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California Department of Toxic Substances Control
The State’s Poor Management of the Exide Cleanup Project Has Left Californians at Continued Risk of Lead Poisoning

Report Number: 2020-107

Appendix A

Scope and Methodology

The Joint Legislative Audit Committee (Audit Committee) directed the California State Auditor to review DTSC’s activities related to the cleanup of lead soil contamination in the area surrounding the former Exide facility located in Vernon, California. The Audit Committee specifically requested that we review DTSC’s contracting practices and its costs and time frames to complete the cleanup of lead-contaminated properties. The table below lists the objectives that the Audit Committee approved and the methods we used to address them.

Audit Objectives and the Methods Used to Address Them
1 Review and evaluate the laws, rules, and regulations significant to the audit objectives. Reviewed relevant laws, regulations, rules, policies, procedures, and best practices related to the Exide cleanup project.
2 For the contracts that DTSC has executed for cleanup activities, determine the following:
  1. Whether the cleanup cost per property varies between contracts, the causes for any such differences, and whether such differences are reasonable; if not, identify actions DTSC could take in the future to prevent cost differences.
  2. Which major factors, apart from parcel size, determine the per-property cleanup costs.
  3. Whether DTSC complied with relevant state contracting rules in awarding cleanup contracts. If DTSC did not comply, identify the major reasons why not.
  4. What actions DTSC has taken to avoid contractors exceeding contract amounts.
  5. Whether DTSC’s administrative costs for oversight and administration of the contracts are consistent with its actual expenses.
  • Reviewed DTSC’s cleanup contracts to identify anticipated costs per property.
  • Reviewed DTSC contractors’ billing and DTSC payment records to identify the cleanup cost per property for each of its Exide-related contracts.
  • Reviewed contract documentation and interviewed key personnel to determine the reasons that cleanup costs per property for DTSC’s Exide-related contracts differed and whether these differences were appropriate and supportable.
  • Reviewed comparable site mitigations and interviewed DTSC and EPA staff to identify major factors that determine per-property cleanup costs. We found that size of property, depth of excavation, and need for transportation of contaminated soil were major cost factors.
  • Reviewed all of DTSC’s active Exide cleanup contracts to determine whether it awarded them in compliance with state requirements. Because state law exempts DTSC from many state contracting requirements in response to hazardous waste mitigation, we did not identify any noncompliance with state requirements for awarding contracts.
  • Reviewed all of DTSC’s active Exide cleanup contracts to determine whether its cleanup contract payments have exceeded original contract amounts.
  • Interviewed DTSC staff to identify what actions the department has taken to avoid contract cost overruns.
  • Identified DTSC’s costs for the Exide cleanup that do not directly relate to its cleanup contracts. These other costs totaled $34 million as of May 2020. DTSC did not track these costs in a manner that allowed us to identify the portion specific to its oversight and administration of the cleanup contracts.
3 Evaluate DTSC’s per-property cleanup cost estimates. Determine what factors contributed to increases in cost estimates in 2018 and whether those factors are consistent with the reasons cited in DTSC’s budget documents. Determine whether the magnitude of the contracts was a factor in the increase in per-property cleanup costs. To the extent possible, determine whether DTSC’s current per-property estimates will further increase.
  • Reviewed DTSC’s cost estimates and comparable site mitigations and interviewed DTSC staff to determine the reasonableness of its per-property cleanup cost estimates.
  • Reviewed DTSC’s budget change proposals to identify the factors it determined to have contributed to its cost estimate increases in 2018.
  • Reviewed DTSC’s cleanup contracts and budget change proposals and interviewed DTSC staff to determine whether the magnitude of its contracts or additional causes were factors in the increase in per-property cleanup costs.
  • Interviewed DTSC staff to obtain their perspectives on whether DTSC’s cost estimates will further increase.
4 Determine when DTSC anticipates completion of the Exide cleanup efforts of different kinds of properties, such as commercial properties and private residences, and assess the reasonableness of the projected time frames. Specifically, identify the factors that contributed to the duration of the cleanup efforts.
  • Reviewed DTSC’s cleanup plan and budget change proposals to identify its time frames for the completion of different types of properties within the cleanup site.
  • Reviewed property cleanup data from DTSC’s property database and interviewed DTSC staff to identify factors that contributed to the duration of the cleanup efforts.
  • Analyzed the reasonableness of DTSC’s time frames to determine whether it is likely to meet its expected deadline of June 2021 to clean the most contaminated residences and all contaminated childcare centers, parks, and schools. DTSC’s cleanup plan does not include cleaning contaminated commercial or industrial properties; as a result, DTSC does not have a timeline to clean these properties.
  • Assessed the completeness and accuracy of DTSC’s property database and determined that the information in the database was sufficiently reliable for our purposes.
5 Determine the total expected cost of the Exide cleanup efforts, including actual costs so far and, to the extent possible, the estimated cost of expected remaining cleanup efforts.
  • Reviewed state and departmental financial reports. We compared the amounts the State has lent to DTSC and the amount DTSC has spent thus far for the Exide cleanup.
  • Projected the expected remaining cleanup costs for residences, childcare centers, parks, and schools based on DTSC’s actual prior costs and number of properties cleaned.
6 Determine whether there are additional steps that DTSC can take to improve the efficiency of the Exide cleanup process.
  • Reviewed the contracts DTSC holds for cleanup of contaminated properties to determine the available options under these contracts for DTSC to accelerate the speed of cleanup efforts.
7 Review and assess any other issues that are significant to the audit.
  • Contacted the Office of the Attorney General to inquire about the status of the State’s cost recovery efforts.
  • Reviewed DTSC’s outreach activities and interviewed DTSC staff to determine the sufficiency of and adherence to DTSC’s Public Participation Plan. The plan includes informing affected communities about the cleanup plan and identifies key community stakeholders, local governments, nonprofit organizations, legislative offices, and other agencies. We found that DTSC conducted sufficient outreach efforts to the affected communities.
  • Reviewed the status of Exide’s permit application since 2000 and DTSC’s actions in response to the application.

Source: Analysis of Audit Committee’s audit request number 2020-107, state law, and information and documentation identified in the column titled Method.

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Appendix B

Sampling and Cleanup Status as of May 2020 of Properties in the Cleanup Site
Sampled 8,555
Not sampled* 1,604
Cleaned by DTSC 1,529
Cleaned by Exide 186
Cleaned by Los Angeles School District 49
Remaining to be cleaned † 6,375
Total Properties Needing Cleaning 8,139
No Permission to sample/clean 1,150
Sampled and did not need cleaning ‡ 870
Total properties without permission to clean or not needing cleaning 2,020
Cleaned before implementation of DTSC’s cleanup plan 330
Prioritized for cleanup 3,200
Additional contaminated properties needing to be cleaned to meet DTSC’s target 4,609
Total needing to be cleaned 8,139
Total properties not needing cleaning or without permission to clean 2,020

Source: DTSC property database.

* For 1,150 properties, owners have not granted DTSC permission to sample the soil and determine the lead contamination level. DTSC has permission to sample the remaining properties but has not yet done so.

Includes an estimate of the number of unsampled properties with permission to sample that will likely require cleaning.

Includes an estimate of the number of unsampled properties with permission to sample that will likely not require cleaning.

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