Supplemental Environmental Project (SEP) Policy & Audit
Policy and Audit Reports
The California Air Resources Board (CARB) has a Supplemental Environmental Project (SEP) Policy. CARB's SEP Policy allows community-based projects to be funded from a portion of the penalties received during settlement of enforcement actions. SEPs can improve public health, reduce pollution, increase environmental compliance, and bring public awareness to neighborhoods most burdened by environmental harm. In 2016 CARB updated the SEP Policy to incorporate the requirements of Assembly Bill 1071. The Policy now includes:
- A public process to solicit potential SEPs from disadvantaged communities.
- Allowing the amount of the SEP to be up to 50% of the settlement penalties.
- An annual list of SEPs that may be selected to settle a portion of an enforcement action.
- A consideration in the relationship between the location of the violation and location of the proposed SEP with priority given to projects in disadvantaged communities.
Legacy SEPs Performance Audit
In 2018, California Air Resources Board (CARB) commissioned Sjoberg Evashenk Consulting Inc. to conduct an audit for three long-standing Supplemental Environmental Projects (SEP). This audit focused on the evaluation of SEP program performance and development of improvement recommendations.
The objectives of the audit were to identify opportunities to improve efficiency, effectiveness, and ensuring SEP Administrators and funding recipients were following appropriate agreements, guidelines, and fiscal/accounting standards.
The results of this audit and Executive Officer’s response to the audit report are available for the public to view.