We have audited the consolidated balance sheet of the U.S. Environmental Protection Agency (EPA) as of September 30, 2012, and September 30, 2011, and the related consolidated statements of net cost, net cost by goal, changes in net position, and custodial activity; and the combined statement of budgetary resources for the years then ended. These financial statements are the responsibility of EPA management. Our responsibility is to express an opinion on these financial statements based upon our audit. We conducted our audit in accordance with U.S. generally accepted auditing standards; the...

Nanomaterials encompass a wide range of substances based on the understanding and control of matter at the scale of nanometers-the equivalent of one-billionth of a meter. Nanomaterials are nanoscale materials or materials that contain nanoscale structures internally or on their surfaces. Nanomaterials are currently used in a wide variety of applications, including consumer products, health care, transportation, energy, and agriculture. While some nanomaterials can occur naturally, this report focuses on intentionally manufactured nanomaterials. Figure 1 illustrates the relative size of...

Based on the results of our survey, 85 percent of the EPA survey respondents reported that they have used IRIS as their primary source for cancer values and 81 percent have used IRIS as their primary source for non-cancer values. More than half (51 percent) of the survey respondents who reported using IRIS as the primary source for cancer values indicated a reason they did so was because it was required for the activity they were conducting. Similarly, more than half (52 percent) of the survey respondents who reported using IRIS as the primary source for non-cancer values indicated a reason...

Gas production in the United States has grown significantly in recent years. From 1992 to 2010,3 the number of producing gas wells increased by 76 percent. Onshore gross withdrawals of gas increased by about 43 percent. About 11,000 new wells were drilled annually from 1992 to 2010, on average. According to a 2011 EPA fact sheet,4 the United States had nearly 1.1 million producing oil and gas wells in 2009. Growth in gas production has been particularly significant in areas covered by EPA Regions 3, 6, and 8. For example, in Region 8, the number of gas wells increased by 416 percent and gross...

Although EPA has been releasing unneeded space since 2007, it continues to have under-utilized space. The U.S. General Services Administration (GSA) owns or leases facilities for EPA use. At 13 of the 16 facilities reviewed, we estimated that EPA had 433,336 square feet of under-utilized space as of February 2012. EPA is limited in what type of space it can release back to GSA before a lease expires. Space can only be released if it is marketable; configuration issues and the cost to relocate employees can pose problems. If all under-utilized space in our sample was marketable, we estimate...

EPA is not recovering all its costs of administering the lead-based paint program. Our analysis, based on the Agency's rough cost estimates, showed unrecovered costs of $16.4 million for fiscal years (FY) 2010 through 2014 combined. Although collections exceeded costs by $8.9 million in FY 2010, for FYs 2011 through 2014 costs exceeded collections by $25.3 million, thus the net difference of $16.4 million. In a 2009 final rule, EPA established a fee schedule under the authority of TSCA to recover the program costs incurred over a 5-year certification cycle.

EPA enforcement data show that the amount of monetary results EPA regions achieve from concluded enforcement cases varies from year to year and from region to region. While the number of enforcement cases concluded for FYs 2006 through 2011 remained relatively constant, the overall monetary results varied. The variations are linked to when and where in the nation a few large cases are concluded. These few large cases can result in unusually large monetary results in any given year. National Enforcement Initiatives (NEIs) set by EPA's Office of Enforcement and Compliance Assurance drove the...

EPA did not comply with the IPERA because the fiscal year (FY) 2012 Agency Financial Report (AFR) did not include all required elements of a corrective action plan. EPA did not include, among other things, planned and actual completion dates for corrective actions and improper payment reduction targets. EPA also misstated improper payments for state revolving funds (SRFs), grants, and contracts and commodities payment streams in the FY 2012 AFR.

EPA's management controls for ensuring inspector training and inspection quality provide limited assurance of the effectiveness of its RMProgram inspections. Proper training helps inspectors conduct quality inspections. However, 15 of the 45 RMProgram inspectors nationwide received inspector credentials without documentation indicating that they met minimum training requirements. Further, six of the 12 supervisors did not meet minimum training requirements. EPA's management controls did not detect or prevent the cases of missed or undocumented training. Weaknesses in controls included...

Contrary to its plans, EPA upgraded some less critical facilities prior to its most important facilities (including EPA headquarters). EPA stated it was more efficient to upgrade facilities based on geographic location rather than importance, but provided no quantitative data to support that position. In addition, EPA indicated it did not want to make mistakes upgrading headquarters buildings so it upgraded others first. As a result, some lower valued facilities required a higher level of authentication for access than EPA headquarters facilities. The processes used to gain access are...