California Integrated Waste Management Board Consideration of a Memorandum of Understanding Between the California Integrated Waste Management Board and

California Integrated Waste Management Board

Consideration of a Memorandum of Understanding

Between the California Integrated Waste Management Board and the Department of

Toxic Substances Control Regarding Enforcement Against Fraud in the Electronic Waste

Payment SystemJune Board Item 15 Harllee Branch,

Staff Counselwww.ciwmb.ca.gov

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Issues Department of Finance (DOF)

Recommendations– E-Waste Payment System at High Risk for

Fraud– CIWMB Should Institute Prevention and

Enforcement– Enter into Memoranda of Understanding

(MOU) as Necessary

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IssuesOverlapping Enforcement

Authority– California Integrated Waste

Management Board (CIWMB)–Department of Toxic Substances

Control (DTSC)

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IssuesCIWMB and DTSC Staff Find That

MOU Is Necessary– Clarify Roles and Responsibilities–Define Working Relationship

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Options for the BoardOption 1 – Approve the MOU Option 2 – Do Not Approve the

MOUOption 3 – Provide Other

Direction to Staff

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Staff RecommendationOption 1 – Approve the MOU and

Adopt Resolution Number 2007-140

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The E-Waste Recycling Act

SB 20 (Sher, 2003) – The Electronic Waste Recycling Act (Act)

Amended by SB 50 (Sher, 2004)– Comprehensive Payment System to Encourage

Recycling of Electronic Waste (E-Waste)– Video Display Devices Identified by DTSC as

Hazardous When Discarded– Known as “Covered Electronic Waste” or

“CEW”

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The Act Places Responsibilities on Both CIWMB and DTSC– CIWMB

Management of E-Waste Payment System

–DTSC Management of E-Waste as Hazardous

Waste

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CIWMB and DTSC Have Concurrent Enforcement Authority

– CIWMB – Public Resources Code Section 42475 “The board shall administer and enforce [the E-Waste

payment system portions of the Public Resources Code] in consultation with the department.”

– DTSC – Health and Safety Code Section 25214.9 “The requirements and other provisions of [the E-

Waste payment system portion of] the Public Resources Code are incorporated by reference as requirements and provisions of this chapter.”

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The Act Does Not Make Specific How To Handle The Concurrent Enforcement Authority Issue

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Risk of FraudSince Program Inception,

Millions of Dollars Have Been Paid to E-Waste Recyclers

550 Approved Program Participants Statewide

Payment Claims Increasing

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Risk of Fraud 2005

– Over $29 million paid to recyclers– Over 60 million lbs. of E-Waste approved for

reimbursement 2006

– Over $59 million paid– Over 123 million lbs. approved

2007 (as of 05/30/07)– Over $8 million paid– Nearly $1 million in claims awaiting approval– Nearly 9 million lbs. approved

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Risk of Fraud197% Overall Increase in Claimed

Reimbursements from 2005 to 2006


1st qtr.2nd qtr.

3rd qtr.4th qtr.

$12,067,981.36

$14,410,977.70

$17,187,202.49$17,763,827.82

$4,269,568.27$7,197,405.04 $8,271,384.74

$11,370,201.30

$-

$2,000,000.00

$4,000,000.00

$6,000,000.00

$8,000,000.00

$10,000,000.00

$12,000,000.00

$14,000,000.00

$16,000,000.00

$18,000,000.00

CIWMB E-Waste: Growth in first two years of Program

2005 MoniesClaimed2006 MoniesClaimed* The effective date of Final Regulations, may be affecting growth rate.

283% growth 200% growth 208% growth 156% growth*

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Department of Finance Recommendations

November, 2006 Letter to CIWMB E-Waste Payment System at High Risk of

Fraud– Enormous Volume of State Funds– Similarities With Department of

Conservation’s California Redemption Value (CRV) Program CRV Program has experienced fraud since inception Continued enforcement and vigilance necessary

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Department of Finance Recommendations

CIWMB - Take Lead in Fraud Detection, Investigation, and Enforcement Development

Enter Into MOUs With Other Agencies As Necessary to Accomplish Recommendations

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NecessityCIWMB and DTSC Have Overlapping

Enforcement AuthorityPotential For Interagency Conflict,

Duplication of Activities, ConfusionMOU Will Address These Potential

Problems

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MOU TermsRoles and Responsibilities– CIWMB

Integrity of E-Waste AccountFraud Detection/Investigation

–DTSCManagement of Hazardous Waste

AspectsEnforcement Investigations/Prosecution

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MOU Terms Principles of Agreement– DTSC takes lead role in investigations and

prosecutions in consultation with CIWMB Enforcement personnel, experience, and

background Consults and works in cooperation with CIWMB

– Front-loaded mutual decisionmaking by both agencies

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MOU Terms Principles of Agreement (cont.)

– E-Waste Fraud Team– Free exchange of documents and information– CIWMB may assist DTSC with investigations– Allowance for independent work on fraud

detection/investigation Share information and consult if potential fraud

discovered– Tracking fund expenditures in relation to fraud

enforcement– Coordinate and share training opportunities

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Staff RecommendationOption 1 – Approve MOU As

Currently Written and Adopt Resolution No. 2007-140

Staff of both CIWMB and DTSC Support the MOU

www.ciwmb.ca.gov

Documents

California Integrated Waste Management Board Consideration of a Memorandum of Understanding Between the California Integrated Waste Management Board and