Environmental Auditing:

A Useful Tool That Can Improve Environmental Performance and Reduce Costs

RCED-95-37: Published: Apr 3, 1995. Publicly Released: May 3, 1995.

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Pursuant to a congressional request, GAO provided information on the potential for federal agencies to improve their environmental performance and reduce costs by conducting environmental audits, focusing on the: (1) types of programs leading environmental auditing organizations use; (2) benefits of and extent to which federal agencies use environmental auditing; and (3) obstacles and disincentives federal agencies face in environmental auditing.

GAO found that: (1) effective environmental audit programs have strong support from top management and the resources necessary to hire and train audit personnel, are independent from external or internal pressures, and employ quality assurance procedures to ensure accuracy and thoroughness; (2) private and public organizations with effective environmental auditing programs have reported improved compliance, reduced exposure to civil and criminal liability, operational cost savings, and reduced environmental hazards; (3) most federal agencies do not conduct environmental auditing programs; (4) although the Bureau of Land Management and Federal Aviation Administration have implemented preliminary environmental auditing programs, improvements to these programs are still needed to fully address these agencies' significant environmental liabilities; (5) most other federal agencies are beginning to develop environmental auditing programs; and (6) the obstacles to further development and implementation of environmental auditing in federal agencies include the inconsistent application of audit report and enforcement policies and the lack of commitment from senior agency management, incentives from federal agencies, and agency technical expertise.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: EPA has developed and released the document: "Strategy for Improving Environmental Management Programs at Civilian Federal Agencies" in December 1995. The document outlines a national strategy to increase enforcement attention at civilian federal facilities in FY 1996 and beyond.

    Recommendation: To encourage the practice of environmental auditing in civilian federal agencies, the Administrator, EPA, should augment EPA efforts to refocus federal and state inspection strategies to ensure that civilian federal agencies receive a measure of enforcement attention commensurate with the environmental risks posed by their operations.

    Agency Affected: Environmental Protection Agency

  2. Status: Closed - Implemented

    Comments: EPA has issued several auditing documents that assist federal agencies in performing environmental audits. For example, in concert with six civilian federal agencies, EPA issued a generic protocol for conducting environmental audits of federal agencies. Among other publications providing policies and standards for environmental auditing, EPA issued a revision of its "Environmental Audit Program Design Guidelines for Federal Agencies."

    Recommendation: To encourage the practice of environmental auditing in civilian federal agencies, the Administrator, EPA, should provide regular and sustained technical assistance on environmental auditing to civilian federal agencies (possibly through cooperative arrangements with other federal agencies), with particular emphasis on improving senior managers' awareness and understanding of the benefits to be gained from environmental auditing.

    Agency Affected: Environmental Protection Agency

  3. Status: Closed - Implemented

    Comments: In the new Audit/Self-Policing Policy, EPA has clarified and formalized its policy of not routinely requesting audit reports.(See "Federal Register" December 22, 1995: 60 FR 66706, Section II, C(4) pg. 66711)

    Recommendation: To encourage the practice of environmental auditing in civilian federal agencies, the Administrator, EPA, should require EPA regional offices to adhere to the agency's stated policy that the agency will not "routinely request" environmental audit reports but will confine such requests to the exceptional situations outlined in its 1986 policy statement on environmental auditing.

    Agency Affected: Environmental Protection Agency

  4. Status: Closed - Implemented

    Comments: EPA's policy was published in the "Federal Register" in December 1996 (60 FR 66706). It took effect on January 22, 1996. The policy statement is responsive to the recommendation. It states that the agency will completely eliminate gravity-based penalties for companies or public agencies that voluntarily identify, disclose, and correct violations according to the conditions outlined in the policy, and that the agency will not recommend criminal charges against a company acting in good faith to identify, disclose, and correct violations, if no serious actual harm has occurred. These provisions are contingent on several conditions, including voluntary self-policing and self-disclosure, prompt correction of identified problems or noncompliance, remediation of imminent and substantial endangerment and environmental harm, no repeat violations or lack of adequate preventive measures, and cooperation with EPA, including provision of such information as is reasonably necessary and required by the policy.

    Recommendation: To encourage the practice of environmental auditing in civilian federal agencies, the Administrator, EPA, should revise EPA environmental audit and related policies to encourage regulated entities to self-discover, report, and correct noncompliance by providing for the reduction of penalties for violations identified through environmental auditing. This consideration should be given only if the reporting entity meets EPA criteria of "taking reasonable precautions to avoid noncompliance, expeditiously correcting underlying environmental problems discovered through audits or other means, and implementing measures to prevent their recurrence."

    Agency Affected: Environmental Protection Agency


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