cleanup 
at hazardous waste sites,[Footnote 1] or compel PRPs to clean up 
sites. In addition, EPA can clean up the sites itself and then seek 
reimbursement from the PRPs. EPA's primary source of funds for EPA-led 
cleanups of Superfund sites is its annual appropriations by Congress 
from the Hazardous Substance Superfund Trust Fund (Trust Fund), which 
receives a transfer from the general fund of the Treasury. 

EPA is also authorized by CERCLA to retain and use funds received from 
settlements with a PRP, and EPA may hold these funds in interest-
earning, site-specific accounts called "special accounts."[Footnote 2] 
These special accounts are interest-bearing subaccounts within the 
Trust Fund that are generally used for future cleanup actions at the 
sites associated with a specific settlement or to reimburse 
appropriated funds that EPA had previously used for response 
activities at these sites. These accounts help EPA respond to and 
clean up sites by providing resources in addition to EPA's annual 
appropriations. In 1990, EPA had five special accounts totaling about 
$1.9 million. Over the next few years, the number of special accounts 
increased slowly. However, beginning in 1995, EPA issued memorandums 
and guidance encouraging greater use of special accounts. Since that 
time the number and dollar value of these accounts has steadily 
increased. EPA's regional offices are primarily responsible for 
establishing and managing special accounts for the Superfund sites 
located in their region, and EPA headquarters offices are responsible 
for overseeing the regional offices' management of these accounts. 

In two reports, issued in 2006 and 2009, the EPA Inspector General 
(IG) made recommendations to improve the management of Superfund 
special accounts.[Footnote 3] In 2009, for example, the IG stated that 
EPA needed to assign a central management official to be responsible 
for developing an action plan to ensure that the management 
accountability and related issues regarding special accounts that the 
IG had identified were addressed. The IG recommended that this action 
plan include, among other things, (1) an annual planning process to 
aid in monitoring special accounts, (2) more guidance or a policy that 
addresses how special accounts should be implemented and used, and (3) 
plans for developing complete reports with accurate special accounts 
data from EPA's Comprehensive Environmental Response, Compensation, 
and Liability Information System (CERCLIS) database to manage the 
program and improve its performance.[Footnote 4] 

In this context, you asked us to examine EPA's Superfund special 
accounts. Specifically, our objectives were to (1) describe the 
status--including balances, locations, and recent and planned uses--of 
Superfund special accounts and (2) examine the extent to which EPA's 
headquarters and regions have implemented processes and policies to 
improve the monitoring and management of Superfund special accounts. 

To conduct this work, we reviewed relevant law and EPA guidance and 
interviewed senior officials at EPA's headquarters and regional 
offices. Specifically, to describe the status of special accounts, we 
obtained and analyzed data regarding all special accounts from EPA's 
CERCLIS database, as of October 2010.[Footnote 5] To assess the 
reliability of the CERCLIS data, we reviewed relevant documentation, 
examined the data to identify obvious errors and inconsistencies, and 
interviewed knowledgeable agency officials to see if there were any 
known problems with the data and to learn more about their procedures 
for maintaining the data. We determined that the data were 
sufficiently reliable for the purposes of this report. To examine the 
extent to which EPA's headquarters and regions are implementing 
processes and policies to improve the monitoring and management of 
Superfund special accounts, we analyzed documents and interviewed 
officials from EPA headquarters offices, including the Office of 
Superfund Remediation and Technology Innovation, the Office of Site 
Remediation Enforcement, and the Office of the Chief Financial 
Officer. We also interviewed EPA's IG officials regarding their 2006 
and 2009 reports on EPA's management of special accounts. According to 
these officials, all recommendations from these two reports were 
closed out based on EPA's response. In addition, we conducted 
interviews with officials in EPA's 10 regional offices to determine 
how each region managed and monitored its special accounts and 
coordinated with EPA headquarters. We also obtained from the regional 
offices relevant supporting documentation, including detailed 
information on 20 of 285 special accounts. We selected 20 accounts on 
the basis that EPA headquarters had either raised questions about them 
with the regions or recommended that the regions take further actions 
on issues relating to them that arose during EPA's fiscal year 2010 
annual review of the regions' planning data for special accounts. We 
reviewed data on these 20 accounts to determine how and to what extent 
regional offices had addressed these issues. These 20 special accounts 
were chosen from a random nonprobability sample of the 285 accounts 
and therefore cannot be generalized to all special accounts. A more 
detailed discussion of our scope and methodology is presented in 
appendix I. 

We conducted this performance audit from October 2010 to January 2012 
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. 

Background: 

CERCLA, often referred to as the "Superfund" law, gave the federal 
government the authority to respond to actual and threatened releases 
of hazardous substances, pollutants, and contaminants that may 
endanger public health and the environment. EPA established the 
Superfund program to carry out these responsibilities. Data as of 
September 2011--the most current data available--show that there were 
13,856 sites in EPA's CERCLIS active site inventory, which may require 
attention under EPA's Superfund program. Management of these sites, 
including the special accounts associated with them, has historically 
been the responsibility of the EPA region in which a site is located. 
EPA has 10 regional offices, each one responsible for the execution of 
EPA programs within several states and, in some regions, territories. 
Figure 1 shows the states included in each of the 10 regions. 

Figure 1: EPA's 10 Regions: 

[Refer to PDF for image: illustrated U.S. map] 

Map depicts the geographic boundaries of EPA's 10 Regions: 

Region 1: 
Connecticut: 
Maine: 
Massachusetts: 
New Hampshire: 
Rhode Island: 
Vermont: 

Region 2: 
New Jersey: 
New York: 
Puerto Rico: 
Virgin Islands: 

Region 3: 
Delaware: 
District of Columbia: 
Maryland: 
Pennsylvania: 
Virginia: 
West Virginia: 

Region 4: 
Alabama: 
Florida: 
Georgia: 
Kentucky: 
Mississippi: 
North Carolina: 
South Carolina: 
Tennessee: 

Region 5: 
Illinois: 
Indiana: 
Michigan: 
Minnesota: 
Ohio: 
Wisconsin: 

Region 6: 
Arkansas: 
Louisiana: 
New Mexico: 
Oklahoma: 
Texas: 

Region 7: 
Iowa: 
Kansas: 
Missouri: 
Nebraska: 

Region 8: 
Colorado: 
Montana: 
North Dakota: 
South Dakota: 
Utah: 
Wyoming: 

Region 9: 
Arizona: 
California: 
Hawaii: 
Nevada: 

Region 10: 
Alaska: 
Idaho: 
Oregon: 
Washington: 

Source: GAO. 

[End of figure] 

This section discusses (1) EPA's process for cleaning up Superfund 
sites, (2) EPA's enforcement process for site cleanup, (3) the Trust 
Fund established under CERCLA, (4) EPA's use of special accounts for 
Superfund cleanup, and (5) the EPA IG's recommendations for better 
management of these special accounts. 

EPA's Process for Cleaning Up Superfund Sites: 

EPA's Superfund cleanup process can be lengthy, sometimes taking 
decades to clean up contamination to the standards selected for a 
site. The cleanup process involves a series of steps during which 
specific activities take place or decisions are made. The first step 
occurs when the Superfund program is notified of a potential site 
through various mechanisms, including receipt of citizens' petitions, 
and referrals or notifications from states, tribes, and other federal 
agencies. Following notification, a site undergoes a minimal screening 
process, called a pre-CERCLIS screening, to determine whether a site 
assessment process is appropriate. Sites deemed appropriate are added 
to the CERCLIS active site inventory. During the site assessment 
process, EPA and states collect data to identify, evaluate, and rank 
hazardous waste sites based on Hazard Ranking System criteria. 
[Footnote 6] Using these criteria, EPA and/or its state and tribal 
partners conduct a preliminary assessment and, if warranted, a site 
inspection or other more in-depth assessment to determine whether the 
site warrants short-or long-term cleanup attention. Sites that EPA 
determines are among the nation's most seriously contaminated 
hazardous waste sites are placed on the National Priorities List (NPL) 
for attention under the federal Superfund program. Cleanup work under 
CERCLA generally involves two categories of actions: short-term 
removal actions that address immediate threats to human health and the 
environment, and long-term remedial actions that aim to permanently or 
significantly reduce contamination. Only sites on the NPL are eligible 
for Trust Fund-financed remedial actions, but sites not listed on the 
NPL may be remediated with private funds, in some instances with EPA 
oversight. EPA conducts removal actions at both NPL and non-NPL sites. 

EPA or a PRP will begin the remedial process by conducting a two-part 
study of the site: (1) a remedial investigation to characterize site 
conditions and assess the risks to human health and the environment, 
among other actions and (2) a feasibility study to evaluate various 
options to address the problems identified through the remedial 
investigation. The culmination of these studies is a record of 
decision, which identifies the selected remedy for addressing the 
site's contamination and a cost estimate for implementing the remedy. 
EPA or the PRP may develop preliminary estimates of construction costs 
and, as the site moves from the study phase into the remedial action 
phase, a more accurate cost estimate may be developed. The method of 
implementation for the selected remedy is then developed during 
remedial design and implemented during the remedial action phase, when 
actual cleanup of the site occurs. 

When all construction of the cleanup remedy at a site is finished, all 
immediate threats have been addressed, and all long-term threats are 
under control, EPA generally considers the site to be "construction 
complete." Sites where additional work is required after construction 
is completed then enter into the postconstruction phase, which 
includes actions such as operation and maintenance and conducting 5-
year reviews.[Footnote 7] When EPA in consultation with the state 
determines that no further site response is appropriate, then EPA may 
delete the site from the NPL. Figure 2 illustrates the typical 
Superfund process for cleaning up a site. 

