Detailed Information on the
Office of Surface Mining - State Managed Regulation of Surface Coal Mining Assessment

Working with States and Tribes to obtain more detailed data to represent the new long-term performance measure.

Continuing to review baseline data and targets for all performance measures.

Collaborate with the regulated states and Indian Tribes to review the performance of the program and agree on appropriate program measures and data collection and reporting.

Develop baseline data and targets for performance measures.

Develop a process for and schedule independent program evaluations.

Work with the states and Tribes to implement the new performance measures.

Review baseline data and targets for performance measures.

Measure: Percent of mined acreage reclaimed: Cumulative reclaimed (restored) acres to cumulative mined acreage (represented by bonded acreage).

Explanation:The ratio of reclaimed to mined acreage is the number of acres that have been reclaimed to the number of acres that have been mined annually. The timelines of the acres released from bond in conjunction with the mined acres is an indicator whether reclamation is current with mining, i.e. contemporaneous reclamation. The ratio is determined by utilizing cumulative data for mined acres and combined Phases I, II, and III bond release acres for three reasons (1) year to year variations are "smoothed out", (2) annual targets would be difficult to predict, and (3) all reclaimed acres are counted. The estimated target is 45%. This is a not a static number, i.e. exact number of acres reclaimed versus acres mined, but a dynamic target since the number of acres will continuously change as areas are mined and then reclaimed. The average time from mined to reclaimed differs depending on the area. The timeframe between mining versus reclamation is much shorter in the Appalachian mining region than in the west, particularly for the vast surface mines in the Powder River basin in Wyoming. The recommended ratio, 45 percent, is based on 10 years of available data.

Measure: Number of acres released from phase III performance bonds.

Explanation:These are the number of acres that have been fully reclaimed from current mining operations, meet the performance standards, and released as useful and productive restored land. This performance measure is the acreage of land that is released every year by active coal mine operators (and is dependent on the operator filing application for release). This is done through a series of bond releases. The bonds are required to assure that funds are available for reclamation in case the operator fails to reclaim the mined land.

Measure: Number of acres released from Phase I and II Performance Bonds.

Explanation:Phase I and II bond releases are necessary prior to final release at phase III.

Measure: Percentage of sites that are free of off-site impacts.

Explanation:Protecting the environment, people and property is measured by the number of times incidents occur outside the boundaries of the permitted areas being mined. These are known as off-site impacts and ideally the goal is to not have any incidents occur. It is inevitable that some impacts will occur-100% compliance is not realistic. The impacts are damaging effects that would occur as a result of blasting, land stability, hydrology, encroachment, etc., that would affect people, land, water, or structures outside the permitted area of mining operations. This is also measured on an annual basis.

Measure: OSM will provide appropriate grant funding within 60 days of a complete grant application. Goal: 85%

Explanation:OSM's established policy is to process and obligate funds within 60 calendar days of receipt of the grant application by OSM. The Federal Assistance Manual is the official location of policies and procedures for management and administration of OSM's financial assistance program.

Is the program purpose clear?

Explanation: Through legislation enacted in 1977, the Office of Surface Mining (OSM) was charged to establish a nationwide program to protect society from the adverse effects of surface coal mining, strike a balance between protection and the Nation's need for coal as an essential source of energy, and to assist coal mining states and Indian Tribes, through grants, to develop, administer and enforce the Surface Mining Control and Reclamation Act (SMCRA) programs. Currently, twenty-four States (92% of the 26 States with active coal mining) have chosen to take 'primacy', i.e., responsibility for regulating surface coal mining and reclamation operations within their borders. No Indian Tribes have yet assumed primacy.

Evidence: The Surface Mining Control and Reclamation Act (SMCRA), specifically sections 102, 705 and 710(i), contain the purposes of the SMCRA and the authorities to provide grants to the States and Tribes. OSM's mission goals are to: (1) Provide a cleaner and safer environment by reclaiming and restoring land and water degraded by past mining, and (2) Protect people and the environment during current mining operations and to ensure that the land is restored to beneficial use after mining has ceased. These goals are published on OSM's website, in its Budget Justifications, and Annual Reports.

Does the program address a specific and existing problem, interest, or need?

Explanation: Prior to 1977 there was no nationwide program regulating surface coal mining activities. In 1972, there was a large surface coal mining disaster on the Buffalo Creek, West Virginia. Failure of a coal company sludge pond led to a flood which killed 125 people and left about 4,000 people homeless. Passage of SMCRA in 1977 has not eliminated the risk of surface mine failures but it has significantly reduced it. During active mining, there is always risk for safety and environmental hazards both on and off the permitted mine site. There are also complex technical challenges. The State regulatory programs, incorporating SMCRA requirements cover every aspect of coal mining operations. OSM provides oversight and technical assistance to its state partners to reduce the adverse impacts of coal mining on society and the environment.

Evidence: SMCRA identified "Findings", specifically section 101 (c), (e), (f), and (g), to support the legislation. Those findings outline the problem, interest, and need for the program. For example, (f) states that "because of the diversity in terrain, climate, biologic, chemical, and other physical conditions in areas subject to mining operations, the primary governmental responsibility for developing, authorizing, issuing, and enforcing regulations for surface mining and reclamation operations subject to this Act should rest with the States."

