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entitled 'Status of U.S. Army Corps of Engineers Efforts to Implement 
GAO's 2007 Recommendations Regarding Its Section 214 Authority' which 
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GAO-10-385R: 

United States Government Accountability Office: 
Washington, DC 20548: 

February 19, 2010: 

The Honorable James L. Oberstar:
Chairman:
Committee on Transportation and Infrastructure:
House of Representatives: 

Subject: Status of U.S. Army Corps of Engineers Efforts to Implement 
GAO's 2007 Recommendations Regarding Its Section 214 Authority: 

Dear Mr. Chairman: 

When cities, counties, or other nonfederal public entities propose 
public works projects that could degrade or damage federally regulated 
waters and wetlands, such as road construction and sewer line 
construction or maintenance, they must obtain a permit from the U.S. 
Army Corps of Engineers (Corps) before proceeding. Under authorities 
delegated to the Corps from Section 404 of the Clean Water Act, 
[Footnote 1] the agency is responsible for regulating activities that 
may impact wetlands, streams, and other waters throughout much of the 
United States and it decides whether to allow such activities to 
occur. To obtain the Corps' approval, the nonfederal public entity, 
like any other property owner, must submit a permit application that 
contains a description of the proposed project, including its purpose 
and location, and other information the Corps needs to evaluate how 
the project will affect wetlands and other federally regulated waters. 
Once the Corps receives all of the required information from the 
applicant, the permit review process begins. 

Some policymakers and others have expressed concerns that the Corps' 
permit process takes too long and has significantly delayed some 
public works projects. In 2000, the Congress included a provision in 
the Water Resources and Development Act (WRDA) to expedite permit 
processing for nonfederal public entities. Specifically, section 214 
of the act authorizes the Secretary of the Army, after providing 
public notice, to accept and expend funds from nonfederal public 
entities--known as funding entities--to expedite the evaluation of 
permit applications that fall under the jurisdiction of the Department 
of the Army. As we reported in May 2007,[Footnote 2] these funds 
primarily go toward supporting the salaries of Corps program managers 
who will dedicate their efforts to reviewing the permit applications 
from funding entities. The act also requires the Secretary to ensure 
that the funds accepted will not impact impartial decision making with 
respect to permit approvals. The Secretary of the Army has delegated 
this authority to the Corps and, in turn, the Corps has delegated day-
to-day responsibility for implementing the section 214 authority to 
its 38 districts, which have responsibility for processing permit 
applications. 

In our May 2007 report, we reviewed Corps permitting activities using 
the WRDA section 214 authority. As a result of this review, we 
recommended that the Secretary of the Army direct the Corps of 
Engineers to take the following four actions: 

* clarify the guidance that the districts must follow when evaluating 
permit applications under the section 214 authority, 

* clarify the documentation that district officials must include in 
project files to justify and support their decisions, 

* provide training to district officials to ensure that they are aware 
of the requirements that apply to permits processed under the section 
214 authority, and: 

* develop an effective oversight approach that will ensure that the 
districts are following all the appropriate requirements when 
evaluating projects under the section 214 authority. 

When we first reviewed the Corps implementation of the section 214 
authority at the end of fiscal year 2006, four districts were using 
this authority and had executed agreements with 13 entities.[Footnote 
3] At the end of fiscal year 2009, the program had expanded 
significantly and 17 districts were using this authority and had 
executed agreements with 36 entities. Total amount of expended funds 
through these agreements in fiscal year 2009 was almost $4 million. 
[Footnote 4] 

The WRDA section 214 authority was originally set to expire at the end 
of fiscal year 2003; however, this temporary authority has been 
extended several times, most recently until December 2009. As the 
Congress considers whether to authorize continued use of this 
authority, you asked us to review the progress the Corps has made in 
implementing our May 2007 recommendations. 

