Bergeson & Campbell, P.C. serves small, medium, and large pesticide product registrants and other stakeholders in the agricultural and biocidal sectors, in virtually every aspect of pesticide law, policy, science, and regulation.

By Lisa M. Campbell and Lisa R. Burchi

On February 8, 2018, the U.S. Environmental Protection Agency (EPA) announced that it is planning to submit an information collection request (ICR), “Submission of Unreasonable Adverse Effects Information under FIFRA Section 6(a)(2)” (EPA ICR No. 1204.13, OMB Control No. 2070-0039), to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act.  

EPA states that information submitted under Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) Section 6(a)(2) “provides an important means of focusing EPA attention on key problem areas regarding the use of a particular pesticide.”  EPA states that since the last ICR was approved, it is increasing by 71,778 hours the total estimated respondent burden compared with the ICR currently approved by OMB.  This increased estimate is based in part on the number of Section 6(a)(2) submissions, which EPA expects to increase by 16 percent from 93,000 in the last ICR approval to approximately 108,000 for this ICR renewal.  According to EPA, the increase is “due to EPA’s revised expectations regarding the number of incident reports that will be submitted to the Agency, which reflects historical information on the number of responses received.”  EPA states this increase also is due to additional data requests under 40 C.F.R. Part 159, including:

  • Additional standardized post-market surveillance reporting on adverse effects and submission of sales information required by EPA following  a significant increase in the number of adverse incidents for spot-on domestic animal pet products from several registrants;
  • Additional information required by EPA from the registrant of an herbicide to help explain circumstances for incidents of alleged tree and plant damage; and 
  • Additional documentation required by EPA from neonicotinoid registrants following concerns about neonicotinoid pesticides and the loss of bee colonies. 

Through EPA’s notice, it is soliciting public comments on the proposed ICR.  EPA states that this is a proposed extension of the ICR, which is currently approved through September 30, 2018.  Comments are due by April 9, 2018.  EPA has posted supporting documents in the docket for this notice, EPA-HQ-OPP-2017-0687, on www.regulations.gov:


 

By James V. Aidala

On January 31, 2018, Scott Pruitt, the Administrator of the U.S. Environmental Protection Agency (EPA), announced the establishment of an Interagency Working Group to Coordinate Endangered Species Act (ESA) Consultations for Pesticide Registrations and Registration Review.  EPA, the U.S. Fish and Wildlife Service, and the National Marine Fisheries Service (NMFS) (the Services) signed a Memorandum of Agreement (MOA) on the establishment of the working group.  The stated purpose of the working group is that it “will provide recommendations to EPA, FWS, and NMFS leadership on improving the [ESA] consultation process for pesticide registration and registration review (‘pesticide consultation process’) and will ensure that the new process is recorded and formalized as appropriate.”  The working group’s action plan includes the following:

  1. Analyze relevant statutes, regulations, and case law.  The Working Group will review the statutory requirements under ESA and the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA); the case law that has developed on the intersection of ESA and FIFRA; and existing regulations for the pesticide consultation process. 
  2. Review past ESA pesticide consultation practices to learn lessons from recent experience and review current and previous pesticide consultation practices to identify problems and areas for improvement, as well as best practices that should be used in future pesticide consultations.
  3. Prepare recommendations to improve scientific and policy approaches to ESA pesticide consultations.  For example, the Working Group will develop a streamlined process for identifying which actions require no consultation, informal consultation, or formal consultation.  The Working Group will also help provide clarity as to what constitutes the “best scientific and commercial data available” in the fields of pesticide use and ecological risk assessment, which EPA and the Services are required to use under ESA section 7(a)(2).
  4. To the extent that current authorities and practices do not allow for the timely and accurate review of pesticides consistent with governing authorities, the Working Group may memorialize its recommendations for a revised regulatory framework, including addressing agency responsibilities, recommended technical approaches, and recommendations for new regulations, a memorandum of understanding, or other appropriate documentation. 

