FY 2012 Financial and Program Performance Highlights http://www2.epa.gov/planandbudget EPA 190-R-13-008 ------- FY 2012 Financial and Program Performance Highlights Message from the Administrator 2 Message from the Chief Financial Officer 3 Introduction 5 Regional Highlights 6 Goal 1: Taking Action on Climate Change and Improving Air Quality 7 Goal 2: Protecting America's Waters 9 Goal 3: Cleaning Up Communities and Advancing Sustainable Development 11 Goal 4: Ensuring the Safety of Chemicals and Preventing Pollution 13 Goal 5: Enforcing Environmental Laws 16 Cross-Cutting Fundamental Strategies 19 Financial Performance 22 Annual Assurance Statement 24 ------- UNITED STATES ENVIRONMENTAL PROTECTION AGENCY * WASHINGTON, D.C. 20460 FEB 15 2013 OFFICE OF THE ADMINISTRATOR I am pleased to present the U.S. Environmental Protection Agency's Fiscal Year 2012 Financial and Program Performance Highlights, which summarizes some of the EPA's key FY 2012 accomplishments in fulfilling our mission to protect human health and the environment. Through increased stakeholder involvement and strong partnerships, we worked diligently to assess and address many of the new environmental concerns facing the nation. Building upon our progress, the agency in FY 2012 took an active approach to addressing climate change. We established limits on toxic emissions at power plants and finalized national greenhouse-gas emission standards for light-duty trucks and cars, calling for fuel economy to increase to 54.5 miles per gallon. We honored the 40th anniversary of the Clean Water Act by making measurable progress in restoring natural treasures such as the Chesapeake Bay, the Everglades and the Great Lakes, and tackling the tough issues of nutrient pollution in states across our nation. We also strengthened the capabilities of small drinking-water systems, helping to ensure that 94 percent of the population now has safe drinking water. We worked to return 11,500 previously contaminated sites to communities for reuse, preserving green space and boosting local economies. The EPA strengthened the many different partnerships that contribute to the success of our national environmental-protection enterprise. For instance, the Economy, Energy and the Environment Program partnerships bring federal agencies and state and local communities together to promote sustainable manufacturing and growth through innovative technologies. We turned to innovative techniques to address the specific environmental concerns on tribal lands and internationally, and we have made environmental justice a defining aspect of how we do business, giving those who have been historically disproportionally impacted by pollution a seat at the table and a voice in the debate. Looking forward, the EPA is committed to using the principles of sustainability to solve many of the environmental problems we face, including converting the agency to 21st"century electronic reporting of environmental data. During the past four years the EPA has celebrated many milestones, including the agency's 40th anniversary, and confronted many challenges, from the Deepwater Horizon Spill in the Gulf of Mexico to the F-5 tornado that devastated Joplin, Mo., to the aftermath of Hurricane Sandy. Through each of these events I have been astounded not only by the resiliency of the American people but by the dedication and commitment present at the EPA. I have tremendous confidence in the EPA's talented and committed professionals, and their work with our federal, state and local partners to successfully meet the environmental challenges ahead. Bob Perciasepe Acting Administrator Internet Address (URL) • http://rwww.epa.gov Recycled/Recyclable • Printed with Vegetable Oil Based Inks on Recycled Paper (Minimum 30% Postconsumcr) ------- I" ** ^ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 8 WASHINGTON, D.C. 20460 February 12, 2013 OFFICE OF THE CHIEF FINANCIAL OFFICER During FY 2012, the EPA worked cooperatively with our federal, state and tribal partners to advance the agency's mission. We made strides in protecting human health and the environment while also increasing efficiency in our business processes and enhancing internal controls. Additionally, I am pleased to present the FY 2012 Financial and Program Performance Highlights report in an online only format, allowing for easy access to additional information about our programs and performance. As EPA's Chief Financial Officer, I must ensure that we adhere to the highest standards of financial management and stewardship in carrying out our mission. For the 13th consecutive year, EPA's Office of Inspector General issued an unqualified or "clean" opinion on the agency's financial statements. Among our other financial management accomplishments, this year the EPA launched Compass, the agency's new, re-scoped financial system on time and within budget. We revised our internal procedures that promote timely, efficient and effective resolution of audit findings and recommendations and implemented new guidance to reduce conference spending. In response to an OMB directive, the agency developed payment procedures to accelerate processing of payments to small business while maintaining effective internal controls. The new processes were accomplished while ensuring the EPA continued to be a leader in the Federal government at keeping improper payments to a minimum. We have also made great progress encouraging new approaches to solving environmental problems. These new approaches have potential to provide more cost-effective solutions to environmental challenges. During FY 2012, the agency released its Roadmap on Technology Innovation for Environmental and Economic Progress to promote sustainable technology innovation and examine a broad range of approaches to solving the country's most pressing current environmental problems and preventing future ones. Additionally, the EPA, along with American