Figure 2: Phases of the Typical Superfund Site Cleanup Process: 

[Refer to PDF for image: illustration] 

Phase: Preliminary assessment. 

Phase: Site Inspection; 
Milestone: NPL Listing. 

Phase: Remedial investigation. 

Phase: Feasibility study; 
Milestone: Record of Decision. 

Phase: Remedial design. 

Phase: Remedial action; 
Milestone: Construction complete. 

Phase: Postconstruction completion; 
Milestone: Deletion from NPL. 

Source: GAO analysis of EPA data. 

[End of figure] 

Thus, EPA may incur a variety of costs in implementing the Superfund 
program at particular sites. EPA may spend funds to investigate and 
clean up sites, including short-term removals at any site, and long- 
term remedial actions at NPL sites. EPA may also incur costs for 
oversight associated with a site cleanup where a private party is 
conducting and funding the cleanup. 

EPA's Enforcement Process for Superfund Site Cleanup: 

EPA may enter into agreements with PRPs for those parties to conduct 
cleanups, compel site cleanups by PRPs, or conduct cleanups itself and 
seek reimbursement for its costs from those parties. EPA's enforcement 
of environmental cleanup at Superfund sites begins with the 
identification of the PRPs, usually early in the cleanup process; 
continues throughout site cleanup; and often does not conclude until 
after the site is declared construction complete. EPA identifies PRPs 
by, among other actions, reviewing documentation related to the site; 
conducting interviews with government officials or other knowledgeable 
parties; performing historical research on the site; sampling soil or 
groundwater at the site; and requesting additional information from 
relevant parties. In addition to identifying PRPs, EPA attempts to 
obtain information on the type and amount of hazardous substances 
shipped to a site by each party and any financial constraints faced by 
the identified parties. 

EPA may begin a cleanup process before it has identified PRPs. 
However, once it identifies PRPs, it typically seeks to reach a 
settlement with them on their cleanup responsibilities and/or their 
payment for cleanup costs that EPA incurs. These negotiations 
generally may take place at any time throughout the site cleanup 
process. We have previously found that in reaching these settlements, 
EPA's and the PRPs' decisions are influenced by site-specific 
characteristics and other key considerations, such as the expected 
cost of site cleanup, the strength of EPA's evidence of PRP liability, 
and the number and type of other PRPs.[Footnote 8] 

The Trust Fund Established Under CERCLA: 

CERCLA established the Trust Fund to support Superfund program 
activities. EPA generally can use appropriated monies from the Trust 
Fund for short-term cleanups and for long-term cleanups of NPL sites. 
For example, EPA may elect to use such funds at sites for which the 
parties responsible for site contamination cannot be found or are 
unwilling or unable to clean up a site, to initiate work pending 
settlement, or in an emergency.[Footnote 9] Historically, the Trust 
Fund received revenue from four major sources: taxes on crude oil and 
certain chemicals, as well as an environmental tax assessed on 
corporations based on their taxable income;[Footnote 10] transfers via 
appropriations from the general fund of the Treasury; fines, 
penalties, and recoveries from PRPs; and interest earned on the 
balance of the Trust Fund. In 1995, the authority for the taxes 
expired and, as of November 2011, had not been reinstated. As of 2011, 
the Trust Fund's primary source of revenue is the transfer from the 
general fund of the Treasury. At the end of fiscal year 2010, the 
Trust Fund had total assets and liabilities of $3.74 billion, with 
nearly 55 percent of that total in special accounts. 

EPA's Use of Special Accounts for Superfund Cleanup: 

Section 122(b)(3) of CERCLA allows EPA to retain and use funds 
received pursuant to an agreement with a PRP for purposes of carrying 
out an agreement. EPA retains those funds in subaccounts of the Trust 
Fund called "special accounts." As part of the settlement, those funds 
placed in a special account may be used for that specific site or may 
be transferred by EPA to the general portion of the Trust Fund. EPA's 
goal in establishing special accounts is to preserve the use of annual 
congressionally appropriated funds for cleanup at sites without a 
viable PRP. EPA regions are encouraged to create and use special 
accounts as an incentive to secure PRP cleanups and to fund EPA's 
cleanup when it has lead responsibility. EPA officials said that they 
believe that PRPs are more willing to settle when assured that their 
settlement money will generally be used at the site where they hold 
liability, rather than at another site. 

According to EPA guidance, regions should strive to use model 
(standardized) settlement language to establish special accounts. The 
model language is intended to allow EPA flexibility in deciding for 
what specific response actions special account funds can be used and 
therefore when to use these funds. It allows EPA to use the funds for 
a response action at the site associated with the account, and EPA 
guidance states that special account funds are site-specific and are 
generally not available for EPA to use at other sites. The model 
language also retains EPA's authority to transfer funds from a special 
account to the general portion of the Trust Fund for future 
appropriation by Congress. EPA guidance notes that the language of the 
actual agreement governs EPA use of a particular special account's 
funds. 

Generally, funds may be deposited in a special account regardless of 
whether the settling party is performing the work. According to EPA, 
the agency typically receives funds as a result of agreements entered 
when the PRPs are unable or unwilling to perform the response action, 
as is the case in a bankruptcy or an "ability to pay" settlement for 
parties facing financial difficulties. EPA may also determine that the 
hazardous substance contributed by a particular PRP was minimal in 
amount and toxicity compared with other substances at a site and 
therefore allow that party a de minimis settlement.[Footnote 11] In 
addition, PRPs who are conducting some response actions may make 
payments to EPA to address past or future response actions. EPA's 
costs of overseeing the PRPs' implementation of the work are usually 
included in future response costs. These payments may be made for the 
estimated amount of oversight or on a periodic basis. However, under 
its guidance, EPA is only to establish a special account for a site 
where future cleanup work remains at a site. According to EPA 
officials, they prefer to establish one centralized special account 
per site because this generally allows them to more easily manage 
funds for a site, but certain situations may require more than one 
account for a site. For example, multiple special accounts for one 
site may be established for amounts that EPA will provide or disburse 
to PRPs who agree to perform the response work (serving as a 
settlement incentive for the PRPs to perform the work), or for each 
separate operable unit or different response action at a site. 
[Footnote 12] 

Once settlement proceeds are deposited in a special account, EPA 
regional staff enter plans for the use of those funds into CERCLIS. 
According to EPA guidance, regional staff, such as the sites' regional 
remedial project managers, are to evaluate the planned uses of special 
account funds on an ongoing basis, as warranted by site activity, to 
ensure that these resources are used efficiently and effectively and 
make corresponding changes to their planned use as appropriate. The 
regional staff are to consider both the short-and long-term plans for 
the site; thus they often plan several fiscal years in advance. 
According to the guidance, estimates of EPA's future response costs at 
a site should be based on the best information available at a given 
point in time and the best professional judgment of regional staff. 
Various EPA groups, including regional counsel, regional program 
management, regional finance, and headquarters staff are all involved 
in this planning process. 

In general, according to EPA guidance, special account funds should be 
used prior to annual congressional appropriations. This guidance 
establishes priorities for the use of special account funds, referred 
to as the General Hierarchy of Special Account Use. According to this 
hierarchy, funds in special accounts should be: 

* used to facilitate settlement with PRPs for response actions; 

* used to fund EPA's costs for response actions; 

* reclassified to reimburse previous EPA site expenditures made from 
annual congressional appropriations; reclassification is available 
when an EPA region reasonably estimates that the special account 
contains more funds than are needed to address all known and potential 
future work at the site.[Footnote 13] Funds made available from 
reclassification may be used by EPA at another Superfund site for the 
same category of expenditure as the costs being reimbursed; and: 

* transferred to the general portion of the Trust Fund, when 
reclassification has already been considered and is not appropriate, 
and the special account balance exceeds the estimated known and 
potential future cleanup costs at that site.[Footnote 14] In contrast 
to reclassified funds, transferred funds require a future 
congressional appropriation to make the funds available for use by EPA. 

Typically, EPA closes special accounts when (1) all site work has been 
completed; (2) no funds are left in the account, and no future 
deposits are anticipated; or (3) EPA does not anticipate incurring any 
additional costs at those sites. To close an account, the remaining 
funds in the special account, if any, are then transferred to the 
general portion of the Trust Fund to increase the balance available 
for future appropriation for cleanups. 

EPA IG's Recommendations for Better Management of Special Accounts: 

In March 2009, EPA's IG reported on EPA's management of special 
accounts, finding that, if EPA had had better management controls in 
place at that time, more funds would have been available for Superfund 
cleanup. According to the 2009 IG report, EPA had a decentralized 
management control structure for overseeing the use of special 
accounts. Management oversight was fragmented--no single office at 
headquarters or the regions was responsible for managing, overseeing, 
and coordinating special accounts work. In addition, the IG found that 
EPA headquarters did not have a structured approach for following up 
on regional plans to use special account funds to ensure that they 
were being managed correctly and that EPA lacked detailed guidance and 
policy on the proper use, management, and monitoring of special 
accounts funds. As a result, among other things, the IG recommended 
that EPA designate a central management official for special accounts 
with responsibility for developing an action plan to ensure that 
management accountability and related issues regarding special 
accounts were addressed. The IG stated that this action plan should 
include, among other things, (1) a process for ensuring completed 
CERCLIS reports with accurate special accounts data to manage the 
program and improve performance; (2) an annual planning process--
including a determination that regional special account funds will be 
used consistent with the General Hierarchy--to aid in monitoring 
special accounts; (3) development of headquarters and regional 
controls that include follow-up to make sure planned or requested uses 
(e.g., reclassifications and transfers to the Trust Fund of special 
account funds) were conducted; and (4) establishment of guidance and 
policy that addresses the proper application and amount of special 
account funds that should be reserved for future use. In addition, the 
IG recommended that EPA regularly analyze the "oldest accounts" for 
opportunities to better use special account funds. 

