HomeMy Public PortalAboutExhibit MSD 70E - Review of Division of Environmental ComplianceThis report is intended solely for the use of The Metropolitan St. Louis Sewer District (“MSD”) and is not intended to be and should not
be used by any other parties without the prior written consent of MSD.
Review of DEC – Three Units FY 2020 AUDIT PLAN
Metropolitan St. Louis Sewer District
Review of Division of Environmental Compliance
(DEC) - Three Units: RAU, SWU, and ERU
Fiscal Year 2021
December 2020
Exhibit MSD 70E
This report is intended solely for the use of The Metropolitan St. Louis Sewer District (“MSD”) and is not intended to be and should not
be used by any other parties without the prior written consent of MSD.
Review of DEC – Three Units I FY 2021 AUDIT PLAN
The St. Louis Metropolitan Sewer District
Review of Division of Environmental Compliance
(DEC) - Three Units (RAU, SWU, & ERU)
December 2020
Table of Contents
Introduction and Scope .......................................................................... 1
Objectives and Methodology .................................................................. 3
Overall Conclusion and Results ............................................................. 6
Opportunities for Improvement ............................................................... 7
Acknowledgements .............................................................................. 11
INTRODUCTION AND SCOPE
This report is intended solely for the use of The Metropolitan St. Louis Sewer District (“MSD”) and is not intended to be and should not
be used by any other parties without the prior written consent of MSD.
Review of DEC – Three Units 1 FY 2021 AUDIT PLAN
The Division of Environmental Compliance (DEC) was first established in 1988 in a response to
an increase in the number of regulations and other obligations designed to protect the
environment. The DEC is currently a division of the Engineering Department.
The DEC’s three key objectives are to:
• Ensure District Management has an adequate understanding of and is familiar with all
environmental requirements and regulations (Federal, State, and Local) applicable to the
District.
• Ensure that District operations and activities are in compliance with environmental
regulations and requirements (Federal, State, and Local).
• Ensure any sources of water pollution within the District’s boundaries are identified and
properly addressed.
The DEC is divided into five overall groups:
1. Regulatory Affairs Unit (RAU): Manages and oversees environmental compliance for
the District’s various facilities (treatment plants, maintenance yards, and pump stations).
2. The Stormwater Unit (SWU): Oversees activities associated with the MS4 Stormwater
Permit for the District, St. Louis County, and sixty (60) other entities covered by the
permit. Monitors compliance with the six minimum control measures outlined in the
permit.
3. The Emergency Response Unit (ERU): Responsible for investigating and initiating
corrective actions when instances occur in which untreated sewage from the collection
system or treatment plants enters the environment. Performs preventative investigations
such as routine inspections of food service establishment (FSEs) and performs follow-up
investigations when grease, etc. is identified in the system by the Operations
Department.
4. Industrial Pretreatment Group: Implements the Federally mandated Industrial
Pretreatment Program for the District which requires DEC to inspect and sample
industrial customers and enforce MSD’s Sewer Use Ordinance. Responsible for
calculating surcharge values and reduction factors that are utilized in the billing process
for industrial/commercial customers. Investigates illicit discharges at regulated industrial
sources. Collects stream samples for environmental testing.
5. Laboratory Group: Performs testing and analysis of water samples and other types of
samples. Supports the other four groups and Operations Department.
INTRODUCTION AND SCOPE
This report is intended solely for the use of The Metropolitan St. Louis Sewer District (“MSD”) and is not intended to be and should not be used
by any other parties without the prior written consent of MSD.
Review of DEC – Three Units 2 FY 2021 AUDIT PLAN
The District’s service area encompasses 520 square miles including all 66 square
miles of the City of St. Louis and 454 square miles of St. Louis County.
The Districts’ wastewater, stormwater, and combined collection system consists of approximately
9,400 miles of pipe and channel.
The District currently operates seven (7) Treatment Plants:
• Lemay,
• Bissell Point
• Coldwater Creek
• Missouri River
• Fenton
• Lower Meramec
• Grand Glaize
- Lemay and Bissell Point are the largest, with average treatment volumes of 121 and
120 million gallons per day (MGD), respectively.
- Overall, the seven facilities treated 367.5 million gallons per day (MGD) in FY ’20.
Scope:
The scope of this engagement focused on the processes and procedures for the following three
units:
1. Regulatory Affairs Unit (RAU) – previously audited in 2015
2. The Stormwater Unit (SWU) – previously audited in 2015
3. The Emergency Response Unit (ERU) – previously audited in 2015
Scope period for activities/transactions was January 1, 2018 through December 31,
2019.
The Industrial Pretreatment and Laboratory Groups will be addressed in a separate
engagement in FY ’22. - previously audited in 2017
OBJCTIVES AND METHODOLOGY
This report is intended solely for the use of The Metropolitan St. Louis Sewer District (“MSD”) and is not intended to be and should not be used
by any other parties without the prior written consent of MSD.
