the Administrator made a speech 4 days before September 11 saying it would be immoral for the Federal Government to expect residents and homeowners to pay the cost of remediating their own homes. We could see the contrast of what the EPA was not doing in New York. That reservoir of experience and openness about that experience is extremely valuable.

Senator CLINTON. Thank you very much.

Mr. NADLER. Thank you.

Senator CLINTON. We continue to look forward to working with you, Congressman. It is always a pleasure.

We are going to be calling the second panel now-Ms. Nikki Tinsley, Inspector General, U.S. Environmental Protection Agency; and Mr. David Wood, Director, Natural Resources and Environment, U.S. General Accounting Office.

STATEMENT OF NIKKI TINSLEY, INSPECTOR GENERAL, U.S. ENVIRONMENTAL PROTECTION AGENCY

Ms. TINSLEY. Good morning, Senator Clinton. I am happy to be here.

With me today I brought Peggy Boyer, who is our Acting Ombudsman. I would like to start by saying I am just going to give summary remarks and I would appreciate it if my whole statement was put in the record.

Senator CLINTON. Absolutely.

Ms. TINSLEY. Congress established the ombudsman function at EPA in 1984 to provide information and to investigate complaints from the public related to certain hazardous and solid waste programs. The Agency maintained that function for 16 years, long after the statutory authority expired. Last July, GAO issued a report about EPA's national and regional ombudsman. That report identified weaknesses in the Ombudsman's independence, impartiality and freedom from conflict of interest, and its accountability and reporting.

When I read the GAO report, I realized that our office had many of the attributes that the Ombudsman's office was missing. Congress established the Inspectors General to serve as independent, impartial and accountable sources for audits and investigations of the activities of Federal departments and agencies. We are sometimes known as watchdogs for our role in alerting the public and Congress to problems within the executive branch. The Act gives Inspectors General numerous authorities, including access to all agency records and subpoena authority. The Act also grants us authority to ensure our independence. We select, prioritize and carry out all our work assignments independent of agency oversight. We have separate budget authority, separate hiring and contracting authority and independent reporting responsibilities. We have broad authority to receive complaints and conduct investigations.

Since the early 1980's, our office has operated a hotline to receive complaints and allegations from the public regarding EPA's programs and operations. We receive hotline complaints through our toll-free number, through correspondence, through in-person visits and over the Internet. Given that the EPA Ombudsman's role of re

viewing agency actions was similar to the work that Offices of Inspector General were created to perform, and because we report both to the Congress and to the Agency, I believed that our office is well suited to assume the investigatory functions of the Ombudsman's office when I read the GAO report.

In April of this year, the Ombudsman's office was transferred to the Office of Inspector General. Since the transfer, we have expanded the services of the Ombudsman to include all EPA-administered programs, rather than limiting it only to Superfund and hazardous waste issues. We have been busy during the 10 weeks since we began doing the work of the Ombudsman. The Acting Ombudsman is assessing the transferred caseload which is a rather challenging task due to the lack of any organized system of records or case file index. Our primary focus at this point is to work to resolve the already existing cases.

We have met with individual Members of Congress and congressional committee staff. We have made contact with citizens groups in several of the communities where there are open cases, and we have scheduled site visits and public meetings for Coeur d'Alene, ID and Tarpon Springs, FL.

Senator Clinton, I want to assure the public, EPA stakeholders and Congress that we will conduct the ombudsman work with independence and professionalism. I welcome your suggestions as we move forward with our new responsibilities. I appreciate the opportunity to participate today and would be happy to respond to your questions.

Senator CLINTON. Thank you very much, Ms. Tinsley.
Mr. Wood.

STATEMENT OF DAVID WOOD, DIRECTOR, NATURAL RESOURCES AND ENVIRONMENT, U.S. GENERAL ACCOUNTING OFFICE

Mr. WOOD. Thank you, Senator Clinton.

My statement today discusses two topics-first, a brief description of the standards for ombudsmen that have been published by professional organizations; and second, preliminary observations on issues raised by EPA's recent reorganization of its ombudsman function.

