IEPA did not comply with State law and its contract regarding lane inspector training and certification

If Envirotest does not pay a damage claim, motorists cannot appeal to IEPA.

The I/M 240 test is the most enhanced vehicle emissions test and it is used by only six states.

Motorists responding to our mail survey said they were generally satisfied with the vehicle emissions testing process and personnel.

Two-thirds of the contractor’s training records randomly sampled did not demonstrate that all required training had been provided.

1,043 motorists filed damage claims in calendar year 2000 of which 220 claims were paid.

Some states are involved in the damage claim process.

The program did not have written policies and procedures but they are now being developed.

IEPA reported that motorists waited 7½ minutes in line before the test – half the contract limit of 15 minutes.

Vehicle emissions are videotaped but motorists are not informed that they can see their videotape

States are beginning to test more vehicles on the highway using "remote sensing" and using newer vehicles’ On-Board Diagnostic system.

REPORT CONCLUSIONS

Illinois tests the emissions of certain gasoline powered vehicles that are more than four model years old. These tests are performed in the Chicago and Metro-East St. Louis areas which have exceeded federal air quality standards. IEPA uses a contractor named Envirotest Illinois, Inc. (Envirotest) and the program’s total cost is approximately $50 million per year. In calendar year 2000, Envirotest performed 1,647,995 emissions tests and 8.4 percent of the vehicles tested failed, mostly vehicles older than 1990.

• Motorist Survey. We conducted a mail survey of motorists whose vehicles had been tested in February 2001. Respondents (413 of 1,036 surveyed) were generally satisfied, giving the testing personnel and process an overall rating of 4.12 on a 5.00 scale.

• Training. IEPA’s contract with Envirotest requires the tests given to lane inspectors after their training to be monitored and graded by IEPA, and State statute requires lane inspectors to be certified by IEPA. However, the contractor trains its employees, gives the tests, grades the tests, and certifies its employees. Two-thirds of the 97 employees’ training records we randomly sampled had some shortcomings (e.g., we could not determine if they received all training required by contract).

• Damage Claims. In calendar year 2000, 1,043 motorists filed damage claims and Envirotest paid 220 of the damage claims. The total amount paid was $74,649 for an average of $339 per claim. Envirotest directed 560 of the 1,043 motorists filing damage claims to a Claim Evaluation Center (CEC); 113 of the motorists took their vehicle to a CEC and Envirotest paid 21 of these damage claims.

• Appeal. If Envirotest does not pay a damage claim (79% in calendar year 2000), motorists do not have any administrative recourse to a State agency even though the emissions test is required by the State. Motorists may either take their claim to binding arbitration with the Better Business Bureau or litigate in court.

Monitoring. IEPA has established a structure to monitor the contractor, although some procedures may be enhanced. The program did not have a written policy manual or procedures for this $392 million contract. IEPA is now drafting a written manual.

Other States. We conducted a mail survey of states and received responses from 29 of 35 states with a vehicle emissions testing program which showed the following:

• Enhanced Test. The I/M 240 is the most enhanced vehicle emissions test according to the U.S. EPA and it is used by Colorado, the District of Columbia, Illinois, Maryland, Missouri, and Wisconsin.

• Other Tests. Most states, including large states like California, New York, and Texas, used a less comprehensive test than the I/M 240 test.

• Program Changes. Since newer vehicles pollute less, changes are occurring in vehicle emissions testing programs nationally. For example, states are increasing the use of the vehicle’s computer to diagnose emissions and "remote sensing" to test vehicles as they drive by a sensor on a highway ramp. Florida discontinued its vehicle emissions testing program in 2000 when its air quality met federal standards. [Pages 1-4]

Legislative Audit Commission Resolution Number 119 directed the Auditor General to conduct a management audit of the Vehicle Emissions Inspection Program. Specifically, the Resolution requested a report on IEPA’s monitoring of the contractor, including the training of contractor employees and due care during inspections; the process to record and resolve complaints; and a comparison of Illinois’ emissions test with other states.

Congress enacted the Clean Air Act in 1970 to improve air quality and reduce air pollution. In 1977, the Clean Air Act was amended and broadened to include an Inspection and Maintenance (I/M) program. In 1983, the U.S. Environmental Protection Agency began formal sanctions to withhold federal highway funding from Illinois for failure to meet ozone health requirements. In response, Public Act 83-1477 created an I/M program known as the Illinois vehicle emissions testing program.

We conducted a survey of Illinois motorists whose vehicles’ emissions were tested at one of the 35 test stations in February 2001. A total of 1,036 motorists were selected randomly and mailed a written survey questionnaire which asked them to rate their level of satisfaction; 413 returned the survey questionnaire. As shown in Digest Exhibit 2, motorists generally responded that they were satisfied with the emissions testing process and gave an overall rating of 4.12 on a 5.00 scale.