About Half of the $3.7 Billion that EPA Has Collected in Special 
Accounts Is Available for Future Superfund Cleanup: 

From fiscal year 1990 through October 2010, EPA collected from PRPs 
over $3.7 billion that it placed in 1,023 special accounts.[Footnote 
15] Nearly half of these funds--$1.8 billion--are still available to 
be obligated for future Superfund cleanup; and the remaining funds--
$1.9 billion--have already been obligated, but not all of these 
obligated funds have been disbursed.[Footnote 16] In addition, for 
fiscal years 1990 through 2010, all EPA regions reclassified about 
$131 million from 96 special accounts to pay for previous EPA site 
expenditures, transferred about $14 million from 39 accounts to the 
general portion of the Trust Fund, and closed 76 accounts. 

Status of Unobligated Funds in EPA Special Accounts: 

As of October 2010, of the $3.7 billion that it placed in 1,023 
special accounts, EPA held nearly $1.8 billion in unobligated funds in 
947 open accounts--accounts that have funds available for use in 
future cleanup responses at specific sites--at 769 Superfund 
sites;[Footnote 17] 503 of these sites are currently on the NPL. The 
number of special accounts increased significantly from 2001 through 
2010: 854 of the 1,023 accounts, or 83 percent, were established 
during this period. Table 1 shows these accounts by region, with the 
number of open accounts, sites, NPL designation, and unobligated funds. 

Table 1: Open Superfund Special Accounts and Sites, Including NPL 
Sites, by EPA Region, as of October 2010: 

EPA region: 1; 
Number of open special accounts: 66; 
Percentage of special accounts by region: 7.0%; 
Number of sites with special accounts[A]: 62; 
Number of sites with special accounts on the NPL: 55; 
Percentage of sites with special accounts on the NPL: 88.7%; 
Total unobligated funds in special accounts: $121 million. 

EPA region: 2; 
Number of open special accounts: 94; 
Percentage of special accounts by region: 9.9%; 
Number of sites with special accounts[A]: 93; 
Number of sites with special accounts on the NPL: 80; 
Percentage of sites with special accounts on the NPL: 86.0%; 
Total unobligated funds in special accounts: $192 million. 

EPA region: 3; 
Number of open special accounts: 116; 
Percentage of special accounts by region: 12.2%; 
Number of sites with special accounts[A]: 103; 
Number of sites with special accounts on the NPL: 86; 
Percentage of sites with special accounts on the NPL: 83.5%; 
Total unobligated funds in special accounts: $75 million. 

EPA region: 4; 
Number of open special accounts: 68; 
Percentage of special accounts by region: 7.2%; 
Number of sites with special accounts[A]: 68; 
Number of sites with special accounts on the NPL: 35; 
Percentage of sites with special accounts on the NPL: 51.5%; 
Total unobligated funds in special accounts: $61 million. 

EPA region: 5; 
Number of open special accounts: 212; 
Percentage of special accounts by region: 22.4%; 
Number of sites with special accounts[A]: 180; 
Number of sites with special accounts on the NPL: 93; 
Percentage of sites with special accounts on the NPL: 51.7%; 
Total unobligated funds in special accounts: $195 million. 

EPA region: 6; 
Number of open special accounts: 63; 
Percentage of special accounts by region: 6.7%; 
Number of sites with special accounts[A]: 45; 
Number of sites with special accounts on the NPL: 22; 
Percentage of sites with special accounts on the NPL: 48.9%; 
Total unobligated funds in special accounts: $100 million. 

EPA region: 7; 
Number of open special accounts: 68; 
Percentage of special accounts by region: 7.2%; 
Number of sites with special accounts[A]: 63; 
Number of sites with special accounts on the NPL: 28; 
Percentage of sites with special accounts on the NPL: 44.4%; 
Total unobligated funds in special accounts: $319 million. 

EPA region: 8; 
Number of open special accounts: 72; 
Percentage of special accounts by region: 7.6%; 
Number of sites with special accounts[A]: 55; 
Number of sites with special accounts on the NPL: 30; 
Percentage of sites with special accounts on the NPL: 54.5%; 
Total unobligated funds in special accounts: $262 million. 

EPA region: 9; 
Number of open special accounts: 93; 
Percentage of special accounts by region: 9.8%; 
Number of sites with special accounts[A]: 62; 
Number of sites with special accounts on the NPL: 51; 
Percentage of sites with special accounts on the NPL: 82.3%; 
Total unobligated funds in special accounts: $330 million. 

EPA region: 10; 
Number of open special accounts: 95; 
Percentage of special accounts by region: 10.0%; 
Number of sites with special accounts[A]: 38; 
Number of sites with special accounts on the NPL: 23; 
Percentage of sites with special accounts on the NPL: 60.5%; 
Total unobligated funds in special accounts: $140 million. 

EPA region: Total; 
Number of open special accounts: 947; 
Percentage of special accounts by region: 100%; 
Number of sites with special accounts[A]: 769; 
Number of sites with special accounts on the NPL: 503; 
Percentage of sites with special accounts on the NPL: 65.4%; 
Total unobligated funds in special accounts: $1.795 million. 

Source: GAO analysis of EPA data. 

[A] Sites may have more than one special account. 

[End of table] 

The majority of available special account funds are concentrated in a 
small number of special accounts. As of October 2010, 33 open 
accounts, or 3 percent, had a total of $1 billion available, or 61 
percent of the total amount available in special accounts. Table 2 
below shows the number of open accounts that have an available balance 
of less than $500,000, from $500,000 to $10 million, and greater than 
$10 million. 

Table 2: Open Superfund Special Accounts Grouped in Categories by 
Unobligated Balance, as of October 2010: 

Unobligated balance: Greater than $10 million; 
Open accounts: Number: 33; 
Open accounts: Percentage: 3%; 
Unobligated balance: Sum: $1.102 billion; 
Unobligated balance: Percentage: 61%. 

Unobligated balance: From $500K to $10 million; 
Open accounts: Number: 292; 
Open accounts: Percentage: 31%; 
Unobligated balance: Sum: $605 million; 
Unobligated balance: Percentage: 34%. 

Unobligated balance: Less than $500K; 
Open accounts: Number: 622; 
Open accounts: Percentage: 66%; 
Unobligated balance: Sum: $88 million; 
Unobligated balance: Percentage: 5%. 

Unobligated balance: Total; 
Open accounts: Number: 947; 
Open accounts: Percentage: 100%; 
Unobligated balance: Sum: $1.795 billion; 
Unobligated balance: Percentage: 100%. 

Source: EPA. 

[End of table] 

As of October 2010, EPA had plans to obligate 99.8 percent of the $1.8 
billion available in special accounts, according to our analysis of 
EPA CERCLIS data. EPA tracks plans for unobligated special account 
funds in CERCLIS by three categories: (1) planned obligations; (2) 
additional reserved uses (estimated costs) not captured as planned 
obligations; and (3) amounts for work parties (e.g., generally PRPs 
who have agreed to conduct response work under a settlement agreement) 
that are included in settlements but have not yet been distributed to 
them. Specifically: 

* Planned obligations are costs anticipated by EPA to be incurred in 
association with specific site response actions. Planned obligations 
are grouped into five categories: removal and removal support, 
pipeline operations,[Footnote 18] remedial action, enforcement, and 
federal facilities.[Footnote 19] 

* Additional reserved uses are regional staff's estimated costs for 
possible or long-term future actions. This category includes 14 
different types of potential uses, such as 5-year reviews.[Footnote 
20] Reclassifications and transfers to the Trust Fund are also 
included in this category, but EPA prefers to break out this 
information separately for the purpose of evaluating the data in 
management reviews. 

* Amounts for work parties refers to funds promised in settlements to 
parties performing the cleanup work at the site; these are amounts 
that were used as a settlement incentive in negotiations with 
potential work parties. 

Figure 3 shows, as of October 2010, how EPA planned to use unobligated 
funds in special accounts. 

Figure 3: EPA's National Planned Uses for $1.8 billion in Special 
Account Funds, Beginning Fiscal Year 2011: 

[Refer to PDF for image: pie-chart] 

Planned obligations: 64.93%; 
Additional reserved uses: 32.57%: 
* Reclassification/transfer to the Trust Fund: 4.1%; 
Amounts for work parties: 2.35%; 
Unassigned remaining balance: 0.16%. 

Source: GAO analysis of EPA data. 

Note: The total percentage exceeds 100 percent due to the rounding of 
the values. 

[End of figure] 

Planned obligations were made for 64.9 percent--$1.16 billion--of the 
$1.8 billion in unobligated funds at the beginning of fiscal year 
2011, according to our analysis of EPA data. Funds designated for 
remedial action and pipeline operations made up the largest portions 
of the $1.16 billion. Approximately $671 million, or 58 percent of 
these funds, were planned for remedial action, and $418 million, or 36 
percent of these funds, were planned for pipeline operations. 

