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Report to Congressional Requesters:

July 2005:

Clean Water Act:

Improved Resource Planning Would Help EPA Better Respond to Changing 
Needs and Fiscal Constraints:

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-721]:

GAO Highlights:

Highlights of GAO-05-721, a report to congressional requesters.

Why GAO Did This Study:

Federal and state fiscal constraints may jeopardize past and future 
accomplishments resulting from the Clean Water Act (the act). In this 
environment, it is important to manage available resources as 
efficiently as possible and to identify future human capital needs, 
including the size of the workforce and its deployment across the 
organization. GAO was asked to determine (1) the extent to which the 
Environmental Protection Agency’s (EPA) process for budgeting and 
allocating resources considers the nature and distribution of its Clean 
Water Act workload and (2) the actions EPA is taking to improve 
resource planning and the challenges the agency faces in doing so.

What GAO Found:

EPA’s process for budgeting and allocating resources is largely based 
on historical precedent and does not fully consider the changing nature 
or distribution of the workload either for specific environmental laws 
or the broader goals and objectives in the agency’s strategic plan. 
With prior year’s allocations as the baseline, year-to-year changes are 
marginal. EPA’s program offices and regions also have some flexibility 
to realign resources based on actual workload. Overall, the impact of 
these changes is minor, according to EPA. Because the nature and 
distribution of the act’s workload has changed as the scope of 
regulated activities has grown, with EPA gaining new responsibilities 
and shifting others to the states, more than marginal changes may be 
appropriate. EPA does not conduct the periodic “bottom-up” assessments 
of the work that needs to be done, the distribution of the workload, or 
the resources needed to respond more effectively to changing needs and 
constrained resources.

EPA has developed initiatives that could improve its ability to plan 
its resources more strategically, including efforts that focus on 
workforce planning. These efforts are promising but could be more 
effective if two agencywide initiatives were better coordinated and 
employee skill surveys were designed to identify gaps in needed skills. 
Beyond these initiatives, EPA faces larger challenges in adopting a 
more systematic process for budgeting and resource allocation, 
particularly in obtaining reliable data on key workload indicators. 
According to EPA officials, data on many of the factors that affect 
workload—and thus, drive resource needs—are not comprehensive or 
reliable. One of the biggest challenges will be assessing which of the 
workload indicators represent the most significant factors in 
determining resource needs. While this assessment presents a challenge, 
it would help EPA set priorities for improving data quality. 

What GAO Recommends:

Among other things, GAO recommends that EPA identify the key workload 
indicators that drive resource needs, ensure that relevant data are 
complete and reliable, and use the results to inform its budgeting and 
resource allocation. In commenting on a draft of this report, EPA 
expressed general agreement with much of the report and two of the 
recommendations. EPA did voice concern that a bottom-up workload 
assessment contrasts with its approach, which links budgeting and 
resource allocation to performance goals and results. GAO continues to 
believe that assessing workload and how it drives resource needs is 
fully compatible with EPA’s approach.

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-721].

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact John B. Stephenson at 
(202) 512-3841 or stephensonj@gao.gov.

[End of Section]

Contents:

Letter:

Results in Brief:

Background:

EPA's Process for Budgeting and Allocating Resources Does Not Fully 
Consider the Current Workload in Terms of Strategic Goals or Specific 
Laws:

EPA Has Made Some Progress in Improving Its Resource Planning, but 
Challenges Remain:

EPA Has Not Developed a Detailed Estimate of the Cost to Implement the 
Clean Water Act, As Required:

Conclusions:

Recommendations for Executive Action:

Agency Comments and Our Evaluations:

Appendixes:

Appendix I: Scope and Methodology:

Appendix II: Information on Resources Allocated to EPA Regional Offices 
and States for Controlling Point and Nonpoint Source Pollution:

Appendix III: Information on Selected Workload Indicators Related to 
Controlling Point and Nonpoint Source Pollution:

Appendix IV: Comments from the Environmental Protection Agency:

Appendix V: GAO Contact and Staff Acknowledgments:

Tables:

Table 1: Increasing Workload Associated with Selected Clean Water Act 
Responsibilities Related to Controlling Point and Nonpoint Source 
Pollution Since 1972:

Table 2: Strategic Plan Goals That Encompass Clean Water Act 
Responsibilities Related to Controlling Point and Nonpoint Source 
Pollution:

Figures:

Figure 1: States Authorized to Assume Key Permitting Responsibilities, 
1972 to 2004:

Figure 2: Allocation of Funding by the Office of Water under the 
Surface Water Protection Program Project, by EPA Region, in Fiscal 
Years 2004 and 2005:

Figure 3: Allocation of Staff Years by the Office of Water under the 
Surface Water Protection Program Project, by EPA Region, in Fiscal 
Years 2004 and 2005:

Figure 4: Estimated Staff Years from the Office of Enforcement and 
Compliance Assurance, by EPA Region, Dedicated to Controlling Point 
Sources under the Clean Water Act during Fiscal Years 2004 and 2005:

Figure 5: Allotments to States for Section 106 Grants, by EPA Region, 
for Fiscal Years 1999 to 2005:

Figure 6: Allotments to States for Section 319 Grants, by EPA Region, 
for Fiscal Years 1999 to 2005:

Figure 7: Number of States in Each EPA Region That Are Authorized to 
Issue Individual Permits and the Number of States Not Authorized:

Figure 8: Number of Major and Minor Facilities, by EPA Region:

Figure 9: Total River and Stream Miles, by EPA Region:

Figure 10: Total Lake Acres, by EPA Region:

Figure 11: Percent Change in Population, by EPA Region, 1990-2004:

Figure 12: Change in Relative Share of U.S. Population, by EPA Region, 
1990-2004:

Abbreviations:

EPA: Environmental Protection Agency:

[End of Section]

Letter July 22, 2005:

The Honorable James L. Oberstar:
Ranking Democratic Member:
Committee on Transportation and Infrastructure:
House of Representatives:

The Honorable Jerry F. Costello:
House of Representatives:

The Honorable John F. Tierney:
House of Representatives:

For over 50 years, the Federal Water Pollution Control Act, commonly 
referred to as the Clean Water Act, has played a critical role in 
reducing water pollution and improving the health of the nation's 
waterways.[Footnote 1] However, federal and state fiscal constraints 
may jeopardize these accomplishments and make it increasingly difficult 
to achieve further progress in addressing new and existing sources of 
pollution. In this environment, it is important to manage available 
resources as efficiently as possible. The Environmental Protection 
Agency (EPA), as the federal agency primarily responsible for 
administering the Clean Water Act, plays a key role in determining what 
must be done to meet the act's requirements, identifying the skills 
needed to accomplish the work, and deploying resources to the 
appropriate entities.

In addition to fiscal constraints, other forces, such as demographic 
trends and technological advances, are challenging government agencies 
to change the way they do business by setting priorities and managing 
their resources to achieve better performance more efficiently. In this 
context, leading private sector organizations have found that ensuring 
that the right people with the right skills are in the right place is 
critical to achieving performance goals. Relatedly, in September 2000, 
GAO recommended that federal agencies develop an explicit workforce 
planning strategy to identify their current and future human capital 
needs, including the size of the workforce; its deployment across the 
organization; and the knowledge, skills, and abilities needed for the 
agency to meet its goals and objectives.[Footnote 2] GAO further 
recommended that such a strategy should be explicitly linked to the 
agencies' mission and strategic and program planning efforts.

For EPA specifically, both GAO and the National Academy of Public 
Administration have recommended that EPA use data on workload 
requirements and skill needs to better manage resources for its 
environmental programs. For example, in July 2001, GAO recommended that 
EPA collect information on the size of its workforce, the deployment of 
staff geographically and organizationally, and the skills needed to 
support its strategic goals.[Footnote 3] GAO concluded that a workforce 
strategy could be particularly useful during a time of fiscal 
constraint because such a strategy allows the agency to tailor 
reductions in a manner that would minimize potential adverse impacts on 
EPA's programs.

To carry out its responsibilities under the Clean Water Act, EPA relies 
on its Office of Water, Office of Enforcement and Compliance Assurance, 
and 10 regional offices, as well as states' water pollution control 
agencies. With a number of key amendments beginning in 1972, the scope 
of the act has increased significantly, along with the workload 
associated with implementing and enforcing its requirements. Major 
changes included, for example, controls over pollution from sewer 
overflows, storm water, and animal waste at concentrated feeding 
operations. At the same time, EPA has authorized states to take on more 
responsibilities, shifting the agency's workload from direct 
implementation to oversight. Changes in the nature, extent, and 
distribution of the Clean Water Act workload can affect the resources 
needed to carry out the act. In this regard, section 516(b)(1) of the 
act requires, among other things, that EPA provide the Congress with a 
detailed estimate of these costs every 2 years.[Footnote 4]

You asked us to determine the (1) extent to which EPA's process for 
budgeting and allocating resources considers the nature and 
distribution of its Clean Water Act workload and (2) actions EPA is 
taking to improve resource planning and the challenges it faces in 
doing so. In addition, we determined what effort EPA has made to 
develop the detailed estimate of the cost of carrying out the 
provisions of the Clean Water Act, as required by the act. As agreed 
with your offices, we focused on EPA and state resources associated 
with implementing and enforcing the major programs under the Clean 
Water Act. Also as agreed, for the purposes of this review, we defined 
EPA's Clean Water Act workload to include activities associated with 
controls over pollution from specific facilities (called the National 
Pollutant Discharge Elimination System program) and diffuse sources, 
such as agricultural runoff. We also included related activities, such 
as setting water quality criteria and standards, for both specific 
pollutants and individual water bodies; monitoring water quality; and 
establishing requirements for the disposal of sewage sludge. We 
excluded (1) financial assistance for local infrastructure under the 
Clean Water State Revolving Fund; (2) activities for which the primary 
federal responsibility lay outside EPA, such as issuing permits for 
dredged and fill material, managed by the U.S. Army Corps of Engineers; 
and (3) location-specific programs, such as those focused on the Great 
Lakes, Chesapeake Bay, and designated sites under the National Estuary 
Program. (App. I contains a detailed description of our methodology.)

