On February 26, 2027, the U.S. Environmental Protection Agency’s (EPA) Office of Inspector General (OIG) published a report entitled Independent Audit of the EPA’s Fiscal Years 2022 and 2021 (Restated) Toxic Substances Control Act Service Fee Fund Financial Statements. Under the Toxic Substances Control Act (TSCA), as amended by the Frank R. Lautenberg Chemical Safety for the 21st Century Act, EPA is required to prepare and OIG to audit the accompanying financial statements of the TSCA Service Fee Fund. OIG rendered a qualified opinion on EPA’s fiscal years (FY) 2022 and 2021 TSCA Service Fee Fund financial statements, “meaning that, except for material errors in expenses and income from other appropriations and earned and unearned revenue, the statements were fairly presented.” OIG noted the following:

• Material weaknesses: EPA materially understated TSCA income and expenses from other appropriations and EPA materially misstated TSCA earned and unearned revenue;
• Significant deficiency: EPA needs to improve its financial statement preparation process; and
• Noncompliance with laws and regulations: EPA did not publish an annual chemical risk evaluation plan for calendar year 2022.

OIG states that during its user fee analysis, it found that the TSCA fee structure in the fees rule for FY 2022 “appeared reasonable based on the data available when the EPA developed the fees rule.” According to OIG, the TSCA fees collected “adequately offset the actual or projected costs of administering the provisions of TSCA for the three-year period.” The fees collected in FYs 2020 – 2022 met the intent of TSCA to defray 25 percent of the specified costs of carrying out Sections 4 and 5, parts of Section 6, and Section 14.

OIG recommends that the chief financial officer:

• Correct the calculation in the on-top adjustment for income and expenses from other appropriations;
• Provide training for calculating the TSCA income and expenses from other appropriations on-top adjustment;
• Correct the TSCA revenue balances;
• Develop and implement accounting models for TSCA revenue-related activity;
• Develop and implement a plan to strengthen and improve the preparation and management review of the financial statements; and
• Correct other errors in the TSCA financial statements.

OIG recommends that the Assistant Administrator for Chemical Safety and Pollution Prevention develop and implement a plan to publish chemical risk evaluation plans at the beginning of each calendar year. EPA agreed with OIG’s recommendations and provided estimated completion dates for corrective actions.