According to EPA headquarters officials, in some instances, funds for 
anticipated long-duration Superfund cleanup actions may be planned as 
much as 40 or 50 years in advance, when there are enough funds in an 
account to plan that far in advance. Regional data indicate that, of 
the available special account resources that have planned obligations, 
more than half are planned to be obligated from fiscal years 2011 
through 2013 and, according to EPA officials, 95 percent will be 
obligated by fiscal year 2022. However, EPA regional officials told us 
that the special account planned obligations are estimates rather than 
commitments. According to headquarters and regional officials, planned 
funds may not be used for their original planned use or may not be 
used in the originally designated fiscal year for a number of reasons, 
such as unforeseen issues that arise with Superfund cleanups, 
especially during the remedial investigation and remedial actions; EPA 
regional staff responding to national and regional emergencies; or 
site schedule changes. EPA regional staff must either delete or move 
forward plans to use special account funds into a subsequent fiscal 
year when special account obligations for a prior fiscal year are not 
obligated as previously planned. Table 3 shows CERCLIS information on 
the number of special accounts and associated obligations planned by 
type of EPA cleanup activity, enforcement, and federal facilities for 
fiscal years 2011 through 2070. 

Table 3: Special Accounts Obligations Planned for Fiscal Years 2011-
2070, by Type of Cleanup Activity, Enforcement, and Federal Facilities: 

Fiscal year: 2011-2013; 
Removal and removal support: Number of accounts: 44; 
Removal and removal support: Value: $62.80 million; 
Pipeline operations: Number of accounts: 398; 
Pipeline operations: Value: $208.37 million; 
Remedial action: Number of accounts: 173; 
Remedial action: Value: $437.34 million; 
Enforcement: Number of accounts: 12; 
Enforcement: Value: $5.47 million; 
Federal facilities: Number of accounts: 14; 
Federal facilities: Value: $2.65 million; 
Total: $716.63 million; 

Fiscal year: 2014-2016; 
Removal and removal support: Number of accounts: 6; 
Removal and removal support: Value: $3.22 million; 
Pipeline operations: Number of accounts: 151; 
Pipeline operations: Value: $82.95 million; 
Remedial action: Number of accounts: 78; 
Remedial action: Value: $205.29 million; 
Enforcement: Number of accounts: 2; 
Enforcement: Value: $0.15 million; 
Federal facilities: Number of accounts: 1; 
Federal facilities: Value: $0.13 million; 
Total: $291.74 million; 

Fiscal year: 2017-2019; 
Removal and removal support: Number of accounts: 1; 
Removal and removal support: Value: $0.23 million; 
Pipeline operations: Number of accounts: 69; 
Pipeline operations: Value: $38.94 million; 
Remedial action: Number of accounts: 13; 
Remedial action: Value: $26.93 million; 
Enforcement: Number of accounts: 1; 
Enforcement: Value: $0.05 million; 
Federal facilities: Number of accounts: 0; 
Federal facilities: Value: 0; 
Total: $66.15 million; 

Fiscal year: 2020-2022; 
Removal and removal support: Number of accounts: 1; 
Removal and removal support: Value: $0.15 million; 
Pipeline operations: Number of accounts: 42; 
Pipeline operations: Value: $34.14 million; 
Remedial action: Number of accounts: 6; 
Remedial action: Value: $1.76 million; 
Enforcement: Number of accounts: 0; 
Enforcement: Value: 0; 
Federal facilities: Number of accounts: 0; 
Federal facilities: Value: 0; 
Total: $36.04 million; 

Fiscal year: 2023-2025; 
Removal and removal support: Number of accounts: 0; 
Removal and removal support: Value: 0; 
Pipeline operations: Number of accounts: 29; 
Pipeline operations: Value: $15.66 million; 
Remedial action: Number of accounts: 0; 
Remedial action: Value: 0; 
Enforcement: Number of accounts: 0; 
Enforcement: Value: 0; 
Federal facilities: Number of accounts: 0; 
Federal facilities: Value: 0; 
Total: $15.66 million; 

Fiscal year: 2026-2070; 
Removal and removal support: Number of accounts: 0; 
Removal and removal support: Value: 0; 
Pipeline operations: Number of accounts: 25; 
Pipeline operations: Value: $38.14 million; 
Remedial action: Number of accounts: 0; 
Remedial action: Value: 0; 
Enforcement: Number of accounts: 0; 
Enforcement: Value: 0; 
Federal facilities: Number of accounts: 0; 
Federal facilities: Value: 0; 
Total: $38.14 million; 

Fiscal year: Total; 
Removal and removal support: Number of accounts: 52; 
Removal and removal support: Value: $66.40 million; 
Pipeline operations: Number of accounts: 714; 
Pipeline operations: Value: $418.19 million[A]; 
Remedial action: Number of accounts: 270; 
Remedial action: Value: $671.32 million; 
Enforcement: Number of accounts: 15; 
Enforcement: Value: $5.67 million; 
Federal facilities: Number of accounts: 15; 
Federal facilities: Value: $2.78 million; 
Total: $1.16434 billion. 

Source: GAO analysis of EPA data. 

[A] The total in this column does not add up due to the rounding of 
the values. 

[End of table] 

Additional reserved uses made up 32.6 percent--or $585 million--the 
second largest portion of the national planned uses for all special 
account funds in fiscal year 2011. According to EPA officials, they 
have not yet entered these estimates as specific planned obligations 
in CERCLIS because the planning of these funds is more challenging to 
predict or in some cases, there are limitations for how obligations 
can be entered into CERCLIS. For example, only one 5-year review can 
be entered as a planned obligation in CERCLIS as a site financial 
transaction. The "outyear five year review" field may be used to enter 
estimates for subsequent 5-year reviews. Other funds under this 
category represent such items as potential EPA work takeover from a 
PRP where the PRP does not have adequate or liquid financial assurance 
and anticipated costs prior to determination of the final remedy for 
cleanup. This category also includes special account funds that are 
planned for reclassification or transfer to the Trust Fund, which we 
discuss in greater detail later. 

Amounts for work parties were approximately $42.2 million--or about 
2.4 percent of the $1.8 billion in unobligated special account funds--
as promised in settlements, as of the beginning of fiscal year 2011, 
according to EPA regions' planning documents. These funds will be 
disbursed to work parties as they submit claims for reimbursement to 
EPA, in accordance with milestones established in the settlement 
documents. 

The unassigned remaining balance was approximately 0.2 percent of 
special account funds, or approximately $3 million, as of October 
2010. According to the national special accounts coordinator, EPA 
headquarters generally permits a small amount of the total balance of 
unobligated special account funds to remain unplanned. However, 
according to an EPA official, headquarters staff question regions when 
the unassigned remaining balance of a special account is generally 
more than 10 percent of its available balance, more than 10 percent of 
the total available funds for the region, or more than $100,000 per 
account. 

Status of Obligated Special Account Funds: 

As of October 2010, of the total accumulated receipts of $3.7 billion 
in 1,023 special accounts, about $1.9 billion had been obligated for 
site specific response work, according to our analysis of EPA 
data.[Footnote 21] Of this total, EPA had disbursed approximately $1.6 
billion for Superfund cleanup expenses; the remaining $247 million in 
obligations had not yet been disbursed (i.e., unliquidated 
obligations). 

Furthermore, EPA regions have not disbursed any funds from 240 of the 
947 open special accounts with a total of $228 million available in 
these accounts. Twenty-five of these 240 accounts include unliquidated 
obligations. According to officials from regions that had large 
numbers of special accounts with no disbursements, there are numerous 
reasons for not having disbursed any funds from these accounts for 
site cleanup. For example, one regional official stated that funds are 
often deposited in special accounts early in the Superfund site 
cleanup process, sometimes years before cleanup at the site actually 
begins. Also, regions often retain funds in special accounts for 
contingency purposes if cleanup plans change (e.g., potential EPA work 
takeover at a later date). Another regional official stated that 
numerous special accounts in the region had recently received sizable 
deposits from a large bankruptcy settlement, and the funds have been 
planned for but not obligated as of the time of our review. 

Status of Reclassification, Transfer of Funds, and Closure of Special 
Accounts: 

Historically, EPA has conducted few reclassifications or transfers of 
funds to the general portion of the Trust Fund. Recently, however, EPA 
regions have begun to reclassify more funds from open special 
accounts. While all EPA regions reclassified about $131 million from 
96 special accounts during the 20-year period from fiscal years 1990 
through 2010, about $111 million, or about 85 percent, of this amount 
was reclassified during the last 3 years of this period. In addition, 
since fiscal year 1990, EPA has transferred about $14 million from 39 
special accounts to the Trust Fund. 

According to EPA guidance, for reclassification and transfer, regions 
should provide planning estimates for the current fiscal year, as well 
as the two subsequent fiscal years. According to EPA data, for fiscal 
years 2011 through 2013, about 4.1 percent--$74 million--of the total 
$1.8 billion in unobligated special account funds were designated for 
reclassification or transfer to the Trust Fund. Of the $74 million, 
EPA regions plan to reclassify about $61 million, or about 82 percent, 
from special accounts and to transfer the remaining $13 million. EPA's 
plans to reclassify or transfer funds may change as a result of 
changing site conditions throughout the Superfund cleanup process. For 
example, in fiscal year 2010, EPA planned to reclassify $43 million 
and transfer about $4 million; however, at the end of the fiscal year, 
EPA actually had reclassified only $26 million and transferred about 
$3 million. Tables 4 and 5 show, by region, the number and value of 
special accounts planned for reclassification and transfer for fiscal 
years 2011 to 2013, as of October 2010. 

Table 4: Special Account Funds Planned for Reclassification, Fiscal 
Years 2011-2013, as of October 2010: 

Region: 1; 
Fiscal year 2011: Number of accounts: 3; 
Fiscal year 2011: Reclassification amount: $2.5 million; 
Fiscal year 2012: Number of accounts: 0; 
Fiscal year 2012: Reclassification amount: $0; 
Fiscal year 2013: Number of accounts: 0; 
Fiscal year 2013: Reclassification amount: $0. 