University, sponsored the first Technology Market Summit to bring together government, industry, academia, and investment decision makers to accelerate the development and adoption of technologies to achieve economic growth through environmental protection. Internet Address (URL) • http-./A/vww.epa.gov Recycled/Recyclable • Printed with Vegetable Oil Based Inks on 100% Postconsumer. Process Chlorine Free Recycled Paper ------- The EPA made significant achievements over the past year, and I look forward to continuing our success through collaboration with our partners and stakeholders and implementing innovative strategies to help meet the challenges ahead. Barbara }. Bennett / ------- EPA's FY 2012 Financial and Program Performance Highlights offers a snapshot of the agency's FY 2012 performance in five environmental areas as well as highlights of how the agency manages its internal operations. Measuring our progress and reporting on our results is an essential part of EPA's accountability to the American public and a critical component of our planning and budgeting cycle. EPA uses performance measures to assess our progress towards meeting the goals outlined in our FY 2011-2015 Strategic Plan, inform decision-making and communicate our results to our stakeholders. In EPA's FY 2012 Annual Plan and Budget, the agency committed to 214 annual performance measures. The graph below shows the number of these measures we met, did not meet, and are awaiting data as of February 1, 2013. We provide a more detailed discussion of our results, including reasons for missing or exceeding FY 2012 targets, in our FY 2012 Annual Performance Report. In addition to annual performance measures, the agency tracks performance on the Agency's Priority Goals, a component of the Administration's performance management framework which supports improvement in near-term outcomes related to our strategic plan. More information on the Agency Priority Goals is available at Performance.gov. EPA's FY 2012 Performance Results {Total Measures = 24} ------- Highlights of Environmental Accomplishments, EPA Regions Region 10 Protecting Stratospheric Ozone In FY 2012, EPA settled two cases alleging Clean Air Act violations by two seafood processors based in Washington state. American Seafoods agreed to pay $700,000 in penalties for inadequate management of ozone-depleting substances and spend $9 million to $15 million to convert industrial refrigeration systems to non-ozone depleting substance refrigerants. Icicle Seafoods agreed to pay $400,000 for refrigerant leaks, repair leaks at a lower trigger rate aboard its largest processor-vessel and land-based facilities, and imple- ment comprehensive inspection and leak repair plans at all its facilities. Region 9 Building Sustainable Communities in Fresno As part of the White House Strong Cities, Strong Communities Initiative, EPA; the city of Fresno, California; and 12 federal agencies collaborated to align multiple planning and infrastructure projects designed to revitalize downtown Fresno and cre- ate economic growth and innovation leading to environmental benefits. Projects considered include enhancing transit connectivity with options like bus rapid transit and supporting the city in reconnecting an 18-square-block street grid in the heart of down- town to better support infill development funded by the Department of Transportation. Region 7 Preventing Overflow in St. Louis In FY 2012, EPA and the Department of Justice lodged a consent decree valued at more than $4.7 billion against the Metropolitan St. Louis Sewer District (MSD), requiring injunctive measures and pollution controls to cut sewer overflows. To address potential environmental justice concerns, MSD will also provide $100 million for green infrastructure and $230 million to the Cityshed Mitigation Program to alleviate flooding. Region 8 Improving Tribal Health in South Dakota In FY 2012, EPA performed time-critical removal actions on 90 structures contaminated with asbestos, lead-based paint, and other sources threatening children and other residents of the Pine Ridge Reservation in South Dakota. To address health concerns, EPA coordinated with the Oglala Sioux Tribe's Environmental Protection Program, the South Dakota Department of Health, the Indian Health Service, and the Centers for Disease Control and Prevention. Region 5 Making Great Lakes Health a Priority On September 7, 2012, the United States and Canada amended the Great Lakes Water Quality Agreement to include provisions to combat invasive species, protect habitat, address climate change impacts, and reduce nutrient levels in western Lake Erie and other impaired Great Lakes watersheds. First signed in 1972, the agree- ment is the cornerstone of abinational effort to protect and restore water quality in the Great Lakes. Region 6 Reducing Pollution in Texas On December 7, 2011, EPA and Agrifos Fertilizer LLC in Pasadena, Texas, agreed to a $1.8 million penalty for viola- tions of the Clean Air Act and the Resource Conservation and Recovery Act, including processing and disposing of hazardous waste without a permit. Corrective actions out- lined in the consent agreement and final order may reduce the release of hazardous waste into area surface water by more than 1.5 million tons and fund a $600,000 Supple- mental Environmental Project. Region 4 Filtering Out Pollution in the Everglades In FY 2012, EPA reached a historic agreement with the state of Florida on permits aimed to restore water qual- ity in the Everglades through limits on phosphorus. Additionally, more than $875 million will be invested in projects that expand wetland treatment systems that filter and clean the water before release and create flow equalization basins that will store and slowly release water into an additional 6,500 acres of stormwater treat- ment areas. Region 1 Integrated Stormwater Campaign in New England EPA and the New England states are using