By Lisa M. Campbell and Lisa R. Burchi
On April 30, 2018, the U.S. District Court for D.C. issued a memorandum opinion that sets forth the reasons for its denial of defendant Monsanto Company’s (Monsanto) motion to dismiss in a case in which the plaintiffs allege that certain glyphosate label claims violate the District of Columbia Consumer Protection Procedures Act (DCCPPA) (Opinion). The order denying Monsanto’s motion to dismiss was issued on March 31, 2018, but did not provide any substantive discussion as to why it was denied, only that a statement that the reasons would be provided in 30 days.
Plaintiffs Beyond Pesticides, et al.’s amended complaint alleges that under the DCCPPA “the claim that Roundup targets an enzyme ‘found in plants but not in people or pets’ is false and misleading because that enzyme ‘is found in people and pets’” (emphasis in original), because, plaintiffs assert, “glyphosate, the active ingredient in Roundup, targets an enzyme that exists in ‘gut bacteria’ found in humans and other mammals.” The amended complaint additionally alleges that Monsanto “is aware that its labels and advertising are false … but continues to repeat this claim because ‘consumers are more likely to buy -- and will pay more for -- weed killer formulations that do not affect people and animals.’”
Monsanto’s motion to dismiss, filed on July 10, 2017, stated that plaintiffs’ “claims are time-barred, that Plaintiffs fail to state a claim because the statement at issue is not false or misleading, and that Plaintiffs’ claims are preempted by [the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA)].”
The Opinion outlines the reasons for the court’s conclusion that the claims are not time-barred, at least for purposes of deciding the motion to dismiss. The Opinion states, in response to some of the arguments that the claims were time-barred, that the court has “little trouble concluding that Plaintiffs’ claims are not time-barred in their entirety,” and that Monsanto is “entitled to renew its argument that some portion of Plaintiff’s claims are time-barred at the summary judgment stage.”
With regard to the court’s decision that plaintiffs “have adequately pleaded a claim” that Roundup’s label is false or misleading under the DCCPPA, the Opinion states: “Roundup supposedly targets an enzyme that is not found in people or animals, but that enzyme is, in fact, found in their gut bacteria.” Moreover, the Court notes that “even if the statement on Roundup’s label is not ‘literally false,’ Plaintiffs have also alleged that it is also misleading.” For these reasons, the Opinion states, the Court “cannot conclude that ‘no reasonable person would be deceived’ by the Roundup label, such that dismissal of Plaintiffs’ claims would be appropriate.”
Perhaps of most interest is the Opinion’s discussion of the preemption claim in light of the fact that the claims at issue are claims approved on multiple occasions by the U.S. Environmental Protection Agency (EPA) as part of its approval of the label. The Opinion states that “Plaintiffs’ claims are not preempted because the DCCPPA, as it relates to pesticide labels, does not impose a broader or different obligation than FIFRA.” Rather, “[u]nder both statutes, false or misleading statements on a pesticide label are proscribed.” The Opinion cites the Supreme Court case Bates v. Dow Agrosciences LLC, 544 U.S. 431 (2005) in stating that “the question is not whether the statute reaches conduct beyond such labeling,” but “whether the statute ‘impose[s] a labeling requirement that diverges from those set out in FIFRA and its implementing regulations’” (emphasis in original). Moreover, the Opinion finds that a request for declaratory relief is not “functionally a requirement that the company change its label.” Instead, the Opinion distinguishes between the declaration that plaintiffs seek, that Monsanto’s label violates the DCCPPA, and an injunction stating that the declaratory relief requested “would not require Monsanto to change its label, even though it might well ‘induce’ it to do so” (emphasis in original). The Court found that for this reason the requested relief is not preempted by FIFRA.
Registrants should pay attention to the potential implications of this case, and others like it, particularly with regard to label claims that EPA has approved. More information on other glyphosate issues is available on our blog.