A recent report drafted in 2001 by the National Academy of Sciences, pursuant to a request by the U.S. Congress, questioned the level of effectiveness of I/M programs. The U.S. EPA’s initial response generally concurred with that assessment and other findings and recommendations. The report titled "Evaluating Vehicle Emissions Inspection and Maintenance Programs" was prepared by the Academy’s National Research Council.

Digest Exhibit 3 shows that, in terms of percentages, most of the vehicles that failed the Illinois vehicle emissions test were vehicles manufactured before 1990. [Pages 4-20]

TRAINING

IEPA and Envirotest have established a training program for Envirotest lane inspectors which consists of 40 hours of classroom training and 40 hours of field training for lane inspectors, and an additional 144 hours for managers. The contractor also has detailed written manuals that are used to train its lane inspectors and managers in conducting vehicle emissions tests and in serving customers. However, the training records kept by the contractor did not demonstrate that all the required training had been provided to its employees in 66 of 97 training records sampled.

• Inspectors. Our random sample of training records showed that 16 of 63 lane inspectors (25%) did not have all the required training hours documented and the training records of 16 more lane inspectors included some questionable training hours.

• Managers. None of the contractor’s 34 test station managers in our random sample had complete training records. They were missing at least one of the following records: training hours, written exam results, or checklists documenting field training.

• Compliance. IEPA did not comply with two requirements pertaining to the training of contractor employees. First, IEPA’s contract with Envirotest requires the tests to be "monitored and graded by the Agency" and State statute requires lane inspectors to be certified by IEPA. However, the contractor trains its employees, gives the tests, grades the tests, and certifies its employees.

• Federal Regulations. IEPA did not comply with a federal regulation which states that IEPA field auditors be formally trained in specifically listed areas pertaining to vehicle emissions testing. IEPA has 44 field monitoring personnel who conduct, or review, test station audits.

Proper training is important because the turnover rate for lane inspectors was 100 percent in fiscal year 2000. The audit recommended that IEPA monitor the training required by the contract, grade the tests as required by the contract, certify the lane inspectors as required by State law, and provide IEPA’s test station monitoring personnel the training that is required by federal regulations. IEPA accepted the recommendation and responded that the Agency has taken over the responsibility to certify the contractor’s lane inspectors and to verify the completeness of the contractor’s training records. [Pages 21-31]

In calendar year 2000, Envirotest conducted approximately 1.65 million vehicle emissions tests. As shown in Digest Exhibit 4, Envirotest recorded 1,043 damage claims from motorists and paid 220 of the damage claims (21%). The total amount paid was $74,649 for an average of $339 per claim.

Envirotest is responsible for receiving, recording, and deciding whether to pay damage claims. IEPA receives monthly reports on damage claims but does not review Envirotest’s handling of individual claims.

Motorists submit damage claims directly to Envirotest which decides whether to pay, often after requiring motorists to take their vehicles to a third-party Claim Evaluation Center (CEC). There are 34 CECs which are selected and paid $25 by Envirotest for each evaluation.

Envirotest directed 560 of the 1,043 motorists filing damage claims to take their vehicle to a CEC. Only 113 of these motorists (20%) took their vehicle to a CEC and Envirotest paid 21 of these damage claims.

If Envirotest does not pay a damage claim, as it did not 79 percent of the time in calendar year 2000, motorists do not have any administrative recourse to a State agency even though emissions testing is required by the State. Motorists may either take their claim to binding arbitration with the Better Business Bureau or litigate in a court of law. Some other states indicated in our survey that they are involved in resolving damage claims:

1. California Mediation by Bureau of Automotive Repair
2. Colorado Involved with rejected or contested claims
3. Delaware Claim filed with state
4. Kentucky (Louisville)Arbitration by Air Pollution Control District
5. New York Investigation by Department of Motor Vehicles
6. Oregon Tort claim filed with state
7. Wisconsin Unresolved claims investigated by state

The audit recommended that IEPA be more involved in the damage claims process to ensure that the contractor’s records are accurate and that legitimate damage claims are paid promptly. IEPA accepted the recommendation and responded that the Agency now participates in the damage claim meetings held by the contractor and verifies that decisions made by the contractor pertaining to damage claims are documented and result in payment on all legitimate damage claims. [Pages 33-45]

The IEPA vehicle emissions testing program has established a structure to monitor the contractor; however, some monitoring methods and procedures may be enhanced. The program did not have a written policy manual or written procedures for its test station monitoring personnel and for imposing liquidated damages, although this is a program involving a nine-year contract worth $392 million.

In calendar year 2000, IEPA State Inspectors completed 25,927 daily test procedure monitoring reports which evaluate Envirotest’s testing procedures; the maximum number of daily test procedure monitoring reports that could have been prepared was 52,740 if all were completed (i.e., if no vacancies or time off for sick, vacation).

IEPA imposed a total of $731,045 in liquidated damages on Envirotest for non-compliance with the contract in FY 2000, such as for excessive wait time and performing the incorrect testing procedures. This included $53,391 in liquidated damages for 1,826 violations reported by IEPA test station monitoring personnel – half (946) for not performing a required pre-safety check which may help reduce damage claims.