Commentary

Like others before them, the Trump Administration is embarking on a journey to address the problem of how to integrate ESA assessment and consultation requirements with the FIFRA registration process.  This directive will help organize a senior level effort to coordinate activities of EPA and the Services and, like past efforts, at the senior management level there will likely be at least a recognition that something needs to be done to fashion a more efficient and predictable process.  Currently ESA reviews add months and years to the registration review process and, to date, that process is followed by seemingly inevitable litigation challenging the EPA decision as not sufficient to meet ESA requirements.

The result has been an exhaustive, time and resource intensive initial set of “pilot” biological opinions, and a very long list of promised consultations resulting from past litigation cases.  Currently, the workload already committed will be virtually unattainable for a number of years, and as EPA plans to have ESA assessments as part of the registration review process for older pesticides (as well as for future new product applications), the budget and staffing implications are staggering.  Meantime, agricultural stakeholders, including pesticide manufacturers and grower groups who use pesticides, fear that the current process might result in the loss or delay in the introduction of needed pest control products.

This is the context for the current attempt to devise an integrated, more efficient process to have any realistic chance to fashion a process which meets the requirements of both statutes.  We wish any and all participants good luck and constant senior political level involvement -- they will likely need much of it.

More information on ESA issues is available on our blog.


 

By Lisa M. Campbell and Margaret R. Graham

On January 10, 2018, the U.S. Environmental Protection Agency (EPA) issued its final rule to adjust the level of statutory civil monetary penalty amounts under the statutes that EPA administers, including the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).  83 Fed. Reg. 1190.  This follows EPA’s July 2016 interim final rule adjusting penalty amounts for (FIFRA) violations by more than three times the current level, in some cases, as well as the level of statutory civil monetary penalty amounts for the other statutes that EPA administers.  The adjustments in the January 10, 2018, final rule, as well as in the July 2016 rule, are mandated by the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended through the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.  The law prescribes a formula for annually adjusting statutory civil penalties to reflect inflation, maintain the deterrent effect of statutory civil penalties, and promote compliance with the law.  The final rule is effective as of January 15, 2018. 

With this rule, the new statutory maximum penalty levels listed in Table 2 of 40 C.F.R. Section 19.4 will apply to all civil penalties assessed on or after January 15, 2018, for violations that occurred after November 2, 2015, when the 2015 Act was enacted.  For general civil penalties under Section 14(a)(1) of Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), the penalty amount is increasing to $19,446 from $19,057; for FIFRA Section 14(a)(2), which applies to private applicators and contains three separate statutory maximum civil penalty provisions, the penalty amounts are increasing from $2,795, $1,801, and $2795; to $2,852, $1,838, and $2,795. 

More information on this interim final rule is available in our blog item “EPA Issues ‘Catch-Up’ Adjustments for Federal Civil Penalties.”  The January 10, 2018, final rule is available online.


 

By Lisa R. Burchi and Lisa M. Campbell

On January 3, 2018, the California Department of Pesticide Regulation (DPR) issued Notice 2018-01:  Expanding Use of Pesticide Products Under Reevaluation.  Under Notice 2018-01, effective immediately, DPR will not act upon an Application for Pesticide Registration or an Application to Amend a Pesticide Product if it determines the registration or acceptance would potentially “expand use” of an active ingredient or pesticide product currently under reevaluation until the conclusion of the reevaluation.  

DPR states that it commences a reevaluation of an existing registered pesticide when it finds, based on an investigation of all reported episodes and information received, that a significant adverse impact to human health or the environment has occurred or is likely to occur.  DPR states that the policy set forth in Notice 2018-1 is needed for pesticides under reevaluation because until DPR reviews existing data for substances under reevaluation, determines whether additional data to satisfy reevaluation data requirements must be submitted, and then receives and assesses additional data applicable to the reevaluation that can mitigate the concern that prompted the initiation of the reevaluation, DPR “is not in a position to determine that an expanded use will not cause a ‘significant adverse environmental impact,’ as required under its certified regulatory program (3 CCR section 6254).”  Once the reevaluation process is completed, DPR states that it will then be in a position, in light of its reevaluation determination, to consider applications for product registration or amendment.