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: SMCRA is the only Federal statute specifically directed toward regulation of the environmental impacts of coal mining. Its coal regulatory program is based on a cooperative partnership between States and OSM. SMCRA established that States should be the primary regulatory authority because of the physical diversity of lands. OSM's role is to approve State regulatory programs and amendments, monitor and oversee program implementation, and provide technical and other assistance to the States. EPA and Army Corps of Engineers regulatory programs also regulate coal mining activities, but their programs work to control water pollution and disturbances to surface waters; they do not consider non-water problems, such as blasting, subsidence, and land reclamation after mining. Another Federal agency that regulates mining is the Mine Safety and Health Administration (MSHA). MSHA governs miner safety, but not the safety and health of other coalfield citizens nor protection of the environment. While other agencies touch on aspects of mining, OSM's program covers the complete mining cycle.

Evidence: 1) Title V of SMCRA, sections 501, 502, 503, 517, 521, outlines the control of the environmental impacts of surface coal mining such as the environmental protection standards, establishment of State Programs, inspections and monitoring, and enforcement of the law. Sections 705 and 710 (i) outline the authority for providing grants to the States and Tribes. 2) Performance Agreements between OSM and each State are developed to ensure that all parties meet intended goals. A description of the agreement content can be found in OSM's Directive REG-8, "Oversight of State Regulatory Programs." Signed agreements are maintained in appropriate Field Offices.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: No major flaws were discovered in the program design or suggested alternative designs that would substantially increase the program's effectiveness or efficiency. As stated in 1.2, one of the findings in SMCRA is to allow for a State to regulate coal mining within its borders. This is working as evidenced by the fact that of the 26 coal producing states, only two are operated as a Federal program. The States have unique capabilities and knowledge to regulate the lands within their borders. The Federal grants are matched dollar-for-dollar by the receiving state. Providing a 50 percent match of Federal funds to primacy States in the form of Grants results in the highest benefit and the lowest cost to the Federal government. If a State were to relinquish primacy, OSM would have to hire sufficient numbers and types of Federal employees to implement the program. The cost to the Federal government would be significantly higher. The major constraint on the program is funding -- if States do not receive the Federal grant or the State match funding they need, OSM's ability to meet the goals of SMCRA may be lessened.

Evidence: 1) State Evaluation Reports are prepared each year by OSM in coordination with the State. Specific data gathered to review the results of the State Program can be found in OSM Directive REG-8 " Oversight of State Regulatory Programs." 2) The DOI Office of the Inspector General issued an Evaluation Report on State Operated Coal Regulatory Programs in October 2004. That report focused on the adequacy of inspection and bond release activities and potential regulatory program cost savings related to GPRA measures (S-IN-OSM-0087-2003).

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: OSM resources and grant awards are allocated on the basis of need, and the extent, type and scope of mining operations in each State. The State regulatory program is designed to balance citizen safety and environmental protection with coal production in a time of continued reliance on coal as a major source of energy to the Nation. As Congress intended, OSM's programmatic efforts and grant funding are primarily directed at the States because they are the primary regulatory authorities in most cases. OSM's Budget Justification contains a sub-activity funding line for the total amount of regulatory grant funding available for States and Tribes. That total dollar value, less any final appropriation reductions, is then distributed to the States and Tribes. States must be able to match with State funding the Federal grant amount provided.

Evidence: 1) The State and Tribal funding level for regulatory grants is contained in the FY 2007 Budget Justification on page 75. An estimated distribution of that funding is outlined on page 78. States provide 18-month estimates well in advance of the budget year and, as we get closer to the budget year, they update those estimates. OSM grants staff, in coordination with their States, and Regional Directors review the figures provided by the States and past expenditures, and determine the appropriate distribution of funding. 2) Grant distributions for past and the current fiscal years are contained on OSM's web-site.

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: OSM has two long-term performance measures: (1) percent of sites free of off-site impacts and (2) percent of mined acreage reclaimed. These measures are also used by the States in support of their program accomplishments. Both measures focus on outcomes. For the first measure, the SMCRA requirement to protect the environment, people and property is measured by the number of times incidents occur outside the boundaries of the permitted areas being mined, i.e. off-site impacts. The impacts are damaging effects that would occur as a result of blasting, land stability, hydrology, or encroachment that would affect people, land, water, or structures outside the permitted area of mining operations. Ideally the goal is to not have any incidents occur, but it is inevitable that some impacts will occur since 100% compliance is not realistic. The second measure, which was developed in response to an earlier PART recommendation, displays the ratio of cumulative reclaimed (restored) acres to cumulative mined acreage (represented by bonded acreage) to provide a percentage of the mined acreage reclaimed. This measure was developed by OSM in coordination with its State partners and uses data available in State Annual Evaluation Reports. This measures the SMCRA requirement to assure reclamation as contemporaneously as possible, and demonstrates accomplishments of the return of mined acreage to its planned land use. The initial goal is to maintain the existing ratio between acres disturbed verses reclaimed, as a widening gap between the two reflects a backlog of land available for reclamation, contributing to a delay in contemporaneous reclamation and subsequent bond release.