the best available science and tools to address water- ways impacted by polluted stormwater. EPA New England's office is helping cities and towns, issuing permits, and enforcing environmental laws where necessary to protect and restore water quality, shellfish beds, and beaches. As part of a public education "Soak Up the Rain" campaign, EPA has partnered with groups around New England, including inner city youth, to install rain gardens and other green infrastructure solutions. Youth developed valuable green job skills while reducing polluted runoff. Region 2 Bringing Abandoned Sites Back to Life in New Jersey As part of $69.3 million in new investments to help redevelop contaminated properties, boost local economies, and create local jobs, EPA awarded $2.8 million to clean up and redevelop abandoned brownfields sites in Newark and Jersey City, New Jersey. Investments include $900,000 for assess- ments and cleanups in both cities and nearly $ 1 million to maintain a revolving loan fund for marketing the program, provide oversight and tech- nical support, and award subgrants. Region 3 Being Energy Wise in Philadelphia In FY 2012, EPA worked closely with Philadel- phia's Sustainability Office and local building management firms to promote energy efficiency throughout the municipality. The result was increased use of the Energy Star Portfolio Manager, which can help building facility managers reduce energy use. In FY 2012, 20 properties in Phila- delphia—totaling 8,344,581 square feet—received Energy Star labels. ------- Goal 1: Taking Action on Climate Change and Improving Air Quality Reduce greenhouse gas emissions and develop adaptation strategies to address climate change, and protect and improve air quality. Reducing Greenhouse Gas Emissions From Vehicles To advance the FY 2012-2013 Agency Priority Goal to reduce GHG emissions from cars and trucks, EPA and the National Highway Traffic Safety Administration finalized national greenhouse gas emission standards for light-duty trucks and cars. These standards call for fuel economy to increase to 54.5 mpg and these, along with other standards, are expected to reduce greenhouse gas emissions by 6 billion metric tons between 2012-2016. Strengthening Particle Pollution Standards In June 2012, EPA proposed strengthening its national air quality standards for harmful fine particle pollution, known as PM2.5, because the current standard is not as protective as previously thought. Elevated levels of PM2.5 have been linked to health effects such as increased mortality rates and higher incidents of heart attack, stroke, and childhood asthma. Mitigating Mercury and Other Toxic Pollution EPA issued final Mercury and Air Toxics Standards (MATS), the first national standards that require power plants to limit emissions of mercury and other toxic air pollutants. MATS will reduce air pollution by relying on existing controls already in use at many U.S. coal-fired power plants. EPA estimates that the new safeguards will prevent as many as 11,000 premature deaths and 4,700 heart attacks per year. Cutting Cross-State Air Pollution EPA's Cross-State Air Pollution Rule (CSAPR) would require states to significantly improve air quality by reducing power plant emissions that contribute to ozone and/or PM2.5 in other states. On August 21, 2012, the U.S. Court of Appeals for the District of Columbia Circuit issued an opinion that vacated CSAPR. In the meantime EPA will continue to implement the Clean Air Interstate Rule. ------- GOAL 1 AT A GLANCE TAKING ACTION ON CLIMATE CHANGE AND IMPROVING AIR QUALITY Reduce greenhouse gas emissions and develop adaptation strategies to address climate change, and protect and improve air quality. FY 2012 Performance Measures Met = 9 Not Met = 1 Data Unavailable = 24 (Total Measures = 34) How Funds Were Used: Net Program Costs (Dollars in Thousands) TakingAction on Climate Change and Improving Air Quality $1,212,245.9 Enforcing I 1.12% Environmental Laws $822,028.2 \ 7.54% 25 7.14% Cleaning Up Communities and Advancing Sustainable Development Goal I Performance Measures (FY20I2) Source: FY 2012 Statement of Net Cost by Goal Goal I Performance Measures (FY20II) Goal 1 FY 2012 Performance and Resources Strategic Objective FY2012 Obligations (in thousands) %of Goal 1 Funds Objective 1.1: Address Climate Change. Reduce the threats posed by climate change by reducing greenhouse gas emissions and taking actions that help communities and eco- systems become more resilient to the effects of climate change. $207,749.8 17% Objective 1.2: Improve Air Quality. Achieve and maintain health-based air pollution stan- dards and reduce risk from toxic air pollutants and indoor air contaminants. $933,709.0 77% Objective 1.3: Restore the Ozone Layer. Restore the earth's stratospheric ozone layer and protect the public from the harmful effects of ultraviolet radiation. $25,310.0 2% Objective 1.4: Reduce Unnecessary Exposure to Radiation. Minimize unnecessary releases of radiation and be prepared to minimize impacts should unwanted releases occur. $45,477.1 4% Goal 1 Total $1,212,245.9 100% Due to rounding, some numbers might add up to slightly less or more than 100%. ------- Coal 2: Protecting America's Waters Protect and restore our waters to ensure that drinking water is safe, and that aquatic ecosystems sustain fish, plants and wildlife, and economic, recreational, and subsistence activities Ensuring Drinking Water Quality To advance the FY 2012-2013 Agency Priority Goal to improve public health protection for persons served by small drinking water systems by strengthening the technical, managerial, and financial capacity of those systems, EPA has worked to strengthen the capabilities of small drinking water systems to help improve drinking water quality. EPA's performance in FY 2012 ensured that 94 percent of the population is receiving safe drinking water that meets all applicable health based standards, an increase