Guam Use Of Environmental Protection Agency Funds Questioned In Report

$67 million over five years may not been ‘administered efficiently and effectively’

By Haidee V Eugenio

HAGÅTÑA, Guam (Pacific Daily News, June 23, 2016) – More than $67 million in federal funds given to Guam from 2009 through 2014 “may not be administered efficiently and effectively,” putting at risk programs that seek to protect human health and the environment, a federal report says.

The 50-page report released May 9 says internal controls given to the Guam Environmental Protection Agency and the Guam Waterworks Authority over assistance agreements “need improvement.”

Guam EPA’s acting administrator on Thursday told Pacific Daily News that even before the report was issued, steps had already been taken to “strengthen processes and procedures.”

The report states that more than $2 million in environmental permit and operating license fees remains under the control of the Guam Legislature instead of Guam EPA.

While lawmakers provide an allotment to Guam EPA, it may not be for the amount that Guam EPA requested.

The government of Guam further restricts access by placing a 15-percent hold on the funds, which means that 15 percent of the funds are not available for Guam EPA’s use, the report adds.

The U.S. Environmental Protection Agency’s Office of Inspector General released the report on May 9, requiring EPA Region 9 to improve its oversight over Guam’s consolidated cooperative agreements, or CCA, involving drinking water, wastewater and other environmental challenges.

EPA Region 9 has oversight over Guam, the Commonwealth of the Northern Mariana Islands, and American Samoa.

The report cites six major areas of focus requiring actions not only from EPA Region 9, but also from Guam EPA, GWA, the Guam Legislature, and the Government of Guam as a whole.

“Without adequate internal controls and oversight, more than $67 million in CCA funds may not be administered efficiently and effectively, thus reducing the impact those funds could have on protecting human health and the environment,” the report says. “As a result, Guam agencies need to improve the management of EPA-funded projects, and the EPA needs to expand its internal controls accordingly.”

The U.S. EPA Inspector General did the review in light of a significant increase in federal funding of environmental programs in Guam — from about $1.3 million in 2006 to $8.3 million in 2013.

Yvette Cruz, Guam EPA acting administrator, said on Thursday that around the same time the U.S. EPA Inspector General was auditing U.S. EPA, Guam EPA was working with U.S. EPA on standard operating procedures “that would strengthen processes and procedures with our local office that address some of the concerns raised by this audit.”

“For example, regarding the agreement payment, there was a process in place but the inspector general's office wants U.S. EPA and Guam EPA to be more consistent with regard to issues like filing quarterly reports or drawdown requests. Guam EPA will comply alongside U.S. EPA,” she said.

Cruz said as stated in the report, “U.S. EPA is working on, or has already worked on with Guam EPA, corrective actions.”

‘Unallowable costs’

The report recommends EPA Region 9 to determine if Guam EPA can be granted authority to directly receive and process income payments, instead of the Guam Legislature.

Serena A. McIlwain, EPA Region 9 assistant regional administrator, in response to the inspector general report, said the project officer has raised this issue with Guam EPA and will pursue additional information and meet with various GovGuam stakeholders to determine if this recommendation can be implemented.

The report says Guam EPA claimed $316,858 in “unallowable costs” against an air pollution control fund.

This involves unallowable court settlement costs of $309,000 and unallowable travel cost of $7,858 by two staff members of the Guam governor’s office in December 2013 and January 2014.

EPA Region 9 gave Guam EPA six months to either replenish more than $300,000 to the account from nonfederal sources or EPA Region 9 will seek to recover the funds.

Weak controls

The report identified six areas requiring attention:

  • Guam EPA does not have complete control over program income funds totaling more than $2 million;
  • Guam EPA and GWA consolidated cooperative agreements have inconsistent terms and conditions on agreement payment;
  • GWA contracts shift risk to GWA and are missing federal and industry-wide terms;
  • Guam EPA and GWA inconsistently reported in-kind and interagency agreement costs totaling more than $12 million;
  • EPA Region 9 project files were not readily available to third parties; and
  • EPA Region 9 did not ensure reliability of Guam EPA Safe Drinking Water Information System data.

States and territories including Guam are required to monitor drinking water systems and report them to EPA through the Safe Drinking Water Information System.

“Inaccurate and incomplete SDWIS data leads to concerns about whether GEPA has achieved measurable protection of public health and the environment,” the report says.

EPA Region 9 concurred with all of the 18 recommendations and plans to complete a majority of the corrective actions by Sept. 30, 2016.

Heidi Ballendorf, GWA spokeswoman, said she’s gathering information about the agency’s response to the federal report.

CNMI, American Samoa

The U.S. EPA Inspector General also issued a June 20 report on the CNMI and a May 23 report on American Samoa, requiring EPA Region 9 to also improve oversight over these islands' federal environmental funds totaling $126 million.

In the CNMI, for example, more than $58 million in its consolidated cooperative agreement funds “are not being administered efficiently and effectively due to inadequate oversight and lack of internal controls,” the U.S. EPA Inspector General report says.

A separate report from the same federal agency says EPA Region 9 “needs to enhance its internal controls over the more than $68 million in consolidated cooperative agreement funds for American Samoa.”

EPA fines Navy, Guam Shipyard

Meanwhile, EPA Region 9 fined the U.S. Navy $80,680 and the Guam Industrial Services or Guam Shipyard $44,893 for illegal storage and improper containment of hazardous wastes at Apra Harbor in Guam.

Both agreed to pay the fines to settle their violations under the federal Resource Conservation and Recovery Act, EPA Region 9 said in a June 21 statement.

As part of the recent settlement deal, Guam Shipyard has also agreed to spend $250,000 to $330,000 to remove an abandoned vessel called the Guahan-I on the shoreline of the outer Piti Channel in Apra Harbor.

EPA’s inspections at the Guam Shipyard facility in 2012, 2013 and 2014 documented illegal storage and improperly contained hazardous wastes. The U.S. Navy also generated a portion of the hazardous waste stored at the Guam Shipyard facility, including discarded flammable liquids, waste battery acid, lead paint, zinc powder, fluorescent light bulbs, and oily rags. They have since been properly disposed of.

Pacific Daily News
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