To assess the Corps' efforts to implement our recommendations, we 
reviewed the agency's policy and guidance documents, fiscal year 2008 
and 2009 annual reports submitted to Corps headquarters by Corps 
districts that are using this authority, and recommendation status 
updates provided by the Corps to the DOD Inspector General. In 
addition, we interviewed Corp regulatory program managers about steps 
taken to refine guidance, train district officials, and oversee 
participating districts' implementation of the WRDA section 214 
authority. 

We conducted our work from October 2009 to January 2010 in accordance 
with all sections of GAO's Quality Assurance Framework that are 
relevant to our objectives. The framework requires that we plan and 
perform the engagement to obtain sufficient and appropriate evidence 
to meet our stated objectives and to discuss any limitations in our 
work. We believe that this information and data obtained, and the 
analysis conducted, provide a reasonable basis for any findings and 
conclusions in this product. 

On November 9, 2009, we briefed your office on the preliminary results 
of our review. As agreed with our office, we subsequently updated our 
results to incorporate the most recent set of annual report 
submissions from the Corps districts that are using this authority. 
This letter summarizes the information presented in the briefing and 
from our additional review and officially transmits the updated 
briefing slides in the enclosure. 

Corps Implementation of Our 2007 Recommendations: 

We believe that the Corps has implemented three of the four 
recommendations that we made in May 2007. For the one remaining 
recommendation, while the Corps has taken some steps, we believe that 
more action is needed for the agency to be fully responsive to our 
recommendation. Specifically, we found the following. 

The Corps has implemented our recommendation to clarify the guidance 
that the districts must follow for section 214 permit applications. On 
October 1, 2008, the Corps issued revised guidance that improves on 
the prior guidance and addresses a number of the points we raised in 
our May 2007 report. 

* The revised guidance includes a list of acceptable activities for 
which section 214 funds can be used and more explicitly describes the 
circumstances under which funds can be accepted. For example, the 
guidance now specifically states that funds can be accepted if (1) 
they will expedite permit processing for the funding entity, (2) the 
district can ensure decision making will be impartial and not affected 
by receipt of the funds, and (3) accepting the funds will not slow 
down evaluation of other permits. 

* The section of the revised guidance related to accountability has 
been revised, and additional items that need to be tracked and 
reported to Corps headquarters on an annual basis are now delineated. 
Additional items include performance metrics for evaluating the 
effectiveness of the use of the funds and a statement certifying that 
all project managers funded under the section 214 authority are aware 
of and trained on the requirements contained in the guidance. 

* The Corps also significantly expanded upon the requirements in the 
guidance related to impartial decisionmaking. Specifically, under the 
revised guidance, participating Corps districts are to ensure that all 
documents involved in the decision-making process, including the 
supporting documents and issued permit, are reviewed and approved by 
someone at least one level higher than the program manager who is 
funded by the authority. In addition, the guidance now requires that 
all final permit decisions need to be updated monthly on the 
district's Web page in an area separate from any other final actions 
and that the decision be clearly identifiable as being for projects 
funded through the WRDA section 214 authority. 

The Corps has clarified the documentation that must be included in 
section 214 project files. We believe that the Corps has taken 
appropriate steps to ensure that the documentation that district 
officials include in project files will justify and support their 
permitting decisions. Specifically, the Corps has completed a 
checklist, or template, of the decision documents necessary to support 
its general, or nationwide, permitting process, and it tested this 
tool in some of its districts.[Footnote 5] In addition, the Corps 
recently completed a template for its standard permits decision-making 
process that includes additional elements necessary to document 
compliance with the National Environmental Policy Act and other 
relevant statutes and regulations. As part of its efforts to develop 
these decision document templates, the Corps completed an analysis of 
all national permitting processes in December 2008 and incorporated 
the results of this analysis into these templates to help ensure 
consistent and complete support documentation. A Corps official said 
that they intend to release these new templates for immediate use at 
an upcoming executive regulatory seminar and branch chief annual 
meeting. During these sessions, the official said that the templates 
will be discussed and instructions on their use provided. 