While there are no Federal standards specific to the operation of ombudsman offices, several professional organizations provide standards of practice relevant to ombudsmen who deal with inquiries from the public. These standards incorporate the core principles of independence, impartiality and confidentiality. For example, an effective ombudsman must have both actual and apparent independence from any person who may be the subject of a complaint or inquiry. According to guidelines published by the American Bar Association, key indicators of independence include a budget funded at a level sufficient to carry out the ombudsman's responsibilities, and the power to appoint, supervise and remove staff.

Standards of practice published by another professional group, the Ombudsman Association, advocate that for independence, an ombudsman report to the highest authority in the organization. These standards also stress the importance of impartiality and confidentiality in the ombudsman's operations.

While Federal agencies face some legal and practical constraints in meeting these standards, we found that ombudsmen at the Federal agencies we reviewed for our 2001 report did reflect aspects of the standards. For example, at the Federal Deposit Insurance Corporation and the Food and Drug Administration, the Ombudsman's Office had its own budget and reported directly to the highest level of the Agency. In that report, we found that key aspects of EPA's national hazardous waste Ombudsman, then located within the Agency's Office of Solid Waste and Emergency Response, were not consistent with the standards. Our report recommended that EPA take actions intended to increase its Ombudsman's consistency with the standards, including modifying its organizational structure to locate the Ombudsman outside of the Waste Office.

Partly in response to our report, EPA announced a reorganization relocating the National Ombudsman to the Office of Inspector General. This brings me to the second topic of my testimony-observations on issues raised by EPA's reorganization. Our observations are based on limited work we had done in response to a recent request from Representative Diana DeGette. For that reason and because EPA has not yet developed detailed operating policies or an official description of the position within the Inspector General's Office, our observations should be viewed as preliminary.

While EPA's reorganization raises several issues, GAO believes that the most fundamental is intent. If EPA intends to have an ombudsman function that is consistent with the way the position is typically defined in the ombudsman community, placing the function within the OIG will not achieve the objective. This is because the role of an ombudsman typically includes program operating responsibilities such as helping to informally resolve program-related issues and mediating disagreements between the Agency and the public.

Including these responsibilities in the position within the OIG would conflict with the Inspector General Act, which prohibits the transfer of program operating responsibilities to an Inspector General. Yet, omitting these responsibilities would result in establishing a position labeled ombudsman that is not fully consistent with the function as it is typically defined.

Further, while EPA's reorganization removes the national Ombudsman from the Office of Solid Waste and Emergency Response, it may not result in a degree of structural or functional independence that is consistent with the professional standards. For example, according to EPA, authority for budget and staffing for its national Ombudsman will rest the newly created Assistant Inspector General for congressional and Public Liaison, not the Ombudsman. Also, according to EPA the Inspector General has the overall responsibility for the work performed by the office, and no single staff member, including the national Ombudsman, will have the authority to select and prioritize his or her own caseload independent of other needs.

In addition, the reorganization does not appear to address concerns we raised in our report about the independence of the regional Ombudsman, whose position is generally seen as a collateral duty within EPA.

Finally, placing the Ombudsman in the OIG could affect the activities of the Inspector General. For example, the OIG could no longer independently audit or investigate the Ombudsman as the Inspector General can at other Federal agencies where the functions are separate.

Senator Clinton, Mr. Chairman, that concludes my oral statement. I will be glad to respond to any questions that you all have. Senator CLINTON. Thank you very much, Mr. Wood. I thank you as the representative of GAO for another very helpful analysis, which I think clearly lays out the issues that we are concerned about today.

Ms. Tinsley, as I review Mr. Wood's testimony based on the 2001 report on EPA's Ombudsman, it makes a very convincing case that the functions that an ombudsman must properly perform would be quite constrained and difficult to administer within the Office of the Inspector General, and certainly would be at odds with any description of an ombudsman's role from the relevant professional standards.

I think that the real crux of our issue today is the EPA reorganization that essentially subsumed the office within the functioning of the Inspector General, and whether that gives either the real or apparent perception of independence that is essential to such a position.

