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The Honorable John W. Olver: 
Chairman:
Subcommittee on Transportation, Housing and Urban Development, and 
Urban Development and Related Agencies: 
Committee on Appropriations:
House of Representatives: 

Subject: Transportation Disadvantaged: Progress in Implementing the New 
Freedom Program Has Been Limited, and Better Monitoring Procedures 
Would Help Ensure Program Funds Are Used as Intended: 

Dear Mr. Chairman: 

The Americans with Disabilities Act (ADA) of 1990 seeks to ensure equal 
opportunity for persons with disabilities in employment, 
transportation, and other matters. ADA sets minimum standards for the 
accessibility of public transportation systems. For example, for 
persons unable to use a fixed-route bus or rail system due to 
disability, transit systems must provide service within three-quarters 
of a mile of the fixed-route service and during the same hours as the 
fixed-route service.[Footnote 1] In February 2001, the Bush 
Administration announced the New Freedom Initiative, a comprehensive 
program intended to extend and enhance efforts begun under ADA to help 
bring Americans with disabilities into mainstream life. According to 
the U.S. Census Bureau, in 2005 there were about 40 million 
noninstitutionalized persons over the age of 5 with one or more 
disabilities. 

In August 2005, the Safe, Accountable, Flexible, Efficient 
Transportation Equity Act--A Legacy for Users (SAFETEA-LU) authorized 
the New Freedom program, to be administered by the Department of 
Transportation's Federal Transit Administration (FTA). This program is 
designed to support new public transportation services and public 
transportation alternatives beyond those required by ADA. Congress 
appropriated $77.2 million for the New Freedom program in fiscal year 
2006 and $81.0 million in fiscal year 2007. Program funds are 
distributed through grants from FTA to entities designated by state 
governors, and these grants may be used for operating support or 
capital projects. Operating and capital project grants require state/ 
local matching funds. Projects eligible for New Freedom grants must be 
derived from a locally developed coordinated public transit-human 
service transportation plan (coordinated plan) with input from a wide 
variety of state and local entities, human service agencies, consumer 
groups, and others. 

On May 4, 2007, we briefed your staff on the work you requested related 
to FTA's New Freedom program. Enclosure I contains the detailed 
briefing slides that were presented to your staff on May 4, 2007. The 
objectives of this work were to (1) determine the extent to which FTA 
has implemented the New Freedom program and identify concerns, if any, 
of selected state and local entities and (2) determine how FTA monitors 
program performance. To accomplish these objectives, we reviewed 
pertinent legislation, interim and final program guidance issued by 
FTA, and New Freedom grants approved by FTA, and we interviewed FTA 
officials in headquarters and two regions. We also interviewed 
officials in organizations designated as grant recipients in three 
large urban areas--Chicago, Illinois; Orlando, Florida; and Washington, 
D.C.--and in three states--Illinois, Maryland, and Virginia. We 
selected urban areas that had significant fiscal year 2006 New Freedom 
funding and, among other things, were in different phases of program 
implementation. The states were selected for their proximity to and 
relationship with the urban areas selected and their differing 
abilities to provide matching fund assistance. We conducted our work 
from December 2006 to March 2007 in accordance with generally accepted 
government auditing standards. 

In general, we found that progress in implementing the New Freedom 
program had been limited and that state and local officials we spoke 
with identified implementation concerns. As of March 2007, FTA had 
awarded few grants--13 grants representing about 3 percent of funds 
appropriated in fiscal year 2006. FTA issued final program guidance in 
March 2007, after engaging in a careful and deliberate but time- 
consuming process of obtaining public and other stakeholder comments on 
interim versions of the guidance issued in March 2006 and September 
2006. FTA officials conducted extensive outreach through listening 
groups and other mechanisms to help develop the final program guidance. 
FTA officials said this and compliance with the Administrative 
Procedures Act limited their progress in program implementation. FTA 
officials also told us that after consulting with some of its key 
stakeholders, FTA restricted project eligibility in its final program 
guidance by requiring that New Freedom projects be both new and beyond 
ADA requirements. In addition, FTA reported that few governors had 
designated the entities to receive program funds. Moreover, state and 
local officials we spoke with had made limited progress in developing 
coordinated plans. State and local officials also voiced concerns about 
the impact of matching fund requirements on project selection, the 
effect of limited program funding on their ability to undertake large 
projects, and the types of projects that qualify under the "beyond ADA" 
requirements. 