of 280,000 people from FY 2011. Avoiding Agricultural Pollution To advance the FY 2012-2013 Agency Priority Goal to reduce pollution runoff from nonpoint sources, EPA worked closely in FY 2012 with the U.S. Department of Agriculture to ensure that federal resources—including both Section 319 grants and Farm Bill funds—are managed in a coordinated manner to protect water quality from agricultural pollution sources. EPA is also revising the 319 grant guidelines to ensure that states have updated Nonpoint Source Management Programs, which are important for setting state priorities. Enhancing Storm and Wastewater Planning In June 2012, EPA issued the Integrated Municipal Stormwater and Wastewater Planning Approach Framework to assist local governments in meeting their Clean Water Act obligations. The Framework allows for flexibility in implementing innovative, cost-saving storm- and wastewater infrastructure solutions. EPA's National Water Program's Performance Information EPA launched a comprehensive website on performance measures and program evaluations pertaining to the National Water Program. For more information, refer to: http://water.epa.gov/resource performance/performance/index.cfm. ------- GOAL 2 AT A GLANCE PROTECTING AMERICA'S WATERS Protect and restore our waters to ensure that drinking water is safe, and that aquatic ecosystems sustain fish, plants and wildlife, and economic, recreational, and subsistence activities. FY 2012 Performance Measures Met = 53 Not Met = 9 Data Unavailable = 10 (Total Measures = 72) How Funds Were Used: Net Program Costs (Dollars in Thousands) TakingAction on Climate Change and Improving Air Quality $1,212,245.9 Enforcing I 1.12% Environmental Laws $822,028.2 \ 7.54% Ensuring the Safety - of Chemicals and Preventing Polluti; Goal 2 Performance Measures 40 7.14% Cleaning Up Communities and Advancing Sustainable Development Source: FY 2012 Statement of Net Cost by Goal Objective I Objective 2 * This total includes 2 performance measures under Objective 2 for which the Agency will not collect data. Goal 2 FY 2012 Performance and Resources Strategic Objective FY2012 Obligations (in thousands) %of Goal 2 Funds Objective 2.1: Protect Human Health. Reduce human exposure to contaminants in drinking water, fish and shellfish, and recreational waters, including protecting source waters. $1,816,437.2 33% Objective 2.2: Protect and Restore Watersheds and Aquatic Ecosystems. Protect the quality of rivers, lakes, streams, and wetlands on a watershed basis, and protect urban, coastal, and ocean waters. $3,742,127.0 67% Goal 2 Total $5,558,564.2 100% Due to rounding, some numbers might add up to slightly less or more than 100%. ------- Coal 3: Cleaning Up Communities and Advancing Sustainable Development Clean up communities, advance sustainable development, and protect disproportionately impacted low-income, minority, and tribal communities Prevent releases of harmful substances, clean up. and restore contaminated areas Cleaning Up Contaminated Sites To advance the FY 2012- 2013 Agency Priority Goal to clean up contaminated sites and make them ready for use, EPA helped return more than 11,500 previously contaminated sites to communities for reuse. In addition, the agency continued making progress under several key land cleanup programs. For example, EPA completed the National LUST Cleanup Backlog: A Study of Opportunities, which provided significant information to better characterize the national inventory of sites awaiting corrective action, and outlined several strategies and opportunities to help reduce the backlog. In addition, under the Federal Facilities Site Evaluation Project, EPA worked closely with other federal agencies and state partners to make cleanup determinations for over 95 percent of the 514 federally owned sites that had not appeared to have been fully assessed. Siting Renewable Energy Facilities EPA developed new tools and policies to enhance its RE-Powering America's Land: Siting Renewable Energy on Potentially Contaminated Land and Mine Sites Initiative. The purpose of this program is to encourage siting renewable energy facilities on thousands of current and formerly contaminated properties across the nation, with the goals of decreasing the amount of green space used for development, reducing greenhouse gas emissions, and providing economic benefits (including job creation) to local communities. Decreasing Material Use and Associated Impacts In FY 2012, EPA advanced a new Sustainable Materials Management Program, an approach that focuses on reducing negative environmental impacts across the life cycle of materials from resource extraction, manufacturing, use, reuse, recycling and disposal. EPA partners with federal agencies and corporate stakeholders through the Food Recovery Challenge, the Federal Green Challenge, and the Electronics Challenge. Improving U.S.-Mexico Border Health Throughout FY 2012, EPA implemented innovative techniques to address environmental concerns on tribal lands and with international partners. One program—Border 2012—successfully completed a 10- year collaboration between the United States and Mexico to improve the environment and protect the health of the nearly 14 million people living along the U.S.-Mexico border. The program, which has now been renewed to Border 2020, resulted in the removal and proper disposal of more than 12 million scrap tires and 570 tons of used electronics; improved water quality and environmental health through targeted infrastructure projects; and improved air quality through diesel truck/bus retrofitting programs. Enhancing Tribal Consultations EPA finalized the Policy for Consultation and Coordination with Indian Tribes on May 4, 2011. Since issuing the Policy, EPA has initiated over 120 consultations with tribal governments on topics such as regulations, policies, and permitting. 