EPA’s OIG to audit agency oversight of RFS RIN market

The U.S. EPA’s Office of Inspector General on Sept. 17 announced its intent to begin fieldwork on an audit of the agency’s oversight of the Renewable Fuel Standard renewable identification number (RIN) market.

Mike Davis, director of environmental investment and infrastructure in the EPA’s Office of Audit, sent a memo to Joseph Goffman, acting assistant administrator in the EPA’s Office of Air and Radiation, on Sept. 17 announcing the audit.

The audit was included as a planned project in OIG’s Fiscal Year 2021 Oversight Plan, released in March 2021. In that plan, the OIG said the audit aims to “determine whether EPA oversight provides reasonable assurance that the generation and exchange of [RINs] comply with EPA regulations and guidance.”

The audit also addresses a top management challenge for the agency—complying with key internal control requirements, as identified in EPA’s FYs 2021-2021 Top Management Challenges Report.

“The OIG’s objective is to determine whether the EPA’s Moderated Transaction System and Quality Assurance Program include controls to identify and reduce the generation and trading of invalid RINs that are used to demonstrate compliance with renewable fuel standards as overseen by the EPA’s Office of Transportation and Air Quality,” Davis wrote in the memo. “The OIG plans to conduct work with staff from EPA headquarters and Ann Arbor, Michigan. Applicable generally accepted government auditing standards will be used in conducting our audit. The anticipated benefits of this audit are identifying and correcting procedural or automated systems problems that increase fraud risks and reduce the positive environmental impacts of the Renewable Fuel Standards program.”

A full copy of the memo can be downloaded from the EPA’s website.