Evidence: 1) Goal Performance Tables, published in the FY 2007 Budget Justification, identify current and new performance measures, targets and accomplishments, and explanations of any changes (pp. 37-44); http://www.osmre.gov/budget.htm; 2) The FY 2007 Budget Justification (p. 71) discusses previous PART recommendations and the process of developing the new long-term outcome measure; 3) Wyoming and Indiana FY 2004 State Annual Evaluation Reports show similar concepts of reporting contemporaneous reclamation, which OSM adapted in developing this new measure. http://www.osmre.gov/report04.htm; 4) OSM Directive REG-8, Oversight of State Regulatory Programs (p. T-5), http://www.osmre.gov/directives/directive883.pdf, shows the data elements reported and available in support of the new measure; 5) The briefing paper entitled "Title V Performance Measure" documents the trend analysis and development of the second performance measure described in the explanation above. This paper was provided to OMB during discussions of the new measure and demonstrates that the measure is meaningful, has trend data, and reflects the purpose of the program.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: The long-term measures are based on trend data and are the best indicators that are available. Due to the nature of mining, changes in the industry, and development of policies, there are many impacts that would encourage more or less mining. The target for the long-term measure percentage of sites free of off-site impacts is ambitious as evidence by the fact that OSM has yet to exceed the target that 93% of coal mines will be free of off-site impacts per year. Considering the nature of mining it would be impossible to achieve 100%. When the target is no longer valid, OSM will reevaluate the data to establish a new target. The long-term measure for the percent of mined acreage reclaimed (calculated as the ratio of cumulative reclaimed (restored) acres to cumulative mined acreage (represented by bonded acreage)) was recently developed by OSM, the initial target, based on trend data, is preliminary. As additional data is collected, OSM will reassess the target to determine if a revision is needed.

Evidence: 1) Goal Performance Tables, published in the FY 2007 Budget Justification, identify current and new performance measures, targets and accomplishments, and explanations of any changes (pp. 37-44),"http://www.osmre.gov/budget.htm"; 2) The FY 2007 Budget Justification (p. 71), "http://www.osmre.gov/budget.htm" lists recommendations to previous PART assessments and explains the process of developing this new measure; 3) The briefing papers that document the trend analysis and development of the new performance measure, provided to OMB during discussions, show that the measure has extensive trend data to develop an ambitious target.

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: The annual measures include the completion of Phases I, II, and III bond release which directly leads to final reclamation and release of land back to its intended land use; and the measurement of the percent of active sites that are free of off-site impacts on an annual basis as well as long-term demonstrates how good the regulatory review processes are being managed by the States.

Evidence: Goal Performance Tables, published in the FY 2007 Budget Justification, identify specific annual performance measures, targets and accomplishments, and explanations of any changes (p. 37-44), "http://www.osmre.gov/budget.htm".

Does the program have baselines and ambitious targets for its annual measures?

Explanation: The measures are based on trend data and have changed over time due to the mining industry actions. Due to the nature of mining, changes in the industry, and development of policies, there are many impacts that would encourage more or less mining. OSM and the States are not in a position to request an operator to apply for bond release. Therefore, OSM's bond release targets are based on trend data and are the best indicators that are available. Protecting the environment, people and property is measured by the number of times incidents occur outside the boundaries of permitted areas being mined. For this purpose, OSM uses an off-site measure. The measure looks at off-site impact to water quality, blasting, land stability, encroachment, and any other notable impacts. The target is that 93% of coal mines will be free of off-site impacts per year. The baseline is calculated by dividing the number of inspectable units by the number of off-site impacts occurring. The target is ambitious considering the nature of mining and that it would be impossible to achieve 100%.

Evidence: 1) Goal Performance Tables, published in the FY 2007 Budget Justification, identify specific annual performance measure, targets and accomplishments, and explanations of any changes (p. 37-44), "http://www.osmre.gov/budget.htm"; 2) The Code of Federal Regulations [Cite: 30CFR800.40, Revised as of July 1, 2005] explains the requirements needed to release performance bonds, "http://frwebgate.access.gpo.gov/cgi-bin/get-cfr.cgi"; 3) OSM directive REG-8, "Oversight of State Regulatory Programs" (pp. I-4 - I-8, II-7, T-4), http://www.osmre.gov/directives/directive883.pdf provide guidance and instructions in support of off-site impacts.

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: The States are an integral part of achieving the goals for the Surface Mining Program. In an effort to track the progress toward meeting OSM's annual and long-term goals, OSM receives data annually from its State and Indian Tribe partners through the State Annual Evaluation Reports which form the basis for several OSM performance measures. In an effort to develop program goals, OSM and coal-producing States committed to a two year effort to forge a consensus and mutual collaboration to develop effective and meaningful measures. OSM considered the committee's extensive recommendations during the development of OSM's new long-term measure "percent of mined acreage reclaimed," which is calculated as the ratio of cumulative reclaimed (restored) acres to cumulative mined acreage (represented by bonded acreage). In the regulatory grant applications, the States identify the results and benefits expected from the program funding.

Evidence: 1) Performance Agreements between OSM and each State are developed to ensure that all parties meet intended goals. A description of the agreement content can be found in OSM's Directive REG-8, "Oversight of State Regulatory Programs." Signed agreements are maintained in appropriate Field Offices. 2) Performance Measures: Title V Data Elements Meeting Summary May 25-26, 2004, Cincinnati, Ohio, outlines steering committee recommendations for possible new performance measures. 3) OSM Federal Assistance Manual Chapter 5-20R outlines the grant application process required data elements.