Can you comment on S. 606 and the concept of having the Ombudsman report directly to the EPA Administrator, as opposed to the Inspector General?

MS. TINSLEY. We have not prepared official comments on S. 606, but when GAO was doing its initial review it asked us to review the draft legislation and comment. Our concern when we read it was that it sounded like the IG Act, and in fact gave the Ombudsman similar authorities to IGs. For example, it suggested that the Ombudsman would have subpoena authority, which we already have. It also required us to assist the Ombudsman as the Ombudsman did its work. So it appeared to me that it would create another Office of Inspector General, to look just at some limited aspects of EPA's programs. I do not think that is necessary.

Senator CLINTON. My view of Inspectors General within the Federal Government has been that they function usually and primarily as watchdogs over the internal operations of the Agency in which they are housed; that complaints and concerns that affect the performance of duties of an individual or a department within the Agency are clearly within the purview of the responsibility of the Inspector General.

What we are talking about here is largely concerns driven by different constituencies-people who are outside, who are living near a hazardous waste site, who are breathing the air from the World Trade Center. I do not see any history of either expertise or administrative responsibility that equips the Inspector General to perform that function. I very much respect the role of an Inspector General. I think it is an essential ingredient within the checks and balances that Federal agencies have to maintain. But here, we are looking at the legitimate complaints about the Agency that come from outside. I think Mr. Wood's description of what is required for independence is much more convincing than the concerns about du

plication of responsibilities within the EPA when I do not think that they are the same functions at all.

I am also wondering-in your written testimony, you referred to various investigations that have been accepted into the IG's office after the dissolution of the Ombudsman's, and you indicate that the World Trade Center investigation has been incorporated into an already ongoing OIG assignment. What does that mean?

Ms. TINSLEY. We had already begun some work to look at EPA's actions connected with the tragedy at the World Trade Center. As we looked at the Ombudsman's files, we added some questions to our ongoing assignment, so that we could address what was in there. In addition, we did contact Congressman Nadler's staff, although they did not choose to meet to discuss our work with us. Of course, your staff was involved in our briefings when we took over the Ombudsman function, and when that decision was actually announced by the Administrator.

Senator CLINTON. Of course, those briefings led to our concerns. We are very concerned about the decision to eliminate the independent Ombudsman and to basically incorporate these very specialized constituency-driven concerns into the ongoing work that you do.

Now, I wanted to ask Mr. Wood, you indicated in your testimony that according to ABA guidelines, key indicators of independence include sufficient funding, ability to spend funds independent of any approving authority, and the power to appoint, supervise and remove staff. Now, based on these indicators, and based on what you know about the EPA's testimony concerning their reorganization, do you believe that the Ombudsman will be able to establish that kind of independence within the Office of Inspector General? Mr. WOOD. I think the short answer would be no. Our reading of the standards is that those characteristics are to adhere to the Ombudsman in its own right, and not by dint of being included in or placed in an office that also may happen to have similar characteristics of independence.

Senator CLINTON. Also in your testimony you talked about how placing the Ombudsman within the OIG alters the relationship between the function of the Ombudsman and the individuals who make inquiries or complaints. Can you elaborate on that?

Mr. WOOD. I think it harkens back to the distinction that you just made about an ombudsman being more oriented to hearing complaints from the public. It is frankly that element of informal provision of information and dispute resolution that, actually if included in the IG, we think would violate the Inspector General Act. Senator CLINTON. So in other words, if the best intentions of this reorganization were taken at face value and the Ombudsman were incorporated within the Inspector General Act, that might in itself violate the legislative act establishing the Inspector General.

Mr. WOOD. They can define a position-and I believe this is what EPA is intending to do in a way that does not violate the Act. However, our point is, if you do that, you have removed an essential element of what an ombudsman is.

Senator CLINTON. Right. Well, I think that our concerns, Ms. Tinsley, do not reflect in any way upon you or your office, but really go to the heart of the matter, which is that the EPA, as we