EPA OIG chides EPA for consistency and transparency in decisions

OIG, TSCA, and more

• The Environmental Protection Agency’s (EPA) Office of Inspector General (OIG) acts as the agency’s independent watchdog group, reviewing issues of fraud, waste, and abuse within the agency as well as identifying a more efficient and cost-effective manner to run the agency. OIG produces reports on various aspects of EPA programs to determine both issues as well as recommendations for how the agency can remedy the issues. These audits, evaluations, and investigations provide the basis for OIG’s actions, as well as additional support overseeing the implementation of the EPA’s budget across the agency.
• The Toxic Substances Control Act (TSCA) was passed in 1976 and became effective in 1977. TSCA covers most regulation of manufacture, processing, commercial distribution, use, and disposal of chemical substances in the United States. The act also includes requirements for recordkeeping, testing, and implementing restrictions or prohibitions on the chemicals. In 2016, Congress passed the Lautenberg Chemical Safety Act, which (among other new provisions) requires that a person intending to manufacture or import a new chemical or existing chemical for a significant new use must first notify the EPA, and the agency must make an affirmative determination on the safety of the chemical before it can be manufactured or imported. The agency is supposed to make these determinations within 90 days; however, it rarely meets this time frame.
• The Lautenberg Act also authorized the agency to collect user fees from chemical manufacturers to help offset the costs of new chemical reviews. The agency is authorized to collect the lesser of either 25 percent of the costs to implement sections 4, 5, and 6 of TSCA or $25 million. The agency has broad authority to assess these costs from chemical manufacturers for a variety of actions, including premanufacture or significant new use notices, chemicals subject to a risk evaluation, or when a company is required to send testing data to the EPA. Between fiscal years 2019 to 2022, the EPA collected an average of $10.45 million in fees, though most years were closer to $5 million, with 2021’s $28.6 million in fees collected the outlier.
• The New Chemicals Division (NCD) of the Office of Chemical Safety and Pollution Prevention administers the New Chemicals Program. The office conducts risk assessments as part of the new chemicals review process and determines whether new chemicals present unreasonable risks. NCD conducts both human health and ecological risk assessments. The new chemicals review process under the Lautenberg amendments contains 14 steps that includes risk assessment. The process begins with a pre-screen, leading to chemistry review, hazard meetings, and scoping meetings.
• OIG has previously issued several reports on EPA issues within TSCA and the New Chemicals Program. This included a report on the agency’s lack of planning that impacted its ability to meet TSCA deadlines as well as a Government Accountability Office (GAO) report that described concerns about the EPA’s programs responsible for risk assessment and management. In late December 2022, the OIG released a report that detailed issues with the new TSCA fee program, and how the agency had collected significantly less in fees than the planned 25% of TSCA program costs. OIG recommended that the EPA change its methodology for accounting for TSCA expenses to ensure that all costs for administering the sections covered under the fee rule were properly recorded and reported. The EPA agreed with these recommendations and has planned corrective actions from the report.