Review of DEC – Three Units 3 FY 2021 AUDIT PLAN
Objectives:
The overall objectives of this engagement were to ensure that:
Processes are in place to ensure that the DEC maintains a complete and up-to-date
database of the various environmental requirements facing the District.
Systems and processes are in place that are effective in tracking, capturing, and
communicating information regarding the following:
- RAU Compliance tasks:
i. Due dates
ii. Open tasks (including training)
iii. Completed tasks with support (including training)
- Compliance with the Minimum Control Measures (MCM’s) in the SWMP.
- Notices of Violations (NOVs, LOWs, NOEEs)
- Bypasses and overflows.
- Illicit discharges.
- DEC inspections and investigations.
BMP (Best Management Practice) assets are inspected as required (once every 36
months).
The District, as the coordinating authority and a co-permitee, adequately implements and
monitors the six MCMs (minimum control measures) required by the MS4 Stormwater
Permit.
The District's FOG (Fat's, Oil, and Grease) program is designed and operates in manner
that meets the FOG requirements of the Consent Decree.
- Inspections, including follow-up inspections, of FSEs are occurring as required.
Procedures to investigate and address items such as grease, illicit discharges, bypasses,
overflows and spills are adequate and performed timely.
Reports are accurately prepared and properly supported.
In general, DEC procedures are designed in a manner that provides the District with the
ability to maintain compliance with the various environmental regulations and
requirements.
OBJCTIVES AND METHODOLOGY
This report is intended solely for the use of The Metropolitan St. Louis Sewer District (“MSD”) and is not intended to be and should not be used
by any other parties without the prior written consent of MSD.
Review of DEC – Three Units 4 FY 2021 AUDIT PLAN
Methodology
To accomplish the above objectives, Internal Audit (IA):
- Obtained an understanding of the various environmental regulations and
permit requirements at the various jurisdiction levels:
o Federal level requirements
o State level requirements
o Local level requirements
- Obtained access to the current Environmental Management Systems (EMS)
utilized by the DEC.
o Reviewed the systems and utilized the systems in performing
engagement testing procedures.
- Held discussions and perform walkthrough procedures with personnel of the
District Regulatory Affairs Unit (RAU) to gain an understanding of the
procedures and processes utilized for:
o Maintaining the compliance calendar
o Tracking the performance or completion of tasks
o Staying current with the regulations, requirements, and
pronouncements of the various governing bodies.
o Maintaining guidance materials, job aids, checklists, etc.
- Tested the accuracy and effectiveness of the DEC’s process to properly
identify and monitor open and completed tasks (including training)
o Reconciled permit and other regulatory requirements with tracked
tasks and related information such as due dates, etc.
o Reviewed for uncompleted tasks.
o Reviewed supporting documentation for completed tasks.
- Reviewed and gained an understanding of the current Stormwater
Management Plan (SWMP).
- Held discussions and performed walkthrough procedures with personnel of the
DEC Stormwater Unit to gain an understanding of the procedures and
processes utilized for:
o Tracking compliance with the Minimum Control Measures (MCM’s) in
the SWMP.
o Inspection and tracking of BMP assets.
OBJCTIVES AND METHODOLOGY
This report is intended solely for the use of The Metropolitan St. Louis Sewer District (“MSD”) and is not intended to be and should not be used
by any other parties without the prior written consent of MSD.
Review of DEC – Three Units 5 FY 2021 AUDIT PLAN
o Preparing the MS4 annual report for submission to the Missouri
Department of Natural Resources (MDNR). (including supporting
documentation)
- Reviewed the MS4 Annual report to ensure accuracy and compliance with
requirements.
o Reviewed supporting documentation.
- Tested inspections of BMP assets to ensure timeliness and adequacy of
procedures and related documentation.
- Held discussions and performed walkthrough procedures with personnel of the
DEC Emergency Response Unit (ERU) to gain an understanding of the
procedures and processes utilized for:
o Tracking and responding to bypasses and overflows.
o Tracking and investigating illicit discharges.
o Conducting and tracking FOG (Fats, Oil, and Grease) inspections and
investigations, including follow-up procedures.
- Reconciled the District’s FOG program with the requirements of the Consent
Decree.
- Performed tests of the following:
o Inspections of food service establishments (FSEs – FOG program).
o Follow-up inspections for FSEs that fail inspection.
o Grease investigations resulting from issues identified by Operations.
o DEC work orders for overflows, bypasses, illicit discharges, etc.
OVERALL CONCLUSION AND RESULTS
This report is intended solely for the use of The Metropolitan St. Louis Sewer District (“MSD”) and is not intended to be
and should not be used by any other parties without the prior written consent of MSD.