Scope of Notice 2018-1

DPR is currently reevaluating certain pesticide products containing the following active ingredients:

  • Chloropicrin;
  • Copper-based antifouling paints (copper oxide, copper hydroxide, and cuprous thiocyanate);
  • Cyfluthrin;
  • Diazinon; and
  • Nitroguanidine neonicotinoids (imidacloprid, thiamethoxam, clothianidin, and dinotefuran).

This notice applies to new pesticide products that include these active ingredients, including supplemental distributor registrations (subregistrations) and amendments to currently registered pesticide products, when “expanding use” of the active ingredient relevant to the concern that prompted the reevaluation.  

Specifically, DPR states in Notice 2018-1 that it interprets the following types of actions, related to a new or amended product containing the active ingredient under reevaluation, as examples of “expanding use”:

  • A proposed new pesticide product, including any Special Local Needs registration or Experimental Use Permit, with a label bearing uses or exposure scenarios relevant to the concern that prompted the reevaluation. This includes any product label that is identical or substantially similar to a currently registered product in California.
  • Amendment of a currently registered product to add or modify uses or exposure scenarios relevant to the concern that prompted the reevaluation, even if such use is already on other currently registered pesticide products in California. Examples of such changes include:
    • New or modified uses (e.g., new crops, pests, or use sites);
    • New or modified use patterns (e.g., adding aerial, aquatic, soil applications, or outdoor use);
    • Significant formulation changes (unless prompted by the reevaluation);
    • Increased application rates or total use amount allowed (e.g., acreage or frequency of application); and
    • Other label additions or changes that may increase pesticide exposure in a manner that is relevant to the basis for the reevaluation.

This notice does not preclude expanded use of a product if the expansion is not consistent with uses or exposure scenarios relevant to the concern that prompted the reevaluation.  As an example, DPR states that an application containing an active ingredient that is under reevaluation over concerns regarding exposure to wildlife would not be precluded under this notice as an expanded use is if the product is labeled solely for indoor use, with no potential wildlife exposure.

DPR also acknowledges that a pest management or public health need could arise during a reevaluation that would support the issuance of an Emergency Exemption request under Section 18 of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).  In those cases, with regard to the potential applicability of Notice 2018-1, DPR states that it “will assess the request by relying on currently available information and risk mitigation strategies.”

Discussion

DPR’s reevaluation process can take years to complete, so not only are pending affected submissions for products containing the active ingredients at issue effectively frozen, but future submissions for active ingredients newly entering the reevaluation process could be halted potentially for lengthy periods of time, despite the fact that DPR may ultimately determine that any identified “expanded uses” do not cause a significant adverse environmental impact.  It is an initiative that many in industry are monitoring closely.

More information on other California DPR-related issues is available on our blog under key phrase California DPR.


 

By Lynn L. Bergeson

Bergeson & Campbell, P.C.’s (B&C®) much anticipated and highly acclaimed annual Forecast, “Predictions and Outlook for U.S. Federal and International Chemical Regulatory Policy 2018,” is now available.  In the Forecast, the lawyers, scientists, and chemical regulatory specialists at B&C and its affiliated consulting firm, The Acta Group (Acta®), offer comprehensive and highly useful observations on the fast-changing and nuanced area of domestic and global chemical legal, scientific, and regulatory issues expected to be hot topics in 2018. This 38-page document is chock-full of insights, predictions, and useful information.

Happy New Year and enjoy reading our predictions!


 

By Lisa M. Campbell and Timothy D. Backstrom

On December 20, 2017, the U.S. Court of Appeals for the Ninth Circuit issued an order in LULAC v. Pruitt, Case No. 17-71636, a case challenging an order denying administrative petitions to revoke the tolerances and cancel the registrations for chlorpyrifos.  The court’s order includes actions concerning two pending motions.  The court has denied a motion by the U.S. Environmental Protection Agency (EPA) and Administrator Pruitt (Respondents) to dismiss the case for lack of jurisdiction while granting a motion by League of United Latin American Citizens (LULAC), et al. (Petitioners) to expedite briefing and hearing in the case.  More information on these two motions is available in our blog item “NGOs and Farmworkers File Motion for Expedited Briefing and Hearing in Chlorpyrifos Litigation.”