We also found that FTA had not fully developed policies and procedures 
for monitoring and oversight of the New Freedom program. In particular, 
FTA had not included specific provisions for the New Freedom program in 
its triennial and state management reviews, nor had it developed 
guidance about reviews of grantees not subject to triennial or state 
management reviews (called "spot" reviews).[Footnote 2] FTA officials 
told us that they plan to develop such procedures and had already begun 
to develop questions on the New Freedom program to be incorporated into 
the agency's existing oversight reviews. We believe that completing 
these procedures will be important to ensuring that funds are being 
used in accordance with program requirements and that recipients are 
being held accountable for their use of program funds. Based on our 
findings, we recommend that the Secretary of Transportation direct the 
FTA Administrator to develop and implement a plan to oversee the New 
Freedom program that includes adding program-specific provisions to the 
triennial and state management reviews and specifying the role and 
frequency of spot reviews. 

We provided a draft of this report and the briefing slides to the 
Department of Transportation and FTA for comment. DOT officials, 
including the FTA Director of the Office of Transit Programs, generally 
agreed with the findings in the report and briefing slides and said 
they would consider the recommendation as they move forward in 
implementing the New Freedom program. They also noted that they have 
requested authority, in the President's fiscal year 2008 budget, to use 
1 percent of New Freedom program funding for oversight. We believe that 
it will be important for FTA to develop and implement an oversight plan 
for the New Freedom program, regardless of whether FTA receives 
specific funding for oversight of this program in its fiscal year 2008 
budget. 

As agreed with your office, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 10 days 
from the report date. We will then send copies of this report to the 
Chairmen and Ranking Minority Members of the Senate and House 
Subcommittees with jurisdiction over FTA matters. We will also send 
copies to the Secretary of Transportation and the Administrator of the 
Federal Transit Administration and other interested parties. In 
addition, the report will be available at no cost on the GAO Web site 
at [hyperlink, http://www.gao.gov]. 

If you or your staff have questions about this report, please contact 
me at brownke@gao.gov or at (202) 512-7215. Contact points for our 
offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. Individuals making key contributions to 
this report are listed in enclosure II. 

Sincerely yours, 

Signed by: 

Kay E. Brown:

Acting Director:
Physical Infrastructure Issues: 

Enclosure I: GAO Briefing to House Subcommittee: 

Transportation Disadvantaged: Progress in Implementing the New Freedom 
Program Has Been Limited, and Better Monitoring Procedures Would Help 
Ensure Program Funds Are Used as Intended.

Briefing for the Subcommittee on Transportation, Housing and Urban 
Development, and Related Agencies, House Committee on Appropriations. 

May 4, 2007: 

Overview: 

Introduction:
Objectives, Scope, and Methodology: 
Results in Brief: 
Background: 
Results: 
Conclusions: 
Recommendations: 
Agency Comments and Our Evaluation: 
Appendix: I: 

Introduction: 

The Americans with Disabilities Act (ADA) of 1990, enacted in July 
1990, prohibits discrimination against, and ensures equal opportunity 
for, persons with disabilities in employment, transportation, and other 
matters. ADA sets minimum standards for the accessibility of public 
transportation systems. For example, transit providers must provide 
complementary paratransit service [A] within ¾ of a mile of a fixed-
route transit service and during the same hours as the fixed-route 
service for persons with disabilities. 

In February 2001, the Bush Administration announced the New Freedom 
Initiative, a comprehensive program initiative intended to extend and 
enhance efforts begun under ADA to help bring Americans with 
disabilities into mainstream life. 

According to the U.S. Census Bureau, there were about 40 million 
noninstitutionalized persons over the age of 5 with one or more 
disabilities in 2005. 

In August 2005, the Safe, Accountable, Flexible, Efficient 
Transportation Equity Act—A Legacy for Users (SAFETEA-LU) authorized 
the Federal Transit Administration’s (FTA) New Freedom program (49 U.S. 
C. § 5317). This program is designed to support new public 
transportation services and public transportation alternatives beyond 
those required by ADA, such as complementary paratransit service beyond 
¾ mile of a fixed-route service. 

a/To comply with the ADA, transit agencies must provide “complementary” 
paratransit or other special services--for people who are unable to use 
the fixed-route bus and rail services due a disability—that are 
comparable to the level of service provided to individuals who use the 
fixed-route system. 