We performed our work between August 2004 and July 2005 in accordance 
with generally accepted government auditing standards.

Results in Brief:

EPA's process for budgeting and allocating resources does not fully 
consider the agency's current workload, either for specific statutory 
requirements, such as those included in the Clean Water Act, or for the 
broader goals and objectives in the agency's strategic plan. Instead, 
EPA makes incremental adjustments and relies primarily on historical 
precedent. With prior years' allocations as the baseline, year-to-year 
changes are marginal and occur in response to (1) direction from the 
Office of Management and Budget and the Congress, (2) spending caps 
imposed by EPA's Office of the Chief Financial Officer, and (3) 
priorities negotiated by senior agency managers. In addition, EPA's 
program offices and regions have some flexibility to realign resources 
based on their actual workload, but the overall impact of these changes 
is also minor, according to agency officials. Changes at the margin may 
not be sufficient because both the nature and distribution of the Clean 
Water Act workload have changed as the scope of activities regulated 
under the act has increased and EPA has taken on new responsibilities 
while shifting others to the states. For example, controls over 
pollution from storm water and animal waste at concentrated feeding 
operations have increased the number of regulated entities by hundreds 
of thousands and required more resources in some regions of the 
country. EPA may be unable to respond effectively to changing needs and 
constrained resources because it does not have a system in place to 
conduct periodic "bottom-up" assessments of the work that needs to be 
done, the distribution of the workload, or the staff and other resource 
needs.

EPA has made progress in improving resource planning, but challenges 
hinder comprehensive reform. Effective resource planning involves 
identifying the tasks that must be accomplished to achieve an 
organization's objectives, determining the type and level of resources 
needed to carry out the work, and developing a strategy to obtain the 
needed resources. Workforce planning is a key component of any 
successful resource management strategy. While EPA's initiatives 
related to workforce planning address, to varying degrees, some of its 
human capital management problems, the agency's efforts could be more 
effective. For example, both the Office of Enforcement and Compliance 
Assurance and the Office of Human Resources surveyed current employees 
to determine the types of skills they possess without first identifying 
the specific skills most needed to accomplish the agency's mission. As 
a result, these surveys may not necessarily capture the information EPA 
needs to comprehensively determine the skills gap. Although the Office 
of Human Resources subsequently identified priority occupations, needed 
competencies, and skill gaps for the agency as a whole, EPA officials 
acknowledge that this was a high level effort that was not linked to a 
detailed analysis of workload and did not provide specific information 
on the type and deployment of workforce needs. Other efforts by EPA 
show promise in providing useful information, but they are still in the 
early stages. As EPA moves forward with efforts to improve resource 
planning, it faces larger challenges in adopting a more systematic 
process for budgeting and resource allocation: obtaining reliable data 
on key workload indicators, such as the quantity and quality of water 
in particular areas, and overcoming internal resistance. Specifically, 
according to EPA officials, data on many of the factors that affect 
workload--and thus, drive resource needs--are not comprehensive or 
reliable. In addition, EPA staff may be reluctant to adopt a more 
systematic, data-driven approach to resource allocation, because of 
unsatisfactory experiences with using workload models in the 1980s.

At least in the last few years, EPA has not developed and submitted to 
the Congress the detailed estimate of the cost of carrying out the 
provisions of the Clean Water Act, as required by section 516(b)(1) of 
the act. According to EPA, the agency had been operating under the 
assumption that the requirement had expired. Upon further 
investigation, EPA acknowledged that the requirement was subsequently 
reinstated. While silent on reports required in earlier years, EPA said 
that the agency had been remiss in not producing reports due in 2003 
and 2005. Regardless, EPA currently lacks the information needed to 
develop the estimate. For example, in addition to problems with the 
completeness and reliability of the workload data needed to support 
sound cost estimates, EPA's budget and cost accounting systems cannot 
isolate the resources allocated to Clean Water Act enforcement 
activities. To the extent that EPA improves its resource planning and 
allocation process, and develops the data required to support such a 
process, the agency would also have the information it needs to 
estimate the cost of carrying out the provisions of the Clean Water Act.

We are making recommendations to, among other things, improve EPA's 
process for budgeting and allocating resources and help EPA comply with 
its reporting requirement under section 516(b)(1).

In commenting on a draft of this report, EPA agreed with our 
recommendation to comply with its reporting requirement and recognized 
that workforce planning strategies we recommended can be effective 
tools for identifying and addressing future performance needs and has 
already begun some of these efforts. However, EPA expressed concern 
that a bottom-up assessment of workload, as we recommended, contrasts 
with the approach it advocates, which links budgeting and resource 
allocation to performance goals and results. While we acknowledge EPA's 
concern, we believe that assessing the underlying workload and how it 
drives resource needs organizationally and geographically is critical 
to sound workforce planning and can be fully compatible with EPA's 
overall approach.

Background:

Through the National Pollutant Discharge Elimination System program, 
the Clean Water Act established the basic structure for regulating 
discharges of pollutants into the waters of the United States, 
including rivers, lakes, and streams. Under this program, EPA and EPA- 
authorized states issue and enforce permits to regulate pollution from 
specific entities, including, for example, industrial dischargers and 
municipal wastewater treatment facilities, known as "point sources." In 
support of the permitting program, EPA and the states perform a number 
of important activities, such as monitoring water quality and setting 
limits on the amounts of specific pollutants that can be discharged 
into water bodies. The act also requires states to implement management 
programs for controlling pollution from diffuse or "nonpoint" sources, 
such as agricultural runoff.

To carry out its responsibilities for controlling point and nonpoint 
source pollution, EPA relies on the Office of Water, the Office of 
Enforcement and Compliance Assurance, and 10 regional offices, as well 
as states' water pollution control agencies. As table 1 shows, since 
the Clean Water Act was amended in 1972, the scope of EPA and state 
responsibilities and the associated workload, has increased 
significantly.

Table 1: Increasing Workload Associated with Selected Clean Water Act 
Responsibilities Related to Controlling Point and Nonpoint Source 
Pollution Since 1972:

Year: 1972-1973;
Changes in scope of Clean Water Act-related activities: Clean Water 
Act, as amended (1972), establishes the National Pollutant Discharge 
Elimination System program;
EPA issues implementing regulations (1973). The amendments also 
required EPA to oversee total maximum daily load calculations by the 
states.[A];
Estimated workload for EPA and states (as of June 2005): 
* 15,033 
municipal wastewater treatment facilities (municipal facilities) 
covered by individual permits;
* 30,504 industrial facilities, 785 federal facilities, and 1,974 other 
facilities covered by individual permits;
* 52,304 facilities covered by general permits.

Year: 1977-1978;
Changes in scope of Clean Water Act-related activities: Clean Water 
Act, as amended (1977), requires publicly owned treatment works serving 
industrial users to implement pretreatment programs;
EPA issues implementing regulations (1978).[B];
Estimated workload for EPA and states (as of June 2005): 
* 1,500 
municipal facilities with approved pretreatment programs, collectively 
covering 30,000 industrial facilities.

Year: 1987;
Changes in scope of Clean Water Act-related activities: Clean Water Act 
amended. Among other things, the amendments require states to implement 
nonpoint source pollution control programs, establish a framework for 
regulating storm water discharges, and require EPA to issue regulations 
on managing sewage sludge;
Estimated workload for EPA and states (as of June 2005): 
* Includes 
controls over urban and agricultural runoff, for example;
workload in different regions of the United States varies depending on 
pollution sources.

Year: 1990;
Changes in scope of Clean Water Act-related activities: EPA issues 
regulations implementing Phase I of storm water permitting program.[C];
Estimated workload for EPA and states (as of June 2005): 
* 1,000 
municipal separate storm sewer systems[D];
* 100,000 industrial facilities;
* Construction projects larger than 5 acres.

Year: 1993;
Changes in scope of Clean Water Act-related activities: EPA issues use 
and disposal regulations for biosolids/sludge.[E];
Estimated workload for EPA and states (as of June 2005): 
* All domestic 
wastewater treatment facilities.

Year: 1994;
Changes in scope of Clean Water Act-related activities: EPA issues 
policy on combined sewer overflows.[F];
Estimated workload for EPA and states (as of June 2005): 
* 748 
communities and cities with combined sewer systems.

