1. Environmental Liabilities February 3, 2016

2. What is an Environmental Liability? Environmental Liability - A probable, measurable and reasonably estimable future outflow or expenditure of resources that exists as of the financial reporting date for environmental cleanup costs resulting from past transactions or events. 2

3. What is an Environmental Liability? It’s a Future Cost to Clean Up Any Asset May Have One It’s Not Only Current Remediation Projects It’s a Bookkeeping Entry, Not a Project It’s a Critical Part of the Department Annual Financial Statement 3

4. What is NOT an EDL Permit requirements (RCRA, NPDES) Radon Environmental audits Routine disposal of hazardous materials UST/AST operation costs Physical security (e.g., mine adits) NEPA, ESA, CWA, CAA, NHPA, NAGPRA Location of Concern 4

5. How Do You Make an Environmental Liability? 5 YESYES

6. 6 NO

7. How Do You Make an Environmental Liability? 7 Maybe So

8. Asbestos 8 Often Used in Buildings, Ships and Aircraft Prior to 1981 An Expense for Every Demo Project More than 45,000 Department Buildings

9. Environmental Remediation Current Focus of Environmental Programs Managed at Bureaus and CHF program 774 Current Projects Regulatory Compliance is Primary Driver Cost-to-Complete = EDL = Project Budget Often Initiated by Asset Divestiture or Acquisition (Bad Planning?) 9

10. Key Characteristics of EDLs A Release to the Environment  Lead Paint on the Walls vs Lead Leached into Soil CERCLA, RCRA, OPA  Also State, Local or Tribal Regulations Future Outlay of Resources  Current FY Cleanups not Included 10

11. How Do We Recognize and Report Environmental Liabilities? 11 Solicitor

12. How Do We Sustain Environmental Liabilities? 12

13. Where Are Our Environmental Liabilities? 13 Bureau EDL Bureau TotalSites BUREAU OF INDIAN AFFAIRS $ 35,811,535154 BUREAU OF LAND MANAGEMENT $ 257,921189 BUREAU OF RECLAMATION $ 57,383,22714 FISH AND WILDLIFE SERVICE $ 48,227,86136 NATIONAL PARK SERVICE $ 45,594,502379 Grand Total $ 187,275,046772 AMLs are government- acknowledged = reasonably possible

14. Where Are Our Environmental Liabilities? 14 Bureau Asbestos Bureau TotalSites BUREAU OF INDIAN AFFAIRS $ 133,733,125 6,021 FISH AND WILDLIFE SERVICE $ 74,143,466 7,299 USGS $ 8,074,495 390 BUREAU OF LAND MANAGEMENT $ 10,699,475 1,223 NATIONAL PARK SERVICE $ 290,170,325 27,499 BUREAU OF RECLAMATION $ 26,613,629 1,958 GRAND TOTAL $ 543,434,515 44,390

15. Where Are Our Environmental Liabilities? 15

16. Where Are Our Environmental Liabilities? 16

17. What is an Audit? Chief Financial Officer’s Act of 1990 Chief Financial Officer’s Act of 1990 Every Federal Agency Audited Every Year Every Federal Agency Audited Every Year Independent Auditors Review Financial Policies and Procedures Independent Auditors Review Financial Policies and Procedures  Real Property  Personal Property  Payroll  OM&S  Environmental Liability  Fund Balance w/Treasury  Accts Payable/Receivable  Medical and Pension Liabilities  Contingent Legal Liabilities 17

18. AThree-Tiered Approach 18 Environmental Assessments and Compliance Audits Environmental Disposal Liabilities Handbook FASAB and OMB Guidance

19. Environmental Disposal Liabilities Handbook Guidance for Bureaus and Headquarters Operational Controls Only Living Document Primary Documentation of Processes for Audit Minimum Requirement Currently in Revision 19

20. Bureau and Unit Role Environmental Assessments and Compliance Evaluations Reveal Possible EDLs Routine Activities Provide Due Care Reconnaissance Reveals Locations of Concern LOCs ≠ EDLs but May Become EDLs and Remediation Projects 20

21. Signs of a Location of Concern Stained Soil Chemical Odors Stressed Vegetation Discolored Water Surface Sheen Abandoned Dumps Undocumented earth piles 21

22. Writing It Down 22 Field HQ

23. Who is Responsible? 23 Environmental Managers  Identify and Valuate EDLs Bureaus  Track, Validate, and Report EDLs OEPC  Integrates Bureau EDL Data  Reports EDLs to PFM PAM  Maintain Real Property Records PFM  General Ledger Entries  Annual Financial Report

24. Internal Controls Control Activities  Segregation of Duties (Authorizing, Processing, Recording, Reviewing)  Controls Over Access To Resources and Records – limited access to EDL Database  Verifications – ECEs periodically verify site conditions  Reviews of Operations, Processes and Activities – continuous review by OEPC and PFM Monitoring  Ongoing Monitoring – quarterly reporting 24

25. EDL Database Training 25 After log-on, go to Workgroup Tab OEPC website:  https://www.doi.gov/oepc/HQ-Teams/eclm- team/documents  Online EDL Tutorial  EDL User Guide  EDL Training Guide  Guidance documents

26. Communication is Key 26

27. The End 27 Bill Kirby, PhD U.S. Department of the Interior 1849 C St., NW Washington, DC 20240 charles_kirby@ios.doi.gov 202-208-5303 (w) 202-731-2998 (c)