Congress appropriated for the New Freedom program $77.2 million in 
fiscal year 2006 and X81.0 million in fiscal year 2007. 

Program funds are distributed through grants from FTA to entities 
designated by state governors. 

Grantees may provide transportation service themselves or through third 
parties (called “subrecipients”). 

Grants may be used for operating support or capital projects and 
require state/local matching funds. 

Projects eligible for New Freedom grants must be derived from a locally 
developed coordinated public transit-human service transportation plan 
(called a “coordinated plan”) with input from a wide variety of state 
and local entities, human service agencies, consumer groups, and 
others. 

Objectives, Scope, and Methodology Objectives: 

Objectives: 

Determine the extent to which FTA has implemented the New Freedom 
program and identify concerns, if any, of selected state and local 
entities. 

Determine how FTA monitors program performance. 

Scope and Methodology: 

We reviewed pertinent legislation interim and final program guidance, 
and New Freedom grants approved by FTA and interviewed program FTA 
officials in headquarters and two regions. We also interviewed 
officials in organizations designated as grant recipients in three 
large urban areas—Chicago, Illinois; Orlando, Florida; and Washington, 
D.C.—and in three states (Illinois, Maryland, and Virginia). (See app. 
I for more detail.) 

We selected large urban areas that (1) had significant fiscal year 2006 
New Freedom funding and were in different phases of program 
implementation and (2) were among the highest in initial program 
spending. 'We selected states for their proximity and their 
relationship with the urban areas selected and their differing 
abilities to provide matching fund assistance for New Freedom projects. 
Our results for these selected areas cannot be generalized to the 
nation as a whole. 

Results in Brief: 

Progress in implementing the New Freedom program has been limited and 
the state and local officials we spoke with identified implementation 
concerns. 

* Progress at the federal level: 

-Few grants have been awarded. As of March 2007, FTA had awarded a 
total of 13 New Freedom grants that, together, represent about 3 
percent of funds appropriated in fiscal year 2006. 

-FTA issued final program guidance for the New Freedom program in March 
2007. 

-FTA revised its guidance to restrict project eligibility. 

*Progress at the state/local level: 

-Few governors had reported to FTA the entities to receive program 
funds as of March 2007. 

-Officials we spoke with had made limited progress in developing 
coordinated plans. 

* The state and local entities we spoke with had concerns about: 

-Program matching fund requirements and their impact on project 
selections. 

- Limited federal money for the New Freedom program and the effect of 
funding limitations on their ability to fund large projects. 

-The types of projects that qualify under the “beyond ADA” requirements 
of the New Freedom program. 


FTA has not yet fully developed policies and procedures for monitoring 
and oversight of the New Freedom program. FTA has taken steps to 
develop such policies and procedures. However, several gaps could limit 
program oversight and monitoring, including triennial and state 
management reviews that do not yet include 'specific provisions for New 
Freedom and unclear FTA guidance about the role of spot reviews. 

Background: 

New Freedom Program Funding: 

Authorized by SAFETEA-LU for 4 years (fiscal years 2006-2009) at $339 
million (see fig. 1). 

* Congress appropriates funds for the program annually--$77.2 million 
for fiscal year 2006 and $81.0 million for fiscal year 2007. 

* FTA apportions annual appropriations to three types of areas (see 
fig. 2): 

- 60 percent to large urbanized areas (populations of 200,000 or more): 

- 20 percent to small urbanized areas (populations of 50,000 to less 
than 200,000), and: 

-20 percent to other than urbanized areas (populations of less than 
50,000). 

* Apportionments are based on the number of persons with disabilities 
in each area divided by the total number of persons with disabilities 
in each area nationwide (see fig. 3). For example: 

-Large urbanized area (population of 200,000 or more): Population of 
persons with disabilities in each large urbanized area divided by total 
population of persons with disabilities in all large urbanized areas 
nationwide: 

-Small urbanized area (population of 50,000 to less than 200,000): 
Population of persons with disabilities in each small urbanized area 
divided by total population of persons with disabilities in all small 
urbanized areas nationwide. 

Figure 1: SAFETEA-LU Authorizations and Appropriations for the New 
Freedom Program in Fiscal Years 2006 to 2009 Background (cont.) 