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: The OSM program evaluation system is an ongoing process of assessing program accomplishments and communicating those assessments to management. OSM and States develop performance agreements on an annual basis which includes the topics or areas where program evaluations will be conducted. Those evaluations are included as part of the oversight and annual evaluation reports and contribute to developing an accurate picture of progress in accomplishing OSM's mission. In addition, OSM conducts Internal Departmental Control Reviews, Alternative Internal Control Reviews, and audits under the auspices of OMB's A-123 guidance and the Federal Managers' Financial Integrity Act. Reviews of OSM's Certification and Accreditation of information technology systems, which includes its financial system containing grants data, are conducted by third party contractors on a recurring basis.

Evidence: 1) OSM has a plan of all appropriate program components and a schedule for review of those components. Reviews are conducted periodically depending on the risk rating for each component, usually by a team of appropriate staff, with management review and input. In addition, DOI requires functional reviews of several administrative and financial components on an annual basis, including financial assistance. Reviews are conducted and submitted to DOI. DOI's Office of Financial Management and Office of Inspector General examine a representative sample of final reports to ensure compliance with all standards. This process is outlined in the November 4, 2005, memorandum, "Guidelines for FY 2006 Internal Control and Audit Follow-up Programs. OSM's final reviews are referenced in various documents such as the Director's Annual Assurance Statement on Internal Control, OSM's Annual Reports (available on the OSM web-site), and OSM's Financial and Performance Accountability Report. 2) The DOI Office of the Inspector General issued an Evaluation Report on State Operated Coal Regulatory Programs in October 2004. That report focused on the adequacy of inspection and bond release activities and potential regulatory program cost savings related to GPRA measures. 3) Annual Independent Auditors' Reports for OSM are contracted by DOI's Inspector General Office to KPMG LLP an independent certified public accounting firm. 4) Single Audit Reports on States performed by State Auditors and/or contracted to Independent Auditors (29 performed in the last 3 years) detail any deficiencies in financial recordkeeping or processes found. 5) State Annual Evaluation Reports completed each year by OSM in conjunction with its State Partners outline any issues and corrective action taken to resolve those issues and include public outreach.

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: OSM's budget requests since FY 2003 have included the integration of planning and performance. In FY 2005 and FY 2007, OSM's budget requests included increases in funding for State Regulatory grants. Long-term and annual performance goals include eliminating off-site impacts and restoring the land to its planned use. Providing adequate funding for state regulatory program grants is essential to OSM's effort to achieve those goals. When funding falls below program needs, programs may be unable to keep active sites free of off-site impacts, reclaim mined acres, and prevent injuries.

Evidence: Discussion of request for increase in State and Tribal funding is contained on page 70 of the FY 2007 Budget Justification; the entire chapter on Environmental Protection also identifies the activities associated with the requested funding, "http://www.osmre.gov/budget.htm" .

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: Strategic planning deficiencies were identified during the earlier PART review in FY 2003 and by DOI's Office of the Inspector General evaluation on state operated coal regulatory programs. Corrective actions have been taken to develop a new long-term outcome measure and an efficiency measure. In an effort to develop a new measure, OSM and coal-producing States committed to a two year effort to forge a consensus and mutual collaboration to develop effective and meaningful measures. OSM considered the committee's extensive recommendations during the development of OSM's new long-term measure "percent of mined acreage reclaimed" which is calculated as the ratio of cumulative reclaimed (restored) acres to cumulative mined acreage (represented by bonded acreage).

Evidence: 1) The DOI Office of the Inspector General issued an Evaluation Report on State Operated Coal Regulatory Programs in October 2004. That report focused on the adequacy of inspection and bond release activities and potential regulatory program cost savings related to GPRA measures. 2) Performance Measures: Title V Data Elements Meeting Summary May 25-26, 2004, Cincinnati, Ohio, outlines steering committee recommendations for possible new performance measures. 3) The new measure is also included on page 37 in DOI's "Draft Revised Department of the Interior Strategic Plan for FY 2007 - 2012" for public review and comment, "http://www.doi.gov/ppp".

Are all regulations issued by the program/agency necessary to meet the stated goals of the program, and do all regulations clearly indicate how the rules contribute to achievement of the goals?

Explanation: Regulations to establish permanent regulatory procedures for active surface coal mining that minimize damage to the environment and to the productivity of the soil and to protect the health and safety of the public. Regulations are also essential in order to insure that competition in interstate commerce among sellers of coal produced in different States will not be used to undermine the ability of the several States to improve and maintain adequate standards on coal mining operations within their borders. Because of the diversity in terrain, climate, biologic, and other physical conditions in coal mining areas, States are intended to take the primary responsibility for regulating surface coal mining and reclamation. Regulations implementing this program generally address five major program components required by SMCRA: (1) designation of areas as unsuitable for mining; (2) performance standards; (3) permitting requirements and procedures; (4) performance bond; and (5) inspection and enforcement requirements. The rules are necessary to carry out the intent of the Surface Mining Control and Reclamation Act (SMCRA).