The Corps has provided training on the section 214 authority. The 
Corps held training sessions in August 2007 and May 2008 at national 
conferences attended by all regulatory staff, during which the 
following topics relating to the section 214 authority were discussed 
and clarified: the revised guidance in draft form, expectations 
regarding impartial decision making and disclosure of decisions to the 
public, and the annual reporting process. Furthermore, discussion of 
the WRDA section 214 program was also included in the curriculum for a 
development course to help train new regulatory chiefs. As part of its 
dissemination efforts for the revised guidance, the Corps also sent a 
memo to regulatory chiefs across all Corps districts and divisions 
highlighting sections of the guidance where clarifications were made 
that could impact the districts' implementation of the section 214 
authority. Among the items highlighted were the increased annual 
reporting requirements designed to improve the Corps' ability to 
assess the program's impacts. In addition, Corps district commanders 
now need to affirm that their program managers who are funded through 
section 214 are fully aware of and trained on the relevant guidance. 

The Corps has not fully implemented an effective oversight approach 
for the section 214 authority. Although the Corps has taken some steps 
to improve its oversight of the districts' implementation of the 
section 214 authority since our May 2007 report, we believe that the 
Corps has not yet fully implemented our recommendation. More 
specifically, the Corps has taken some positive steps by expanding the 
revised guidance with regard to impartial decision making and annual 
reporting and by enforcing the submission of the annual reports. 
Furthermore, the Corps has taken steps to ensure that the funds 
identified as being from WRDA section 214 sources are tracked and 
accounted for separately. However, the Corps' actions have fallen 
short in two significant oversight areas: (1) ensuring the quality and 
thoroughness of the annual reports and (2) improving the transparency 
of decision making to the public by clearly posting public notices of 
funding decisions on the district Web sites. 

* Annual reporting. Although districts were to submit annual reports 
describing their use of the section 214 authority since 2001, no 
districts had done so until 2008. Our review of the fiscal year 2008 
and 2009 annual reports, each due by November 1 of the respective 
year, indicates that compliance with the reporting elements delineated 
in the revised guidance has been uneven across the districts. While 
almost all the districts complied with the requirements to include in 
the report the amount, type, and source of accepted and expended funds 
and an analysis of issues related to impartial decision making, few 
districts included performance metrics and an evaluation of the 
program's effectiveness. In addition, most districts confined their 
assessment of the degree to which funds expedited the permit review 
process to a brief qualitative discussion and only four districts 
attempted to compute the actual time it took to process permits to 
ensure that the program met the goal of expediting permit processing 
for funding entities without negatively impacting evaluation of other 
permit applications. 

* Transparency of decision making. Under the Corps' revised guidance, 
all WRDA section 214 funding decisions are to be posted online "in an 
area separate from any other final actions, clearly identifiable as 
being for projects funded by this authority." However, our review of 
the participating districts' Web sites found that such postings were 
not clearly and consistently done. As of January 17, 2010, while we 
were able to locate section 214 agreements on the Web sites of 15 of 
the 17 districts, not all of these were in accordance with the 
guidance. Specifically, many were not in a separate area from other 
actions or clearly identifiable as being related to the section 214 
authority. 

Agency Comments: 

We provided the Corps with a draft of this report and obtained oral 
comments at a meeting with a Deputy Chief for Regulatory Programs. In 
commenting on the report, this official generally concurred with the 
conclusions reached and said that the Corps is taking additional steps 
to address the remaining recommendation to develop an effective 
oversight approach. Specifically, the official stated that starting 
with the fiscal year 2010 annual reporting cycle, the Corps will 
require that districts submit their reports using a standard template 
to ensure that each required element is being fully reported on. In 
addition, the Corps headquarters will be instituting quarterly calls 
with Corps division and district regulatory officials and section 214 
WRDA program managers to discuss progress made in meeting section 214 
performance measures, such as timeliness of the permit processing. 
This official also said headquarters will continue to work with 
district officials to ensure that information about WRDA section 214 
agreements is posted clearly on the district Web sites and is easily 
accessible by the public. In addition to providing information about 
actions underway to address the recommendations, the Corps official 
also provided technical comments, which we incorporated as appropriate. 