Year: 1996;
Changes in scope of Clean Water Act-related activities: States begin 
establishing total maximum daily loads;
Estimated workload for EPA and states (as of June 2005): 
* Of nearly 
55,000 water quality impairments identified, more than 14,000 total 
maximum daily load requirements have been issued with EPA approval.

Year: 1999;
Changes in scope of Clean Water Act-related activities: EPA issues 
regulations implementing Phase II of storm water permitting program.[C];
Estimated workload for EPA and states (as of June 2005): 
* 5,000 
municipal separate storm sewer systems;
* 80,000 industrial facilities;
* Construction projects larger than 1 acre.

Year: 2003;
Changes in scope of Clean Water Act-related activities: EPA 
substantially revises regulations implementing permitting requirements 
for concentrated animal feeding operations.[G];
Estimated workload for EPA and states (as of June 2005): 
* 18,000 
operations;
still in the process of identifying dischargers.

Year: Ongoing;
Changes in scope of Clean Water Act-related activities: EPA is 
developing regulations on sanitary sewer overflows.[H];
Estimated workload for EPA and states (as of June 2005): 
* 20,428 
municipal facilities and satellite collection systems.

Source: GAO analysis of EPA data and pertinent legal and regulatory 
requirements.

Note: We are reporting estimated workload, as of June 2005, because 
data were not available to determine the workload at the time 
regulatory changes occurred.

[A] A total maximum daily load is a calculation of the amount of a 
specific pollutant that a specific body of water can receive and still 
meet water quality standards.

[B] Under the pretreatment program, some industrial facilities are 
required to pretreat their wastewater before discharging into sewer 
systems to remove pollutants that may pass through or interfere with 
the treatment processes at municipal wastewater treatment facilities.

[C] Storm water regulated under the Clean Water Act is defined as 
runoff from point sources, such as industrial facilities, during rain 
or snow events. In Phase I, EPA regulated storm water discharges from 
larger municipal separate storm sewer systems, and from industrial 
facilities, including larger construction projects. In Phase II, EPA 
began regulating storm water discharges from smaller municipal storm 
sewers and smaller construction projects.

[D] A municipal separate storm sewer system is a system designed for 
collecting and conveying storm water only and is not part of a publicly 
owned treatment works.

[E] Biosolid/sludge is any residue removed during the treatment of 
municipal wastewater or domestic sewage, which can be recycled under 
certain conditions stipulated by an EPA or state permit.

[F] A combined sewer system collects domestic and industrial sewage and 
rainwater runoff in one system of pipes. During periods of heavy 
rainfall or snowmelt, these systems may overflow, discharging untreated 
sewage into the nation's waters.

[G] A concentrated animal feeding operation is a facility in which 
animal waste can potentially enter water bodies as a result of breaks 
in waste storage structures or other accidents.

[H] A sanitary sewer system is a wastewater collection system designed 
to collect and convey only domestic sewage from homes and industrial 
and commercial wastewater. In such systems, storm water is conveyed 
through a municipal separate storm sewer system. As with combined sewer 
systems, however, these systems can overflow and discharge sewage 
directly into water bodies when collection system capacity is exceeded 
due to wet weather.

[End of table]

Even as the overall workload has increased as a result of these 
changes, the states have been playing a greater role in carrying out 
required tasks. As shown in figure 1, since 1972, EPA has authorized 45 
states to perform at least some of the permitting activities associated 
with controlling pollution from wastewater treatment and industrial 
facilities. As EPA authorizes states to take on more responsibilities, 
the agency's workload shifts from direct implementation to oversight.

Figure 1: States Authorized to Assume Key Permitting Responsibilities, 
1972 to 2004:

[See PDF for image]

Note: For certain types of facilities, EPA and the states issue a 
general permit to cover all facilities with stated characteristics.

[End of Figure]

EPA's Process for Budgeting and Allocating Resources Does Not Fully 
Consider the Current Workload in Terms of Strategic Goals or Specific 
Laws:

EPA budgets and allocates resources incrementally, largely based on 
historical precedents, and thus its process does not reflect a bottom- 
up review of the nature or distribution of the current workload--either 
for specific environmental laws or the broader goals and objectives in 
the agency's strategic plan. These historical precedents are drawn from 
workload models EPA had developed in the 1980s, but the distribution of 
EPA's workload has changed over time as EPA has taken on new 
responsibilities under the Clean Water Act and other laws and the 
states gradually assumed a greater role in the day-to-day 
implementation of key aspects of this workload. Other factors, such as 
the introduction of new technologies and shifts in regional population, 
have also affected the amount, type, and distribution of EPA's resource 
needs.

Nonetheless, in developing the amounts of its budget request and 
subsequent resource allocations, EPA officials use prior years' 
allocations as a baseline and make adjustments to reflect (1) direction 
from the Office of Management and Budget and the Congress and (2) 
spending caps imposed by EPA's Chief Financial Officer, such as 
ceilings on staff years and payroll. For example, guidance from the 
Office of Management and Budget sets overall parameters for the 
agency's budget--generally a given percentage of the previous year's 
budget. Once EPA receives its appropriation from the Congress, the 
agency's operating plan--which is also based on historical precedent-- 
guides the allocation of funding and staff years to the organizational 
units.

While acknowledging that their budgeting and resource allocation is not 
based on a bottom-up review, EPA officials said that the process is 
linked to the agency's strategic goals and objectives. They told us 
that the annual budgeting and resource allocation process reflects 
changes in program and budget priorities, as determined by senior EPA 
managers, across the agency and within specific program offices. In 
particular, officials from both the Office of Water and Office of 
Enforcement and Compliance Assurance told us that they make strategic 
decisions in developing the agency's budget--within and across agency 
goals and objectives--to reflect shifting priorities. For example, for 
fiscal year 2005, EPA asked for an additional $22 million for grants to 
state water pollution control agencies, including $17 million to 
address a need for more water quality monitoring. However, EPA 
officials acknowledged that shifts in funding and staff years, as a 
result of changing priorities, are generally marginal and that 
increases in priority areas are usually offset by decreases in areas of 
lower priority.

Within the existing system,[Footnote 5] EPA and state officials have 
some flexibility to realign resources based on actual workload but have 
not taken full advantage of such opportunities.[Footnote 6] For example:

* During each budget cycle, EPA's regional offices have an opportunity 
to influence how the program offices allocate any increases or 
decreases in resources, as reflected in the agency's operating plan. 
While, in theory, such changes could be directed to the regions based 
on their relative need, regional officials report that most changes are 
allocated based on historical precedent.

* Under section 106 of the Clean Water Act,[Footnote 7] EPA must 
distribute grants to state water pollution control agencies based on 
the extent of the pollution problem in the respective states. In 1997 
and 1998, an EPA-state work group developed a weighted distribution 
formula that considers various workload indicators, such as a state's 
surface water area, groundwater use, water quality impairment, point 
and nonpoint pollution sources, and population of urbanized areas. The 
formula, currently in regulations, includes a funding "floor," which 
stipulates that states must receive at least as much as they received 
in fiscal year 2000, unless funding goes down, with an annual 
adjustment for inflation and the current year's appropriation.[Footnote 
8] Consequently, as EPA regional officials pointed out, the allocations 
do not fully reflect relative workloads.

* In 1995, EPA and the states established the National Environmental 
Performance Partnership System, which gave states greater flexibility 
to direct resources to their most pressing environmental problems by 
combining funds from multiple grants. In practice, however, officials 
in EPA's regional offices and a state environmental organization report 
limited use of the funding flexibility. According to EPA officials, 
states have only used the program to move marginal amounts of money to 
target cross-cutting initiatives or other similar programs.

In terms of overall structure, EPA has organized its budget requests 
and allocated resources around its strategic plan, rather than specific 
environmental laws or programs.[Footnote 9] The strategic plan lays out 
broad agency goals and objectives, some of which encompass Clean Water 
Act responsibilities for controlling point and nonpoint source 
pollution. EPA's current strategic plan includes these activities 
primarily under two goals: Clean and Safe Water (Goal 2) and Compliance 
and Environmental Stewardship (Goal 5). As table 2 indicates, however, 
the objectives and subobjectives within each goal can include 
activities under multiple environmental laws. Within the agency's goal 
for Clean and Safe Water, for example, objectives for protecting water 
quality, protecting human health, and enhancing science and research 
address requirements under the Safe Drinking Water Act and other laws, 
in addition to those under the Clean Water Act.

Table 2: Strategic Plan Goals That Encompass Clean Water Act 
Responsibilities Related to Controlling Point and Nonpoint Source 
Pollution:

Goal 2: Clean and Safe Water: Objective 2.1: Protect Human Health;
* Subobjective 2.1.1: Water Safe to Drink;
* Subobjective 2.1.2: Fish and Shellfish Safe to Eat;
* Subobjective 2.1.3: Water Safe for Swimming. 

Objective 2.2: Protect Water Quality;
* Subobjective 2.2.1: Improve Water Quality on a Watershed Basis;
* Subobjective 2.2.2: Improve Coastal and Ocean Waters. 