[See PDF for image.] 

Source: FTA. 

Note: The appropriation for FTA's fiscal year 2006 programs required a 
1 percent recission, leaving $ 77.2 million available for apportionment 
to the New Freedom Program. 

[End of figure] 

Figure 2: FTA’s Apportionment of New Freedom Funds by Area ($77.2 
million in Fiscal Year 2006; $81.0 million in Fiscal Year 2007) 
Background (cont.) 

[See PDF for image] 

Source: FTA. 

[End of figure] 

Figure 3: Distribution of Persons with Disabilities in Large Urbanized, 
Small Urbanized, and Other Than Urban Areas, as Used by FTA for Fiscal 
Year 2006 Apportionments. Background (cont.) 

[See PDF for image] 

Source: GAO analysis of FTA data. 

[End of figure] 

Background (cont.): 

New Freedom Program Funding (cont.): 

* While large urbanized areas receive program funds directly, states 
receive program funds for small urbanized and other than urbanized 
areas. According to FTA, it does not allow states to suballocate funds 
among specific small urbanized areas without a competitive process. 

State and local matching fund requirements: 20 percent for capital 
projects; 50 percent for operating assistance. Matching funds can come 
from other federal, non- Department of Transportation funds such as 
Medicaid and employment training programs. 

Up to 10 percent of program funds may be used for administration with 
no match required. 

Under FTA guidance, grantees have 3 years to obligate New Freedom funds 
for a given fiscal year (the fiscal year of apportionment plus 2 
years). For example, fiscal year 2006 funds would remain available for 
obligation through the end of fiscal year 2008. 

Major Elements of FTA’s New Freedom Program (see fig. 4): 

Governors designate recipient agencies (called “designated 
recipients”). 

* Local entities (e.g., transit agencies or metropolitan planning 
organizations) are designated recipient agencies for large urbanized 
areas. 

* State agencies (e.g., state departments of transportation) are 
designated recipients for small urbanized and other-than-urbanized 
areas. 

Designated recipients are expected to 

* Select projects from coordinated plans. Under FTA program guidance, 
organizations other than designated recipients may prepare the 
coordinated plans. 

* Conduct areawide (in urbanized areas with populations of over 
200,000) or statewide (in small urban and other than urbanized areas) 
solicitations for grant applications. 

* Select projects for grant awards through a competitive process and 
certify that the selected projects were derived from a coordinated 
plan. However, FTA final program guidance allows designated recipients 
to establish alternative arrangements to administer and conduct the 
competitive selection process. This is intended to minimize the 
potential for conflicts of interest when the designated recipient also 
competes for program grants. 

* Ensure program funds are distributed fairly and equitably through the 
competitive selection process. 

* Submit applications to FTA for New Freedom grants. 

* Report to FTA about use of program funds. 

* Monitor subrecipients’ use of program funds. 

* Major Elements of FTA’s New Freedom Program: 

Figure 4: Major Elements of FTA's New Freedom Program. 

[See PDF for image] 

Source: GAO analysis of FTA data. 

[End of figure] 

Planning Process and Coordinated Plans: 

Fiscal year 2006 grants could be made without a formal coordinated 
plan. Coordinated plans are required by law in fiscal year 2007 and 
beyond. Fiscal year 2007 coordinated plans are expected to address at 
least three elements—available services, service needs, and strategies 
to address service gaps. FTA also expects coordinated plans to meet a 
fourth element—relative priorities for implementation—by fiscal year 
2008. 

Coordinated plans should: 

* Identify needs, resources, service gaps, service overlaps, and 
priorities. 

* Be coordinated with a wide array of transportation, human service, 
and consumer groups. 

* Include service needs that will be funded under FTA’s Job Access and 
Reverse Commute (JARC) and the § 5310 (Elderly and Persons with 
Disabilities) programs. 

* Include consideration of other programs for transportation 
disadvantaged populations (for example, Temporary Assistance for Needy 
Families or Medicaid recipients). 

Results – Extent of New Freedom Program’s Implementation and Concerns 
Expressed: 
 
Implementation of New Freedom program has been limited. 

Progress at the federal level: 

Few grants have been approved by FTA since the program was created. As 
of March 2007, FTA had approved a total of 13 grants (see table 1). 

* 4 were for the 10 percent administrative funds only. 