As agreed with your office, 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 interested 
congressional committees, the Corps, and other interested parties. 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 questions about this report, please contact 
me at 202-512-3841 or mittala@gao.gov. Contact points for our Offices 
of Congressional Relations and Public Affairs may be found on the last 
page of this report. Key contributors to this report were Elizabeth 
Erdmann (Assistant Director), Janice Ceperich, Nancy Crothers, Carol 
Kolarik, and Lisa Vojta. 

Sincerely yours, 

Signed by: 

Ms. Anu K. Mittal:
Director, Natural Resources and Environment: 

Enclosure: 

[End of letter] 

Enclosure: WRDA Section 214 Update: 

Briefing for House Transportation and Infrastructure Committee: 

November 9, 2009 (updated January 14, 2010): 

Current Status of Section 214 Program: Positions, Agreements, 
Entities, and Funding: 

For each fiscal year, the number of fully funded positions, districts 
using the section 214 authority, and entities with agreements is as 
follows: 

* FY2006: 10 positions across 4 districts; 13 entities; 

* FY2007: 15 positions across 6 districts; 17 entities; 

* FY2008: 39 positions across 12 districts; 30 entities; 

* FY2009: 49 positions across 17 districts; 36 entities. 

* Total amount of expended funds in FY2009 was almost $4 million. 
(Figure excludes expenditures from 1 of the 17 districts that did not 
supply such figures in their annual reports. Four districts reported 
data for fiscal year of July 2008 through June 2009.) 

GAO Recommendations in GAO-07-478: 

To ensure that the permits processed under the section 214 authority 
comply with federal regulations and guidance, we recommended that the 
U.S. Army Corps of Engineers (Corps) take the following four actions: 

(1) Clarify the guidance that the districts must follow when 
evaluating permit applications under section 214. 

(2) Clarify the documentation that districts must include in project 
files to justify and support their decisions. 

(3) Provide training to district officials to ensure that they are 
aware of the requirements that apply to permits processed under the 
section 214 authority. 

(4) Develop an effective oversight approach that will ensure that the 
districts are following all the appropriate requirements when 
evaluating projects under the section 214 authority. 

Status: Recommendation 1: Clarify guidance: 

The Corps has implemented this recommendation. 

The Corps issued revised guidance on October 1, 2008. A section by 
section review demonstrates an improvement over prior guidance in a 
number of significant ways: 

* Expanded list of acceptable activities for funding. 

* Additional language making it clear that the Corps can accept funds 
if (1) they expedite processing of permits, (2) the district can 
ensure impartial decision making, and (3) accepting funds will not 
slow evaluation of other permits. 

* Clarified the conditions a private entity can be involved in with 
regard to submissions under a funded agreement. 

Most significant changes made to “Accountability” and “Impartiality” 
sections of the guidance: 

* Accountability: expanded list of items that need to be included in 
annual reports. Now includes performance metrics used to evaluate 
effectiveness of fund usage and a statement certifying that all funded 
project managers are aware of and trained on 214 guidance. 

* Impartiality: significantly expanded this section, including 
clarification that (1) all decision documents and permits must be 
reviewed and signed by a manager one-level-above reviewer, and (2) 
final permit decisions need to be updated monthly on the district’s 
Web page in an area that is separate from other final actions and 
clearly identifiable as section 214 authority. 

Status: Recommendation 2: Clarify documentation to support decisions: 

The Corps has implemented this recommendation. 

The Corps completed a checklist/template of documentation necessary to 
support: 

* nationwide permits and has tested it in the Northwestern Division, 
and; 

* standard permits, including additional elements required to 
demonstration compliance with the National Environmental Policy Act 
and other statutes. 

Templates will be released for use by all districts in February 2010. 

Both templates are the result of a district-level analysis completed 
in 2008, which helped ensure the development of consistent and 
complete support documentation for all major permit categories, 
according to the Corps. 