11 ------- GOAL 3 AT A GLANCE CLEANING UP COMMUNITIES AND ADVANCING SUSTAINABLE DEVELOPMENT Clean up communities, advance sustainable development, and protect disproportionately im- pacted low-income, minority, and tribal communities. Prevent releases of harmful substances and clean up and restore contaminated areas. FY 2012 Performance Measures Met = 28 Not Met = 4 Data Unavailable = 4 (Total Measures = 36) How Funds Were Used: Net Program Costs (Dollars in Thousands) TakingAction on Climate Change and Improving Air Quality $1,212,245.9 Enforcing I 1.12% Environmental Laws $822,028.2 ^ 7.54% 7.14% Cleaning Up Communities and Advancing Sustainable Development Source: FY 2012 Statement of Net Cost by Goal Goal 3 Performance Measures Protecting America's Waters Objective I Objective 2 Objective 3 Objective 4 Goal 3 FY 2012 Performance and Resources Strategic Objective FY2012 Obligations (in thousands) %of Goal 3 Funds Objective 3.1: Promote Sustainable and Livable Communities. Support sustainable, resil- ient, and livable communities by working with local, state, tribal, and federal partners to promote smart growth, emergency preparedness and recovery planning, brownfield redevelopment, and the equitable distribution of environmental benefits. $530,964.0 21% Objective 3.2: Preserve Land. Conserve resources and prevent land contamination by reducing waste generation, increasing recycling, and ensuring proper management of waste and petroleum products. $247,093.5 10% Objective 3.3: Restore Land. Prepare for and respond to accidental or intentional releases of contaminants and clean up and restore polluted sites. $1,673,324.3 66% Objective 3.4: Strengthen Human Health and Environmental Protection in Indian Country. Support federally recognized tribes to build environmental management capacity, assess environmental conditions and measure results, and implement environmental programs in Indian country. $82,935.0 3% Goal 3 Total $2,534,316.8 100% Due to rounding, some numbers might add up to slightly less or more than 100%. ------- Goal 4: Ensuring the Safety of Chemicals and Preventing Pollution Reduce the risk and increase the safety of chemicals and prevent pollution at the source. Ensuring Chemical Safety In FY 2012, EPA took action to ensure that chemicals used for agriculture, manufacturing, and construction are safe and do not pose potential risks to human health or the environment. EPA also participated in domestic and international partnerships and collaborations to reduce waste; conserve energy and natural resources; and leave homes, schools, and workplaces cleaner and safer. Protecting Children From Lead Through FY 2012, EPA and authorized states certified 126,323 firms under the Lead Renovation, Repair, and Painting Rule, which aims to protect children from risks associated with lead-based paint present in many American homes. As one indication of progress, the Centers for Disease Control reported that the rate of elevated blood lead levels (>5u.g/dL) among children under 6 years old has decreased from 4.1 percent in 2003-2006 to 2.6 percent in 2007-2010. Better Understanding Human Exposure to Contamination In FY 2012, EPA invested in research activities to better understand human exposure to contaminants. EPA finalized the noncancer health assessment for dioxins, which contributes to a range of agency initiatives, including establishing cleanup levels at Superfund sites. EPA also reported to Congress on its progress in implementing April 2011 recommendations made by the National Research Council to improve the Integrated Risk Information System, which provides health effects information on chemicals to which the public may be exposed. Increasing Availability of Chemical Information In FY 2012, EPA exceeded its annual target for addressing confidential data claims under the Toxic Substances Control Act (TSCA). EPA increased the availability of TSCA 8(e) chemical hazard filings through the Chemical Data Access Tool, and is working to promote transparency through its Design for the Environment (DfE) program by posting an online list of 494 chemicals, updated periodically, that meet the criteria for the DfE Safer Product Labeling Program. EPA also conducted stakeholder meetings to obtain input on which TSCA chemical data products might be useful to users or customers of TSCA data. Helping Manufacturers Be More Sustainable In FY 2012, EPA participated in the E3: Economy, Energy and the Environment Program partnerships, which help small to medium-sized manufacturers improve productivity, energy efficiency, and environmental performance. E3 brings federal agencies and state and local communities together to provide manufacturers with assessments that promote sustainable manufacturing and growth through innovative technologies that improve regional economies and reduce environmental impacts. E3 partnerships are actively in place in 18 states. Organizations in an additional 15 states and territories have begun the E3 process. 13 ------- Promoting Sustainable Development In June 2012, the EPA Administrator attended the United Nations Conference on Sustainable Development, commonly known as Rio+20. The Administrator worked to advance U.S. positions and interests in promoting a global green economy and supported an improved institutional framework for sustainable development, focusing on enhanced U.N. operations. 