By Lisa M. Campbell and Carla N. Hutton
On April 10, 2018, Bergeson & Campbell, P.C. (B&C®) held a complimentary webinar, “FIFRA Hot Topics.” Co-hosted with Bloomberg BNA, the webinar featured Richard P. Keigwin, Jr., Director, Office of Pesticide Programs (OPP), Office of Chemical Safety and Pollution Prevention (OCSPP), U.S. Environmental Protection Agency (EPA); Daniella Taveau, former International Trade Negotiator for EPA and now Regulatory and Global Trade Strategist, King & Spalding; and William L. Jordan, former senior toxics lawyer with EPA’s OPP and Office of General Counsel. The timely and fascinating conversation was augmented by B&C’s Senior Government Affairs Consultant, James V. Aidala, and moderated by Lisa M. Campbell, Partner, B&C. More information about the webinar, including instructions on downloading a recording and related materials, is available on our Regulatory Developments page.
By Lisa M. Campbell and Heather F. Collins, M.S.
On March 22, 2018, the U.S. Environmental Protection Agency (EPA) released the Pesticide Registration Notice (PR Notice) 2018-1 issued by the Office of Pesticide Programs (OPP) entitled “Determination of Minor Use under Federal Insecticide, Fungicide, and Rodenticide Act Section 2(ll)” (PR Notice 2018-1). Notice of Availability issued on March 21, 2018. 83 Fed. Reg. 12385. The PR Notice states that it “describes the revised approach to interpreting economic minor use based on the concept of the registration of a pesticide as an investment.” It “revises the method and criteria used by EPA for evaluating ‘sufficient economic incentive’ under FIFRA section 2(ll)(2),’” and it “also clarifies that minor use under FIFRA section 2(ll)(1) is based on acreage reported in the [U.S. Department of Agriculture (USDA)] Census of Agriculture.”
Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) Section 2(ll)(1) defines a minor use of a pesticide as a use on a crop grown on 300,000 acres or less in the United States. Section 2(ll)(2) of FIFRA defines a minor use of a pesticide as one that lacks sufficient economic incentive to seek or maintain a registration but has private or social value.
PR Notice 2018-1:
- Clarifies that the USDA’s most recent Census of Agriculture, conducted every five years by the USDA’s National Agricultural Statistics Service (NASS), is the appropriate source for data on acreage or crops grown in the U.S. to establish a minor use under the acreage definition in FIFRA 2(ll)(1);
- Revises and provides guidance to registrants concerning the method used by EPA for evaluating “sufficient economic incentive” under FIFRA Section 2(ll)(2); and
- Explains how qualitative information may be used to inform the quantitative analysis and interpret the results.
Previously, EPA’s interpretation of economic minor use in Section 2(ll)(2) was based on PR Notice 97-2. EPA states PR Notice 2018-1 supersedes PR Notice 97-2. EPA states that through PR Notice 2018-1, EPA “seeks to identify and encourage the registration of pesticides for minor uses to protect communities from harmful pests.” EPA states in PR Notice 2018-1 that “the existing methods for identifying an economic minor use in PRN 97-2 do not consider all relevant factors which could affect the incentives of a registrant to apply to register a minor use,” and that “use of the approach in PRN 97-2 to identify economic minor uses could prevent applicants from registering pesticides that would be beneficial to users and growers, thus limiting the availability of pesticides for certain use sites.” For this reason, “EPA revised the method to determine an economic minor use.”
PR Notice 2018-1 is significant because it can be applied to conventional pesticides, biopesticides, and antimicrobial pesticides to determine whether they meet the definition of minor use. The criteria in PR Notice 97-2 only applied to conventional pesticides.
EPA states the rationale for revising the PR Notice to consist of the following:
- EPA has decided to revise the policy on determining minor use.