Evidence: The first Federal final rules were published March 13, 1979, and addressed all SMCRA regulatory requirements. Changes to these Federal rules occur as a result of passage of law that directly or indirectly affects SMCRA requirements, court decisions affecting the interpretation of SMCRA requirements or the changing nature of technology. Approved primacy State regulatory programs must be no less stringent than SMCRA and no less effective than the Federal implementing regulations. OSM reviews any changes to the Federal rules to determine whether a State must amend its program to be in accordance with SMCRA and consistent with the Federal regulations.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: OSM and its key program partners (the coal-producing States) jointly develop annual performance agreements (PA) listing program goals and plans to achieve those goals. The PA includes (1) topics where State program evaluations will be conducted and measured and (2) core, high quality program data States provide to OSM. Results are presented in the State Annual Evaluation Reports along with any recommendations and actions taken as a result of evaluations. The grant application process also provides detailed data from our key program partners. The State provides detailed and precise data on how the grant funding will be spent, outlines an action plan for the project and identifies associated results and benefits.

Evidence: 1) Performance Agreements between OSM and each State are developed to ensure that all parties meet intended goals. A description of the agreement content can be found in OSM's Directive REG-8, "Oversight of State Regulatory Programs." Signed agreements are maintained in appropriate Field Offices. 2) The Federal Assistance Manual outlines the grant application process and requirements for monitoring. It may be found on OSM's website.

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: OSM and States determine performance goals in annual performance agreements. OSM field managers and their staff plan and conduct oversight activities, including inspections, independent reviews and technical analyses, and prepare related documents and reports, including an annual evaluation report for each State. The OSM oversight reports focus on whether the public protection requirements and environmental protection standards of SMCRA are being met, with primary focus on end results and on-the-ground success in meeting SMCRA's environmental protection goals. Timetables and schedules are part of the oversight process, e.g., annual submission of program data by States and grants monitoring.

Evidence: 1) Performance Agreements between OSM and each State are developed to ensure that all parties meet intended goals. A description of the agreement content can be found in OSM's Directive REG-8, "Oversight of State Regulatory Programs." Signed agreements are maintained in appropriate Field Offices. 2) The Federal Assistance Manual, Chapter 5-50, outlines the requirements and responsibilities for grant monitoring to assure that the terms, condition, and scope of the grant are being followed.

Are funds (Federal and partners') obligated in a timely manner, spent for the intended purpose and accurately reported?

Explanation: OSM has procedures in place to award grant funds within 60 calendar days from receipt. Deobligations as a result of grantees not expending all awarded funding during the fiscal year are low. The OSM review of regulatory grant funding in 1999 reported that the unexpended grant balances declined from 6.9% in FY 1994 to 2.2% in FY 1997. In addition, OSM monitors state-match contributions to ensure that states are also obligating state funding at the same rate as the Federal grant. OSM procedures follow the instructions outlined in OMB Circular A-102 that the program narrative statement should identify a detailed spending plan for the funds. OSM also has procedures in place to monitor and document the results, and track submission of required financial and performance reports by due date.

Evidence: 1) National Grant Team Report June 18, 2003, contains a summary of grant funding and spending. 2) Annual budget submissions contain State-by-State data on obligations of grants funding. 3) The OSM Federal Assistance Manual contains policies and procedures for management/administration of OSM's financial assistance programs.

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: The State Regulatory program is non-competitive and, therefore, the use of incentives is not applicable since funding is based on appropriated amounts, States' needs as shown in grant applications, and States' ability to provide State funding to match the Federal grant amount. OSM does conduct an annual evaluation of every State program and that includes compiling a variety of program performance data such as program staffing, number of inspections conducted, Phases I, II and III bond release, off-site impacts and the type and severity, etc. In addition, a recent example of how OSM used cost comparisons and trend data is demonstrated in its review of the Missouri program to determine temporary Federal needs for enforcement, as well as the future State Program needs. OSM continues to use and implement IT improvements and use E-gov, where possible. Progress includes: 1) the use of electronic grants to simplify and expedite the application process for the States and Tribes; 2) Technical Innovation and Professional Services (TIPS), an analytical tool to assist the States with hydrologic assessments, quantifying potential effects of coal mining, geospatial technology, etc; and 3) the current and future use of electronic permitting by States. OSM encourages reforestation which achieves environmental and economic benefits, including higher quality reclamation, an increase in the number of sites reclaimed, economic opportunities for local communities, aesthetic and recreational improvements, sale of forest products by landowners, and the opportunity for reporting carbon reductions through sequestration in forests. Activity-based costing also enables OSM to fully cost its program accomplishments.

Evidence: 1) The FY 2007 Budget Justification "http://www.osmre.gov/budget.htm", details OSM's implementation of IT improvements and its use of E-gov. The TIPS program (p. 102) and Reforestation Initiatives (pp. 111-112) are two examples of OSM's activity in these areas; 2) Various single audit reports conducted by the IG for various States; 3) The FY 2006 ABC/M Dictionary defines the activity based costing codes which OSM uses to measure efficiencies and cost effectiveness; 4) Missouri: Internal OSM Document and the 2005 Annual Summary Report outlines accomplishments while the program was administered by OSM's MidContinent Region (pp.2-3, 10), "http://www.osmre.gov/report05.htm" ; 5) Brochure 'Appalachian Regional Reforestation Initiative' details the economic benefits of reforestation to the environment and local communities; and 6) Brochure, '2006 Excellence in Surface Coal Mining Reclamation Awards, Call for Nominations' includes rating criteria and point system for evaluation of entries.

Does the program collaborate and coordinate effectively with related programs?