In support of their August 21, 2017, motion to dismiss the case for lack of jurisdiction, Respondents argued that the Federal Food, Drug, and Cosmetic Act (FFDCA) requires the Petitioners to exhaust their administrative remedies by submitting formal objections to the order denying their request to revoke the tolerances for chlorpyrifos and then waiting for EPA to issue a final order before they may seek judicial review.  The Petitioners argued in response that requiring exhaustion in this instance would be “futile,” and that the court should also consider reviewing the EPA order under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), because EPA has declined to cancel the registrations for chlorpyrifos.  In response, Respondents argued that Petitioners have not shown that requiring exhaustion of administrative remedies would be futile, and that 21 U.S.C. § 346a(h)(5) explicitly prohibits judicial review of any order concerning pesticide tolerances under any other statute, including FIFRA.

After the motion to dismiss was fully briefed, the court summarily denied it, but also characterized that denial as “without prejudice to renewing the arguments in the answering brief.”  The court also denied a motion by the Petitioners for oral argument concerning the pending motion to dismiss.  These two actions indicate that the court has decided to defer argument and resolution of the jurisdictional issues presented by the motion to dismiss until briefing and argument on the merits.

The court also granted an October 13, 2017, motion by the Petitioners to expedite briefing and hearing in the case.  Petitioners submitted this motion to expedite because they contend that the refusal of EPA to revoke the tolerances and cancel the registrations for chlorpyrifos is causing ongoing harm even though EPA “did not and cannot determine that chlorpyrifos is safe under the Food Quality Protection Act.”  The court set the following expedited briefing schedule:  Petitioners’ opening brief is due January 23, 2018; Intervenors’ brief(s) are due February 6, 2018; Respondents’ answering brief is due March 8, 2018; Petitioners’ optional reply brief is due 28 days after service of Respondents’ brief; and Intervenors’ optional reply brief(s) are due 42 days after service of Respondents’ brief.  The court also directed the Clerk to “calendar this case [for argument] as soon as possible upon completion of briefing.”

Commentary

The current actions of the court should be viewed in the context of the prior decision by this same court to issue a writ of mandamus that required EPA to take action on pending petitions to cancel the registrations and revoke the tolerances for chlorpyrifos after what Petitioners claimed was a quite protracted administrative delay, and the subsequent decision by EPA under Administrator Pruitt to defer final action on chlorpyrifos, after the prior Administration had proposed to take the actions sought by the Petitioners.  By granting the motion to expedite, and also by deferring the ultimate disposition of the jurisdictional issues raised by EPA, the court appears to have given the Petitioners a prompt and full opportunity to explain why judicial intervention at this stage of the administrative process is warranted.  Nevertheless, because the jurisdictional arguments made by EPA are supported by substantial precedent, it could prove difficult for the Petitioners ultimately to overcome these arguments. 

More information on the chlorpyrifos litigation and related matters is available on our blog under key word chlorpyrifos


 

By Lynn L. Bergeson and Margaret R. Graham

The American Bar Association (ABA) Pesticides, Chemical Regulation, and Right-to-Know (PCRRTK) Committee is collaborating with David Rejeski, Director of the Technology, Innovation, and Environmental Project at the Environmental Law Institute (ELI), on a project involving the law, regulation, and policy of cannabis.  David has written extensively on the topic, one example of which is his article “Cannabis. The ‘Next Big Thing’ for the Environment?” 

Federal Insecticide, Fungicide, and Rodenticide (FIFRA) practitioners likely noticed the cannabis item on the most recent State FIFRA Issues Research and Evaluation Group (SFIREG) meeting agenda.  Also, the state of Colorado is preparing a white paper on cannabis.  Many other initiatives are in play as well.

The newly formed Task Group will outline legal, regulatory, and policy issues pertinent to cannabis as a crop, the absence of tolerances, its impact on the environment, and a wide range of related issues.

If you are interested in participating, please e-mail Lynn L. Bergeson at .(JavaScript must be enabled to view this email address).