- First, PRN 97-2 is outdated regarding the crops that would not meet the acreage definition of a minor use under FIFRA section 2(ll)(1). PRN 97-2 contained a fixed list of crops that were grown on more than 300,000 acres in 1997, but cropping patterns change over time and the list of crops provided in PRN 97-2 is no longer accurate.
- Second, the method in PRN 97-2 does not accurately reflect economic incentive to register pesticides. Gross revenue is not an appropriate measure for estimating returns on an investment; since it does not account for production and distribution costs, it overstates the returns to the investment. However, revenue from a single year understates the time period when a firm would receive a return on an investment. Finally, gross revenue at full market potential does not account for the difference in timing between costs of registration and future returns. Costs are likely to be incurred at the beginning of registration, whereas revenues will occur over multiple, future years.
- Third, PRN 97-2 applies only to registration actions on conventional pesticides. The notice specifically states that it does not apply to registrations of biopesticides and antimicrobials (e.g., disinfectants). The method described in this PRN may be used to evaluate the registration incentive for all types of products registered by each of OPP's registering divisions.
Additionally of note, EPA states in PR Notice 2018-1 that seeking minor use designation is not required as part of the pesticide registration process. It is an optional designation that an applicant can seek to obtain certain incentives associated with minor uses, such as:
- Extension of exclusive use of data under FIFRA Section 3(c)(1)(F)(ii); and
- Qualifying for an exemption from the fee or waiver of a portion of the registration service fee for an application for minor uses of a pesticide under FIFRA Section 33(b)(7)(D).
More information on other PR Notices is available on our blog under key phrase Pesticide Registration Notice.
By Lynn L. Bergeson, Christopher R. Bryant, and Margaret R. Graham
On March 6, 2018, the U.S. Environmental Protection Agency (EPA) issued a proposed rule (pre-publication version available here) to add hazardous waste aerosol cans to the category of universal wastes regulated under the federal Resource Conservation and Recovery Act (RCRA) regulations (Title 40 of the C.F.R., Part 273), entitled Increasing Recycling: Adding Aerosol Cans to the Universal Waste Regulations. EPA cites as authority for this change Sections 2002(a), 3001, 3002, 3004, and 3006 of the Solid Waste Disposal Act, as amended by RCRA, as amended by the Hazardous and Solid Waste Amendments Act (HSWA). EPA states the streamlined Universal Waste regulations are expected to:
- Ease regulatory burdens on retail stores and other establishments that discard aerosol cans by providing a clean, protective system for managing discarded aerosol cans;
- Promote the collection and recycling of aerosol cans;
- Encourage the development of municipal and commercial programs to reduce the quantity of these wastes going to municipal solid waste landfills or combustors; and
- Result in an annual cost savings of $3.0 million to $63.3 million.
As aerosol cans are “widely used for dispensing a broad range of products” including pesticides, the proposed rule may have implications for chemical companies that create and distribute pesticide products marketed in aerosol cans. Hazardous waste aerosol cans that contain pesticides are also subject to Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) requirements, including compliance with the instructions on the product label. Under 40 C.F.R. Section 156.78, a flammability label statement is required for pressurized pesticide product products that states “Do not puncture or incinerate container,” but EPA’s 2004 determination (that will be posted to Docket No. EPA-HQ-OLEM-2017-0463 on www.regulations.gov for this proposed rule) allows for the puncturing of cans. The proposed rule states:
- EPA issued a determination that puncturing aerosol pesticide containers is consistent with the purposes of FIFRA and is therefore lawful pursuant to FIFRA section 2(ee)(6) provided that the following conditions are met:
- The puncturing of the container is performed by a person who, as a general part of his or her profession, performs recycling and/or disposal activities;
- The puncturing is conducted using a device specifically designed to safely puncture aerosol cans and effectively contain the residual contents and any emissions thereof; and
- The puncturing, waste collection, and disposal, are conducted in compliance with all applicable federal, state and local waste (solid and hazardous waste) and occupational safety and health laws and regulations.