Region: 2; 
Fiscal year 2011: Number of accounts: 5; 
Fiscal year 2011: Reclassification amount: $3.8 million; 
Fiscal year 2012: Number of accounts: 4; 
Fiscal year 2012: Reclassification amount: $1.9 million; 
Fiscal year 2013: Number of accounts: 0; 
Fiscal year 2013: Reclassification amount: 0. 

Region: 3; 
Fiscal year 2011: Number of accounts: 1; 
Fiscal year 2011: Reclassification amount: $0.5 million; 
Fiscal year 2012: Number of accounts: 0; 
Fiscal year 2012: Reclassification amount: 0; 
Fiscal year 2013: Number of accounts: 0; 
Fiscal year 2013: Reclassification amount: 0. 

Region: 4; 
Fiscal year 2011: Number of accounts: 14; 
Fiscal year 2011: Reclassification amount: $8.1 million; 
Fiscal year 2012: Number of accounts: 4; 
Fiscal year 2012: Reclassification amount: $2.3 million; 
Fiscal year 2013: Number of accounts: 1; 
Fiscal year 2013: Reclassification amount: $1.1 million. 

Region: 5; 
Fiscal year 2011: Number of accounts: 7; 
Fiscal year 2011: Reclassification amount: $7.8 million; 
Fiscal year 2012: Number of accounts: 1; 
Fiscal year 2012: Reclassification amount: $1.9 million; 
Fiscal year 2013: Number of accounts: 0; 
Fiscal year 2013: Reclassification amount: 0. 

Region: 6; 
Fiscal year 2011: Number of accounts: 5; 
Fiscal year 2011: Reclassification amount: $6.4 million; 
Fiscal year 2012: Number of accounts: 0; 
Fiscal year 2012: Reclassification amount: 0; 
Fiscal year 2013: Number of accounts: 0; 
Fiscal year 2013: Reclassification amount: 0. 

Region: 7; 
Fiscal year 2011: Number of accounts: 7; 
Fiscal year 2011: Reclassification amount: $1.1 million; 
Fiscal year 2012: Number of accounts: 4; 
Fiscal year 2012: Reclassification amount: $1.0 million; 
Fiscal year 2013: Number of accounts: 1; 
Fiscal year 2013: Reclassification amount: $0.2 million. 

Region: 8; 
Fiscal year 2011: Number of accounts: 0; 
Fiscal year 2011: Reclassification amount: 0; 
Fiscal year 2012: Number of accounts: 0; 
Fiscal year 2012: Reclassification amount: 0; 
Fiscal year 2013: Number of accounts: 0; 
Fiscal year 2013: Reclassification amount: 0. 

Region: 9; 
Fiscal year 2011: Number of accounts: 3; 
Fiscal year 2011: Reclassification amount: $12.8 million; 
Fiscal year 2012: Number of accounts: 0; 
Fiscal year 2012: Reclassification amount: 0; 
Fiscal year 2013: Number of accounts: 0; 
Fiscal year 2013: Reclassification amount: 0. 

Region: 10; 
Fiscal year 2011: Number of accounts: 4; 
Fiscal year 2011: Reclassification amount: $1.6 million; 
Fiscal year 2012: Number of accounts: 4; 
Fiscal year 2012: Reclassification amount: $7.8 million; 
Fiscal year 2013: Number of accounts: 0; 
Fiscal year 2013: Reclassification amount: 0. 

Region: Total; 
Fiscal year 2011: Number of accounts: 49; 
Fiscal year 2011: Reclassification amount: $44.6 million; 
Fiscal year 2012: Number of accounts: 17; 
Fiscal year 2012: Reclassification amount: $14.9 million; 
Fiscal year 2013: Number of accounts: 2; 
Fiscal year 2013: Reclassification amount: $1.3 million. 

Source: GAO analysis of EPA data. 

[End of table] 

Table 5: Special Account Funds Planned for Transfer to the Trust Fund, 
Fiscal Years 2011-2013, as of October 2010: 

Region: 1; 
Fiscal year 2011: Number of accounts: 0; 
Fiscal year 2011: Transfer amount: $0; 
Fiscal year 2012: Number of accounts: 0; 
Fiscal year 2012: Transfer amount: $0; 
Fiscal year 2013: Number of accounts: 0; 
Fiscal year 2013: Transfer amount: $0. 

Region: 2; 
Fiscal year 2011: Number of accounts: 4; 
Fiscal year 2011: Transfer amount: $0.6 million; 
Fiscal year 2012: Number of accounts: 2; 
Fiscal year 2012: Transfer amount: $2.3 million; 
Fiscal year 2013: Number of accounts: 0; 
Fiscal year 2013: Transfer amount: 0. 

Region: 3; 
Fiscal year 2011: Number of accounts: 6; 
Fiscal year 2011: Transfer amount: $0.9 million; 
Fiscal year 2012: Number of accounts: 0; 
Fiscal year 2012: Transfer amount: 0; 
Fiscal year 2013: Number of accounts: 0; 
Fiscal year 2013: Transfer amount: 0. 

Region: 4; 
Fiscal year 2011: Number of accounts: 2; 
Fiscal year 2011: Transfer amount: $0.9 million; 
Fiscal year 2012: Number of accounts: 0; 
Fiscal year 2012: Transfer amount: 0; 
Fiscal year 2013: Number of accounts: 0; 
Fiscal year 2013: Transfer amount: 0. 

Region: 5; 
Fiscal year 2011: Number of accounts: 18; 
Fiscal year 2011: Transfer amount: $6.0 million; 
Fiscal year 2012: Number of accounts: 1; 
Fiscal year 2012: Transfer amount: $0.05 million; 
Fiscal year 2013: Number of accounts: 0; 
Fiscal year 2013: Transfer amount: 0. 

Region: 6; 
Fiscal year 2011: Number of accounts: 4; 
Fiscal year 2011: Transfer amount: $0.8 million; 
Fiscal year 2012: Number of accounts: 0; 
Fiscal year 2012: Transfer amount: 0; 
Fiscal year 2013: Number of accounts: 0; 
Fiscal year 2013: Transfer amount: 0. 

Region: 7; 
Fiscal year 2011: Number of accounts: 2; 
Fiscal year 2011: Transfer amount: $0.5 million; 
Fiscal year 2012: Number of accounts: 0; 
Fiscal year 2012: Transfer amount: 0; 
Fiscal year 2013: Number of accounts: 0; 
Fiscal year 2013: Transfer amount: 0. 

Region: 8; 
Fiscal year 2011: Number of accounts: 1; 
Fiscal year 2011: Transfer amount: $0.2 million; 
Fiscal year 2012: Number of accounts: 2; 
Fiscal year 2012: Transfer amount: $0.001 million; 
Fiscal year 2013: Number of accounts: 0; 
Fiscal year 2013: Transfer amount: 0. 

Region: 9; 
Fiscal year 2011: Number of accounts: 1; 
Fiscal year 2011: Transfer amount: $0.5 million; 
Fiscal year 2012: Number of accounts: 0; 
Fiscal year 2012: Transfer amount: 0; 
Fiscal year 2013: Number of accounts: 0; 
Fiscal year 2013: Transfer amount: 0. 

Region: 10; 
Fiscal year 2011: Number of accounts: 1; 
Fiscal year 2011: Transfer amount: $0.005 million; 
Fiscal year 2012: Number of accounts: 1; 
Fiscal year 2012: Transfer amount: $0.01 million; 
Fiscal year 2013: Number of accounts: 0; 
Fiscal year 2013: Transfer amount: 0. 

Region: Total; 
Fiscal year 2011: Number of accounts: 39; 
Fiscal year 2011: Transfer amount: $10.2 million[A]; 
Fiscal year 2012: Number of accounts: 6; 
Fiscal year 2012: Transfer amount: $2.4 million; 
Fiscal year 2013: Number of accounts: 0; 
Fiscal year 2013: Transfer amount: 0. 

Source: GAO analysis of EPA data. 

[A] The total in this column does not add up due to the rounding of 
the values. 

[End of table] 

EPA guidance states that reclassifications and transfers to the Trust 
Fund should not take place until it can be reasonably estimated that 
the special account contains more funds than are needed for remaining 
response actions at the site. Therefore, according to EPA officials, 
it is generally easier for the regions to determine if special account 
funds can be reclassified or transferred once response actions at a 
site are substantially complete. EPA officials said that they consider 
"Construction Complete," "NPL Delete," and "Post Construction" to be 
the three phases in the Superfund cleanup process when a site most 
likely can be considered substantially complete and, therefore, the 
funds in a special account may be considered for reclassification or 
transferred to the Trust Fund. As of October 2010, the cleanup 
activities at 297 of the 769 Superfund sites with open accounts were 
considered substantially complete, according to our analysis of EPA 
data, and therefore more likely to have funds eligible to be 
reclassified or transferred than sites in the earlier stages of the 
cleanup process. Table 6 presents the number of Superfund sites with 
special accounts in each phase or milestone of the cleanup process, 
from the remedial investigation/feasibility study to deletion from the 
NPL, as of October 2010. 

Table 6: Number of Sites with Special Accounts in Each Phase or 
Milestone of the Superfund Cleanup Process, as of October 2010: 

Cleanup phase or milestone: Remedial investigation/Feasibility study; 
Remedial assessment not begun; 
Number of sites with special accounts[B]: 40. 

Cleanup phase or milestone: Remedial investigation/Feasibility study; 
Study under way; 
Number of sites with special accounts[B]: 169. 

Cleanup phase or milestone: Remedial investigation/Feasibility study; 
Study complete; 
Number of sites with special accounts[B]: 11. 