 

By Lisa M. Campbell and Timothy D. Backstrom

On October 13, 2017, Petitioners League of United Latin American Citizens (LULAC), et al. filed a motion to expedite briefing and hearing in League of United Latin American Citizens v. Pruitt, Case No. 17-71636 (9th Cir. June 5, 2017).  In their motion, Petitioners request that the court “expedite proceedings because of the harm being caused by [U.S. Environmental Protection Agency (EPA)] Administrator Pruitt leaving chlorpyrifos tolerances in effect when he did not and cannot determine that chlorpyrifos is safe under the Food Quality Protection Act.” 

Petitioners state there is good cause for expedition “because children continue to be exposed to chlorpyrifos in their food, drinking water, and the air around their homes, schools, and playfields, putting them at risk of such brain impairments as lower IQ, attention deficit disorders, and developmental delays,” and “Ninth Circuit Rule 27-12 provides that ‘motions to expedite briefing and hearing may be filed and will be granted upon a showing of good cause,’” including ‘“situations in which … in the absence of expedited treatment, irreparable harm may occur.’”  Pursuant to Ninth Circuit Rule 27-12, Petitioners determined the position of EPA counsel on the motion, who stated that, “EPA opposes the motion to expedite as premature under Circuit Rule 27-11(b).” 

 The Petitioners’ motion to expedite briefing was submitted despite the pendency of an unresolved motion to dismiss submitted by Respondents Administrator Pruitt and EPA on August 21, 2017.  In that motion, EPA argued that the court lacks jurisdiction to review the March 29, 2017, order denying the petition by Pesticide Action Network North America (PANNA) and Natural Resources Defense Council (NRDC) to revoke all Federal Food, Drug, and Cosmetic Act (FFDCA) tolerances for chlorpyrifos, until after the Petitioners have exhausted their administrative remedies by filing objections to the denial, and EPA has issued a final order ruling on such objections.  In its motion to dismiss, EPA noted that the Ninth Circuit denied a motion by PANNA and NRDC for further mandamus relief in In re PANNA on July 18, 2017, stating that “one valid agency response to a petition challenging a pesticide’s tolerances is to ‘issue an order denying the petition,’” and ‘“now that EPA has issued its denial, substantive objections must first be made through the administrative process mandated by’ the FFDCA.”

 On September 27, 2017, Petitioners filed their opposition to the motion to dismiss.  Petitioners argued that exhaustion of administrative remedies by filing objections under the FFDCA is not an absolute jurisdictional prerequisite to judicial review, and that the court can proceed with review under the “futility doctrine” because EPA’s refusal to revoke the tolerances for chlorpyrifos constitutes a “flagrant violation of a statutory prohibition.”  Petitioners also argued that even if FFDCA exhaustion is required, EPA has also denied the petition by PANNA and NRDC to cancel the registrations of chlorpyrifos, and that additional denial constitutes a final order that is subject to immediate review under FIFRA Section 16(b) because the notice and comment process concerning the petition was a “public hearing” under the applicable precedent.

 Commentary

The new motion by Petitioners LULAC, et al. to expedite briefing on the challenge to EPA’s denial of the PANNA and NRDC petition reflects the view of the Petitioners that this matter is urgent because continued use of chlorpyrifos jeopardizes the health of children, but this motion is unlikely to be resolved before the court rules on EPA’s pending motion to dismiss.  EPA has stated that it will oppose the Petitioners’ motion to expedite briefing as premature. Moreover, EPA has not yet replied to the arguments made by the Petitioners in their opposition to the pending dismissal motion.

To prevail on their argument that exhausting the administrative process prescribed by the FFDCA will be “futile,” the Petitioners likely will have to persuade the Court that these FFDCA procedures are not jurisdictional prerequisites to judicial review, and that there is little likelihood that EPA will change its mind in response to their objections.  With respect to the argument that EPA’s denial of the petition to cancel the registrations for chlorpyrifos is final agency action subject to immediate review under FIFRA Section 16(b), EPA will likely contend that this argument is contravened by 21 U.S.C. § 346a(h)(5), which states: “any issue as to which review is or was obtainable under this subsection shall not be the subject of judicial review under any other provision of law.”  It could be difficult for Petitioners to defeat this jurisdictional prohibition in the FFDCA; they would presumably need to show the court that their substantive contentions concerning the hazards posed by chlorpyrifos would not be directly implicated in EPA’s final determination of whether or not to revoke the tolerances for chlorpyrifos.

