The Environmental Protection Agency left in limbo over $22,000 in employee applications to waive debt accrued from salary overpayments, according to a Sept. 12 inspector general report.

“When a salary overpayment occurs, the [Interior Business Center]’s payroll system automatically computes the amount of overpayment, generates a bill for collection, and mails the bill to the subject employee. The bill, known as a debt memo, formally notifies the employee of the amount that needs to be repaid to the agency,” the report said.

“The employee may submit an application to the appropriate EPA office to request that the debt be waived.”

But, according to an OIG investigation, weaknesses in internal controls at the EPA resulted in 18 debt waiver requests that were not processed by the Office of the Chief Financial Officer, and the agency was not aware of the missing requests until the OIG brought it to their attention.

All but one of the debts were left in waiver review status for more than a year. One request remained in review status for over three years.

“When debt waiver requests are not resolved in a timely manner, EPA employees may assume their debts have been forgiven,” the report said.

According to the report, the IBC had conflicting instructions on where to send the debt waiver requests, as one policy determined that files should be sent to the EPA’s Claims Officer, while another said that notifications should be sent to OCFO’s Human Resources and Payroll help desk.

In addition, the EPA did not monitor or account for employee debts, nor did it record any employee debts related to salary overpayments.

“The EPA did not believe that this was its responsibility, stating that the IBC is responsible for managing employee debts. However, this contradicts the EPA’s own accounting policy — Resource Management Directive System 2540-9-P1 — which states that all debts/accounts receivable must be recorded in the agency’s financial accounting system of record. Additionally, any changes in the status of the debts/accounts receivable must be recorded promptly in the agency’s accounting system,” the report said.

As part of the OIG audit, the OCFO acted to address many of the problems, including forwarding missing debt waiver requests to the appropriate office for review, developing standard operating procedures to identify debts as part of the financial statement process and discontinuing the practice of the OCFO’s Office of the Controller making decisions on in-service debt waiver requests.

“The EPA has made progress addressing various issues related to the debt waiver process. However, the agency needs to act and address internal control issues that resulted in the missing debt waiver requests and formally establish these individual debts in their accounting system. The agency also needs to develop policies and procedures that clearly and consistently describe the debt waiver process, including requirements to periodically monitor the process,” the report said.