* 9 were for a mix of service projects and administrative/planning 
uses. 

* Largest commitment of funds for service projects appears to be in 
Iowa to purchase additional buses and provide operating support 
($243,559). 

A small portion of program funds has been committed. The 13 grants 
receiving FTA approval represent about 3 percent of the fiscal year 
2006 funds appropriated for the New Freedom program ($2.5 million out 
of $77.2 million appropriated). FTA apportioned fiscal year 2007 New 
Freedom funds on March 23, 2007. 

Final program guidance was issued by FTA in March 2007. 

* Prior interim guidance issued in March 2006 and September 2006. 

* Interim guidance allowed early grants and was used by FTA to solicit 
program comments. 

* In general, FTA’s implementation of the New Freedom program has been 
careful and deliberate. Among other things, FTA has conducted extensive 
outreach through listening sessions and held focus groups to help 
develop final program guidance. 

Table 1: FTA New Freedom Program Grant Approvals (Federal Funds Only), 
as of March 1, 2007. 

Recepient: 1: California State Department of Transportation; 
Extended Service: $190,585; 
Mobility Management [A]: $312,254; 
Administration: $236,977; 
FTA Approved: $739,816; 

Recepient: 2: LYNX/Central Florida Regional Transportation Authority, 
Orlando, Florida; 
Extended Service: 88,379; 
Mobility Management [A]: 195,000; 
Administration: 31,487; 
FTA Approved: 314,866; 

Recepient: 3: Ventura County Transportation Commission, Ventura, 
California; 
Extended Service: 55,164;
Mobility Management [A]: 0; 
Administration: 0; 
FTA Approved: 55,164; 

Recepient: 4: South Coast Area Transit, Oxnard, California;
Extended Service: 60,000
Mobility Management [A]: 0; 
Administration: 0; 
FTA Approved: 55,164; 

Recepient: 5: City of Shreveport, Shreveport, Louisiana;
Extended Service: 70,851; 
Mobility Management [A]: 0;
Administration: 7,872;
FTA Approved: 78,723;

Recepient: 6: City of Albuquerque, Albuquerque, New Mexico;
Extended Service: 0;
Mobility Management [A]: 0; 
Administration: 14,700; 
FTA Approved: 14,700; 

Recepient: 7: City of Santa Fe, Santa Fe, New Mexico;
Extended Service: 51,249; 
Mobility Management [A]]: 0; 
Administration: 0; 
FTA Approved: 51,249;

Recepient: 8: Texas Department of Transportation;
Extended Service: 0; 
Mobility Management [A]: 0; 
Administration: 139,642; 
FTA Approved: 139,642; 

Recepient: 9: Texas Department of Transportation;
Extended Service: 0; 
Mobility Management [A]: 0; 
Administration: 107,204; 
FTA Approved: 107,024; 

Recepient: 10: Iowa Department of Transportation;
Extended Service: 123,788; 
Mobility Management [A]: 0; 
Administration: 0; 
FTA Approved: 123,788; 

Recepient: 11: Iowa Department of Transportation;
Extended Service: 243,559; 
Mobility Management [A]: 0; 
Administration: 0; 
FTA Approved: 243,559; 

Recepient: 12: Regional Transportation District, Denver, Colorado;
Extended Service: 144,000; 
Mobility Management [A]: 328,048; 
Administration: 0; 
FTA Approved: 472,048; 

Recepient: 13: Ohio Department of Transportation;
Extended Service: 0; 
Mobility Management [A]: 0; 
Administration: 104,567;
FTA Approved: 104,567; 

Totals: Extended Service: $1,027,575; 
Totals: Mobility Management [A]: $835,302; 
Totals: Administration: $642,269; 
Totals: FTA Approved: $2,505,146; 

a/ Mobility management can include coordinating service for persons 
with disabilities, older adults, and low-income persons; supporting 
local coordination policy bodies; or creating one-stop call centers for 
eligible travelers. 

Source: FTA. 

[End of table]

Results – Extent of New Freedom Program’s Implementation and Concerns 
Expressed (cont.): 

Progress at the federal level (cont.): 

FTA revised its program guidance to restrict project eligibility. 

* Interim guidance in March 2006 indicated New Freedom projects needed 
to be either new or beyond ADA requirements. 