Review of DEC – Three Units 6 FY 2021 AUDIT PLAN
In the opinion of Internal Audit, in all significant respects, the controls and procedures
utilized by the Division of Environmental Compliance to operate the three DEC units
reviewed by IA are effectively designed and implemented. However, IA did note a couple
of items that are opportunities for further strengthening and improving the processes of
the units. These opportunities are discussed in detail in the Opportunities for
Improvement section of this report.
Initial Inherent Business Process Risk: High Risk #
Overall Assessment of Engagement Results: Satisfactory **
____________________________________________________
DEFINITIONS
How Results Are Assessed
** Engagement results are evaluated as Satisfactory, Generally Satisfactory or Unsatisfactory.
• Satisfactory (clean opinion) – No significant engagement findings2 or material
weaknesses3 were noted. Engagement findings1 may have been noted.
• Generally Satisfactory (qualified opinion, i.e. “except for”) – Results contain
significant engagement findings2. No material weaknesses3 were noted.
• Unsatisfactory (adverse opinion, immediate Management attention required) –
Significant engagement findings2 and/or material weaknesses3 were noted.
Types of Findings
1. Engagement Finding (#Low Risk): An engagement finding is a condition that could adversely affect the
organization but is less severe than a significant engagement finding or significant deficiency. Classification includes
process or control deficiencies that are not significant deficiencies as well as includes other low risk or low impact
conditions.
2. Significant Engagement Finding (# Moderate to High Risk): A significant engagement finding is a condition that
could adversely affect the organization. Definition includes all types of findings, such as irregularities, waste,
ineffectiveness, conflicts of interest, illegal acts, errors, and significant deficiencies in internal control over financial
reporting as well as other significant internal control weaknesses. A significant deficiency is defined as a deficiency,
or a combination of deficiencies, in internal control over financial reporting that is less severe than a material
weakness, yet important enough to merit attention by those charged with governance.
3. Material Weakness (# High Risk): A material weakness is a deficiency, or a combination of deficiencies, in internal
control, such that there is a reasonable possibility that a material misstatement of the financial statements will not be
prevented or detected and corrected in a timely basis. For internal audit purposes, the definition also includes
material and/or severe irregularities, waste, ineffectiveness, conflicts of interest, illegal acts, errors, and other material
control weaknesses, etc.
(The term “material weakness” should be thought of as a serious category of significant engagement findings and/or
significant deficiencies. However, not all significant engagement findings and significant deficiencies are material
weaknesses.)
^ - Definitions are based on guidance from the IIA Standards, GAAS, and the PCAOB.
# - Risk is assessed at the District (Entity) Level. (Risk to the District as a whole)
OPPORTUNITIES FOR IMPROVEMENT
This report is intended solely for the use of The Metropolitan St. Louis Sewer District (“MSD”) and is not intended to be and should not
be used by any other parties without the prior written consent of MSD.
Review of DEC – Three Units 7 FY 2021 AUDIT PLAN
1. Inspections (initial and reinspection) of Food Service Establishments (FSEs)
Per the District’s Fats, Oil, and Grease (FOG) Control Program Plan, in regard to inspections of
FSEs, the following guidelines are to be followed by the District:
• Routine periodic inspections of FOG equipment (grease traps, etc.) are to be
performed every two to five years (minimum of every five years).
• When a NOV (Notice of Violation) is issued to an FSE, a re-inspection (follow-up
inspection) is to be performed by DEC personnel within sixty (60) days of the
violation.
1. Routine periodic Inspections: In testing frequencies of routine inspections, IA noted
that for three (3) of fifty-six (56) entities reviewed, a routine inspection had not occurred
within the specified five-year period outlined by the program plan. (The five-year
requirement was exceeded by a range of approximately eight to ten months for the three
FSEs). It is important to note that there are approximately 4,700 FSEs within the
District’s service area.
2. Re-inspections: In testing re-inspections (follow-up inspections), IA noted that for three
(3) of forty-five (45) entities reviewed, the follow-up inspection had not occurred within
the sixty (60) day window prescribed by the program plan. (Re-inspections for all three
FSEs exceeded the prescribed sixty (60) day window by at least ten months).
Recommendation:
IA recommends that Management:
o Take steps to ensure the District maintains compliance with the FSE inspection
frequency and timeline guidelines, as prescribed by the FOG Program Control
Plan. As mentioned above, the areas to be addressed involve:
Routine periodic Inspections
Re-inspections (follow-up inspections)
Risk Rating at District (Entity) Level: Low
Risk Rating at Business Process Level: Moderate
Process Owner Response: All of the FSEs that IA identified have been re-inspected. Overall,
the group performed 2544 inspections at 2398 facilities in 2018, and 2217 inspections at 2150
facilities in 2019. With nearly 4,700 total FSEs in the inspection program, nearly all were
inspected at a frequency that exceeded the 1-in-5-year frequency.
