	Introduction

The Environmental Protection Agency (EPA) administers the federal program for ensuring the cleanup of abandoned hazardous waste sites that pose significant risks to public health and the environment. In 1997, we reported that (1) several agencies had begun to implement systems that consider the relative risks of sites when allocating cleanup funds, while other agencies had not; (2) EPA had not resolved the cost recovery problems we had identified; and (3) EPA still had to improve its use of independent estimates to set the best contract prices for cleanups, its ability to control contractors’ high program management costs, and its efforts to reduce a significant backlog of Superfund contract audits. Specifically, we wanted to assess (1) the efforts that EPA and other federal agencies with major cleanup responsibilities have made to set priorities for spending limited cleanup funds at the sites posing the highest risks; (2) EPA’s actions to recover its expenditures for cleanups from the parties that caused the contamination, and (3) EPA’s efforts to better control contractors’ cleanup costs. However, EPA may not know about all high-risk sites because states now increasingly decide which ones they will address under their own cleanup programs and which ones they want EPA to address through the Superfund program. States are now assuming more responsibility for high-risk sites—those that are risky enough to be eligible for the National Priorities List. The Departments of Agriculture, Defense, and Energy Have Set Risk-Based Cleanup Priorities, but Interior Has Not Yet Identified All Sites Needing Cleanup

Three of the four federal agencies with the largest cleanup workloads—the departments of Agriculture, Defense, and Energy—have implemented systems to set cleanup funding priorities on the basis of the relative risk sites pose. To date, the agency has not adopted this recommendation. To more effectively use its limited cleanup funds and better leverage funds from responsible parties to clean up its hazardous waste sites so as to protect the public and the environment, we recommend that the Secretary of the Interior direct the Assistant Secretary for Policy, Management and Budget; the Assistant Secretary for Lands and Minerals Management; and the Solicitor of the Interior to work together to ensure that the Bureau of Land Management (l) develops a national database for all of its known hazardous waste sites and abandoned mine sites; (2) develops and implements a strategy for updating its national database, which includes collecting new information on potential hazardous waste sites and abandoned mines in a consistent manner across all of its state offices; (3) develops and applies a mechanism for setting cleanup priorities among sites on a nationwide basis using risk and other factors, as appropriate; (4) develops a comprehensive cleanup strategy, including specific goals and time lines for cleaning up the sites, on the basis of their risk-based priorities; and (5) develops nationwide procedures for conducting searches of potentially responsible parties and for using CERCLA authorities, where appropriate, to get more responsible parties to perform or pay for cleaning up contamination; and all of Interior’s bureaus and regional offices understand the purpose and size of the Department’s Central Hazardous Materials Fund and the criteria the Department uses to allocate dollars to cleanups, including both remedial and removal actions. However, EPA has had less success changing cost recovery policies that exclude a significant portion of its indirect cleanup costs from its cost recovery efforts. 3.1)
Although EPA has obtained settlements to recover $2.4 billion, it has lost the opportunity to recover up to another $1.9 billion of indirect costs because it did not revise its indirect cost rate to include all appropriate costs. However, its actions have been slow and some have not gone far enough to protect the government from exposure to unnecessary costs. EPA has reduced its backlog of required contract audits and is more frequently using its own estimates of what cleanup actions should cost to negotiate contract prices. Since the mid-1990s, EPA has used 11 percent as its target for program support costs.
Why GAO Did This Study

Pursuant to a congressional request, GAO provided information on: (1) the efforts that the Environmental Protection Agency (EPA) and the other federal agencies with major cleanup responsibilities have made to set priorities for spending limited cleanup funds at the hazardous waste sites posing the highest risks to human health and the environment; (2) EPA's actions to recover its expenditures for cleanups from the parties that are legally liable for the contamination; and (3) EPA's efforts to better control contractors' cleanup costs.

What GAO Found

GAO noted that: (1) for several years, GAO has included the Superfund program on its list of federal programs that pose significant financial risk to the government and potential for waste and abuse; (2) agencies have corrected some of these problems, but those that remain are important enough to prevent GAO from removing Superfund from the high-risk list; (3) 4 of the 5 agencies GAO reviewed--EPA, the Department of Agriculture, the Department of Defense, and the Department of Energy (DOE)--are setting cleanup priorities on the basis of the relative risk that sites pose to human health and the environment; (4) EPA, Agriculture, and Defense set nationwide priorities for most of their sites; (5) however, EPA may not know about all high-risk sites because states are taking on more cleanups and deciding, often on the basis of factors other than risk, which sites to refer to EPA for possible listing; (6) each DOE facility considers risk and other factors when setting priorities among its competing environmental management projects; (7) however, cleanups at one facility do not compete with those at another facility on a nationwide basis; (8) the Bureau of Land Management has not set nationwide cleanup priorities because it has not yet developed an overall cleanup strategy or an inventory of its hazardous waste sites, estimated to cost billions of dollars to address; (9) although EPA has succeeded in getting responsible parties to conduct 70 percent of long-term Superfund cleanups, it has been less successful in recovering its costs from responsible parties when it conducts a cleanup; (10) EPA has lost the opportunity to collect almost $2 billion it spent on cleaning up sites since the program began because it excluded large portions of its indirect costs when it calculated what costs to assess parties; (11) while EPA has developed a new method of calculating these costs that could increase their recovery, the agency has not implemented it; (12) EPA has eliminated almost all of its backlog of 500 required Superfund contract audits, and is trying to complete the new audits on time; (13) however, some of EPA's actions have been slow and have not gone far enough to address GAO's concerns that the agency was not using its own estimates of what contract work should cost to negotiate the best contract price for the government or to control contractors' program support costs; and (14) less money is going toward the actual cleanup of high-risk sites, and excessive amounts are still being spent on administrative support costs.