Cleanup phase or milestone: Record of decision[A]; Remedy selected; 
Number of sites with special accounts[B]: 22. 

Cleanup phase or milestone: Remedial design; Design under way; 
Number of sites with special accounts[B]: 52. 

Cleanup phase or milestone: Remedial design; Design complete; 
Number of sites with special accounts[B]: 2. 

Cleanup phase or milestone: Remedial action; 
Construction under way; 
Number of sites with special accounts[B]: 45. 

Cleanup phase or milestone: Remedial action complete; 
Number of sites with special accounts[B]: 9. 

Cleanup phase or milestone: Miscellaneous (other responses, such as 
the removal process); 
Number of sites with special accounts[B]: 122. 

Cleanup phase or milestone: Construction complete[A]; 
Number of sites with special accounts[B]: 2. 

Cleanup phase or milestone: Postconstruction; 
Number of sites with special accounts[B]: 263. 

Cleanup phase or milestone: Deletion from NPL[A]; 
Number of sites with special accounts[B]: 32. 

Cleanup phase or milestone: Total sites; 
Number of sites with special accounts[B]: 769. 

Source: GAO analysis of EPA data. 

[A] These steps are considered "milestones" in the Superfund cleanup 
process. 

[B] The site designations that are noted here are based on the action 
at a site associated with a special account that is least advanced in 
the Superfund cleanup process. Other actions may be taking place at 
these sites that are more advanced in the Superfund cleanup process. 

[End of table] 

EPA requires special accounts to be closed when (1) all site work has 
been completed, (2) no funds are left in the account and no future 
deposits are anticipated, or (3) EPA does not anticipate incurring any 
additional costs at those sites. As of October 2010, EPA had closed 76 
special accounts since the beginning of the program; these accounts 
were open an average of 7 years. According to our analysis of EPA 
data, EPA closed 9 special accounts from fiscal years 2000 through 
2005 and 67 accounts from fiscal years 2006 through 2010, including 33 
in fiscal year 2010. According to EPA officials, the steady increase 
in closures has occurred because the regions are improving their 
management of special accounts and closing accounts where no funds 
remain or funds are no longer needed for future work. 

EPA Has Implemented Processes and Policies in Recent Years to Better 
Monitor and Manage Superfund Special Accounts: 

In response to the IG's findings and recommendations,[Footnote 22] as 
well as EPA officials' own recognition that the agency needed to 
provide better oversight of the special accounts process, EPA has 
implemented the following processes and policies in the last few years 
to better monitor and manage special accounts: (1) processes to better 
plan the use of special account funds, (2) increased oversight of 
special accounts by designating a national special accounts 
coordinator, and a Special Accounts Senior Management Committee, and 
(3) strategies and guidance on how to plan for using and monitoring 
special accounts. 

EPA Has Implemented Processes to Better Plan for Use of Funds in 
Special Accounts: 

To facilitate regional management and headquarters planning and review 
of special accounts, in 2008, EPA established a process to better 
track planned uses for special account funds. That is, it established 
a section in CERCLIS--referred to as the Special Account Management 
Screen (or planning screen)--that enables EPA regions to see and enter 
special account planning data into specific data fields and create 
reports so that both EPA headquarters and regional officials can 
monitor the special account balances against planned obligations for 
ongoing and future site-specific response activities. According to EPA 
officials, reports based on data entered into fields on this screen 
have allowed both EPA headquarters and regional staff to review the 
data to assure that, among other things, the agency maximizes 
opportunities to use, reclassify, or transfer these resources to the 
general portion of the Trust Fund over time. 

In the first few years of using this new planning screen, regional 
staff noticed that some funds did not easily fit into the specified 
categories in the screen, and they had to place the funds under other 
catchall fields, according to EPA headquarters officials. As a result, 
in December 2010, EPA added four new fields under the reserved use 
section and combined two categories into one. These changes are 
intended to allow EPA headquarters staff to better track the regions' 
funding plans and to comply with guidance issued in September 2010 
clarifying how special account funds are to be planned and used. For 
example, EPA headquarters created a new field for funds reserved for a 
potential EPA takeover of the work if one or more PRPs who are 
performing the site cleanup work become insolvent; in such cases, EPA 
might have to fund necessary work with special account funds. 
According to officials we spoke with in one EPA region, these changes 
have helped reduce the number of questions and concerns from 
headquarters during its reviews of regions' plans to allocate funds. 

EPA Has Increased Oversight for Special Accounts: 

Before the IG's 2009 report, EPA had recognized that it needed to 
better oversee the regions' management of special accounts, according 
to an EPA headquarters official. In 2008, an EPA staff person in the 
Office of Superfund Remediation and Technology Innovation--with 
assistance from staff from other offices such as the Office of Site 
Remediation Enforcement and Office of the Chief Financial Officer--was 
permanently assigned to coordinate the management of special accounts 
with the regions. This headquarters staff person--the national special 
accounts coordinator--conducts annual and midyear reviews and holds 
discussions with regional staff to evaluate regions' plans to allocate 
special account funds, among other things. Specifically, every August, 
in preparation for the annual review of these funds, the coordinator 
analyzes planning data on all open special accounts using monitoring 
reports developed from CERCLIS data to ensure that regions are 
entering quality data into CERCLIS, complying with special account 
guidance, and effectively managing special accounts. 

The coordinator told us that she focuses on particular details of a 
special account in the annual review that may indicate a potential for 
special account management problems. In particular, the coordinator 
examines accounts that (1) disbursed no funds, and (2) have a large 
amount of funds remaining although construction is complete or the 
site has been deleted from the NPL, and (3) those accounts that are 10 
years old or more. In addition, the coordinator stated that she looks 
closely at certain types of special accounts on a regular basis, such 
as the following: 

* Accounts with balances over $10 million. The coordinator examines 
these accounts--which make up 61 percent of available special account 
balances--to see the types of actions that have occurred. For example, 
the coordinator told us that she checks whether planned funding for 
prior fiscal years was actually obligated and disbursed as planned. 
[Footnote 23] Specifically, she looks for any indications that a 
region might be continually shifting the same planned obligated funds 
from one fiscal year to the next and, if so, investigates the reasons 
for this shift. 

* Accounts that had planned reclassifications, transfers to the Trust 
Fund, or planned closures. The EPA coordinator told us that she 
regularly examines whether these actions have occurred. For example, 
according to EPA data, in fiscal year 2010, regions planned to 
reclassify $43.1 million from 75 accounts at the beginning of the 
year; however, the coordinator found that regions had actually 
reclassified $26.2 million from 41 accounts by the end of that fiscal 
year. For those 34 accounts where reclassification was not completed, 
20 accounts had their planned reclassifications moved to future fiscal 
years, 10 accounts were identified as needing funds for further work 
at the site, and 4 had their planned reclassified funds transferred 
instead to the Trust Fund. 

In addition, according to the coordinator, beginning in fiscal year 
2011, EPA focused on reviewing those special accounts with available 
balances less than $10,000 to help ensure that funds are used as 
quickly as possible so that the accounts can be closed. According to 
the coordinator, this review allows the regions to focus their 
workload efforts on managing the larger special accounts rather than 
the many accounts with relatively few funds. 

According to the coordinator, during this annual review, she may pose 
questions regarding the regions' planning estimates and suggest 
certain actions to ensure better management of specific special 
accounts. For example, the coordinator might suggest that the regions 
(1) use the funds in a special account as an incentive for future 
settlements with PRPs, (2) reclassify or transfer to the Trust Fund 
unneeded funds and close the account when a site cleanup is completed 
or near completion, (3) correct and update the account (such as 
entering funds in the proper planning category), (4) use special 
account funds before using appropriated funds, or (5) move previously 
planned obligated funds that have not yet been obligated in a previous 
fiscal year to a future fiscal year. For example, during the special 
account fiscal year 2011 annual review conducted in 2010, the 
coordinator asked questions regarding the regions' planning estimates 
on 285 special accounts. Based on our analysis of these planning data, 
we identified 65 questions or suggestions related to whether there was 
potential to reclassify or transfer to the Trust Fund some or all 
account funds or close an existing account. The remaining questions or 
suggestions identified a variety of subjects, including whether the 
planned funding was put in the wrong category on the special accounts 
planning screen in CERCLIS, and whether special account funds could be 
used as an incentive for the PRP to do the work. 

During the annual review, regional staff agree to make changes or 
adequately explain the reasons why the coordinator's suggestion should 
not be taken at that time. According to EPA regional officials we 
spoke with, all of the coordinator's questions during the fiscal year 
2011 annual review were addressed before the next midyear planning 
sessions conducted in the spring of 2011. However, according to a 
regional official and the coordinator, a question from a previous 
planning session may be asked again in subsequent planning sessions if 
it was not entirely or sufficiently addressed. In some cases, the 
coordinator stated she wanted to obtain more detailed information from 
the region to ensure that funds were planned for use in the most 
effective and efficient way possible. In other cases, while funds were 
planned in accordance with guidance, the regional officials and the 
coordinator had a difference of opinion on the best planned use of 
funds. 