14 ------- GOAL 4 AT A GLANCE ENSURING THE SAFETY OF CHEMICALS AND PREVENTING POLLUTION Reduce the risk, increase the safety of chemicals, and prevent pollution at the source. FY 2012 Performance Measures Met = 15 Not Met = 4 Data Unavailable = 12 (Total Measures = 31) How Funds Were Used: Net Program Costs (Dollars in Thousands) Taking Action on Climate Change and Improving Air Quality $1,212,245.9 Enforcing 11.12% Environmental Laws $822,028.2 7.54% Ensuring the Safety of Chemicals and Preventing Pollution $778,1 17.5 7.14% Cleaning Up Communities and 1 Advancing Sustainable Development Source: FY 2012 Statement of Net Cost by Goal Goal 4 Performance Measures Protecting America's Waters Objective I Objective 2 Goal 4 FY 2012 Performance and Resources Strategic Objective FY2012 Obligations (in thousands) %of Goal 4 Funds Objective 4.1: Ensure Chemical Safety. Reduce the risk of chemicals that enter our prod- ucts, our environment, and our bodies. $721,746.5 93% Objective 4.2: Promote Pollution Prevention. Conserve and protect natural resources by promoting pollution prevention and the adoption of other stewardship prac- tices by companies, communities, governmental organizations, and individuals. $56,371.0 7% Goal 4 Tola I $778,117.5 100% Due to rounding, some numbers might add up to slightly less or more than 100%. ------- Coal 5: Enforcing Environmental Laws Pursue vigorous civil and criminal enforcement chat targets the most serious water, air, and chemical hazards in communities. Assure strong, consistent, and effective enforcement of federal environmental laws nationwide. Increasing Accessibility to Environmental Information EPA finalized a number of key cases and worked to make environmental information more accessible to the public. EPA is planning to convert to 21st-century electronic reporting technology, which will require some short-term investments but is expected to provide substantial long-term benefits for industry, states, EPA, and the public. Addressing Deepwater Horizon Oil Spill Violations In 2012, EPA, the Department of Justice (DOJ), and the U.S. Coast Guard finalized a $90 million settlement with MOEX Offshore 2007 LLC for alleged Clean Water Act violations resulting from the Deepwater Horizon oil spill. Approximately $45 million will go directly to Gulf states in the form of penalties or expedited environmental projects and will include $20 million to facilitate land acquisition projects. EPA, DOJ, and the U.S. Coast Guard continue to pursue enforcement actions against those who are responsible for the Deepwater Horizon oil spill. Reducing Pollution From Refineries In April 2012, EPA and DOJ announced an innovative environmental agreement with Ohio-based Marathon Petroleum Company (MPC), estimated to reduce harmful air pollution by approximately 5,400 tons per year. In addition to other activities outlined in the consent decree, MPC has agreed to install state-of-the-art controls on combustion devices known as flares and to cap the volume of waste gas it will send to its flares at the company's six refineries in the United States—marking a first for the refining industry. MPC will also pay a $450,000 civil penalty to resolve Clean Air Act violations and $10,000 to resolve violations of the Emergency Planning and Community Right-to-Know Act and the Comprehensive Environmental Response, Compensation, and Liability Act. Obtaining Fines for Violations In the largest criminal penalty to date under the Federal Insecticide, Fungicide, and Rodenticide Act, Scotts Miracle-Gro Company, a lawn and garden pesticides producer, was ordered to pay a $4 million fine and perform community service for 11 violations. In addition to other charges, Scotts pleaded guilty to illegally applying insecticides that are toxic to birds to its wild bird food products, falsifying pesticide registration documents, distributing pesticides with misleading and unapproved labels, and distributing unregistered pesticides. Scotts will also contribute $500,000 to organizations in Ohio that support the protection of bird populations and habitats. Making Pollution Data Publicly Available EPA's enforcement program also launched the Clean Water Act Pollutant Loading Tool, which allows the public to identify and compare the annual pollutant discharge amounts for Clean Water Act direct dischargers. This data is a key component of EPA's Clean Water Act Action Plan, which focuses on the most relevant Clean Water Act dischargers. EPA released 2007-2010 data through a website that 16 ------- includes an interactive mapping application and a feature that helps evaluate actual releases against other data sources, such as the Toxic Release Inventory. Electronic Reporting: Cross Program Agency Priority Goal To advance the FY 2012-2013 Agency Priority Goal to develop a plan to convert existing paper reports into electronic reporting, establish electronic reporting in at least four key programs, and adopt a policy for including electronic reporting in new rules by September 30, 2013, the agency established a task force to recommend important reports to convert to electronic reporting, streamline, consolidate, or delete. The task force began developing an agency policy to encourage electronic reporting as a default for new rules and also established a working group with Environmental Council of the States commissioners to develop a framework and vision for e-reporting. As part of this initiative, the agency is looking at ways to incorporate e-reporting into existing and new rules. 17 ------- GOAL 5 AT A GLANCE ENFORCING ENVIRONMENTAL LAWS Protect human health and the environment through vigorous and targeted civil and criminal enforcement. Assure compliance with environmental laws. FY 2012 Performance Measures Met = 9 Not Met = 6 Data Unavailable = 0 (Total Measures = 15) How Funds Were Used: Net Program Costs (Dollars in Thousands) Taking Action on Climate Change and Improving Air Quality $1,212,245.9 Enforcing I 1.12% Environmental Laws $822,028.2 7.54% Protecting America's Waters $5,558,564.2 $2,534,316.8 50.97% 23.24% Goal 5 Performance Measures $778,1 17.5 7.14% Cleaning Up Communities and Advancing Sustainable Development Source: FY 2012 Statement of Net Cost by Goal Objective I Goal 5 FY 2012 Performance and Resources Strategic Objective FY2012 Obligations (in thousands) %of GoalS Funds Objective 5.1: Enforce Environmental Laws. Pursue vigorous civil and criminal enforcement that targets the most serious water, air, and chemical hazards in communities. Assure strong, consistent, and effective enforcement