* Interim guidance issued in September 2006 required that New Freedom 
projects be both new and beyond ADA requirements. 

* Final guidance issued in March 2007 requires that New Freedom 
projects be both new and beyond ADA requirements. 

Progress at the state/local level: 

Few official designated recipients reported to FTA by state governors. 
As of March 2007, FTA reported that state governors had designated 24 
recipients for the 207 areas—states, territories, and large urbanized 
areas (population of 200,000 or more)—eligible to receive program 
funds. 

Limited development of coordinated plans and competitive selection 
procedures in areas we visited. 

* Officials in all three large urban areas and in the three states we 
contacted were still developing formal coordinated plans. Officials in 
all three large urban areas said they expect to have such plans 
developed during fiscal year 2007. In one state (Illinois), planning 
regions that did not exist before were created to facilitate 
preparation of the coordinated plans in small urbanized areas. Illinois 
is also hiring Regional Coordinators to facilitate the preparation of 
coordinated plans for small urban areas. 

* Similarly, officials in all three large urban areas and in the three 
states said they were still developing procedures to competitively 
select projects for New Freedom funding. 

Concerns of State/Local Entities We Spoke With: 

Program matching fund requirements may affect project selection. 
According to state and local officials we spoke to, some organizations 
may not be able to obtain matching funds. Among the specific issues 
mentioned by these officials were. 

* Availability of state assistance. Some states plan to provide 
matching funds but, others cannot or will not. For example, Maryland 
officials said state assistance is available for matching funds for New 
Freedom projects. However, officials with the designated recipient for 
the Washington, D.C., metropolitan area and the state of Virginia told 
us that such assistance is not expected to be available in Virginia. 

* Need to reprogram funds from existing uses. Some officials told us 
that human service agency (e.g., reprogram budgets have no extra money 
that could be used for projects funded by New Freedom, and that 
matching funds would have to come from funds provided for existing 
services and projects. 

* Potential restrictions on the use of matching funds from other 
federal programs. Some officials told us that some human service 
programs (e.g., Medicaid) may either have restrictions on the use of 
their funds for transportation projects or funds could be slated for 
other, nontransportation uses and thus not be available for matching 
fund purposes. 

Funding large projects will be difficult with the limited federal 
program funds available for the New Freedom program. Officials from all 
three large urban areas and all three states we spoke with said program 
funds were limited and this might make it difficult to fund large 
projects. Some officials told us that to cope with this situation they 
might: 

* Combine fiscal year 2006 and fiscal year 2007 New Freedom funds. 

* Forgo the option to use 10 percent of program funds for 
administration and instead use the funds for services. 

* Select projects that are eligible for funding from multiple 
transportation -programs (e.g., eligible for both New -Freedom and 
JARC). Note: According to FTA, separate grants would be needed to 
receive funds for each program. Also FTA’s final program guidance of 
March 2007 states that -provisions in SAFILTEA-LU do not permit 
"pooling" of funds for programs like JARC and New Freedom. 

The types of projects that qualify under the “beyond ADA” requirement 
of the New Freedom program. Officials in two of the three large urban 
areas and in all three states told us they were uncertain about what 
types of projects would qualify for New Freedom funding under the 
beyond ADA requirements" criteria. Officials in one large urban area 
(Chicago) did not indicate a problem with this requirement. 

Results-How FTA Monitors Program Performance: 

FTA has not yet fully developed policies and procedures for monitoring 
and oversight of the New Freedom program. 

However, FTA has taken steps to develop such policies and procedures. 
According to FTA: 

* Existing oversight mechanisms will be revised to incorporate New 
Freedom requirements. These mechanisms include: 

- Triennial reviews of entities receiving capital grants under FTA’s 
urbanized area formula program (49 U.S.C. § 5307), such as transit 
agencies. 

- State management reviews of state agencies. 

* FTA will design spot reviews of designated recipients not covered by 
either triennial or state management reviews. Spot reviews will assess 
the accuracy and adequacy of a recipient’s management of the New 
Freedom program. 

Several gaps could limit program oversight and monitoring: 

* Current triennial and state management review procedures do not yet 
include specific provisions for the New Freedom program. These 
procedures would need to include compliance with both statutory and 
regulatory requirements of the New Freedom program, including whether 
program funds have been distributed fairly and equitably through the 
competitive selection process. 

