Environmental Enforcement:

EPA Needs to Improve the Accuracy and Transparency of Measures Used to Report on Program Effectiveness

GAO-08-1111R: Published: Sep 18, 2008. Publicly Released: Oct 21, 2008.

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As part of its mission to protect human health and the environment, the Environmental Protection Agency's (EPA) enforcement office maintains civil and criminal enforcement programs to help enforce the requirements of major federal environmental laws such as the Clean Air Act and the Clean Water Act. EPA's civil and criminal enforcement programs work with the Department of Justice (DOJ), and in some cases states, to take legal actions to bring polluters into compliance with federal laws. While civil enforcement actions require polluters to pay penalties and take other corrective actions, criminal enforcement actions also may include imprisonment. EPA's enforcement office sets national priorities to focus resources on significant environmental risks and non-compliance patterns; prepares nationally significant civil and criminal cases for legal action by DOJ; uses 10 regional offices to implement civil enforcement actions on a day-to-day basis; and pursues criminal violations of environmental laws through its criminal enforcement office. The agency exercises its authority to independently pursue some violators through administrative proceedings--civil administrative actions--and to refer significant matters to DOJ when it believes cases need to be filed in federal court as civil judicial actions. DOJ is responsible for prosecuting and settling civil judicial and criminal enforcement cases. EPA relies on a variety of measures to assess and report on the effectiveness of its civil and criminal enforcement programs. For example, EPA relies on assessed penalties that result from enforcement efforts among its long-standing measurable accomplishments. The agency uses its discretion to estimate the appropriate penalty amount based on individual case circumstances. EPA has developed penalty policies as guidance for determining appropriate penalties in civil administrative cases and referring civil judicial cases. The policies are based on environmental statutes and have an important goal of deterring potential polluters from violating environmental laws and regulations. The purpose of EPA's penalties is to eliminate the economic benefit a violator gained from noncompliance and to reflect the gravity of the alleged harm to the environment or public health. Like other federal agencies, EPA has established results-oriented goals and performance measures. Two of the major performance measures for civil enforcement, according to EPA, are (1) the value of injunctive relief--the monetary value of future investments necessary for an alleged violator to come into compliance, and (2) pollution reduction--the pounds of pollution to be reduced, treated, or eliminated as a result of an enforcement action. EPA told us these two measures, as well as penalties, should be considered when assessing the overall impact of its enforcement actions. EPA relies on these measures, among others, in pursuing its national enforcement priorities and overall strategy of fewer, but higher impact, cases. Unless these measures are meaningful, Congress and the public will not be able to determine the effectiveness of the programs. Therefore, it is important to understand how they are determined and the extent to which they accurately reflect EPA's accomplishments. In this context, we agreed to report on (1) amounts of civil and criminal penalties assessed in recent years and how EPA calculates and reports on these outcomes, (2) the value of injunctive relief and amounts of pollution reduction and how EPA calculates and reports on these outcomes, and (3) factors that influence EPA's process in achieving enforcement outcomes. This report recommends steps that EPA should take to improve the transparency and accuracy of its reports to Congress and the public when reporting on the effectiveness of its enforcement programs.