Objective 2.3: Enhance Science and Research;
* Subobjective 2.3.1: Apply the Best Available Science;
* Subobjective 2.3.2: Conduct Leading-Edge Research;

Goal 5: Compliance and Environmental Stewardship: Objective 5.1: 
Improve Compliance;
* Subobjective 5.1.1: Compliance Assistance;
* Subobjective 5.1.2: Compliance Incentives;
* Subobjective 5.1.3: Monitoring and Enforcement;
Objective 5.2: Improve Environmental Performance Through Pollution 
Prevention and Innovation;
* Subobjective 5.2.1: Prevent Pollution and Promote Environmental 
Stewardship by Government and the Public;
* Subobjective 5.2.2: Prevent Pollution and Promote Environmental 
Stewardship by Business;
* Subobjective 5.2.3: Business and Community Innovation;
* Subobjective 5.2.4: Environmental Policy Innovation;
Objective 5.3: Build Tribal Capacity. 

Objective 5.4: Enhance Science and Research;
* Subobjective 5.4.1: Strengthening Science;
* Subobjective 5.4.2: Conducting Research.

Source: EPA.

Note: Italicized text indicates objectives and subobjectives related to 
controlling point and nonpoint source pollution. Some activities under 
Goal 4, Healthy Communities and Ecosystems, which includes location- 
specific programs authorized under the Clean Water Act, such as those 
focused on the Great Lakes and Chesapeake Bay, also involve controlling 
point and nonpoint sources of pollution.

[End of table]

According to officials from EPA's Office of the Chief Financial 
Officer, Office of Enforcement and Compliance Assurance, and Office of 
Water, isolating the amount of resources dedicated to specific Clean 
Water Act programs and activities would be extremely difficult. The 
officials said that the budgeting and allocation structure aligns 
resources with goals and objectives that encompass multiple laws and 
programs and is not intended to provide statute-specific or program- 
specific breakdowns. The Office of Enforcement and Compliance 
Assurance, in particular, organizes its budget into program projects, 
such as compliance monitoring and civil enforcement, that cut across 
all environmental media.

Recognizing these difficulties, we asked budget officials within the 
Office of Enforcement and Compliance Assurance and Office of Water to 
estimate the funding and staff years allocated to EPA's regional 
offices for controlling point and nonpoint source pollution under the 
Clean Water Act and to provide the amounts allotted to the states under 
two grant programs that support such activities at the state level. 
(See app. II for this information.)

EPA Has Made Some Progress in Improving Its Resource Planning, but 
Challenges Remain:

To plan their resources most effectively, organizations must determine 
what they need to accomplish their work and develop a plan to meet 
those needs by obtaining staff and other resources. EPA has developed 
several initiatives that could improve the agency's ability to plan its 
resources more strategically, including some efforts that focus on 
workforce planning and others that could provide key information needed 
to support a data-driven approach to budgeting and allocating 
resources. Beyond these initiatives, however, EPA faces larger 
challenges in adopting a more systematic process for budgeting and 
resource allocation: obtaining reliable data on key workload indicators 
and overcoming internal resistance to adopting such a process.

Effective Resource Planning Involves Identifying Staff and Other 
Resources Needed to Meet Performance Goals and Fulfill the 
Organization's Mission:

At its most basic level, effective resource planning involves 
identifying the specific activities and tasks that must be accomplished 
to achieve an organization's objectives, determining the type and level 
of resources needed to carry out the work, and developing a strategy to 
obtain the needed resources. Realistically, because organizations 
rarely have access to unconstrained budgets, managers typically have to 
set priorities so that the most important tasks can be accomplished 
within available resources. Particularly in an environment of limited 
resources, the data that inform resource planning are useful in helping 
decision makers determine how best to absorb budget cuts. Because an 
organization's employees often account for a significant share of its 
resources, workforce planning is a key component of any successful 
resource management strategy.

Studies by GAO and others have shown that successful organizations use 
strategic workforce planning to identify and fill the gaps between 
their current and future workforce needs in meeting organizational 
goals and fulfilling their overall mission. Strategic workforce 
planning encompasses a broad array of initiatives to attract, retain, 
develop, and motivate a top-quality workforce with the skills needed to 
meet performance goals. In 2003, for example, we reported that 
successful organizations have used strategic workforce planning as a 
tool to both identify current needs and anticipate and prepare for 
upcoming human capital issues, such as an aging workforce or changes in 
mission-critical skills, that could jeopardize the accomplishment of 
goals.[Footnote 10] More recently, we found that leading organizations 
go beyond a succession planning approach that focuses on simply 
replacing individuals and, instead, engage in broad, integrated efforts 
that focus on strengthening both current and future organizational 
capacity.

Our 2003 report said that an analysis of gaps in an organization's 
workforce should identify how many employees have the skills and 
competencies needed to meet program goals and the number that are 
likely to remain with the agency over time, given expected losses due 
to retirement and other attrition. Similarly, the report found that a 
forward-looking analysis should identify the specific skills and 
competencies that will be needed to meet future goals. We concluded 
that workforce gap analyses can be useful in justifying budget requests 
by showing the link between the program goals and the staff resources 
needed to accomplish them.

In July 2001, we reported specifically on EPA and the extent to which 
the agency was using key management practices associated with 
successful human capital strategies, including strategic workforce 
planning.[Footnote 11] We also examined how EPA's Office of Enforcement 
and Compliance Assurance deployed resources across the 10 regional 
offices to ensure consistent enforcement of federal environmental 
requirements. Among other things, we recommended that EPA:

* develop a system for workforce allocation and deployment that is 
explicitly linked to the agency's strategic and program planning 
efforts and that is based on systematic efforts of each major program 
office to accurately identify the size of its workforce, the deployment 
of staff geographically and organizationally, and the skills needed to 
support its strategic goals;

* design succession plans to maintain a sustained commitment and 
continuity of leadership within the agency; and:

* target recruitment and hiring practices to fill the agency's short- 
and long-term human capital needs and, specifically, to fill gaps 
identified through EPA's workforce planning system and implement 
training with an explicit link to needed competencies.

Our recommendations to EPA's Office of Enforcement and Compliance 
Assurance expanded on some of the same themes. For example, we 
recommended that the office develop a systematic method for deploying 
resources to address the agency's enforcement workload, taking into 
account the workforce planning information needed to analyze the 
workload. According to our report, such information should include the 
level of resources currently being allocated to specific enforcement 
activities; the factors that determine the enforcement workload in each 
region; and the specific skills needed to address each region's 
workload, along with the number of employees who possess such skills.

EPA Has Several Efforts Under Way to Improve Resource Planning:

EPA has initiated several efforts that could improve the agency's 
ability to strategically plan its workforce and other resources. While 
some of these efforts are not directly related to workforce planning, 
they could give the agency some of the information needed to support a 
systematic, data-driven method for budgeting and allocating resources.

Three initiatives within EPA focus specifically on workforce planning, 
including one by the Office of Enforcement and Compliance Assurance, 
which focused on civil enforcement activities and was completed in 
2003, and two agencywide efforts that are still in the early stages of 
development. The agencywide efforts are being managed by EPA's Office 
of Human Resources and the Office of the Chief Financial Officer. These 
three initiatives are as follows:

* Workforce Deployment Review for civil enforcement activities. In 
response to our July 2001 report, the Office of Enforcement and 
Compliance Assurance surveyed about 2,600 headquarters and regional 
employees engaged in civil enforcement activities to identify existing 
workforce skills and specific areas of programmatic expertise.[Footnote 
12] EPA's report on the survey, issued in October 2003, recommended, 
among other things, expanding the survey to include all of the office's 
employees, periodically updating the information, and aligning training 
with national priorities.[Footnote 13] In addition, the report 
recognized that circumstances have changed since the 1980s, when EPA 
last used the workload models to establish a baseline. The report 
concluded that enforcement officials should reexamine the existing 
practice of adjusting staff levels based on historical precedent.

* Strategic workforce planning process. In response to guidance from 
the Office of Management and Budget, EPA's Office of Human Resources is 
currently working on a strategic workforce planning process to help EPA 
identify and address skill needs agencywide. Human Resource officials 
believe that EPA should be using detailed workforce plans to drive its 
budget requests and make informed decisions about how to make the best 
use of the resources it receives. The new planning process includes (1) 
analyzing the skills needed to achieve agency goals now and in the 
future, (2) assessing the skills possessed by the current workforce, 
(3) identifying any current or future gaps in critical skills, and (4) 
developing strategies to fill such gaps. During 2003, the Office of 
Human Resources piloted a computer-based tool designed to capture 
information on the skills possessed by EPA staff but abandoned the 
effort in response to complaints that the tool was overly complicated 
and did not provide helpful information. In 2004, the office's 
workforce planning team reviewed the agency's strategic plan and other 
relevant studies and interviewed key stakeholders inside and outside 
EPA to develop a strategic picture of the agency's future work and 
workforce requirements. The team corroborated its findings with senior 
EPA executives, who provided their views on the work that the agency 
will be doing in the future and described the workforce in terms of the 
priority, mission-critical competencies, and occupations needed to 
support the work. As a result of this effort, EPA identified 18 
priority occupations, 12 technical competencies, and 12 cross- 
occupational competencies that are essential for the agency to 
accomplish its future mission. In addition, based on projected 
retirements and other attrition, EPA identified potential gaps in 
critical areas. Currently, the office is examining any ongoing resource 
planning efforts by EPA regional and program offices before moving 
ahead with its own planning process.

