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Environmental and Disposal Liabilities Identification, Documentation and Reporting Handbook V 3.0

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Environmental and Disposal Liabilities Identification, Documentation and Reporting Handbook V 3.0 Environmental and Disposal Liabilities Identification, Documentation And Reporting Handbook v 3.0 DECEMBER 2011 Environmental and Disposal Liabilities Identification, Documentation and Reporting Handbook v3.0 TABLE OF CONTENTS Page 1.0 INTRODUCTION .............................................................................................................. 1 1.1 Applicable Standards and Guidance ............................................................................... 1 1.2 Definitions ...................................................................................................................... 3 1.3 Responsibilities ............................................................................................................... 6 2.0 EDL IDENTIFICATION .................................................................................................... 7 2.1 Environmental Location of Concern............................................................................... 8 2.2 Deconstruction and Renovation Activities ..................................................................... 9 2.3 Environmental and Disposal Liabilities ........................................................................ 10 3.0 LIABILITY STATUS ...................................................................................................... 12 3.1 Probable ........................................................................................................................ 12 3.2 Reasonably Possible ..................................................................................................... 13 3.3 Remote .......................................................................................................................... 14 4.0 EDL COST ESTIMATING .............................................................................................. 15 4.1 Reasonably Estimable ................................................................................................... 15 4.2 Elements of the Cost Estimate ...................................................................................... 17 4.3 Development of Cleanup Actions Cost Estimates ........................................................ 18 4.3.1 Total Cleanup Cost Estimates ............................................................................... 18 4.3.2 Interim Cleanup Action Cost Estimates ................................................................ 19 4.3.3 Quantification of the Cost Estimate ...................................................................... 19 4.3.4 Periodic Review and Update................................................................................. 20 4.4 Cost Estimate Documentation ...................................................................................... 22 4.5 Records Management ................................................................................................... 23 5.0 EDL RECORDING AND REPORTING ......................................................................... 24 5.1 EDL Recording ............................................................................................................. 24 5.2 EDL Reporting .............................................................................................................. 25 5.2.1 Recognized EDL Amounts ................................................................................... 26 5.2.2 Disclosed EDL Amounts ...................................................................................... 26 5.2.3 Amounts Not Reported ......................................................................................... 27 6.0 EDL PRIORITIZATION PROCESS……………………………………………………28 6.1 Procedures for EDL Site Prioritization……………………….…………………...…28 LIST OF FIGURES Figure 1 EDL Identification, Liability Status, Cost Estimating, Recording and Reporting.…11 LIST OF APPENDICES Appendix A Sample Due Care Worksheet Appendix B Cost Estimating Guides / References Appendix C EDL Cost Estimate Documentation Sheet Appendix D EDL Ranking Tool Environmental and Disposal Liabilities Identification, Documentation and Reporting Handbook v3.0 LIST OF ACRONYMS AAPC Accounting and Auditing Policy Committee ADEQ Arkansas Department of Environmental Quality AFR Annual Finanical Report AST Above Ground Storage Tank BIA Bureau of Indian Affairs BLM Bureau of Land Management BOR Bureau of Reclamation CAA Clean Air Act CERCLA Comprehensive Environmental Response, Compensation and Liability Act CERCLIS Comprehensive Environmental Response, Compensation, and Liability Information System CHF Central Hazardous Materials Fund CMS