Texas State Auditor's Office - Summary of Report 04-016

An Audit Report on Permitting and Enforcement Functions at the Commission on Environmental Quality

December 2003

Report Number 04-016

Overall Conclusion

For the air, water quality, and public water supply programs we evaluated, the Commission on Environmental Quality's (Commission) enforcement function does not consistently:

Issue enforcement orders or settle enforcement cases within its required timeframes. For the cases we tested, late enforcement orders included $299,489 in penalties and yielded economic benefits of $720,253 to the violators.

Classify supplemental environmental projects (SEPs) according to established criteria or monitor SEPs administered by third parties. The misclassification of the 2002 and 2003 SEPs we tested resulted in a loss of $319,590 to the State.

Calculate penalties accurately or fully collect delinquent penalties. As of May 2003, the Commission had outstanding delinquent penalties of $571,322.

If unaddressed, these inconsistencies could limit the Commission's ability to collect penalties on a timely basis, hold environmental violators accountable, and deter future instances of noncompliance.

The Commission's permitting function for these programs generally operates in accordance with state statute and agency policy, although we noted some areas for improvement in the availability of information used for permitting. In addition, while the Commission complies with federal law regarding notification about pending air permits, the Commission's current process can reduce the effective public comment period to less than the federally required 30 days.

Finally, we noted that the Commission's recent changes to its penalty policies may reduce their effectiveness as a deterrent to polluters. We also found that current statutes related to air emissions caps and policies for discounted fees could be modified to increase agency revenue by approximately $25 million per year.