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June 29, 2010

Resource Recycling Electronic Newsletter

The ups and downs of CRV container recycling

Both good and bad news have recently surfaced with respect to the California Redemption Value (CRV) beverage container recycling program.

Good news first: The program's recycling rate for calendar year 2009 increased by eight-percentage points, for a recycling rate of 82 percent. As reported by the Department of Resources Recycling and Recovery (CalRecycle), the recycling rate for the first six months of 2009 was 85 percent; however, for the last six months of 2009, the recycling rate was slightly lower at 82 percent, which, according to CalRecycle officials, "is consistent with the trend observed over the life of the recycling program."

During the 2009 calendar year, Californians recycled more than 17.2 billion beverage containers, an increase of more than one billion containers when compared to 2008. Regarding particular beverage containers, high-density polyethylene (HDPE) plastics containers experienced the biggest increase in recovery, as the container's recycling rate swelled 18 percentage points, year-over-year, from 91 percent to 109 percent. However, because of the rate's drastic increase, CalRecycle is now investigating whether CRV claims for No. 2-labeled HDPE containers are being filed and processed correctly.

Speaking of things being done (or not being done) correctly, that brings us to the bad news. The state's CRV program was recently scrutinized by California's Bureau of State Audits, as examiners took a look into how the CRV program was being managed.

Presented in a 61-page report, entitled Department of Resources Recycling and Recovery: Deficiencies in Forecasting and Ineffective Management Have Hindered the Beverage Container Recycling Program, State Auditor Elaine M. Howle noted numerous problems with the CalRecycle-ran program, including the department missing opportunities to generate revenue, its weakness in investigating potential recycling fraud and its sloppy accounting and auditing practices, among others.

For example, Howle noted an auditing situation from June 2008, where an unnamed beverage distributor agreed that it had underpaid $941,000 with interest over a three-year period. Instead of the department acting swiftly to collect the underpayment, it waited six months to bill the distributor. Howle also noted, "The department's lengthy audit process may also increase its risk of failing to collect on underpayments, because it exceeds the two-year statute of limitations."

Howle further noted CalRecycle's failures to document fraud leads it decides not to investigate, stating that "because the department does not have a systematic and documented methodology for analyzing data, regarding the volume of recycled containers, it is potentially missing opportunities to detect fraud."

The entire report, which includes recommendations on how CalRecycle can improve its forecasting of revenues and expenditures for the state's CRV fund, can be found by clicking here.


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