Corrective Measures Study CWA Clean Water Act Department Department of the Interior ECL Environmental Cleanup Liability EDL Environmental and Disposal Liability EMIS Environmental Management Information System EE/CA Engineering Evaluation and Cost Analysis FASAB Federal Accounting Standards Advisory Board FRTR Federal Remediation Technologies Roundtable FUDS Formerly Used Defense Site GAAP Generally Accepted Accounting Principles GMRA Government Management Reform Act Handbook EDL Handbook Version 3.0 HCAS Historical Cost Analysis System IGCE Independent Government Cost Estimate LL Lower Limit LOC Location of Concern LTM Long-term Monitoring NPDES National Pollutant Discharge Elimination System No. Number OEPC Office of Environmental Policy and Compliance O&M Operation and Maintenance OMB Office of Management and Budget P Probable PA/SI Preliminary Assessment / Site Inspection PFM Office of Financial Management PMB Office of Policy, Management, and Budget PRP Potentially Responsible Party R Remote RACER Remedial Action Cost Engineering and Requirements RCRA Resource Conservation and Recovery Act RI/FS Remedial Investigation and Feasibility Study RP Reasonably Possible Page ii Environmental and Disposal Liabilities Identification, Documentation and Reporting Handbook v3.0 ROD Record of Decision SFFAS Statement of Federal Financial Accounting Standards TSCA Toxic Substances Control Act UL Upper Limit URL Universal Resource Locator UST Underground Storage Tank Page iii Environmental and Disposal Liabilities Identification, Documentation and Reporting Handbook v3.0 1.0 INTRODUCTION Current directive from the Office of Management and Budget (OMB) requires the Department of the Interior (Department) and other federal agencies to prepare annual audited financial statements in accordance with the Chief Financial Officers Act of 1990 (Public Law 101-576) and the Government Management Reform Act of 1994 (GMRA) (Public Law 103-356). OMB also requires quarterly unaudited financial statements in accordance with OMB Circular A-136, Financial Reporting Requirements. Per Statement of Federal Financial Accounting Standard (SFFAS) Number (No.) 5, Accounting for Liabilities of the Federal Government, federal agencies are required to recognize and disclose contingent environmental liabilities in their financial reports. Agencies are required to recognize a contingent liability when a future outflow or other sacrifice of resources as a result of past transactions or events is probable and measurable. Contingent liabilities that do not meet the criteria of probable, but are reasonably possible, are disclosed in notes to the financial statement. As such, the Department’s bureaus are required to report contingent environmental liabilities to the Office of Financial Management (PFM) on a quarterly basis. This guidance is intended to provide a consistent approach for estimating and reporting contingent environmental liabilities across all bureaus. 1.1 Applicable Standards and Guidance The reporting of contingent environmental liabilities must conform to governmental accounting standards and laws including: Chief Financial Officers Act of 1990, Public Law 101-576, 101st Congress- Second Session Government Management Reform Act of 1994, Public Law 103-356, 103rd Congress- Second Session OMB Circular A-123 - Management's Responsibility for Internal Control, issued by the Office of Management and Budget, revised December 21, 2004 Financial Reporting Requirements, OMB Circular A-136, issued by the Office of Management and Budget, revised annually Statement of Federal Financial Accounting Standards (SFFAS) Number (No.) 5, Accounting for Liabilities of the Federal Government, as amended, issued by the Federal Accounting Standards Advisory Board Statement of Federal Financial Accounting Standards No. 6, Accounting for Property, Plant, and Equipment, as amended, issued by the Federal Accounting Standards Advisory Board Additional guidance developed to facilitate contingent environmental liabilities identification, cost estimating and reporting requirements include: Technical Bulletin 2006-1, Recognition and Measurement of Asbestos-Related Cleanup Costs, issued by the Federal Accounting Standards Advisory Board, September 28, 2006 1 Environmental and Disposal Liabilities Identification, Documentation and Reporting Handbook v3.0 Technical Bulletin 2009-1: Deferral of the Effective Date of Technical Bulletin 2006-1, Recognition and Measurement of Asbestos-Related Cleanup Costs, issued by the Federal Accounting Standards Advisory Board, September 22, 2009 Technical Bulletin 2011-2: Extended Deferral of the Effective Date of Technical Bulletin 2006-1, issued by the Federal Accounting Standards Advisory Board, September 22, 2011. Determining Probable and Reasonably Estimable For Environmental Liabilities in the Federal Government, Federal Financial Accounting and Auditing,
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