The relative share of spending for other Superfund cost categories remained about the same between fiscal years 1996 and 1997. EPA stated that the increase in spending for administration and support between fiscal years 1996 and 1997 can be attributed to normal spending fluctuations for items such as rental payments and other infrastructure needs, and to possible accounting changes. As figure 2 shows, the Corps managed the largest portion of this spending during fiscal years 1996-97 (about 65 percent of the spending during the 2-year period). EPA managed about 13 percent of contractor spending during the 2 fiscal years. The Department of the Interior managed a small portion of contractor spending (about 5 percent), primarily for mining cleanups. Contractor Costs for Remedial Actions Managed by EPA or the Corps

Nationwide, about 71 percent of contractor spending for remedial actions managed by EPA during fiscal years 1996-97 went to the physical implementation of the cleanups. The remaining 29 percent was for prime contractor expenses related to managing and overseeing the cleanups. For the two remedial action projects where information was available from the Corps, about 69 percent of contractor spending during fiscal years 1996-97 went to the physical implementation of the cleanups. We could not determine if these results are typical of the Corps’ projects, however, because these two projects accounted for only 16 percent of the Corps’ spending for contractors during fiscal years 1996-97. Contractor Spending Managed by EPA

For the remedial action projects performed by EPA’s contractors, we found that, nationwide, about 71 percent of contractor spending during 1996-97 went to the subcontractors who physically perform the cleanup work. 3.) Travel associated with the professional labor (1 percent). General and administrative expenses, such as salaries for upper management and corporate office costs (3 percent). Contractor Spending Managed by the Corps

During fiscal years 1996-97, only 2 of the about 70 remedial actions with significant charges by the Corps’ contractors ($10,000 or more in spending during either year) were billed on a cost-reimbursement basis, thus allowing us to analyze the share of contractor spending for physical cleanups. EPA said that the report’s analysis is sound. 6.) Scope and Methodology

To update the share of annual Superfund spending that went to contractor cleanup work to include fiscal year 1997, we obtained information from EPA’s Integrated Financial Management System (IFMS). To determine the share of contractor spending for remedial actions administered by EPA, the Corps, the Department of the Interior’s Bureau of Reclamation, and the states, we also obtained information from IFMS.
Why GAO Did This Study

Pursuant to a congressional request, GAO: (1) updated the share of annual Superfund spending that went for contractor cleanup work to include fiscal year (FY) 1997; (2) determined the share of contractor spending for remedial actions that were managed by the Environmental Protection Agency (EPA), other federal agencies, and the states during FY 1996 and FY 1997; and (3) for the contractor spending for remedial actions that was managed by EPA or the Army Corps of Engineers, analyzed the share that contractors charged for the physical implementation of cleanup actions, as opposed to other contractor charges.

What GAO Found

GAO noted that: (1) in FY 1997, about 46 percent of total Superfund spending went to the contractors who study, design, and implement cleanups, compared with 49 percent that was spent on these functions during FY 1996; (2) a corresponding 3-percent increase occurred in EPA's administrative and support costs for the program between FY 1996 and FY 1997; (3) EPA said that this increase can be attributed to normal outlay fluctuations; (4) the share of spending for other Superfund cost categories remained about the same between the 2 fiscal years; (5) contractor spending for remedial actions is managed by several different entities, including EPA, the Corps, the Department of the Interior, and about half of the states; (6) among these, the Corps manages the largest portion of this spending--accounting for 65 percent during FY 1996 through FY 1997; (7) the states collectively managed about 17 percent of such spending during the past 2 fiscal years; (8) EPA managed about 13 percent of such spending during this period; (9) the Department of the Interior also managed a small portion of such spending--accounting for 5 percent over the 2 fiscal years; (10) for the spending managed by EPA nationwide, about 71 percent of the costs charged by contractors for remedial action work during FY 1996 through FY 1997 was for the subcontractors who physically performed the cleanups, such as earthmoving and constructing treatment facilities; (11) the remaining 29 percent went to the prime contractors for professional work, such as construction management and engineering services, and the associated travel, overhead, and administrative costs and fees; (12) for the two projects where detailed information on contractor charges was available from the Corps, the share of spending for the physical implementation of cleanups was about 69 percent; and (13) because these two projects accounted for only 16 percent of contractor spending managed by the Corps during FY 1996 through FY 1997, GAO could not determine whether these results generally represent the Corps' contractor spending.