of federal environmental laws nationwide. $822,028.2 100% Goal 5 Total $822,028.2 100% Due to rounding, some numbers might add up to slightly less or more than 100%. ------- EPA's five cross-cutting fundamental strategies set clear expectations for changing the way EPA does business in achieving its results. For more information on how EPA implemented these strategies please view our FY 2012 Action Plan Annual Progress Reports. Strategy 1: Expanding the Conversation on Environmentalism Enhancing Access to Water Quality Data EPA released a new data access and outreach tool called How's My Waterway for the 40th anniversary of the Clean Water Act. This multiplatform application helps users find information on the condition of their local waters using a smart phone, tablet, or desktop computer. Increasing Social Media Among Hispanics EPA redesigned its Spanish-language website and launched a new Spanish-language blog to make environmental information more accessible to non-English speakers. Developing Mobile Environmental Applications EPA's "Apps for the Environment" Challenge harnessed the innovation and technical expertise of software developers to create applications that enable the use of EPA data to promote public health and environmental awareness. EPA received 100 ideas for new applications and 38 mobile apps entries, ranging from dashboards to consumer-based information products and games. EPA also launched the Developer Central website, a "how-to" guide for using EPA data and Web services for application development. Detailed performance information can be found in the FY 2012 Action Plan Annual Progress Report for Strategy 1. Strategy 2: Working for Environmental Justice and Children's Health Improving Environmental Justice Screening EPA developed the EJSCREEN tool, now available to every EPA employee via the GeoPlatform. This tool will increase consistency in the data and methods used for environmental justice (EJ) screening and reduce the cost of screening activities across the agency. Increasing Public Involvement Opportunities EPA's Region 1 led the development of EJ and Permitting Regional Implementation Plans under the Plan EJ 2014 Permitting Initiative. The purpose of the plans is to establish a process for prioritizing enhanced public involvement opportunities for EPA-issued permits that may disproportionately impact overburdened communities. 19 ------- Educating Schools on Safe Chemical Management As part of the School Chemical Cleanout Campaign Program grants awarded, Region 8 developed and printed for national distribution 11,000 booklets on "Sensible Steps to Healthier School Environments/' providing information to address some of the most common environmental health concerns in schools and identifying inexpensive measures for resolving them. Detailed performance information can be found in the FY 2012 Action Plan Annual Progress Report for Strategy 2. Strategy 3: Advancing Science, Research, and Technological Innovation Spurring Economic Growth Through Technology EPA and American University jointly sponsored the 2012 Technology Market Summit, bringing together various decision-makers from government, industry, academia, and the private sector to discuss how to accelerate the development and adoption of technologies to spur economic growth through environmental protection. Through a series of case studies and "market talks" from an investor perspective, meeting speakers and participants explored barriers and solutions related to technology, policy, and finance. Focusing Research Where It Is Most Needed EPA adopted integrated trans-disciplinary Research Action Plans for programs on: 1) air, climate, and energy; 2) safe and sustainable water; 3) chemical safety and sustainability; and 4) safe and healthy communities. These plans identify relevant, timely, and sustainable solutions to specific issues and were developed with extensive feedback from EPA program offices and regional partners, to ensure that EPA's research is focused on the highest priority needs. Detailed performance information can be found in the FY 2012 Action Plan Annual Progress Report for Strategy 3. Strategy 4: Strengthening State, Tribal, and International Partnerships Enhancing Government Outreach EPA conducted outreach meetings with key associations representing state, tribal, and local elected officials to discuss EPA's program and policy priorities and to facilitate dialogue on the environmental priorities of state and local governments. The meetings allowed the associations to provide feedback directly to EPA on topics such as 1) EJ and EPA's Plan EJ 2014, including Title VI of the Civil Rights Act; 2) the Urban Waters Federal Partnership; 3) EPA's Integrated Municipal Stormwater and Wastewater Planning Framework; 4) the National Academy of Sciences Green Book Report on incorporating sustainability into the agency's principles and decision-making; 5) EPA's FY 2013 Budget Priorities; and 6) Hydraulic Fracturing (which also included two additional conference calls with 130 state and local government officials). Conducting Research in Partnership with Tribal Colleges and Universities EPA's inaugural Tribal EcoAmbassadors Program provided support to professors from eight different tribal colleges and universities across the country to develop year-long research initiatives that solve an environmental or public health challenge for their students or larger tribal community. A total of 63 tribal students engaged on projects ranging from assessing water quality in local wells, to creating a local business using recycled, carbon-negative building materials. Each project culminated in a report that 20 ------- outlined its community engagement and research process, conclusions, and proposed solutions to the chosen challenge. Promoting Environmental Solutions In May 2012, EPA, joined by the Secretary of Commerce, Secretary of Agriculture, the U.S. Trade Representative, and