Explanation: OSM, State regulatory programs, and other Federal and State programs do collaborate and coordinate effectively to avoid duplication and seek solutions to common problems. In addition, stakeholders - including citizens, public interest groups, and the coal industry - are also provided an opportunity for input. A recent program is to restore active and abandoned surface mine lands to productive, useful forests through promoting the Forest Reclamation Approach (FRA). This initiative has the interest of State, local and Federal governments, industry, citizen and environmental groups and about 102 various representatives have signed a Statement of Mutual Intent to foster this effort. Mining companies are restoring land with forests following the various principles of the FRA. This initiative has resulted in (1) over 1,400 hardwood trees planted through a collaborate effort of school students, coal industry representatives, along with State/Federal staff; (2) a grove of trees using new techniques has survived nearly a decade where other plantings never succeeded, and (3) permanent reforestation demonstration plots include 130 acres of reclaimed mine land where over 65,000 trees have been planted. In another effort, OSM staff and State representatives developed a software program termed AMD-Treat to assist government agencies and mine water practitioners in the process of estimating the cost of abatement of polluted mine drainage discharges. AMD-Treat has aided users to look at the problem of mine drainage as a long-term financial issue. More than 2,500 copies of the program have been distributed free on CD and there are currently over 700 registered users from over 40 different states and a similar number of countries. OSM routinely coordinates with appropriate State, local and Federal governments as well as citizens and industry on current issues. Finally, OSM meets several times a year with the Interstate Mining Compact Commission (IMCC) and the Western Interstate Energy Board (WIEB), organizations that represent more than 20 of the State regulatory authorities.

Evidence: 1) The ARRI's (Appalachian Regional Reforestation Initiative) First Two Years brochure outlines the efforts and approaches being taken to restore lands to forestry. 2) The AMD-Treat Computer Model is available on OSM's website under Research and Technology, Acid Mine Drainage Information.

Does the program use strong financial management practices?

Explanation: OSM's Division of Financial Management has received clean audit reports for the last 15 years. OSM was the only bureau in DOI to receive a 'clean opinion' in all three areas: financial statements, reports on internal controls and compliance with laws and regulations. No material weaknesses were identified. Detection of erroneous payments is part of OSM's program management function carried out by grants specialists through on-site reviews with the States. For OSM program activities, OSM uses activity based costing. This assists management in identifying costs for each defined activity. Codes and outputs are under review and will be revised as OSM moves to DOI's Financial and Business Management System in FY 2007.

Evidence: 1) The Director's Fiscal Year 2005 Annual Assurance Statement on Management Controls dated September 15, 2005, outlines reviews conducted, no material weaknesses, and compliance with appropriate rules and regulations. 2) OSM's Financial and Performance Accountability Report for FY 2005 contains financial statements and a statement of compliance with legal and financial requirements.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: No material weaknesses were identified in OSM's annual assessment of agency programs and systems in accordance with the Federal Manager's Financial Integrity Act and OMB circular A-123. In 2005, OSM conducted assessments of selected programs and administrative functions that were sufficient to ensure the adequacy of controls in place. Areas for improvement were identified and corrective actions are being implemented. In general, management controls are adequate to safeguard OSM programs and systems against waste fraud, abuse, and mismanagement. Currently, neither the General Accounting Office (GAO) nor Interior's Office of Inspector General has identified any major performance or management challenges that limit OSM's effectiveness in carrying-out its mission. OSM is in compliance with the Federal Managers Financial Integrity Act (FMFIA).

Evidence: Independent Auditors' Report on the Office of Surface Mining Reclamation and Enforcement's Financial Statements for Fiscal Years 2004 and 2005 (Report No. X-IN-OSM-0014-2005) contains an unqualified opinion on OSM's balance sheets and related financial statements.

Does the program have oversight practices that provide sufficient knowledge of grantee activities?

Explanation: The Annual Performance Agreement for each grantee is the basis for oversight. The Agreement includes on-site reviews, review of expenditures, and program and performance review. One to two reviews per grantee are conducted annually, focusing on internal controls and management of the program.

Evidence: 1) For each grant, States are required to report regulatory grant activities (FAM 5-60R) and close-out requirements (FAM 5-70R) and submit a semiannual programmatic narrative (optional OSM-51 format) and financial performance reports (SF-269 form); 2) Performance Agreements between OSM and each State are developed to ensure that all parties meet intended goals. A description of the agreement content can be found in OSM's Directive REG-8, "Oversight of State Regulatory Programs." Signed agreements are maintained in appropriate Field Offices.

Does the program collect grantee performance data on an annual basis and make it available to the public in a transparent and meaningful manner?

Explanation: OSM collects and compiles grantee performance data to meet the various needs of the agency, States and public. Data from 26 State annual reports is aggregated to the programmatic level and disseminated through the OSM Annual Report and Annual Budget Justification, which are available in printed format and via OSM's website. State Evaluation reports provide individual grantee programmatic data. The fiscal year State and Tribal (grantee) regulatory funding are disaggregated to the State/Tribe level by non-federal and federal lands. This information is available in the OSM Annual Budget Justification, which is available in printed format and via OSM's website.