* Options for an agency approach to workforce assessment. EPA's Office 
of the Chief Financial Officer formed a work group in the fall of 2004 
to improve the agency's tools for making decisions on distributing 
staffing resources. The work group is currently exploring options for 
how frequently to measure workload: doing a comprehensive assessment of 
all programs every 3 to 5 years or applying a screening tool to 
identify certain high-priority program areas for annual assessment.

Although EPA's workforce planning initiatives address, to varying 
degrees, some of the recommended practices for managing human capital, 
its efforts could be more effective. For example, both the Office of 
Enforcement and Compliance Assurance and the Office of Human Resources 
attempted to determine the types of skills they possess without first 
identifying the skills most needed to accomplish the agency's mission. 
As a result, these surveys may not necessarily capture the information 
EPA needs to comprehensively determine the skills gap. Although the 
Office of Human Resources followed up its skills survey by identifying 
priority occupations, needed competencies, and skill gaps for the 
agency as a whole, EPA characterized the effort as an assessment at the 
"20,000 foot" level. Human Resource officials acknowledged that the 
effort was not linked to a detailed analysis of workload and did not 
provide information on region-or program-specific workforce needs. To 
guide the office's development of ground-level analyses, during the 
spring of 2005, the office surveyed program and regional offices to 
determine the nature of any localized workforce planning. In addition, 
although officials involved in the two agencywide initiatives 
(sponsored by the Office of Human Resources and the Office of the Chief 
Financial Officer) were aware of the parallel efforts, we found little 
evidence that the two offices were coordinating with each other to 
avoid duplication or the adoption of conflicting strategies. Both these 
efforts are still in the early stages; coordinating now would allow the 
agency to ensure that it is making the best use of its resources.

Two other initiatives within the Office of Water, while not directly 
related to resource planning, could provide relevant and useful 
information for a data-driven approach to budgeting and allocating 
resources. For example, beginning in December 1998, EPA and the states 
collaborated on a state resource analysis for water quality management 
to develop an estimate of the resources that states need to fully 
implement the Clean Water Act. The primary focus of the project was 
identifying the gap between states' needs and available resources. To 
develop the estimates of the gap, EPA and the states created a detailed 
model of activities associated with implementing the Clean Water Act, 
the average time it takes to complete such activities, and the costs of 
performing them.[Footnote 14] The National Academy of Public 
Administration subsequently reviewed the model and determined that the 
underlying methodology was sound.[Footnote 15] In fact, the academy 
recommended that EPA and the states refine the model to support data- 
driven grant allocation decisions. According to EPA and representatives 
of state environmental organizations, however, the agency has not 
implemented the recommendation because of resource constraints and 
reluctance on the part of some states.

Another initiative by the Office of Water, called the Permitting for 
Environmental Results Strategy, also has potential to provide useful 
information for more effective resource planning. This effort began in 
2003, prompted by circumstances that were making it increasingly 
difficult for EPA and the states to meet their responsibilities under 
the Clean Water Act. According to EPA, not only had the scope and 
complexity of the act expanded over time, but the states were facing an 
increasing number of lawsuits and petitions to withdraw their 
authorization to administer some Clean Water Act programs. As part of 
its effort to identify and resolve performance problems in individual 
states, EPA and the states have been developing profiles containing 
detailed data on the responsibilities, resources, and workload demands 
of each state and region--information that could be useful in any 
comprehensive and systematic resource planning method.[Footnote 16]

Challenges to Adopting a More Systematic Process for Allocating 
Resources Include Obtaining Reliable Workload Data and Overcoming 
Internal Resistance:

Perhaps the most significant obstacle to developing a systematic, data- 
driven approach to resource allocation is ensuring that needed data on 
EPA's workload are complete and reliable. While our particular interest 
was Clean Water Act activities for controlling point and nonpoint 
source pollution, evidence suggests that EPA would encounter similar 
reliability concerns if a systematic resource allocation process were 
to be organized around strategic goals and objectives, thus 
encompassing other program areas.[Footnote 17] Without comprehensive 
and reliable data on workload, EPA cannot accurately identify where 
agency resources, such as staff with particular skills, are most needed.

According to EPA officials, some of the key workload factors related to 
controlling point and nonpoint source pollution include the number of 
point source dischargers, the number of wet weather dischargers, and 
the quantity and quality of water in particular areas.[Footnote 18] 
However, for some of this information, the relevant databases, such as 
the Permit Compliance System, which contains information on discharging 
facilities, and the National Water Quality Inventory, which contains 
information on water quality, have been subject to criticism from 
several sources, including GAO. For example:

* Discrepancies between Permit Compliance System and state data. In 
2001, the Environmental Council of the States reported that of 42 
states surveyed, more than 80 percent found "significant and pervasive 
data discrepancies" between data tracked by state authorities and data 
contained in the Permit Compliance System. Even among states that 
reported using EPA's database as their primary information system, 75 
percent found errors in the data. Another problem is that the last 
system modernization effort was in 1982; as a result, the database does 
not contain information on more recently regulated entities, such as 
storm water dischargers and concentrated animal feeding operations. The 
database also lacks complete information on the point source 
dischargers it does track, particularly smaller facilities and states' 
enforcement actions. Although at one time EPA linked states' grant 
funding to the submission of facility data to the database, the agency 
discontinued the policy. In addition, EPA does not require complete 
information on minor facilities.[Footnote 19]

* Lack of historical data in Permit Compliance System. EPA's Permit 
Compliance System database does not provide sufficient information to 
evaluate trends in key workload indicators because the system 
overwrites older information whenever program officials enter new data 
on a facility. Thus, for example, EPA cannot generate trend data on the 
number of permits issued or renewed over a specified time period. After 
related criticism from EPA's Inspector General, Office of Water 
officials told us that, in 1999, they began pulling data from the 
system at regular intervals to provide data on trends in the agency's 
permitting backlog and the number of regulated facilities. At the same 
time, however, EPA began to clean up its inventory, eliminating data on 
facilities that were no longer in existence. Although the cleanup was 
necessary, it also affected the agency's ability to develop reliable 
trend data. For these and other reasons, EPA identified the Permit 
Compliance System as an agency weakness beginning in 1999.

* Data limitations in the National Water Quality Inventory. Data on the 
quality of the nation's waters, which EPA compiles and presents in the 
National Water Quality Inventory, are also subject to important 
limitations.[Footnote 20] While the majority of states contributed data 
describing rivers and lakes, data on other types of water bodies were 
less comprehensive. For example, only nine states provided information 
on the status of their wetlands. In addition, states are only able to 
assess a portion of their waters every 2 years. For example, according 
to the 2000 report, states assessed 19 percent of the nation's total 
river and stream miles and 43 percent of the total lake, pond, and 
reservoir acres. Furthermore, states do not report data consistently. 
In 2002, GAO found that variations in the approaches that states use to 
assess water quality causes inconsistencies in the listing of impaired 
waters.[Footnote 21] These inconsistencies also limit the ability to 
compare data from year to year.

While acknowledging that some data are missing from the Permit 
Compliance System, EPA officials told us that since 2001, they have 
worked with the states and regional offices to clean up the data and 
believe that their efforts have improved data quality. The officials 
also said that the system will be modernized into the Integrated 
Compliance Information System, which will be phased in beginning in 
2006. According to information provided by EPA, the modernization 
effort will identify the data elements to be entered and maintained by 
the states and regions and will include additional data entry for minor 
facilities and special regulatory program areas, such as concentrated 
animal feeding operations, combined sewer overflows, and storm water. 
Regarding the National Water Quality Inventory, the Office of Water 
recently began advocating the use of standardized, probability-based, 
statistical surveys of state waters so that water quality information 
would be comparable both among states and from year to year.

We did not attempt to compile an exhaustive list of all factors that 
potentially affect EPA and state workload. Although the state water 
quality management resource analysis compiled a comprehensive list of 
activities performed in support of the Clean Water Act to serve as a 
basis for estimating the state resource needs, there is no similar 
analysis of workload indicators for EPA headquarters or regional 
offices. In addition to the factors discussed above, EPA officials and 
representatives of state environmental organizations identified other 
factors that directly or indirectly affect workload and thus could 
provide some indication of resource needs. Some factors were mentioned 
consistently by all or most of the officials we interviewed and other 
factors were cited less frequently. One of the challenges to improving 
data quality will be determining which of the workload indicators 
represent the most significant drivers of resource needs. Making this 
determination, however, would also help EPA prioritize efforts to 
improve data quality.

More complete data are available on some of the workload factors 
identified by EPA and representatives of state environmental 
organizations, including the number of states authorized to implement 
aspects of the permitting program, the number of major and minor 
facilities, water quantity, and population. While these data may not be 
adequate in all respects, we believe the data are sufficiently reliable 
to illustrate potential differences in the regional distribution of 
workload. Appendix III contains a series of figures displaying selected 
workload indicators.