other leaders, announced EPA's new export-promotion strategy, which is designed to promote environmental solutions designed and manufactured by U.S. companies and also serves to demonstrate that environmental standards stimulate new technologies, manufacturing, and jobs. Detailed performance information can be found in the FY 2012 Action Plan Annual Progress Report for Strategy 4. Strategy 5: Strengthening EPA's Workforce and Capabilities Reducing Waste Generation and Increasing Recycling EPA's Region 9 decreased overall waste generation in the regional office by 12 percent and achieved a 97 percent rate for diverting materials to composting and recycling in lieu of landfills, saving $45,900. Improving Workspace Efficiency To build modern workplaces that promote collaboration and improve efficiency, the agency initiated an ambitious, multi-year effort to redesign EPA workspace, including an analysis of organizational needs and employee work styles to ensure workplace changes match workforce needs. In FY 2012, we focused on space planning and design in Regions 7, 9, and 10 and in three headquarters offices. Improving Resource Management During FY 2012, EPA continued to reduce unliquidated obligations on expired grants and on expired contracts. Tracking and lowering unliquidated obligations is an important internal control to ensure that the agency is using government funds more efficiently and in a timely manner. Detailed performance information can be found in the FY 2012 Action Plan Annual Progress Report for Strategy 5. 21 ------- Financial Performance Sound Financial Management EPA carries out its mission to protect human health and the environment with the support of strong financial management. For the 13th consecutive year, EPA's Office of Inspector General (DIG) issued an unqualified or "clean" opinion on the agency's financial statements. A clean opinion means that the agency's numbers are reliable. Some of EPA's most significant financial achievements in FY 2012 include: • Paid 92.69 percent of its invoices on time and 100 percent of its grant payments electronically; • Implemented guidance to reduce conference spending by establishing a new process for tracking, reviewing, and approving conference-related activities. EPA's Financial Statements The chart below displays assets, liabilities, net position, and net cost of operations as of September 30, 2012. Balance Sheet Trend (dollars in billions) $25 $20 $15 $10 $5 $0 Assets Liabilities Net Position Net Cost of Operations EPA's assets totaled $17.26 billion at the end of FY 2012, a 19.9 percent decrease from FY 2011. EPA's liabilities totaled $2.27 billion at the end of FY 2012, a 5.4 percent decrease from FY 2011. The net cost of operations shows EPA's gross cost to operate, minus exchange revenue earned from its activities. 22 ------- FY 201 2 Composition of Assets FY 201 2 Composition of Liabilities Property, Plant and Equipment (Net) $1.01 billion (6%) Accounts Receivable (Net) $0.52 billion (3%) Oihcrt X1 $0.26 b I Lonns Receivable $0.01 billion (0%) Cashout Advances. Superfund $0.74 billion (32%) Other $0.39 billion (17%) Accounts Payable and Accrued Liabilities $0.83 billion (37%) . • Payroll and Benefits $0.31 billion (14%) The EPA Holds Itself Accountable The Federal Managers' Financial Integrity Act and the Office of Management and Budget Circular A-123 require agencies to report to the President and Congress on the effectiveness of internal controls over programmatic operations and financial activities, and the conformance of the agency's financial systems to government-wide standards. During FY 2012, the agency reviewed 10 key financial processes and 266 key controls and found no new material weaknesses. Subsequent to the agency's review, EPA's DIG identified one new material weakness related to financial management systems that has since been corrected by the agency. Based on the results of the agency's FY 2012 evaluation and reviews, the Administrator provided reasonable assurance on the adequacy and effectiveness of the agency's internal controls over programs, financial activities and financial systems. The agency also responded to management challenges, which EPA's DIG identifies each year. The following are the Key Management Challenges identified in FY 2012: 1. Oversight of Delegation to States 2. Safe Reuse of Contaminated Sites 3. Limited Capacity to Respond to Cyber Security Attacks 4. EPA's Framework for Assessing and Managing Chemical Risk 5. Workforce Planning 23 ------- Fiscal Year 2012 Annual Assurance Statement The U.S. Environmental Protection Agency conducted its FY 2012 assessment of the effectiveness of internal controls over programmatic operations and financial activities, as well as conformance of financial systems to government-wide standards. The assessment was conducted in compliance with the Federal Managers' Financial Integrity Act; OMB Circular A-123, Management's Responsibility for Internal Control; and other applicable laws and regulations. Based on the results of the EPA's assessment and no findings of material weaknesses, I am providing reasonable assurance that the agency's internal controls over programmatic operations were operating effectively and financial systems conformed to government-wide standards as of September 30, 2012. In addition, the EPA assessed the effectiveness of internal controls over financial activities and found no material weaknesses as of June 30, 2012. Subsequently, the agency's Inspector General identified Compass System Limitations as a material weakness. The EPA has corrected this weakness. As a result, internal controls were operating effectively as of September 30, 2012, and no other material weaknesses were found in the design or operation of the internal controls over financial reporting. I am providing reasonable assurance that the EPA's internal controls over financial activities were operating effectively. ------- |