Evidence: 1) State Evaluation Reports are prepared each year by OSM in coordination with the State. Specific data gathered to review the results of the State Program can be found in OSM Directive REG-8 "Oversight of State Regulatory Programs." 2) OSM Annual Reports contain aggregated data to programmatic level for State performance data such as offsite impacts and Phases I, II, III bond release, see Annual Report 2005 Table 10 pg 25, http://www.osmre.gov/annualreport.html. 3) OSM Annual Budget Justification disaggregates overall budget to State level by non-federal/federal lands, 2007 Budget Justification, p.78, http://www.osmre.gov/pdf/final_osm_budget_justification_greenbook_february_%2015_2006.pdf.

Did the program seek and take into account the views of all affected parties (e.g., consumers; large and small businesses; State, local and tribal governments; beneficiaries; and the general public) when developing significant regulations?

Explanation: OSM is required to do so in accordance with the Administrative Procedure Act. When as a result of changes in law, court decisions or other precipitating events the Federal SMCRA regulations must be revised, such revisions are finalized through publication in the Federal Register (FR). Every final rule published in the FR contains a section regarding how OSM obtained and considered public input on the final rule. In addition to publication in the FR, public hearings are held if requested, and OSM maintains a distribution list of individuals, groups, etc. who have requested that they be forwarded a copy of any final rule or final rules pertaining to specific subjects. OSM also often conducts outreach when proposing significant revisions to the Federal regulations. In the final rule, OSM explains its consideration of alternatives and the disposition of all comments received. State program and amendments approvals follow FR procedures and States regulations must also comply with State rule publication process, similar to the FR process.

Evidence: (1) Proposed/Final rules are examples of outreach to interested parties, i.e. requested public comments, conducted extensive public meetings, mailed copies to interested individuals and groups. Examples include the following proposed/final rules: "Valid Existing Rights and Subsidence Due to Underground Coal Mining" (final rules, 64 FR 70766-70866, Dec 17, 1999); "Excess Spoil; Stream Buffer Zones; Diversions" (proposed rule 69 FR 1036-1048, Jan. 7, 2004); "Ownership and Control Settlement", (proposed rule 68 FR 75036-75048 Dec. 29, 2003). (2) Environmental Impact Statement for Mountain Top Mining, October 2005, describes extensive outreach for this controversial issue. [http://www.epa.gov/region3/mtntop/pd/mtm-vf_fpeis_full-document.pd].

Did the program prepare adequate regulatory impact analyses if required by Executive Order 12866, regulatory flexibility analyses if required by the Regulatory Flexibility Act and SBREFA, and cost-benefit analyses if required under the Unfunded Mandates Reform Act; and did those analyses comply with OMB guidelines?

Explanation: OSM conducts these analyses for all proposed regulations to the extent required by law, order, or OMB.

Evidence: These supporting documents are examples of a complex regulatory cost/benefit impact analysis prepared for a significant rule. The Environmental Impact Statement and Economic Analysis were prepared for the "Valid Existing Rights and Subsidence Due to Underground Coal Mining" (final rules, 64 FR 70766-70866, Dec 17, 1999) and are published together in OSM EIS-29.

Are the regulations designed to achieve program goals, to the extent practicable, by maximizing the net benefits of its regulatory activity?

Explanation: The regulations are designed to provide the minimum threshold of requirements with which compliance is necessary. While each coal-producing State has been encouraged to accept primacy so it may incorporate and address circumstances unique to that State (e.g., climate, vegetation) in its regulation of surface coal mining operations within its borders, OSM's responsibility under SMCRA is national in scope. OSM guards against uneven regulation of surface coal mining operations by ensuring that regulation - whether done by the individual States or by OSM as regulatory authority or in providing States with any needed assistance - meets the national requirements' threshold minimum, while maintaining a level playing field that enables industry to meet the need for mining the Nation's most abundant and essential source of energy. In addition to ensuring a level playing field, the Federal regulations must not impose an undue burden upon the regulated entity.

Evidence: The Surface Mining Control and Reclamation Act of 1977, specifically sections 101(g) which describes all States on a level playing field and 102(f) with the concept of striking a balance between coal mining and protecting the environment.

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: The long-term goals are not an end point, but rather reflect what is happening in the coal mining industry. The progress is an indicator of other forces impacting the industry and variations of this indicator are reviewed and explained. The new performance measure was developed using data from 1996-2004. It was determined that a ratio of reclaimed acres to mined acres best represents a nationwide view of the program. Individual State data is available to address unexpected results in meeting target goals.

Evidence: 1) Goal Performance Tables, published in the FY 2007 Budget Justification, identify current and new performance measures, targets and accomplishments, and explanations of any changes (p. 37-44), "http://www.osmre.gov/budget.htm"; 2) OSM Directive REG-8, "Oversight of State Regulatory Programs" (p. T-5), "http://www.osmre.gov/directives/directive883.pdf", shows the data collection process used in support of the new measure; 3) The briefing papers that document the trend analysis and development of the new performance measure, provided to OMB during discussions, show that the measure is meaningful, has trend data and long-term performance goals.

Does the program (including program partners) achieve its annual performance goals?

Explanation: Due to the nature of mining, changes in the industry, and development of policies, there are many impacts that would encourage more or less mining. For example, operators may focus on increased mining due to market demand. OSM and the States are not in a position to request an operator to apply for bond release. Therefore, OSM's target is based on trend data and is the best indicator that we have available. In FY 2004, OSM met the target; however, FY 2005 actual data was slightly below the target. OSM's review of individual state data for FY 2005 revealed that the increase in sites with off-site impacts is due to a higher percentage of minor impacts. The percentage of moderate and major impacts decreased slightly.