Status: Recommendation 3: Provide training on section 214 authority: 

The Corps has largely implemented this recommendation. 

A training session was held in August 2007 at the National Regulatory 
Conference for all Corps regulatory staff. According to the Corps, 
during the session, 

* draft revised guidance was discussed, 

* expectations regarding impartial decision making and disclosure of 
decisions to public was discussed, and, 

* the annual reporting process was clarified. 

Also, a training session on applicable section 214 guidance and draft 
revised guidance was held at the National Regulatory Conference in May 
2008 and at the pilot class of a new regulatory chiefs development 
course. According to the Corps, the training focused on the guidance, 
implementation, and performance related to the section 214 program. 

E-mail announcement to all regulatory chiefs on October 1, 2008, 
announcing and disseminating revised section 214 guidance. Message 
highlighted sections of the guidance where clarifications were made 
that could impact the districts’ implementation of the program, such 
as: 

* Increased upward reporting requirements to improve their ability to 
assess the program’s impacts, 

* Expanded impartial decision-making section to define procedures and 
review requirements, and, 

* Reaffirmation that all regulatory chiefs with funded section 214 
positions will be required to certify that funded program managers are 
appropriately trained on guidance. 

Status: Recommendation 4: Develop Oversight Approach for 214 Authority: 

This recommendation has not yet been fully implemented. 

The Corps has taken some valuable steps, such as: 

* Expanding the section of guidance that relates to impartial decision 
making was expanded to be more explicit about who needs to review 
documentation and permit decisions, 

* Enforcing since FY2008, the requirement for all districts with 
section 214 agreements to submit annual reports to Headquarters, and, 

* Clarifying through a July 2008 memo to all regulatory chiefs the 
accounting codes to be used to track reimbursable funds. A funding 
code was specifically identified for section 214 funding sources. 

However, we also found uneven compliance by the 17 districts with 
agreements with the reporting requirements in the guidance for the 
FY2009 reports submitted to Headquarters. 

* While almost all districts complied with the requirements to include 
the amount, type, and source of accepted and expended funds and an 
analysis of issues related to impartial decision making, few districts 
included performance metrics and an evaluation of the program’s 
effectiveness. 

* Only 4 districts computed the actual time it took to process permits 
to ensure that the program met the goal of expediting permit 
processing for funding entities without negatively impacting 
evaluation of other permit application. 

According to the Corps, HQ’s Regulatory Office conducts quarterly 
checks on District Web sites to ensure that section 214 agreements are 
clearly posted in accordance with the guidance. 

* Our review on January 15, 2010, did not find this to be consistently 
the case. We found agreements for 15 of the 17 District sites, but not 
all would be qualified as being “in an area separate from any other 
final actions, clearly identifiable as being for projects funded by 
this authority” as the guidance states. 

[End of Briefing Slides] 

Footnotes: 

[1] Section 404 of the Clean Water Act generally prohibits the 
discharge of dredged or fill material into waters of the United States 
without first obtaining a permit from the Corps. 

[2] GAO, Waters and Wetlands: Corps of Engineers Needs to Ensure That 
Permit Decisions Made Using Funds from Nonfederal Public Entities Are 
Transparent and Impartial, [hyperlink, 
http://www.gao.gov/products/GAO-07-478] (Washington, D.C.: May 16, 
2007). 

[3] From December 2001 through September 2006, nonfederal public 
entities provided over $2 million in section 214 funds to the four 
Corps districts with whom they had section 214 agreements. 

[4] One of the 17 districts did not supply funding figures in its 
annual report. Four districts reported data for their state's fiscal 
year of July 2008 through June 2009. 

[5] The Corps issues a number of different permits, each with its own 
application and review process. General, or nationwide, permits are 
for projects that are likely to have only minimal impacts on water and 
wetland resources, and their review process is limited. In contrast, 
standard permits are issued for projects that could have substantial 
impacts on water and wetland resources; the review process for these 
permits is more extensive. 

[End of section] 

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