To examine this process in more detail, we sampled 20 accounts from 
EPA headquarters' 2010 annual planning review of 285 accounts about 
which the coordinator had questions. For all of these accounts, the 
regions addressed all the coordinator's questions or took the 
recommended action requested or suggested by the coordinator. For 
example, the coordinator questioned $989,000 in special account funds 
that were placed in the "Other" field without a detailed explanation 
on when the determination for use of these funds would be made. As a 
result of discussions with EPA headquarters and a change to the 
planning screen, these funds were moved to a new field created in 
December 2010--"Protectiveness Contingencies." According to EPA 
documentation, this field should be used when current site information 
indicates there is reasonable potential that a remedy will not be 
protective in the future. For the account in question, EPA regional 
officials determined that available special account funds for the site 
would still be needed to protect nearby residences from the effects of 
a hazardous chemical contamination--Trichloroethylene (TCE).[Footnote 
24] The remedy chosen for this TCE contamination in the groundwater--
an underground drainage system--had not resulted in lower 
contamination levels, and EPA had found vapor intrusion in the crawl 
spaces of houses located at the site. EPA determined that it would 
need the special account funds to assess whether new migration systems 
need to be installed to prevent inhalation of TCE from the crawl 
spaces. 

According to the coordinator, once the planning discussions take 
place, the regions are expected to make any corrections to planned 
special account funds in CERCLIS. The coordinator then reviews the 
data again and uses this information to establish a baseline for 
fiscal year planning. In addition, the coordinator provides an annual 
work planning review report to EPA management in December. In March of 
the following year, the coordinator conducts midyear reviews to follow 
up on regional issues and to monitor planned actions previously 
identified. 

EPA headquarters holds bimonthly national conference calls with 
regional officials to discuss any special accounts issues that have 
arisen and to discuss possible changes to the special accounts process 
to make it more efficient. Several regional officials we spoke with 
stated that, between the conference calls, and other events, such as 
the annual Superfund Special Accounts National Meeting and Cost 
Recovery Training Conference,[Footnote 25] staff are provided with the 
information they need to effectively manage special accounts. 

In 2009, in response to the IG's recommendation that a central 
management official in headquarters for special accounts be 
established to ensure management accountability, EPA established a 
Special Accounts Senior Management Committee. Unlike the coordinator, 
who has daily responsibility for special accounts, the committee has 
broader responsibilities. It meets semiannually to provide overall 
management oversight and monitor the status of special accounts. The 
IG had recommended that a single office in headquarters be responsible 
for the management of special accounts, but EPA officials told us that 
the agency did not think this was a workable arrangement because the 
management of special accounts requires the involvement of, and 
coordination among, several EPA offices, including the regional 
offices. The committee consists of directors from EPA headquarters 
offices involved in the special accounts process, including the Office 
of Superfund Remediation and Technology Innovation, the Office of Site 
Remediation Enforcement, and the Office of the Chief Financial 
Officer, as well as directors of relevant Superfund divisions from the 
regions. Regional representation is rotated among regions every 2 
years. A committee charter lists the responsibilities of each office 
in managing special accounts. 

According to several EPA regional officials we spoke with who have 
responsibilities for special accounts, the level of coordination and 
transparency in managing special accounts between headquarters and the 
regions has improved over the last few years. For example, one 
regional official stated that the high level of coordination is 
evident from headquarters' review of regional planning data and 
related meetings to discuss potential issues with specific special 
accounts. Another regional official stated that headquarters has been 
very responsive, sharing information and obtaining policy viewpoints 
from the region, and implementing ways to streamline and improve the 
process. 

EPA Has Issued Strategies and Guidance on Managing Special Accounts: 

EPA has issued new strategy and guidance documents to help manage 
special accounts in response to the IG's recommendations and EPA 
headquarters' own recognition that the agency needed to provide a more 
nationally consistent approach to managing and monitoring special 
accounts. Specifically, EPA established the Superfund Special Accounts 
Management Strategy in 2009. This strategy sets forth the agency's 
plan to improve the use, management, and monitoring of special 
accounts to help support Superfund site cleanups. According to EPA 
documentation, this strategy serves as a road map for EPA regional and 
headquarters personnel who are responsible for overseeing and managing 
special accounts. The Special Accounts Senior Management Committee is 
responsible for implementing this strategy. The strategy focuses on 
four main areas: (1) coordination and transparency, such as 
intraagency coordination between the EPA offices that are responsible 
for managing special accounts; (2) special account use and planning 
efforts, such as effective regional planning and use of the CERCLIS 
special account planning screen; (3) monitoring special accounts, such 
as annual regional work planning and midyear reviews; and (4) regional 
support, guidance, and training. 

EPA has also issued guidance on the (1) planning, use, and monitoring 
of special account funds and (2) reclassifying special account funds, 
transferring funds to the Trust Fund, and closing special accounts. 

Planning, use, and monitoring of special account funds. EPA's special 
account guidance, issued in 2010, updated and expanded previous EPA 
guidance that was originally published in 2001 and 2002. This newer 
guidance provides specific information on the proper use and planning 
of special account funds throughout the cleanup process. For example, 
EPA generally expects that planning for the use of special account 
funds occurs within 3 months after establishing a special account, and 
planning should be updated on a regular basis during the year. 
According to EPA regional officials we spoke with, they try to plan 
for the use of special account funds as soon as possible. However, 
according to some regional officials, various circumstances can affect 
whether planning can occur within 3 months. For example, they noted, 
large special accounts usually are associated with large, complex 
cleanup sites and therefore it is likely to take longer to plan how 
funds will be used. At the same time, officials said, these accounts 
are often a priority because of the hazards involved. The workload 
required to plan and manage accounts with large balances may result in 
less time available to plan for accounts with smaller balances. 

EPA also issued a detailed Monitoring Plan for Special Account 
Planning Data in 2009, which EPA updated in November 2010. This plan 
describes the process that EPA headquarters and the regions should 
follow to monitor special account planning data, including the 
scheduled times when middle of fiscal year and end of fiscal year 
final planning data should be reviewed and discussed with the regions, 
made final, and reported to the Special Accounts Senior Management 
Committee. 

Reclassifying special account funds, transferring funds to the Trust 
Fund, and closing special accounts. EPA headquarters issued detailed 
guidance on the reclassification of special account funds in 2009, 
including when EPA regions should consider doing a reclassification 
and a step-by-step description of the reclassification process the 
regions should follow. At the same time, it also issued a model 
memorandum for transferring funds from a special account to the Trust 
Fund and closing out a special account. In this guidance and 
memorandum, EPA states that regions must notify headquarters when they 
plan to reclassify funds, transfer funds to the Trust Fund, or close 
out an account. The regions must submit a draft memorandum to 
headquarters staff in the Office of Site Remediation Enforcement and 
the Office of Superfund Remediation and Technology Innovation to 
discuss any potential issues with the action prior to proceeding with 
the action. However, regional officials we spoke with stated that the 
process for reclassifying funds has been complex and that the 
requirements for conducting a reclassification were resource intensive 
and time consuming. For example, regions had to submit a memorandum 
with detailed information on the special account--no matter how small 
the amount of funds to be reclassified. As a result, in April 2011, 
EPA headquarters issued revised model notifications to streamline the 
process and accelerate the review process for reclassifications of 
funds, transfer of funds to the Trust Fund, and closing of a special 
account. According to EPA officials, the most significant change 
eliminates the requirement for a formal memorandum for those 
transactions that involve $200,000 or less. For those transactions, 
EPA regions now only need to send an e-mail to headquarters staff 
informing them of the intended action and provide the appropriate 
assurances in accordance with guidance (e.g., if an account is to be 
closed, the region does not anticipate any future deposits). For 
transactions involving $200,000 or more, regions still need to send 
formal notification memoranda to headquarters. However, these actions 
can now be included in the same memorandum, rather than separate 
memorandums if (1) a transfer of funds to the Trust Fund or closeout 
occurs at the same time or immediately following a reclassification or 
(2) a closeout occurs at the same time or immediately following a 
transfer of funds to the Trust Fund: 

Several regional officials we spoke with stated that, overall the 
increased guidance has been helpful, and that EPA headquarters has 
done a thorough job of establishing any needed special accounts policy 
and guidance documents, addressing all major aspects and issues 
relating to the management of special accounts. In addition, officials 
from EPA regions 3, 5, and 9 stated that their regions have added 
management tools specific to their regions to enhance those available 
from headquarters, including a special accounts regional database, 
intranet site page, and guidance specific to their regions, 
respectively. An EPA headquarters official stated that an increased 
emphasis has been made in the last few years in headquarters to better 
manage the regions' special account process, particularly the "back 
end" of the process involving special account reclassifications, 
transfers to the Trust Fund, and account closures. However, EPA 
headquarters officials told us that the agency has recognized it may 
need to be more involved in the "front end" of the special accounts 
process, when regions are deciding whether to establish a special 
account. EPA headquarters is evaluating whether it is efficient for 
the regions to open special accounts for small amounts, or for those 
sites that may be further along in the cleanup process, because 
regions need to spend time and staff resources monitoring these new 
accounts. An EPA official stated that EPA's Superfund Special Accounts 
Senior Management Committee has approved a review of the policy for 
establishing special accounts. The committee plans to begin this study 
in fiscal year 2012 and, if needed, develop further guidance on the 
opening of special accounts. 

Furthermore, according to several of these regional officials, the 
changes to notifications and revised model memorandum have made the 
reclassification and transfer processes easier by minimizing the 
number of staff who need to prepare and approve reclassifications and 
transfers while saving time by eliminating extensive preparation and 
headquarters review of notifications. The revised processes allow 
special account funds to be reclassified and transferred faster. In 
addition, in June 2011, EPA issued two fact sheets to regional special 
accounts staff that provide supplemental information on special 
account reclassifications, as well as specific steps required to close 
out a special account. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to EPA for review and comment. EPA 
provided technical comments that we incorporated into the report, as 
appropriate. 

As agreed with your office, 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 
appropriate congressional committees, Administrator of EPA, and other 
interested parties. The report also will be available at no charge on 
the GAO website at [hyperlink, http://www.gao.gov]. 