Evidence: 1) Goal Performance Tables, published in the FY 2007 Budget Justification, identify specific annual performance measures, targets and accomplishments, and explanations of any changes (p. 37-44), "http://www.osmre.gov/budget.htm". The tables indicate that OSM is achieving its annual performance goals. 2) The Code of Federal Regulations [Cite: 30CFR800.40, Revised as of July 1, 2005] explains the requirements needed to release performance bonds, "http://frwebgate.access.gpo.gov/cgi-bin/get-cfr.cgi".

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: The States continue to review sites for off-site impacts and come within the range of the target goal, as evidenced in their individual annual reports. Also, several technical initiatives to assist in reclaiming sites with issues, such as 1) the use of mobile computing technologies requiring up to 85% less time and resources to collect field and GIS data collections and analysis; and 2) the development of tools such as AMDTreat software, which helps predict long-term costs to treat acid mine drainage. As an example of the use of AMDTreat, OSM and a team of state staff created a GIS database of all AMD remediation projects for AML and bond-forfeited projects statewide. Information collected contains funding data, water quality of discharges and treated water, organizational information, descriptions of the treatment technology, observations of the effectiveness of the system, and the total capital cost of the projects. Projects in the database have a total capital investment of over $50 million.

Evidence: 1) Goal Performance Tables, published in the FY 2007 Budget Justification, identify current and new performance measures, efficiency measures, targets and accomplishments, and explanations of any changes (p. 37-44), "http://www.osmre.gov/budget.htm"; 2) Technical initiatives assist in the reclamation of sites. The use of mobile computing technologies, discussed in the FY 2006 Budget Justification (p. 103), "http://www.osmre.gov/greenbook06.htm" and AMDTreat software, detailed in the FY 2007 Budget Justification (p. 103) are examples of cost effectiveness; 3) The FY 2006 ABC/M Dictionary lists all of the activity based costing codes which OSM uses to measure efficiencies and cost effectiveness; 4) The 2005 Pennsylvania State Annual Evaluation Report (p. 29, "http://www.osmre.gov/oversight/pennsylvania2005.pdf") describes all of Pennsylvania's Regulation and AML activities, and explains the use of a statewide GIS database and its cost effectiveness.

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: The SMCRA regulatory program is a unique program with state regulatory programs being a component of that program. Therefore, OSM has no basis for comparison.

Evidence: NA.

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: OSM and States develop performance agreements on an annual basis which includes the topics or areas where program evaluations will be conducted. Those evaluations are included as part of the oversight and annual evaluation reports and contribute to developing an accurate picture of progress in accomplishing OSM's mission. In addition, OSM conducts Internal Departmental Control Reviews, Alternative Internal Control Reviews, and audits under the auspices of OMB's A-123 guidance and the Federal Managers' Financial Integrity Act. Reviews of OSM's Certification and Accreditation of information technology systems, which includes its financial system containing grants data, are conducted by third party contractors on a recurring basis. The most recent IG report on the program was issued in October 2004 and focused, among other things, on the adequacy of inspection and bond release activities.

Evidence: 1) State Annual Evaluation Reports completed each year by OSM in conjunction with its State Partners outline any issues and corrective action taken to resolve those issues. 2) The DOI Office of the Inspector General issued an Evaluation Report on State Operated Coal Regulatory Programs in October 2004. That report focused on the adequacy of inspection and bond release activities and potential regulatory program cost savings related to GPRA measures. 3) Annual Independent Auditors' Reports for OSM are contracted by DOI's Inspector General Office to KPMG LLP an independent certified public accounting firm. 4) Single Audit Reports on States performed by State Auditors and/or contracted to Independent Auditors (29 performed in the last 3 years) detail any deficiencies in financial recordkeeping or processes found.

Were programmatic goals (and benefits) achieved at the least incremental societal cost and did the program maximize net benefits?

Explanation: As shown in the agency annual report(s), OSM and its partners, the State regulatory authorities, continue to make progress in encouraging the surface coal mining industry to avoid and reduce the incidence of off-site impacts and to reclaim affected land. Through the Federal requirements, OSM ensures the existence of a minimum national program to protect society from the adverse effects of surface coal mining operations, while assuring that the coal supply essential to the Nation's energy requirements continues. For instance, OSM's December 17, 1999, interpretive rule concerning subsidence due to underground coal mining balances the interests of surface owners and industry; maintains stability in SMCRA implementation; promotes safety; acknowledges existing property rights; and creates no regulatory gaps.

Evidence: 1) OSM Annual Reports contain programmatic data as shown in Table 10 "Regulatory Program Statistics", pg 25, http://www.osmre.gov/annualreport.html. 2) The Environmental Impact Statement (EIS)for a significant rule is an example of a complex regulatory impact analysis focused on social and environmental cost/benefits, and the Economic Analysis (EA) for the same rule demonstrates a rigorous analysis on maximizing net benefits. The EIS and EA were prepared for the "Valid Existing Rights and Subsidence Due to Underground Coal Mining" proposed/final rules (64 FR 70766-70866, Dec 17, 1999) and are published together in OSM EIS-29.