EPA auditor to review emissions testing checks after VW case

By David Shepardson

WASHINGTON (Reuters) - A U.S. Environmental Protection Agency watchdog plans to review whether the agency's internal controls are effective at detecting vehicle emissions fraud, the EPA's Office of Inspector General said.

In a memo dated Monday, the inspector general said it will "begin preliminary research to determine whether the EPA’s existing internal controls are effective at detecting and preventing" light- and heavy-duty vehicle emissions fraud.

In September 2015, the EPA said it would review all U.S. diesel vehicles following an admission from Volkswagen that it installed software in 580,000 vehicles allowing them to emit up to 40 times the legally permissible level of pollution.

That extensive review prompted a delay in certification of some new diesel models last year.

VW sold vehicles with excess emissions for more than six years without EPA detecting the illegal software. VW, which is set to plead guilty on Friday as part of a plea agreement with U.S. prosecutors, has agreed to offer to buy back about 500,000 vehicles and agreed to spend up to $25 billion in the United States to address claims from owners, environmental regulators, states and dealers.

The EPA said at the time it would conduct more spot checks of light-duty vehicles and submit them to real-world driving conditions. It told automakers in 2015 that the EPA would test "using driving cycles and conditions that may reasonably be expected to be encountered in normal operation and use.”

An EPA spokeswoman declined to comment.

As part of the review of other vehicles, the EPA accused Fiat Chrysler Automobiles NV (FCHA.MI) in January of illegally using undisclosed software to allow excess diesel emissions to go undetected. Fiat Chrysler denied wrongdoing and Chief Executive Sergio Marchionne said the automaker was trying to resolve the issue.

EPA and the California Air Resources Board said Fiat Chrysler failed to disclose engine management software in 104,000 U.S. 2014-2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks with 3.0-liter diesel engines. The undisclosed software results in increased emissions of nitrogen oxides.

The Justice Department, a group of state attorneys and the U.S. Securities and Exchange Commission are investigating Fiat Chrysler's excess emissions.

EPA is reviewing other automakers' emissions systems, but it is not clear whether they have found any additional wrongdoing. EPA is still reviewing some Daimler AG (DAIGn.DE) Mercedes-Benz diesel vehicles.

Daimler said in April that the U.S. Justice Department had asked the carmaker to investigate its emissions certification process.

(Reporting by David Shepardson; Editing by Jonathan Oatis)