OIG report on NCD

• On August 2, 2023, OIG released a new report entitled The EPA Lacks Complete Guidance for the New Chemicals Program to Ensure Consistency and Transparency in Decisions. The report reviews the NCD and its operating processes, and how issues within those processes have hindered the EPA from meeting its burdens under TSCA. In addition, the report reviewed OIG hotline claims that NCD staff were pressured to focus on deadlines rather than the risks of new chemical reviews.
• OIG found that NCD did not comply with internal quality assurance and recordkeeping requirements for the New Chemicals Program. The NCD has over 100 pieces of guidance relating to the 14 steps of the new chemicals review process, however, OIG discovered that standard operating procedures for many common activities within the review process do not exist. OIG gave the example of NCD having guidance that defines what a scoping meeting is for chemicals, but no additional guidance on what is supposed to occur during scoping meetings.
• Even when guidance for a procedure existed, it was often not up to date or finalized. In its review, OIG analyzed 52 pieces of internal guidance. Of those documents, 36 had not been reviewed within a year and were outdated and 48 were not signed and finalized. These included guidance on inhalation toxicity studies, quality control for human health risk assessments, environmental hazard assessments, and exposure assessments. OIG cited the 2019 GAO report, which had also noted that the EPA lacked guidance and faced further challenges in developing this guidance as it implemented its new responsibilities under the Lautenberg amendments.
• OIG determined that NCD had not only failed to develop proper recordkeeping guidance for its scoping meetings, but also that its recordkeeping systems were “often inaccessible.” OIG noted that prior to September 2021, TSCA applications within the NCD TSCA Confidential Business Information (CBI) systems could not properly track edits to records that were developed during the new chemicals review process. Although the agency has corrected these deficiencies, OIG found that it is part of a larger problem of failing to produce guidance on how to maintain records. NCD’s internal applications and technology lacked features considered essential for proper recordkeeping under both EPA regulations and Federal government-wide regulations, such as version control capabilities and a global search function for more easily finding records.
• The EPA has run into issues on failing proper version control and accidental deletion of documents before. In September and October 2021, the National Archives sent the EPA letters alleging unauthorized destruction of documents. In the EPA’s response, it explained that staff would often save files in different folders or save changes to the original file. Despite the fact that NCD has now implemented version control capabilities, OIG found that not only was the actual information within TSCA CBI systems mostly inaccessible, these systems were inaccessible during working hours. In at least once instance the system was down for two days.
• A lack of resources has also hindered the EPA’s ability to effectively issue guidance. In a March 2022 analysis, NCD estimated that the agency needed an additional 16 full-time equivalent (FTE) staff to execute the scope of its new chemicals review work. However, despite the lack of staff, the agency has made “progress” in terms of its quality program, updating and finalizing some guidance related to recordkeeping, quality assurance and control, and scientific disagreements.
• OIG also received several hotline complaints from employees that the TSCA 90-day statutory deadline was used to adversely affect performance reviews of staff. OIG found “no evidence” that the EPA uses employee performance standards to measure whether employees comport with the 90-day statutory requirement.

Impact of the report and EPA response

• OIG concluded that the NCD should develop and implement a plan to regularly review NCD guidance documents, as well as develop a process to periodically assess the effectiveness of the NCD recordkeeping system and update it as needed. OIG also recommended developing and implementing a plan for identifying the root causes of frequent technical issues. In addition OIG advised NCD conduct periodic reviews of the NCD workforce and workload analysis and to balance this with NCD staff resources needed to execute the new chemicals process.
• The Office of Chemical Safety and Pollution Prevention (OCSPP), which oversees NCD, agreed with OIG’s recommendations and proposed different corrective actions for all four recommendations. The agency plans to regularly review guidance documents and meet to identify improvements needed for future versions of new chemical review applications. In addition, the agency plans to develop risk assessments for root causes of common technical problems as well as periodic workforce and workflow analysis.
• Overall, the OIG report details yet another one of the bevy of internal issues that the TSCA program faces, both internally and externally. The report highlights the lack of resources that the EPA has had to face some of these problems, which may be improved somewhat in the future. The EPA has been hiring heavily over the past year, and has improved certain aspects of its NCD team, which should help with both future guidance as well as the speed of new chemical reviews. However, the agency still has a long way to go, both in terms of actually outputting internal and external guidance on the New Chemicals Program as well as dealing with constant budget shortfalls that show no sign of letting up, especially as the agency may experience budget cuts in the next round of spending bills.

To contact the author of this analysis, please email Walker Livingston.
To contact the editor of this analysis, please email Patricia Iscaro.

Key Documents and Dates

• The EPA Lacks Complete Guidance for the New Chemicals Program to Ensure Consistency and Transparency in Decisions (August 2, 2023)
• Toxic Substances Control Act
• Lautenberg Chemical Safety Act