 This case will be carefully watched by pesticide industry observers. 

 More information on regulatory issues related to chlorpyrifos is available on our blog.


 

By Lynn L. Bergeson and Sheryl Lindros Dolan

On October 4, 2017, the U.S. Food and Drug Administration (FDA) announced the availability of final guidance that helps to clarify FDA and U.S. Environmental Protection Agency (EPA) jurisdiction over the regulation of mosquito-related products intended to function as pesticides, including those produced through the use of biotechnology.  The notice was published in the Federal Register on October 5, 2017.  82 Fed. Reg. 46500.  Guidance for Industry #236, “Clarification of FDA and EPA Jurisdiction Over Mosquito-Related Products” (Guidance), provides information for industry and other stakeholders regarding the regulatory oversight of articles, including substances, for use in or on mosquitoes (mosquito-related products).  FDA states that it is providing the Guidance to clarify circumstances under which such products are regulated by FDA as new animal drugs under the Federal Food, Drug, and Cosmetic Act (FFDCA) and other circumstances under which such products are regulated by EPA as pesticides under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).

Scope of Guidance

FDA notes that the Guidance is important in light of the public health urgency of countering the spread of mosquito-borne disease such as that caused by the Zika virus.  While novel mosquito control technologies have gained greater attention, there has been confusion regarding FDA and EPA jurisdiction over such products.  FDA, working collaboratively with EPA, is providing the Guidance to clarify the regulatory oversight of mosquito-related products.  This includes, but is not limited to, those produced through biotechnology.

The Guidance includes the following examples of new animal drugs regulated by FDA:

  • Products intended to reduce the virus/pathogen load within a mosquito, including reduction in virus/pathogen replication and spread within the mosquito and/or reduction in virus/pathogen transmissibility from mosquitoes to humans; and
  • Products intended to prevent mosquito-borne disease in humans or animals.

Examples of pesticide products regulated by EPA are “[p]roducts intended to reduce the population of mosquitoes (for example, by killing them at some point in their life cycle, or by interfering with their reproduction or development).”

Guidance for Sponsors/Manufacturers of Products Intended for use on Mosquitoes

In the Guidance, FDA encourages sponsors of mosquito-related products, other than those that are “intended to prevent, destroy, repel, or mitigate mosquitoes by controlling a mosquito population,” to contact FDA early in the development process.  FDA states that if a developer has a jurisdictional question, such as which agency or agencies would have oversight of a mosquito-related product that is expressly intended for both mosquito population control and human disease suppression, the developer may contact either or both agencies via the contacts listed.  FDA and EPA will consult with each other on the jurisdictional question, “as is already common practice.”  The agencies may suggest a joint meeting among EPA, FDA, and the sponsor to discuss appropriate pathways to market.

Commentary

The guidance notes that FDA, EPA, and the U.S. Department of Agriculture (USDA) have committed to clarifying how the federal government intends to regulate genetically engineered insects as described in the September 2016 National Strategy for Modernizing the Regulatory System for Biotechnology Products.  More information on the National Strategy is available in our September 21, 2016, memorandum White House Releases Proposed Update to the Coordinated Framework and National Strategy for Modernizing the Regulatory System for Biotechnology Products.

The new FDA guidance states that products intended to prevent mosquito-borne disease in humans or animals are regulated as new animal drugs subject to FDA jurisdiction, but products intended to control mosquito populations would be regulated by EPA as pesticides.  That FDA and EPA are attempting to clarify their respective jurisdictions is appreciated.  Potential commenters may wish to consider whether the guidance offers sufficient clarity for product development planning purposes.  If “products intended to prevent mosquito-borne disease in humans or animals” are under FDA jurisdiction, the status of mosquito repellents currently registered by EPA that make claims about repelling mosquitoes that carry the Zika virus, the West Nile virus, or other viruses is unclear.  Additionally, it would seem that the Oxitec mosquito is intended to reduce the mosquito population, among other goals.  The Guidance is a good start, but further clarification likely will be needed to support emerging technologies.