Two of the missed FSEs, and all of the follow-up errors, occurred because of staff turnover and
then missing reassignment. (For some perspective, no inspector in this group has worked for
MSD longer than 4 years).
The third FSE that IA identified as missing an inspection is not connected to MSD sewers. The
purpose of its inspection is to ensure it does not become an illicit discharge in the MS4 permit.
The inspection rates in the FOG plan are not strictly applicable to this FSE.
OPPORTUNITIES FOR IMPROVEMENT
This report is intended solely for the use of The Metropolitan St. Louis Sewer District (“MSD”) and is not intended to be and should not
be used by any other parties without the prior written consent of MSD.
Review of DEC – Three Units 8 FY 2021 AUDIT PLAN
1. Inspections (initial and reinspection) of Food Service Establishments (FSEs)(Cont’d)
The results of the audit suggest a high degree of inspection frequency compliance, but we can
improve. DEC sees this as an opportunity to update our on-boarding procedures, to implement a
report that can be run to identify these types of at-risk instances, and to address them before
exceeding their due dates.
Date of Implementation: Immediately, Anticipate February 1, 2021 to have updated on-boarding
procedures and reports.
OPPORTUNITIES FOR IMPROVEMENT
This report is intended solely for the use of The Metropolitan St. Louis Sewer District (“MSD”) and is not intended to be and should not
be used by any other parties without the prior written consent of MSD.
Review of DEC – Three Units 9 FY 2021 AUDIT PLAN
2. Regulatory Training – Supporting Documentation
Per environmental regulations and the various permits that the District is subject to, the District
is required to perform/provide training for personnel that operate in certain roles and perform
certain job duties. As such, the District has developed and implemented a training program to
address these requirements.
• IA tested the training program and noted the following:
1. Evidence of Training Participation/Attendance: In testing for evidence of
employee training attendance/participation, IA noted that for four (4) of fifteen (15)
employees tested (one course per employee), evidence of participation/attendance
could not be obtained for the employee for the specific course.
2. Evidence that Training was Provided: In testing the actual performance of
training courses, IA noted that for one (1) of five (5) courses reviewed, no evidence
that the training course occurred could be provided.
Recommendation:
IA recommends that Management:
• Continue efforts to further leverage the Learning District Platform to perform, track and
document training activities.
o Utilizing the Learning District Platform is a much more effective and efficient
method than the manual methods previously utilized for performing,
documenting and tracking training activities.
Risk Rating at District (Entity) Level: Low
Risk Rating at Business Process Level: Moderate
Process Owner Response:
Prior to the audit, DEC began developing a virtual delivery platform for the Regulatory Training
that will allow better tracking. With the training cycle for CY 2020 beginning in the fall, RAU
worked with Human Resources – Talent Development to convert the training material to a
format that is compatible for delivery on the Learning District.
The Learning District is used to assign individuals training based on which facility they are
assigned to, and which regulations apply to a facility. When courses are assigned to an
individual, they are given an email notification which is generated by the Learning District
alerting them of the need to take the course. The courses appear in their Learning District
required learning dashboard, and a record is generated on their Learning District transcript
when the training modules are completed. Managers and Supervisors have access to this
information, and DEC coordinates with them to ensure their staff take the training. Managers
and Supervisors, as per their roles and responsibilities, can hold their people accountable for
completing the training on time
OPPORTUNITIES FOR IMPROVEMENT
This report is intended solely for the use of The Metropolitan St. Louis Sewer District (“MSD”) and is not intended to be and should not
be used by any other parties without the prior written consent of MSD.
Review of DEC – Three Units 10 FY 2021 AUDIT PLAN
2. Documentation of Regulatory Training (Continued)
This system was implemented on October 12, 2020, after the IA audit was largely complete.
DEC has documented the steps that were taken to roll out this implementation and used it to
develop a SOP – from regulations review, training update, facility roster update, to roll out. At
the end of the year the success of the rollout will be evaluated, and areas of improvement will be
identified. Based on this the SOP will be updated and the critical milestones within the SOP will
be integrated into EMS.
Date of Implementation: October 12, 2020
ACKNOWLEDGEMENTS
This report is intended solely for the use of The Metropolitan St. Louis Sewer District (“MSD”) and is not intended to be and should not
be used by any other parties without the prior written consent of MSD.
Review of DEC – Three Units 11 FY 2021 AUDIT PLAN
Internal Audit Engagement Team:
MSD Internal Audit:
Todd Loretta
Brown Smith Wallace:
Ron Steinkamp
Bret Simmons
Landon Turley
Megan Cable
We would like to thank District personnel for their excellent cooperation and assistance during
this engagement.
Specifically, we would like to express our gratitude to the following:
Engineering:
Rich Unverferth
Jay Hoskins
Jason Peterein
Alverda Oppermann