EPA Audit Policy Update – Examination of Voluntary Self-Disclosures Expected to Increase | Robinson+Cole Environmental Law +
EPA intends to intensify its review of voluntary self-disclosures of violations submitted electronically under the Audit policy. The EPA’s Office of Inspector General (OIG) recently issued a report detailing the results of an evaluation of the EPA’s process for screening for self-reported environmental violations made through its eDisclosure system. The OIG report concluded that the EPA currently does not have the internal controls necessary to ensure that violations disclosed through the electronic disclosure system are reviewed for material concerns, such as criminal conduct and potential imminent dangers.
The Audit Policy provides reduced penalties and mitigation incentives to a regulated company if the company conducts voluntary audits, promptly discloses violations discovered to the EPA, and takes timely corrective action. The company must comply with additional criteria to take full advantage of the audit policy. The audit policy was updated in 2015 to require electronic reporting using the new electronic disclosure portal. The eDisclosure Portal receives and processes submissions under the audit policy in two categories:
Category 1: EPCRA violations that meet the nine audit policy requirements.
Category 2: Non-EPCRA violations and EPCRA violations that do not meet the Category 1 criteria.
The findings of the OIG report focused primarily on Category 2. The EPA has previously said it will review Category 2 disclosures for significant concerns. The OIG report calls into question the EPA’s current ability to effectively conduct such screenings. For starters, the EPA has no national guidance directly from staff on how to screen submissions or any training specific to the eDisclosure system. As a result, the OIG found that testing efforts were inconsistent across EPA regions. According to the OIG report, some EPA regions believed the Office of Enforcement and Compliance Assurance (OECA) was responsible for screening, some did not have access to the electronic disclosure system, and others did not. simply not the resources necessary for adequate filtering.
The OIG report recommended that the OECA take several steps to more effectively screen Category 2 disclosures, including:
- Development of national guidance detailing a process for selecting electronic disclosure submissions for material concerns.
- Provide eDisclosure specific training to EPA Headquarters and EPA Regions on eDisclosure.
- Develop performance measures for the electronic disclosure system.
- Evaluate eDisclosure functionality to identify and implement improvements.
The OECA has already released a statement that it agrees with all of the OIG recommendations and has proposed September 30, 2022 for completion of Recommendation 2 and September 30, 2023 for the remaining three recommendations.
These changes will likely result in an increase in the amount and rigor of Category 2 disclosure controls. Therefore, in the future, companies wishing to use the audit policy and submit a voluntary Category 2 self-disclosure will be subject to further scrutiny to determine if they are eligible under the audit policy and to more frequent follow-up inspections.