Even with better workload data, EPA would find it difficult to 
implement a systematic, data-driven approach to resource allocation 
without staff support for such a process. Support may not be easily 
forthcoming. According to EPA officials in several offices and regions, 
staff are reluctant to accept a data-driven approach because of their 
experience in using workload models during the 1980s. At that time, 
each major program office used a model to allocate resources to the 
agency's regional offices. When the models were initially developed, 
agency officials believed they were useful because EPA's programs were 
rapidly expanding as the Congress passed new environmental laws. Over 
time, however, the expansion of EPA's responsibilities leveled off, and 
its impact on the relative workload of regions was not as significant. 
The change in the rate of the workload expansion, combined with 
increasingly constrained federal resources during the late 1980s, meant 
that the workload models were only being used to allocate changes at 
the margins. The agency stopped using the models in the early 1990s 
because, according to officials, staff spent an unreasonable amount of 
time negotiating relatively minor changes in regional resources.

Officials at EPA headquarters and regional offices cited some of the 
same concerns when we asked about applying a more systematic approach 
to budgeting and allocating resources today. Officials in several 
offices maintained that such an approach would not be useful for the 
agency, in part because EPA would not obtain increased resources as a 
result. Because all programs have insufficient resources, officials 
explained, it would not necessarily be helpful to analyze where these 
resource gaps were largest. Some regional officials were more 
supportive of the use of workforce planning, particularly where 
officials believed the region was receiving fewer resources than it 
deserved relative to other regions. Regional officials also believed 
that this type of analysis would help them manage the resources they 
get and could provide information that could stave off additional 
funding cuts or reduce how frequently headquarters officials implement 
new requirements for the regions.

EPA Has Not Developed a Detailed Estimate of the Cost to Implement the 
Clean Water Act, As Required:

Section 516(b)(1)(A) of the Clean Water Act requires EPA, in 
cooperation with the states, to make a detailed estimate of the cost of 
carrying out the provisions of the act.[Footnote 22] Such estimates 
must be reported to the Congress every 2 years. In response to our 
inquiries, EPA issued a letter on May 2, 2005, stating that the agency 
has been operating under the assumption that the requirement had 
expired as of December 1999. However, the letter acknowledged that the 
reporting requirement may have been reinstated. After studying the 
issue further, EPA issued a follow-up letter on May 16, 2005, which 
confirmed that the requirement had been reinstated and that the agency 
had been remiss in not producing reports due in 2003 and 2005.[Footnote 
23] EPA's letter was silent regarding the reports due in 1999 and prior 
years.

Even if EPA had been aware of the reporting requirement, it currently 
lacks the information needed to develop an estimate of the cost of 
carrying out the Clean Water Act. First, the process EPA uses to budget 
and allocate resources is built around available resources rather than 
an unconstrained budget. Second, EPA's budget structure and cost 
accounting systems do not provide specific detail on how EPA staff 
spend their time in carrying out Clean Water Act enforcement 
responsibilities within the Office of Enforcement and Compliance 
Assurance, where the budget is organized around activities that cut 
across all environmental media. Finally, as already described, EPA 
lacks complete and reliable data on key aspects of its Clean Water Act 
workload, making it difficult to develop sound cost estimates. Having 
better information on specific workload activities would not only help 
improve EPA's process for budgeting and allocating resources within its 
current budget structure, but it would also help EPA develop the cost 
estimates needed to comply with section 516(b)(1)(A).

Conclusions:

Because EPA does not have a system in place to conduct periodic bottom- 
up assessments of the work that needs to be done, the distribution of 
the workload, or staff and other resource needs, the agency may be 
unable to respond effectively to changing needs and constrained 
resources. Despite some flexibility in budgeting and allocating 
resources, EPA cannot determine whether the amount and distribution of 
its resources are appropriate to effectively carry out its strategic 
goals and objectives or meet its responsibilities under the Clean Water 
Act and other environmental laws. Moreover, EPA does not have the 
information it needs to tailor reductions in staff or other resources 
in a manner that minimizes potential adverse impacts on its 
environmental programs.

Having complete and reliable data on the activities and tasks that must 
be accomplished--and how that work is distributed organizationally and 
geographically--will help EPA budget and allocate resources more 
effectively. In addition, such data will inform the agency's workforce 
planning efforts and help ensure that the right people with the right 
skills are where they need to be to get the work done.

EPA is obligated to meet its reporting responsibilities under section 
516(b)(1) of the Clean Water Act. Periodic bottom-up assessments of the 
workload and related resource needs would give EPA the tools it needs 
to develop this detailed estimate, as required.

Recommendations for Executive Action:

We recommend that the Administrator, EPA, identify the key workload 
indicators that drive resource needs, ensure that relevant data are 
complete and reliable, and use the results to inform the agency's 
budgeting and resource allocation.

Furthermore, to ensure that EPA is making the best use of resources 
dedicated to strategic workforce planning, we also recommend that EPA 
coordinate ongoing planning efforts across the agency to avoid 
duplication. EPA's workforce planning efforts should build on what the 
agency has accomplished thus far in identifying priority occupations, 
needed competencies, and skill gaps for the agency as a whole. As a 
next step, consistent with our 2001 recommendations, EPA should focus 
its efforts on a ground level assessment and identify (1) the agency's 
workload and skill needs; (2) the skills and deployment of existing 
staff, geographically and organizationally; and (3) strategies to fill 
identified gaps.

Finally, we recommend that EPA meet its reporting responsibilities 
under section 516(b)(1) of the Clean Water Act or seek appropriate 
relief from the Congress.

Agency Comments and Our Evaluations:

We provided a draft of this report to EPA for review and comment. EPA 
agreed with our recommendation regarding its reporting responsibilities 
under section 516(b)(1) of the Clean Water Act and plans to respond 
according to the requirements of the law. While not addressing our 
recommendation on eliminating potential duplication of effort, EPA 
acknowledged that the workforce planning strategies we recommended can 
be effective tools for identifying and addressing future performance 
needs and stated that it has already initiated several of these 
efforts. EPA also noted that our report raises important issues 
affecting the distribution of constrained resources. However, the 
agency noted that its resource allocation decisions are based on 
performance and results and expressed concern that a bottom-up 
assessment of the underlying workload contrasted with its approach. We 
do not take issue with the use of performance and results in developing 
budgets and allocating resources, although, based on our review, EPA's 
budget and resource allocations were based primarily on historical 
precedent and, hence, year-to-year changes were marginal. Moreover, we 
believe our recommendation is fully compatible with an approach that 
links budgeting and resource allocation to performance goals and 
results. In our view, the agency's performance goals should be informed 
by an assessment of the underlying workload--and how the tasks that 
must be accomplished drive resource needs organizationally and 
geographically. Finally, EPA officials also provided a number of 
technical comments and clarifications, which we incorporated as 
appropriate. EPA's comments are in appendix IV.

As agreed with your offices, 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 appropriate 
congressional committees; the Administrator, EPA; and the Director of 
the Office of Management and Budget. We also will make copies available 
to others upon request. In addition, the report will be available at no 
charge on the GAO Web site at [Hyperlink, http://www.gao.gov.]

If you or your staff have any questions about this report, please 
contact me at (202) 512-3841 or [Hyperlink, stephensonj@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 V.

Signed by:
John B. Stephenson:
Director, Natural Resources and Environment:

[End of section]

Appendixes:

Appendix I: Scope and Methodology:

We defined the scope of our review to include Clean Water Act programs 
for controlling pollution from point and nonpoint sources and related 
activities, such as setting water quality criteria and standards, for 
both specific pollutants and individual water bodies; monitoring water 
quality; and establishing requirements for the disposal of sewage 
sludge. We excluded (1) financial assistance for local infrastructure 
under the Clean Water State Revolving Fund; (2) activities for which 
the primary federal responsibility lay outside the Environmental 
Protection Agency (EPA), such as issuing permits for dredged and fill 
material, managed by the U.S. Army Corps of Engineers; and (3) location-
specific programs, such as those focused on the Great Lakes, Chesapeake 
Bay, and designated sites under the National Estuary Program. We 
performed our work at EPA's Office of Congressional and 
Intergovernmental Relations; Office of the Chief Financial Officer; 
Office of Enforcement and Compliance Assurance; Office of General 
Counsel; Office of Human Resources; and Office of Water in EPA's 
Washington, D.C., headquarters. We also obtained information from four 
EPA regional offices located in Atlanta, Ga; Boston, Mass; 
Philadelphia, Pa; and San Francisco, Calif. Our criteria for selecting 
these offices included differences in how the offices are organized to 
implement the Clean Water Act, differences in the factors that drive 
their workload, and geographic distribution.

For information on EPA's process for budgeting and allocating 
resources, we interviewed officials from the Office of the Chief 
Financial Officer and other EPA offices with responsibility for Clean 
Water Act programs to control pollution from point and nonpoint 
sources, including the Office of Congressional and Intergovernmental 
Relations, Office of Enforcement and Compliance Assurance, and Office 
of Water. Among other things, we reviewed relevant portions of EPA's 
strategic plan, budget data, and operating plan. We also obtained (1) 
estimates of the funding and staff years allocated to EPA's regional 
offices and (2) allotments to the states under two relevant grant 
programs. While these data may not be adequate in all respects, we 
determined that they were sufficiently reliable to illustrate 
differences in the relative share of resources across EPA's regional 
offices. In the four EPA regional offices selected for review, we 
discussed the budgeting and allocation process with cognizant officials.