If you or your staff members have any questions about this report, 
please contact me at (202) 512-7114 or yocomc@gao.gov. Contact points 
for our offices of Congressional Relations and Public Affairs may be 
found on the last page of this report. GAO staff who made major 
contributions to this report are listed in appendix II. 

Sincerely yours, 

Signed by: 

Carolyn L. Yocom: 
Director: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

This appendix provides information on the scope of the work and the 
methodology used to (1) describe the status of special accounts--
including balances, locations, and recent and planned uses--of 
Superfund special accounts and (2) examine the extent to which the 
Environmental Protection Agency's (EPA) headquarters and regions are 
implementing processes and policies to improve the monitoring and 
management of Superfund special accounts. 

To describe the status of the 1,023 special accounts, we obtained and 
analyzed data from EPA's Comprehensive Environmental Response, 
Compensation, and Liability Information System (CERCLlS) database. 
Specifically, for information on special accounts balances; locations; 
and recent and planned uses, including funds that had been obligated 
and disbursed, as well as funds reclassified, transferred to the 
Superfund Trust Fund, or closed, we analyzed spreadsheets obtained 
from officials with EPA's Office of Superfund Remediation and 
Technology Innovation. For those funds that were planned to be 
obligated and reserved for future use, as well as reclassified and 
transferred, we analyzed spreadsheets of planned funds derived from 
EPA's CERCLIS special accounts planning screen, as of October 2010. We 
also obtained data and interviewed officials at EPA's headquarters and 
the Office of the Chief Financial Officer regarding the makeup and 
current status of funds in the Trust Fund. 

To assess the reliability of the data from EPA's CERCLIS database used 
in this report, we analyzed related documentation, examined the data 
to identify if there were any obvious errors or inconsistencies, and 
interviewed knowledgeable agency officials about the data to see if 
there were any known problems with the data and to learn more about 
their procedures for maintaining the data. We determined the data to 
be sufficiently reliable for the purposes of this report. 

To examine the extent to which EPA's headquarters and regions are 
implementing policies and procedures to improve the monitoring and 
management of Superfund special accounts, we analyzed documents and 
interviewed officials from EPA headquarters offices, including the 
Office of Superfund Remediation and Technology Innovation, the Office 
of Site Remediation Enforcement, and the Office of the Chief Financial 
Officer. Specifically, we obtained and reviewed strategies and 
guidance issued by EPA headquarters to the regions on the special 
accounts process, as well as available EPA regional documentation on 
the use of management tools unique to EPA's regions. We also analyzed 
documents and interviewed officials from EPA's Office of Inspector 
General (IG) regarding their 2006 and 2009 reports on EPA's management 
of special accounts. We also conducted interviews with officials in 
each of EPA's 10 regional offices and collected supporting 
documentation to determine how the regions managed and monitored their 
special accounts and coordinated with EPA headquarters and, if needed, 
conducted follow-up interviews to obtain additional data as a result 
of our analysis. During these interviews, we also obtained information 
on how EPA regions addressed EPA headquarters questions or 
recommendations for actions on their special accounts that arose 
during EPA's fiscal year 2011 annual review of the regions' planning 
data. Specifically, we discussed and obtained data on 20 special 
accounts (2 special accounts from each region) taken from a sample of 
285 accounts about which EPA had questions or recommendations for 
actions. These accounts were chosen from a random nonprobability 
sample and therefore cannot be generalized to all special accounts. 

We conducted this performance audit from October 2010 to January 2012 
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] 

Appendix II: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Carolyn L. Yocom, (202) 512-7114, yocomc@gao.gov: 

Staff Acknowledgments: 

In addition to the individual named above, Vincent P. Price, Assistant 
Director; Greg Carroll; Laina Poon; and Amy Ward-Meier made key 
contributions to this report. Elizabeth Beardsley, Cindy Gilbert, 
Julia Kennon, Ruben Montes de Oca, and Carol Herrnstadt Shulman also 
made important contributions. 

[End of section] 

Footnotes: 

[1] Under CERCLA, PRPs generally include current or former owners and 
operators of a site or the generators or transporters of the hazardous 
substances. 

[2] CERCLA section 122(b)(3) was added in 1986, establishing EPA's 
authority to retain and use funds from an agreement with PRPs, which 
EPA has implemented through the use of special accounts. 

[3] EPA Office of Inspector General, Evaluation Report: EPA Can Better 
Manage Superfund Resources, Report No. 2006-P-00013, Feb. 28, 2006. 
EPA Office of Inspector General, Evaluation Report: Improved 
Management of Superfund Special Accounts Will Make More Funds 
Available for Clean-ups, Report No. 09-P-0119, Mar. 18, 2009. 

[4] CERCLIS is EPA's automated inventory of site information for all 
potential or confirmed Superfund sites. It contains information on 
hazardous waste site assessment and remediation from 1983 to the 
present. 

[5] Unless otherwise stated, all EPA data collected are as of October 
2010--the most current available data at the time of our review. 

[6] The Hazard Ranking System is a numerically based screening system 
that uses available information--such as from initial, limited 
investigations--to assess the relative potential for releases of 
hazardous substances at sites to pose a threat to human health or the 
environment. 

[7] CERCLA regulations require reviews every 5 years of the integrity 
of the remedy at a site where hazardous substances remain on-site 
above levels that permit unrestricted use and unlimited exposure, even 
after deletion from the NPL. 

[8] GAO, Superfund: Litigation Has Decreased and EPA Needs Better 
Information on Site Cleanup and Cost Issues to Estimate Future Program 
Funding Requirements, [hyperlink, 
http://www.gao.gov/products/GAO-09-656] (Washington, D.C.: July 15, 
2009). 

[9] EPA may use Trust Fund monies on remedial actions at a site only 
if that site is listed on the NPL, but EPA can use Trust Fund monies 
for removal actions at any nonfederal site. This funding restriction 
does not apply to cleanup actions funded with special account funds. 

[10] The Trust Fund may receive an occasional corporate tax payment 
from an amended tax return. However, the petroleum and chemical taxes 
expired on December 31, 1995, and the corporate environmental income 
tax expired for taxable years commencing after December 31, 1995. 

[11] To qualify parties as de minimis, CERCLA authorizes EPA to use 
its judgment as to whether the hazardous substances contributed by 
parties are minimal in amount and toxicity in comparison with other 
substances at the site. CERCLA requires EPA to offer settlements to 
such parties. 

[12] An operable unit commonly refers to a geographical area, 
contaminated medium, or chronological phase of a cleanup. The division 
of a site into multiple operable units serves to better inform 
stakeholders of the manner in which EPA expects to manage the cleanup 
of a site. 

[13] The reclassification of special account funds is intended to put 
EPA in the same position it would have been in if the PRP settlement 
proceeds had been received prior to the expenditure of Superfund 
appropriation resources at that site. 

[14] Generally funds that are not used for future response work at a 
site are reclassified or transferred to the general portion of the 
Trust Fund, rather than returned to PRPs, unless it is specifically 
written into the settlement that they should be returned to PRPs. 

[15] The $3.7 billion includes approximately $378 million in accrued 
interest that has been earned on all special accounts since the 
inception of the program. Interest begins to accrue from the date that 
the special account is established and is calculated each month based 
on the average daily balance within each special account. Interest 
rate for special accounts is approximately the same as the Trust Fund 
interest rate, which was 2.24 percent in fiscal year 2010. 

[16] EPA considers special account funds that have been reclassified 
to be disbursed. Transfers to the general portion of the Trust Fund 
represent a reduction in the amount of receipts and interest earned 
that are available for obligation. 

[17] Ninety-nine Superfund sites have multiple special accounts. 

[18] According to EPA documentation, the category "pipeline 
operations" contains all other planned special account obligations 
that fall under Superfund's remedial program, including 
investigations, oversight, etc., and the category "remedial action" 
includes all planned special account obligations for removal, remedial 
action, long-term response action, and one 5-year review under 
Superfund's remedial program. 

[19] These five categories in CERCLIS are used by EPA to categorize 
funding for the purpose of the program's budget structure process. 

[20] Only one 5-year review can be entered as a planned obligation in 
CERCLIS. This category may be used to enter estimates for subsequent 5-
year reviews, also referred to as outyear 5-year reviews. 

[21] Obligations in this report refer to funds that have been 
disbursed, as well as unliquidated obligations, which are obligations 
incurred but not yet paid for. 

[22] According to EPA, it has closed out all recommendations from the 
two IG reports. The IG has not conducted a follow-on review to the 
2009 report to determine the sufficiency of all of EPA's responses. 

[23] According to EPA officials, neither headquarters nor the regions 
systematically tracks all special accounts to see whether planned 
funds in a prior fiscal year were actually obligated and disbursed as 
planned. Headquarters and the regions see these planning estimates as 
targets rather than commitments. Therefore, to make the most efficient 
use of EPA resources in overseeing special accounts, the coordinator 
focuses more often on how accounts with larger planned amounts are 
being managed by the regions, as well as accounts that have available 
funds to reclassify or transfer to the Trust Fund. 

[24] TCE, a degreasing agent in metal cleaning that has been used 
widely in Department of Defense industrial and maintenance processes, 
has been documented at low exposure levels to cause headaches and 
difficulty concentrating. High-level exposure may cause dizziness, 
headaches, nausea, unconsciousness, cancer, and possibly death. 

[25] At the time of our discussions with the regions, EPA held the 
Superfund Special Accounts National Meeting and Cost Recovery Training 
Conference annually. Recently, EPA has made the decision to hold this 
meeting bi-annually instead of annually. 

[End of section] 

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