- EPA anticipates that this 2004 FIFRA determination would not be affected by the proposed addition of hazardous waste aerosol cans to the universal waste rules.
Comments will be due 60 days after the proposed rule’s publication in the Federal Register.
By Lisa M. Campbell and Lisa R. Burchi
On February 14, 2018, the U.S. Environmental Protection Agency (EPA) and Amazon Services LLC (Amazon) entered into a Consent Agreement and Final Order (CAFO) whereby Amazon agreed to pay $1,215,700 in civil penalties for approximately four thousand alleged violations under Section 3 of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) for the distribution of unregistered pesticide products. Amazon neither admitted nor denied the specific factual allegations, which included:
- Between January 1, 2013, and November 1, 2015, Amazon distributed, held for distribution, held for shipment, or shipped two unregistered pesticide products called “3pcs Cockroach Cockroaches Bugs Ants Roach Kills Chalk”; and “Miraculous Insecticide Chalk” on multiple occasions in the United States.
- Between January 1, 2013, and March 1, 2016, Amazon distributed, held for distribution, held for shipment, or shipped three unregistered pesticide products called “HUA Highly Effective Cockroach Killer Bait Powder”; “R.B.T.Z. Safe Highly Effective Roach Killer Bait Powder Indoor”; “HUA Highly Effective Fly Killing Bait Powder”; and “Ars Mat 60 pcs. Refil for ARS Electric Mosquito Killer Convenient, Clean & Smokeless” on multiple occasions in the United States.
Amazon also agreed to implement a supplemental environmental project (SEP) consisting of the development, deployment, and operation of a publicly available eLearning course, downloadable educational materials, and test on FIFRA requirements and associated regulations (eLearning Project). Although no monetary amount was specified for the implementation of the SEP, the eLearning Project will be a significant undertaking, as the materials will be available in three languages (English, Spanish, and Chinese) and Amazon will require all of its Amazon.com sellers to complete the eLeaming course and pass an associated test prior to allowing such Amazon.com sellers to sell products identified as pesticides. The only circumstance when this requirement will not apply to Amazon.com sellers is when a seller can “demonstrate that the seller's existing compliance program is sufficient to ensure products sold via Amazon.com comply with FIFRA.”
More information on FIFRA enforcement issues is available on our blog under key word enforcement.
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 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 M. Campbell and Heather F. Collins, M.S.
On Friday, November 3, 2017, the California Department of Pesticide Regulation (DPR) issued guidance (California Notice 2017-13) that DPR indicates is intended to align DPR policy with the U.S. Environmental Protection Agency’s (EPA) guidance on secondary container labeling for pesticides. DPR’s guidance states that secondary containers are used by the pesticide industry as part of the process of applying pesticides and “cannot be sold or distributed.” The guidance further notes that secondary containers are “most commonly used in institutional settings for concentrated antimicrobials that are diluted prior to use or to hold pesticides filled from a larger container to be used and stored prior to application.”
Registrants may elect to provide users with labels for secondary containers. DPR’s new guidance states: “Secondary container labels are not required to be submitted to U.S. EPA or DPR.” Under the new DPR policy, however, effective immediately, if a registrant submits a secondary container label to DPR, “it must bear the same signal word as the concentrate label or no signal word.” DPR states that it will accept a secondary container label with a lesser signal word, precautionary statements, and alternate directions for use for the diluted product only if acute toxicity data are submitted or are currently on file to support these lesser statements.