For information on EPA's efforts to improve resource planning, we 
interviewed officials from EPA's Office of the Chief Financial Officer, 
Office of Enforcement and Compliance Assurance, Office of Human 
Resources, and Office of Water, as well as the Association of State and 
Interstate Water Pollution Control Administrators, the Environmental 
Council of States, and the National Academy of Public Administration to 
identify such efforts and obtain relevant documents on their status and 
results. Officials from these entities and the four EPA regional 
offices selected for review also provided information on the challenges 
EPA faces in taking actions to improve resource planning. In 
particular, we researched sources of data for the workload factors 
identified by EPA officials and state environmental officials as among 
the key drivers of resource needs. For some factors, such as number of 
authorized states in EPA regions, states for which EPA has direct 
implementation responsibilities, population, and population growth, we 
determined that the data were sufficiently reliable for our purposes. 
Regarding other factors, such as number of facilities and water 
quality, we found the data to be incomplete or unreliable for certain 
states or regions, for certain years, or for certain types of 
facilities or water bodies. As a result, we were unable to analyze 
these data for workload trends or geographic distribution.[Footnote 24] 
We found them sufficiently reliable to provide illustrative examples. 
To identify key elements of strategic workforce planning, we reviewed 
reports from GAO, EPA's Office of Inspector General, and the National 
Academy of Public Administration.

For information on EPA efforts to develop the detailed cost estimate 
required under section 516(b)(1)(A) of the Clean Water Act, we 
interviewed officials from EPA's Office of the Chief Financial Officer, 
Office of General Counsel, and Office of Water.

We conducted our work from August 2004 through July 2005 in accordance 
with generally accepted government auditing standards.

[End of section]

Appendix II: Information on Resources Allocated to EPA Regional Offices 
and States for Controlling Point and Nonpoint Source Pollution:

Across the Environmental Protection Agency (EPA), the program offices 
track the funds and staff years dedicated to the goals and objectives 
laid out in the agency's strategic plan, down to a level of detail 
known as program projects. The plan's objectives generally contain 
multiple program projects and the reverse may also be true: an 
individual program project can contribute funds or staff years to 
multiple agency objectives. For example, within the Office of Water, 
most of the resources applicable to controlling point and nonpoint 
source pollution under the Clean Water Act are included under the 
program project called Surface Water Protection and the projects for 
categorical grants on Pollution Control (Section 106) and Nonpoint 
Source (Section 319). However, the Surface Water Protection program 
project contains resources for a broader range of activities than those 
included within our scope. At the same time, some of the resources that 
are relevant to controlling point and nonpoint source pollution are 
included in program projects that contain resources for other Clean 
Water Act and Safe Drinking Water Act-related activities.

We asked Office of Water officials to provide a regional breakdown of 
the funding contained in the Surface Water Protection program project 
(see fig. 2).[Footnote 25] Fiscal years 2004 and 2005 are the only 
years for which consistent data are available because the program 
project for Surface Water Protection was created in 2004.

Figure 2: Allocation of Funding by the Office of Water under the 
Surface Water Protection Program Project, by EPA Region, in Fiscal 
Years 2004 and 2005:

[See PDF for image]

[End of figure]

Figure 3 provides a similar breakdown in terms of regional staff years.

Figure 3: Allocation of Staff Years by the Office of Water under the 
Surface Water Protection Program Project, by EPA Region, in Fiscal 
Years 2004 and 2005:

[See PDF for image]

[End of figure]

Within the Office of Enforcement and Compliance Assurance, it is 
difficult to isolate resources dedicated specifically to implementing 
the Clean Water Act or other environmental statutes because the office 
organizes its budget by program projects, such as compliance monitoring 
and civil enforcement, that cut across all environmental media. 
Beginning in fiscal year 2000, however, the office's budget officials 
asked the regional offices to provide a "best guess estimate" of the 
number of staff years devoted to particular program areas, including 
activities related to controlling point sources under the Clean Water 
Act. (See fig. 4.) The budget officials indicated that this exercise 
likely does not capture all relevant staff years and said that they did 
not verify the regional estimates. Fiscal years 2004 and 2005 were the 
only years for which complete data were available.

Figure 4: Estimated Staff Years from the Office of Enforcement and 
Compliance Assurance, by EPA Region, Dedicated to Controlling Point 
Sources under the Clean Water Act during Fiscal Years 2004 and 2005:

[See PDF for image]

[End of figure]

The Office of Enforcement and Compliance Assurance does not develop 
similar estimates for the amount of funding allocated to the regional 
offices. Although budget officials suggested that we could estimate 
regional spending based on the average cost of a staff year, regional 
officials said such an approach might be misleading because the cost of 
staff years varies from year to year and region to region.

The states receive annual allotments from the Office of Water under two 
major grant programs. Grants under section 106 of the Clean Water Act 
provide funds for water quality monitoring, regulating point source 
dischargers, and related activities. Grants under section 319(h) of the 
act fund the implementation of state programs for controlling pollution 
from nonpoint sources, such as agricultural runoff.[Footnote 26] 
Figures 5 and 6 show allotments to the states, by region, under the 
program projects for Pollution Control (Section 106) and Nonpoint 
Source (Section 319).

Figure 5: Allotments to States for Section 106 Grants, by EPA Region, 
for Fiscal Years 1999 to 2005:

[See PDF for image]

[End of figure]

Figure 6: Allotments to States for Section 319 Grants, by EPA Region, 
for Fiscal Years 1999 to 2005:

[See PDF for image]

[End of figure]

[End of section]

Appendix III: Information on Selected Workload Indicators Related to 
Controlling Point and Nonpoint Source Pollution:

This appendix contains information on selected workload indicators for 
which the underlying data are sufficiently reliable to illustrate 
potential differences in the regional distribution of workload.

Figure 7 shows the number of states in each Environmental Protection 
Agency (EPA) region that are authorized to issue individual permits 
under the Clean Water Act and the number of states for which EPA 
retains direct implementation responsibility. The number of authorized 
states in a given region affects workload in several ways, including 
the number of staff devoted to oversight. When states are not 
authorized, regional officials have greater responsibilities, such as 
writing permits for regulated entities.

Figure 7: Number of States in Each EPA Region That Are Authorized to 
Issue Individual Permits and the Number of States Not Authorized:

[See PDF for image]

Note: Puerto Rico, which is unauthorized, and the U.S. Virgin Islands, 
which is authorized, are included in the count of states for region 2. 
The District of Columbia, which is unauthorized, is included in the 
count of states for region 3. American Samoa, Guam, and the Northern 
Mariana Islands, all of which are unauthorized, are included in the 
count of states for region 9. Tribal lands are not included for any 
region.

[End of figure]

Figure 8 shows the regional distribution of major and minor facilities, 
including both municipal and industrial dischargers. Although these 
data are from EPA's Permit Compliance System, for which concerns about 
data reliability are significant, EPA officials believe that the 
information on the number of facilities is adequate.

Figure 8: Number of Major and Minor Facilities, by EPA Region:

[See PDF for image]

[End of figure]

One of the key workload indicators cited by EPA and representatives of 
state environmental organizations was the quantity of surface waters 
that must be assessed and monitored to obtain a complete picture of 
water quality. These assessments may, in turn, trigger other resource- 
intensive activities, such as establishing total maximum daily loads. 
Figures 9 and 10 portray the miles of rivers and streams and the acres 
of lakes in each EPA region, according to the 2002 update of the 
National Hydrography Dataset, which was first compiled by the U.S. 
Geological Survey in 1992.

Figure 9: Total River and Stream Miles, by EPA Region:

[See PDF for image]

Note: Region 10 does not include data on miles of rivers and streams in 
Alaska.

[End of figure]

Figure 10: Total Lake Acres, by EPA Region:

[See PDF for image]

Note: Region 10 does not include data on acres of lakes in Alaska.

[End of figure]

The National Hydrography Dataset does not contain detailed information 
on wetlands. The most recent information on wetlands was compiled in 
1997 by the U.S. Fish and Wildlife Service. However, the information is 
no longer considered accurate because, for example, the Fish and 
Wildlife Service estimates that the United States loses 58,500 acres of 
wetlands annually.

EPA identified population and population growth as indirect indicators 
of workload, which are not necessarily linked to resource needs. For 
example, while a large population may indicate that the region has a 
large number of municipal wastewater treatment facilities, the 
population may be concentrated in a few large cities with centralized 
facilities, resulting in fewer individual facilities than otherwise 
expected. Similarly, growth in population might indicate that EPA and 
state staff will need to regulate more construction sites. However, the 
work required of environmental officials could vary depending on the 
number and size of these sites in each region. Figure 11 shows the 
census population estimates for the EPA regions for 1990 and 2004, 
along with the percentage increase in each region.[Footnote 27] We used 
1990 as the starting point for this comparison because it was shortly 
after EPA abandoned the use of workload models in the late 1980s.

Figure 11: Percent Change in Population, by EPA Region, 1990-2004:

[See PDF for image]

Note: The District of Columbia is included in the population count for 
region 3.

[End of figure]

Figure 12 presents a slightly different picture of the same population 
data. It shows the change in the relative share of the U.S. population 
in each region between 1990 and 2004.

Figure 12: Change in Relative Share of U.S. Population, by EPA Region, 
1990-2004:

[See PDF for image] 

Note: The District of Columbia is included in the population count for 
region 3.