Total penalties assessed by EPA, when adjusted for inflation, declined from $240.6 million to $137.7 million between fiscal years 1998 and 2007. We identified three shortcomings in how EPA calculates and reports penalty information to Congress and the public. Specifically, EPA is: (1) overstating the impact of the enforcement programs by reporting penalties assessed against violators rather than actual penalties received by the U.S. Treasury; (2) reducing the precision of trend analyses by reporting nominal rather than inflation-adjusted penalties, thereby understating past accomplishments; and (3) understating the influence of its enforcement programs by excluding the portion of penalties awarded to states in federal cases. In contrast to penalties, we found that both the value of estimated injunctive relief and the amount of pollution reduction reported by EPA generally increased. The estimated value of injunctive relief increased from $4.4 billion in fiscal year 1999 to $10.9 billion in fiscal year 2007, in 2008 dollars. In addition, estimated pollution reduction commitments amounted to 714 million pounds in fiscal year 2000 and increased to 890 million pounds in fiscal year 2007. However, we identified several shortcomings in how EPA calculates and reports this information. We found that generally EPA's reports do not clearly disclose the following: (1) Annual amounts of injunctive relief and pollution reduction have not yet been achieved. They are based on estimates of relief and reductions to be realized when violators come into compliance. (2) Estimates of the value of injunctive relief are based on case-by-case analyses by EPA's technical experts, and in some cases the estimates include information provided by the alleged violator. (3) Pollution reduction estimates are understated because the agency calculates pollution reduction for only 1 year at the anticipated time of full compliance, though reductions may occur for many years into the future. Finally, we identified factors that affect EPA's process in achieving penalties, injunctive relief, and pollution reduction. For example, DOJ, not EPA, is primarily responsible for prosecuting and settling civil judicial and criminal enforcement cases. Therefore, EPA does not have ultimate control of enforcement outcomes.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To improve the transparency and accuracy of its reports to Congress and the public when reporting on the effectiveness of the enforcement programs, the EPA Administrator should, when reporting other major outcome measures of civil enforcement efforts, clearly disclose that the monetary value of injunctive relief is based on estimates of future amounts that defendants expect to spend to achieve outcomes, as agreed in consent decrees.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: In EPA's accomplishment data/compliance and enforcement annual results web page for FY 2011, the agency clearly followed our recommendation by adding a footnote explaining that the injunctive relief was an estimated value of a future amount.

    Recommendation: To improve the transparency and accuracy of its reports to Congress and the public when reporting on the effectiveness of the enforcement programs, EPA Administrator should, when reporting the amount and nature of penalties stemming from enforcement actions, disclose states' share of penalties in federal cases.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: EPA updated it National Enforcement Trends (NETs) Report to report states' share of penalties in federal cases.

    Recommendation: To improve the transparency and accuracy of its reports to Congress and the public when reporting on the effectiveness of the enforcement programs, EPA Administrator should, when reporting the amount and nature of penalties stemming from enforcement actions, disclose time series data that are adjusted for inflation.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: EPA updated its Enforcement and Compliance Annual Results end of year reports to report time series data that are adjusted for inflation.

    Recommendation: To improve the transparency and accuracy of its reports to Congress and the public when reporting on the effectiveness of the enforcement programs, EPA Administrator should, when reporting the amount and nature of penalties stemming from enforcement actions, disclose penalties collected as well as assessed by the federal government.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: EPA updated their OECA end of year reports, EPA Enforcement and Compliance Annual Results, Numbers at a Glance, in a manner that indicates they disclose penalties collected as well as assessed by the federal government.

    Recommendation: To improve the transparency and accuracy of its reports to Congress and the public when reporting on the effectiveness of the enforcement programs, EPA Administrator should, when reporting the amount and nature of penalties stemming from enforcement actions, disclose penalties in a manner that clearly indicates that they are assessed rather than collected penalties.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: EPA included accurate language in its OECA enforcement reports to clearly indicate that penalties were assessed rather than just collected.

    Recommendation: To improve the transparency and accuracy of its reports to Congress and the public when reporting on the effectiveness of the enforcement programs, the EPA Administrator should, when reporting other major outcome measures of civil enforcement efforts, clearly disclose that the pounds of pollution reduced represent the anticipated reduction for a 1-year period at the anticipated time of compliance.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: EPA used language that followed our recommendations in its end of year report for FY 2011, where its webpage stated the value of actions "to be taken" was estimated at $19 million. In EPA's 2011 briefing slides with End of Year Data and Trends, EPA in its footnote states, "projected reductions to be achieved during the one year period after all actions required to attain full compliance have been completed," which is consistent with our recommendation.

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