Superfund Activities in the Environment and Natural Resources Division for Fiscal Years 2004 and 2005

Audit Report 07-43
September 2007
Office of the Inspector General

Appendix V
ENRD’S Response to the Draft Report

U. S. Department of Justice

Environment and Natural Resources Division

Assistant Attorney General
950 Pennsylvania Avenue, N.W.
Washington, DC 20530-0001
Telephone (202) 514-2701
Facsimile (202) 514-0557

October 17, 2007

Raymond J. Beaudet
Acting Assistant Inspector General for Audit
Office of the Inspector General
1425 New York Avenue, N.W.
Washington, D.C. 20530

Re:   Audit of Superfund Activities in ENRD for Fiscal Years 2004 and 2005

Dear Mr. Beaudet:

I am writing to thank you for the professional and careful audit work performed by staff from the Office of the Inspector General during the recent audit of the Superfund program in the Environment and Natural Resources Division, and to address the audit report’s recommendations. For nearly 20 years, ENRD has relied on your office to provide sound advice to help us ensure that our accounting systems and operations meet rigorous standards for quality. Through the constructive process of annual audits, ENRD has strengthened its accounting, which has helped the government recover hundreds of millions of dollars in cost recovery litigation. These audits are instrumental in maintaining the integrity, reliability and accountability of the Division’s Superfund program. We greatly appreciate the role that the OIG plays in this process. We also appreciate the opportunity to review this draft report and to respond to the recommendations.

The objective of this audit was to determine if the cost allocation process used by ENRD and its contractor provided an equitable distribution of total labor costs, other direct costs, and indirect costs to Superfund cases during FYs 2004 and 2005. We are pleased with the conclusion stated in your draft audit report that “In our judgment, ENRD provided an equitable distribution of total labor costs, other direct costs, and indirect costs to Superfund cases during FY 2004 and FY 2005.” We also are pleased to learn that your review did not identify any instances of non-compliance with the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (known as “CERCLA” or “Superfund”), the law under which this audit is being conducted.

Overall, we agree with the findings and conclusions described in the draft audit report. The report recommendations highlight three valid and important areas for improvement. Listed below are the audit recommendations followed by the Environment Division’s responses.

RECOMMENDATION 1: Ensure that the ENRD memorandum entitled Determination of Superfund Cases is updated to include all ENRD litigation sections.

RESPONSE: We concur with this recommendation. The above entitled memorandum has been updated to include all ENRD litigating sections and to reflect the current names of each section. The updated memorandum is enclosed for your information.

RECOMMENDATION 2: Ensure that all travel by ENRD employees is appropriately authorized prior to incurring any travel expense.

RESPONSE: We concur with this recommendation. As stated in the draft audit report, the OIG has noted this finding in previous audit reports. In order to address this recommendation, we have composed a memorandum – attached for your information – which we plan to distribute to Division managers within the next week reminding them of their responsibilities to authorize travel before a traveler incurs travel related expenses, as required under DOJ and federal travel regulations. Because this remedial action is similar to previous corrective actions concerning the same recommendation, ENRD plans to take five additional corrective measures to address this shortcoming. First, we plan to post an announcement on the splash screen of our Division’s intranet – the first thing users see when they log on to their computers each day – reminding all employees, not just managers, that they must have authorization to incur travel related expenditures prior to traveling. Second, we plan to update the travel page of our Division’s intranet to highlight this important requirement. Third, we plan to include a new “travel policies” document in ENRD’s new employee orientation package, so all new employees are made aware that they must receive authorization prior to traveling. Fourth, we plan to disseminate an information memorandum to all Division employees, reminding them that they must comply with Section 301, Part 2.1 of the Federal Travel Regulations, which requires pre-approval prior to traveling. Fifth, we plan to purchase a number of ink stamps which will indicate that prior authorization has been provided by an authorizing official (on a date preceding the date of travel) so such authorization, if appropriate, can be easily noted on travel authorization forms. This final corrective action is intended to address situations where last minute or emergency travel is required but where it is not possible or not practical for a supervisor to physically sign a travel authorization form. Any stamped authorization forms will be accompanied by an e-mail confirmation or other written or electronic approval prior to the occurrence of travel. Once again, this stamp and e-mail process will only be implemented if a supervisor is not able to physically sign the actual authorization form. We expect to implement all five of these additional responsive measures within the next 60 days.

RECOMMENDATION 3: Ensure that all FY 2004 and 2005 Superfund SOC 2508 transactions are allocated to the correct case number within the Superfund database and the Financial Management Information System (FMIS).

RESPONSE: We concur with this recommendation. We have generated a complete list of SOC 2508 Superfund transactions for FY 2004 and 2005. This document is attached for your review and information. ENRD has already begun a comprehensive effort to locate each relevant invoice and compare the case number identified on it to the case number keyed into FMIS for the subject fiscal years. We will provide a report of any errors noted during this review upon completion of this project. We expect this effort to take up to 90 days to complete.

The Environment Division is committed to maintaining a reliable and efficient system for allocating Superfund costs. We appreciate the close cooperation and assistance of your staff during the audit. In this era of tight budgets, we also very much appreciate the Inspector General’s willingness to conduct audits of the Superfund program. These audits benefit the government’s efforts to recover federal funds spent to clean the environment. Should you or your staff require further information, please feel free to contact ENRD’s Executive Officer, Robert Bruffy on 616-3147, or ENRD’s Comptroller, Andrew Collier on 616-3359.


Ronald J. Tenpas
Acting Assistant Attorney General
Environment and Natural Resources



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