More information is available in our memorandum FDA Guidance Addresses FDA and EPA Jurisdiction over Mosquito-Related Products.


 

By Lisa M. Campbell and James V. Aidala

On September 18, 2017, the U.S. Environmental Protection Agency’s (EPA) Office of Inspector General (OIG) issued a report on an evaluation conducted by OIG entitled “EPA Needs to Manage Pesticide Funds More Efficiently.”  OIG states that it conducted the audit “to determine whether EPA manages the Pesticides Reregistration and Expedited Processing Fund (known as the [Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA)] Fund) and the Pesticide Registration Fund (known as the [Pesticide Registration Improvement Act (PRIA)] Fund) effectively to minimize reliance on appropriated funds.”

In the report, OIG states its finding that “EPA should manage the [Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA)] and [Pesticide Registration Improvement Act (PRIA)] Funds more effectively by reducing excess fund balances to within a target range. As of September 30, 2016, [OIG] identified excess funds of approximately $21.4 million for FIFRA and $8.5 million for PRIA, for a total of $29.9 million.  A reduction in fund balances would increase the availability of appropriated funds for other environmental purposes.”

In the report, OIG makes the following recommendations to EPA:

  1. For the Assistant Administrator for Chemical Safety and Pollution Prevention (OCSPP) to “establish a target range for its FIFRA and PRIA Fund balances and develop and implement a plan to reduce excess funds to within the target range”; and
  2. For the Chief Financial Officer to “reconcile the FIFRA and PRIA Funds’ balances to the corresponding liabilities.”

The report states that EPA concurred with establishing a target range and developing a plan to reduce excess funds for FIFRA Fund balances, but did not agree with establishing a target range and developing a plan to reduce excess funds for PRIA Fund balances, citing the lack of predictability of PRIA collections. OIG stated that it “still believe[s] PRIA has excess funds that should be addressed,” and “[t]he agency agreed to reconcile FIFRA and PRIA balances.”

This report follows two OIG reports issued on August 14, 2017, on audits of the financial statements of (1) the FIFRA Fund; and (2) the PRIA Fund for fiscal years (FY) 2015 and 2016.  OIG is required to perform an annual audit of the financial statements of the FIFRA Fund under the Food Quality Protection Act (FQPA), and of the PRIA Fund under PRIA.

OIG states in its reports on the audits for FYs 2015 and 2016, of both the FIFRA and the PRIA Funds, that it “noted a material weakness in that the EPA cannot adequately support its FY 2016 [PRIA/FIFRA] Fund costs.”  OIG further stated, however, that this issue has been noted in prior audit reports, and that EPA is taking corrective actions.”  For those reasons, OIG stated that it was making “no new recommendations for [these] material weakness[es].”  In FYs 2016 and 2015, EPA “lost the audit trail to properly support how much of the [PRIA/FIFRA] payroll expenses were paid for by appropriations.”  To address these losses, in October 2016, EPA instituted an enhancement to its timekeeping system’s cost allocation that will allow for “the creation of an audit trail to capture costs incurred by the [PRIA/FIFRA] Fund and other appropriations that support [PRIA/FIFRA]-related activities.”

More information on other EPA OIG reports is available on our blog under key terms OIG and EPA OIG.

Commentary

The reality of why the FIFRA funds are in surplus is a political response to the overall budgetary politics of Congress.  The Office of Pesticide Programs (OPP) has not been authorized to utilize these funds fully or freely hire staff due to the budget agreements of Congress, and, more recently, due to the attempt by the new Administration to keep the Presidential budget proposal more in balance.  The OIG knows this also, but “politics” is not the concern of a good audit, and this is not helped by the problem of EPA having “lost the audit trail” of how these monies were spent.  PRIA reauthorization is soon to be overdue, and now appears perhaps to be in some jeopardy, at least in the near term.  Fortunately for OPP, the surplus in these funds that OIG addresses will be able to buy the program some time to continue relatively “as is” while waiting for PRIA politics to subside to the point where reauthorization is approved and the program can focus more on the improvements suggested by the OIG report.


 
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