The audit recommended that IEPA establish a written policy manual to guide program operations, establish written procedures for imposing liquidated damages, and follow-up on the liquidated damages to ensure that the contractor is taking corrective action. IEPA accepted the recommendations and responded that it has now initiated the development of a more formal, written policy manual that will describe the specific methods and procedures to be used. [Pages 49-64]

State statute and IEPA’s contract with Envirotest establish limits on the time that motorists should have to wait in line before their vehicles are tested. The statute requires that wait time not exceed 20 minutes and the contract sets the daily average wait time at test stations to be under 15 minutes. IEPA found that in 75 instances (beyond the four days per month per test station that is permitted) the 15-minute daily average wait time was exceeded by test stations and imposed $174,500 in liquidated damages in FY 2000.

IEPA reported that in calendar year 2000, motorists waited an average of 7½ minutes in line before the test was administered, or half the 15-minute average wait time limit in the contract. However, in early 2000, IEPA’s test station monitoring personnel reported that the contractor was using improper procedures when manually entering wait time; this may have lowered wait time averages.

Vehicle emissions tests are videotaped and reviewed by the contractor when damage claims are filed by motorists. We received conflicting information from IEPA and the contractor about whether motorists can see the videotape of their test when they file a damage claim. Furthermore, motorists are not informed that they can see their test’s videotape, such as when they file a damage claim.

The audit recommended that IEPA ensure that manually entered wait time information is monitored more closely by its test station monitoring personnel, and that IEPA direct the contractor to inform motorists who file a damage claim that they may view a videotape of their vehicle’s emissions test. IEPA accepted the recommendations and responded that it is adding procedures to ensure that manually entered wait times are closely scrutinized. In addition, IEPA responded that the contractor has revised correspondence advising motorists filing a damage claim that they can set up a time to view the videotape of their emission test. [Pages 65-74]

We contacted the 35 states known to have a vehicle emissions testing program in fiscal year 2000. A total of 29 states responded to our mail survey questionnaire. Illinois was one of six responding states which uses the I/M 240 test to inspect vehicles’ emissions. The I/M 240 is the most enhanced (comprehensive) test being used by the states, according to the U.S. EPA.

• Centralized. Illinois requires vehicles’ emissions to be tested at stations that have been specially constructed for emissions testing only. This type of testing network is known as "centralized" and is used by 13 states who responded to our survey, including Illinois. States with centralized networks used a contractor (primarily Envirotest), except for Delaware, District of Columbia, and Oregon which operated their own programs.

• Decentralized. Another 13 responding states had a "decentralized" network in which vehicles were tested at private garages.

• Hybrid. The remaining three responding states had a "hybrid" network which combined the features of centralized and decentralized testing networks.

• Changes. Several states were making changes to their vehicle emissions testing program. Many states were planning to use On-Board Diagnostic testing to inspect the emissions of vehicles manufactured in 1996 or later.

• Missouri, which uses the I/M 240 test, indicated it is also using remote sensing to test 30 percent of the vehicles as they drive by a sensor on a highway ramp, rather than requiring the vehicle be taken to a test station.
• Colorado and Oregon are adding remote sensing.
• Florida eliminated its vehicle emissions testing program in 2000 after its air quality met federal standards.

IEPA program managers stated they are concerned about funding for the vehicle emissions testing program after their three year allocation of federal Congestion Mitigation and Air Quality program funds is complete. They have been allocated $25 million per year in CMAQ funds through the Illinois Department of Transportation for the first three years of the program. [Pages 75-82]

Illinois uses a method of enforcing requirements of the vehicle emissions testing program that is known as "computer-matching." This method identifies non-compliance by matching vehicle registrations with vehicles whose emissions have not been tested.

In our survey, 25 of 29 states responded that they use a different method called "registration denial" which requires vehicles to comply with the emissions testing program before vehicle registrations can be renewed. Illinois uses a different method which requires sending up to five reminders and warnings (totaling 2,253,668 in FY 2000). The cost of the enforcement program was $2.25 million in FY 2000.

Illinois was the only state responding to our survey that suspends the driver’s license of a vehicle owner for not having the vehicle’s emissions tested. Illinois suspends the driver’s license of the vehicle owners 8 months after the assigned test month and suspends vehicle registration 10 months after the test month. Therefore, polluting vehicles could be legally driven by someone other than the vehicle’s owner for two more months.

Given that Illinois’ enforcement structure is different than other states, that it takes Illinois more time to effect enforcement, that not all the vehicles may be complying with the program, that Illinois has to use four different databases, and that Illinois’ enforcement structure may cost more, an effectiveness review may be warranted by IEPA and the Secretary of State’s Office to determine if changes in the enforcement method are needed. [Pages 83-90]

The audit made ten recommendations to improve the management of the vehicle emissions testing program. IEPA and Secretary of State agreed to implement the recommendations. Their responses are provided after each recommendation in the report and their complete written responses are reproduced in Appendix F.

WGH\AD
October 2001