[End of figure] 

[End of section]

Appendix IV: Comments from the Environmental Protection Agency:

United States Environmental Protection Agency:
Washington, D.C. 20460:
July 1, 2005:

Office Of The Chief Financial Officer:

Mr. John Stephenson Director:
Natural Resources and Environment:
Government Accountability Office:
Washington, DC 20548:

Dear Mr. Stephenson:

Thank you for the opportunity to review and comment on the Government 
Accountability Office (GAO) draft report, "Clean Water Act: Improved 
Resource Planning Would Help EPA Better Respond to Changing Needs and 
Fiscal Constraints." This report focuses on the current allocation of 
resources associated with implementing the Clean Water Act and 
describes and recommends analyses and administrative programs that 
would identify and address workload requirements and needs Agency-wide. 
The report cites important issues that affect the distribution of 
constrained resources, and EPA has been working to address them.

We are proud of EPA's accomplishments to date in integrating its 
planning and budgeting. Our 1997 Strategic Plan, the first the Agency 
developed under the Government Performance and Results Act, established 
a strategic architecture that allowed us to restructure our budget and 
more closely link planning and resource allocation. Our 2000 and 2003 
strategic plans furthered this effort, and we continue to strengthen 
the linkage between planning, resources, and results as we conduct our 
annual planning and budgeting processes and begin to prepare our 2006 
Strategic Plan. As GAO noted in its February 2005 Staff Study, 
"Performance Budgeting: Efforts to Restructure Budgets to Better Align 
Resources with Performance," EPA officials have said that the new 
budget structure better links budget resources to our strategic plan 
and highlights the program/project funding levels associated with 
achieving our goals and objectives. Successfully linking resources and 
planning to achieve improved performance provides a foundation for 
future strategies, such as improving workforce and human capital 
planning.

A critical component of EPA's planning and budgeting is assessing our 
past performance and future needs. In planning our work and determining 
resource allocations, Agency managers apply what they have learned from 
past performance--captured by such efforts as midyear performance 
reviews, Program Assessment Rating Tool (PART) assessments, and our 
annual Performance and Accountability Report-and determine what future 
performance is needed to achieve results. We understand that 
successfully carrying out our mission and achieving our goals depend on 
our ability to develop and sustain a highly skilled, adaptable, and 
results-oriented workforce with the right mix of technical expertise, 
experience, and leadership capabilities. The workforce planning 
strategies that GAO has recommended can be effective tools for 
identifying and addressing future performance needs, and EPA has 
already initiated a number of these strategic workforce planning and 
human capital efforts.

However, I would like to clarify that it is EPA's approach that 
resource allocation decisions-including workforce deployment-include as 
a basis performance and results. EPA's resource planning process is 
results-driven, formulated on achieving our strategic goals, long-term 
objectives, and annual performance goals. We are concerned that GAO's 
recommendations appear to imply that key resource allocation decisions 
should be derived from a "bottom-up" analysis of workforce deployment 
indicators, rather than from an analysis of the performance needed to 
achieve strategic or annual outcomes. The Agency views improved 
performance and better environmental results as the primary driver for 
resource decisions. However, we believe that integrating workforce 
skill and competency strategies with workforce deployment is critical 
to achieving improved environmental performance.

We appreciate GAO's recognition of current EPA efforts to address 
improving workforce strategies. Specifically, current workload strategy 
activities involve the initial steps of collecting additional options 
for workload analysis from Federal and other government organizations, 
along with benchmarking information to guide our choices for assessing 
FTE resources. With these and future activities and goals in mind, EPA 
will address the concerns identified in the report and apply them to 
effectively allocating constrained resources to achieve Agency goals.

Finally, EPA agrees with GAO's recommendations regarding its reporting 
responsibilities under section 516(b)(1) of the Clean Water Act and 
will respond according to the requirements of the law.

Staff has provided you with technical comments on the report separately 
for consideration when preparing the final report.

Thank you for this opportunity to comment on the report.

Sincerely,

Signed by:

Michael W. S. Ryan:
Deputy Chief Financial Officer:

[End of section]

Appendix V: GAO Contact and Staff Acknowledgments:

GAO Contact:

John B. Stephenson (202) 512-3841:

Staff Acknowledgments:

In addition to the individual named above, Christine Bonham, Stephen 
Cleary, Ellen Crocker, Elizabeth Curda, Denise Fantone, Julian Klazkin, 
Krista Loose, Naved Qureshi, Lisa Shames, Carol Herrnstadt Shulman, 
Gregory Wilmoth, and Melissa Wolf made key contributions to this report.

(360511):

FOOTNOTES

[1] For consistency, we refer to the statute as the Clean Water Act 
throughout the report.

[2] GAO, Human Capital: A Self-Assessment Checklist for Agency Leaders, 
GAO/OCG-00-14G (Washington, D.C.: Sept. 1, 2000). 

[3] GAO, Human Capital: Implementing an Effective Workforce Strategy 
Would Help EPA to Achieve Its Strategic Goals, GAO-01-812 (Washington, 
D.C.: July 31, 2001). See also National Academy of Public 
Administration, Setting Priorities, Getting Results: A New Direction 
for EPA (Washington, D.C.: April 1995).

[4] 33 U.S.C. §1375(b)(1).

[5] Realigning appropriated resources is subject to statutory language 
(e.g., earmarks or restrictions in appropriations acts) and 
reprogramming guidelines, which specify how an agency might shift funds 
from one object to another within an appropriations account.

[6] While opportunities for more closely linking resources and workload 
exist, as discussed later in this report, some of the data on key 
workload indicators are not complete or reliable. 

[7] 33 U.S.C. §1256.

[8] 40 C.F.R. §35.162.

[9] EPA restructured its fiscal year 2006 budget in response to 
congressional direction so that it is organized by appropriations 
account and program project. Information on strategic goals and 
objectives is provided as a supplement.

[10] GAO, Human Capital: Key Principles for Effective Strategic 
Workforce Planning, GAO-04-39 (Washington, D.C.: Dec. 11, 2003). 

[11] GAO-01-812. 25, 26.

[12] The skills assessment represents one element of the information 
needed to support a systematic method for deploying enforcement 
resources to address the agency's workload. We also recommended that 
the office develop other information, such as the level of resources 
currently being allocated to specific enforcement activities and the 
factors that determine the enforcement workload in each region. 
However, enforcement officials indicated that internal time constraints 
limited their ability to address these issues. 

[13] EPA, The Workforce Deployment Review, Executive Steering Committee 
Report (Washington, D.C.: October 2003).

[14] According to the project's interim report, issued in April 2002, 
the total estimated needs for states to fully implement the Clean Water 
Act ranged from $1.54 billion to $1.68 billion annually. Based on 
current spending levels, the report estimated an annual resource gap 
ranging from $735 million to $960 million.

[15] National Academy of Public Administration, Understanding What 
States Need to Protect Water Quality (Washington, D.C.: December 2002).

[16] Among other things, the profiles contain information on a wide 
range of activities that comprise state and regional workload, 
including monitoring water quality, permitting, inspecting permitted 
facilities, and taking enforcement actions. In collecting data for 
these profiles, the Office of Water also worked with states to resolve 
data quality problems.

[17] See, for example, GAO, Environmental Information: EPA Needs Better 
Information to Manage Risks and Measure Results, GAO-01-97T 
(Washington, D.C.: Oct. 3, 2000).

[18] EPA uses the term wet weather discharges to include sewer 
overflows, concentrated animal feeding operations, and storm water from 
municipal separate storm sewer systems and from industrial facilities. 

[19] EPA classifies facilities (including municipal wastewater 
treatment plants and industrial and federal facilities) as major or 
minor, depending on the risk to the environment posed by the pollutants 
being discharged from the facility; the volume of pollutants being 
discharged; and, in the case of municipal wastewater treatment 
facilities, the size of the population being served. 

[20] The most recent year for which the full National Water Quality 
Inventory is available is 2000. EPA has posted water quality 
information from the 2002 inventory for approximately 30 states on its 
Web site but has not yet issued the full inventory.

[21] GAO, Water Quality: Inconsistent State Approaches Complicate 
Nation's Efforts to Identify Its Most Polluted Waters, GAO-02-186 
(Washington, D.C.: Jan. 11, 2002).

[22] 33 U.S.C. § 1375(b)(1)(A). 

[23] The reporting requirement was eliminated by section 3003(a) of the 
Federal Reports Elimination and Sunset Act of 1995, which took effect 
on December 21, 1999. Section 302(a)(10) of the Great Lakes and Lake 
Champlain Act of 2002 reinstated the requirement as of November 27, 
2002. No report was required in 2001.

[24] See pages 19-21 for additional information on our efforts to 
assess data reliability for certain workload indicators.

[25] EPA's regional offices are located in the following cities: 
Boston, Mass. (I); New York, N.Y. (II); Philadelphia, Pa. (III); 
Atlanta, Ga. (IV); Chicago, Ill. (V); Dallas, Tex. (VI); Kansas City, 
Mo. (VII); Denver, Colo. (VIII); San Francisco, Calif. (IX); and 
Seattle, Wash. (X).

[26] 33 U.S.C. §1329(h). 

[27] The 2004 census data are based on state estimates from 2004.

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