DPR’s new guidance also incorporates EPA guidance on what a secondary label should contain. (EPA does not require secondary containers to be labeled, but notes that the applicator remains responsible for following the requirements on the pesticide product’s labeling, and complying with other relevant requirements in the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and other statutes.) Although registrants are not required to submit secondary container labels to EPA for review, EPA recommends that the applicator identify the material in the secondary container in the event of a spill to ensure that adequate information regarding the pesticide can be obtained in case of a medical or environmental emergency. EPA recommends that such labels include the following information:
- Product name;
- EPA registration number;
- Name and percentage of active ingredient of the concentrated product or if known, the percentage of active ingredient in the end-use dilution;
- If the product in the secondary container is diluted, it should be followed by the phrase: “The product in this container is diluted as directed on the pesticide product label”;
- The same signal word as the registered concentrate container label;
- The same precautionary statements as the registered concentrate container label unless the registrant has acute toxicity data supporting lesser precautionary statements for the diluted product and alternate directions for the diluted product are indicated on the concentrate container label; and
- The statement: “Follow the directions for use on the pesticide label when applying this product.”
DPR states: “If currently registered products have secondary container labels on file with DPR that do not meet the above criteria, registrants should submit revised labels to DPR as an amendment.”
Each submission must include:
- California Application to Amend Pesticide Product (DPR-REG-035);
- $25 application fee (payable to: Cashier, Department of Pesticide Regulation);
- A copy of the most current EPA stamp-accepted label;
- Six copies of the concentrate container label; and
- Six copies of the secondary container label.
- If the precautionary statement on the secondary container label bears lesser precautionary statements, the submission must be accompanied by acute toxicity data or a reference to data on file with DPR.
As an alternative to submitting revised labels, registrants have the option of requesting that DPR rescind acceptance of the current stamp-accepted secondary container label previously submitted. Registrants may submit their request in writing on company letterhead to their assigned Regulatory Scientist. If a secondary container label is inconsistent with the DPR-approved label, DPR will consider the product misbranded, and DPR notes that misbranded products are subject to enforcement action.
Registrants that have previously submitted secondary labels to DPR should review the label in comparison to the DPR-approved concentrate container label and the requirements in this notice. All inconsistencies must be corrected via amendment submission to DPR or by making a request that DPR rescind acceptance of the current stamp-accepted secondary label so that the product is not considered misbranded and therefore subject to enforcement action.
By Susan M. Kirsch
On October 17, 2017, the U.S. Environmental Protection Agency (EPA) issued a “Quick Guide for Disinfectant Products for Drinking Water Use by Public Water Systems” (Quick Guide) which it states was developed “in response to requests to help prospective pesticide registrants gain a basic understanding of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) product registration process and how it relates to the Safe Drinking Water Act (SDWA) requirements.” Further, “applicants seeking to register pesticide products for treatment of drinking water in public water systems [(PWS)] should refer to this [Quick Guide] for a broad overview of the applicability of FIFRA and SDWA and for references to additional relevant resources.” EPA states the Quick Guide can be used to:
- Compare the jurisdictional authority of FIFRA and SDWA;
- Determine whether a product is required to obtain FIFRA registration; and
- Identify SDWA standards that are applicable to pesticide products used in drinking water disinfection.
EPA states that “it does not register or approve disinfection products under the SDWA, but instead imposes requirements on each regulated PWS to deliver water that meets specific standards to persons served by the system,” and that each PWS “must determine what product or combination of products to use to meet the federal and any applicable state, tribal or territorial drinking water requirements.”
A review of the Quick Guide reveals it is a high level decision support and reference tool which lists the basic steps necessary to obtain product approval for drinking water disinfection use by PWSs under both FIFRA and SDWA; and includes a corresponding flow chart that highlights the intersection between the jurisdictional authorities of the two statutes and illustrates more generally the steps for obtaining product approval. The flow chart also ties these steps to relevant EPA guidance/manuals and applicable Code of Federal Regulations citations, and provides online links to these resources. The Quick Guide does not supply details on any applicable state, tribal, or territorial laws. As EPA notes, some states, tribes, and territories have requirements for the regulatory approval, registration, and licensing of disinfectant products that may be used in their PWSs. Similarly, “FIFRA registration does not mean that the product meets state, tribal or territorial laws regarding drinking water products for use by PWSs.”
More information is available on EPA’s website.
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:
- 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
- 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.
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.