* FTA's guidance is unclear about the role of spot reviews. For 
example, the guidance is unclear about whether spot reviews will be 
more or less frequent than the current cycle for triennial reviews and 
state management reviews. In addition, at the time of our work, FTA had 
not yet developed a plan for implementing spot reviews. 

According to FTA, it plans to start developing oversight requirements 
now that it has issued final guidance for implementing the New Freedom 
program. This would include adding New Freedom program questions to the 
state management reviews and the triennial reviews. FTA also said it 
plans to develop written guidance on spot reviews; however, no date has 
been set for completing these activities. 

We previously reported that performance reporting and oversight are 
important for establishing accountability and evaluating performance. 
Performance data allow agencies to share effective approaches, 
recognize problems, look for solutions, and develop ways to improve 
results. Oversight can help ensure that program funds are being used 
for their intended purposes and that recipients can be held accountable 
for their use of program funds. 

In November 2006, we reported that monitoring gaps may limit FTA’s 
ability to oversee the JARC program. As with New Freedom, FTA proposed 
to monitor JARC recipients through triennial reviews, state management 
reviews, and spot reviews but had not worked out the details. We 
recommended that FTA (1) update its guidance for state management and 
triennial reviews to cover JARC topics and (2) specify how frequently 
FTA will perform spot reviews of designated recipients that are not 
subject to state management reviews or triennial reviews. See GAO, 
Federal Transit Administration: Progress Made in Implementing Changes 
to the Job Access Program, but Evaluation and Oversight Processes Need 
Improvement, GAO-07-43 (Washington, D.C.: Nov. 17, 2006). DOT concurred 
with our recommendation to update triennial and state management 
reviews for JARC criteria. DOT partly concurred with our recommendation 
to perform spot reviews, essaying that it could not totally concur due 
to uncertainties about funding for JARC project management oversight. 
The agency requested JARC project oversight activity funding for fiscal 
year 2008. 

Conclusions: 

Progress in implementing the New Freedom program has been limited, it 
is early in the process, and program recipients have not yet fully 
developed some key elements of the program, such as coordinated plans. 
Developing key elements will be important for the program’s success. 

FTA lacks fully developed procedures for monitoring the New Freedom 
program but says procedures will be developed now that program guidance 
is finalized. Until these procedures are in place, it will be difficult 
to ensure that funds are being used in accordance with program 
requirements and that recipients are being held accountable for their 
use of program funds. Developing these procedures now will be important 
before the program fully ramps up sand funding commitments 
substantially increase. Recommendations: 

We recommend that the Secretary of Transportation direct the 
Administrator, FTA, to take the following actions: 

Develop and implement a plan to provide oversight for the New Freedom 
program that would include: 

* Adding program-specific provisions for existing oversight mechanisms, 
such as triennial reviews and state management reviews, and 

* Specifying the role and frequency of spot reviews to ensure coverage 
for those designated recipients that are not subject to current reviews.

Agency Comments and Our Evaluation: 

We provided a draft of this briefing to the Department of 
Transportation for review and comment. Officials from the Department 
and FTA generally agreed with the briefing’s findings, providing some 
technical clarifications that were incorporated as appropriate. Those 
officials also said that they would consider the recommendations as 
they move forward in implementing the New Freedom program. In 
particular, FTA officials said that FTA intends to include questions 
about the New Freedom program in its triennial and state management 
reviews and that it will conduct oversight of the New Freedom program. 
To enable FTA to conduct more extensive oversight of the New Freedom 
program in the future, FTA has included in the President's fiscal year 
2008 budget a request for authority to use 1 percent of New Freedom 
program funding for oversight. 

[End of section] 

Appendix I - Scope and Methodology: 

Reviewed pertinent federal legislation and FTA’s New Freedom interim 
and final program guidance.

Analyzed apportionment data for fiscal year 2006 and 2007 and grants 
approved by FTA as of March 2007.

Interviewed FTA New Freedom program officials in headquarters and 
Regions IV (Atlanta) and V (Chicago).

Interviewed officials from: 

* Three designated recipient agencies in large urbanized areas 
(Washington, D.C; Chicago, Illinois; and Orlando, Florid-a).

* Three states (Illinois, Maryland, and Virginia). ¾ Three metropolitan 
planning organizations in Chicago, Orlando, and Washington, D.C.

* Selected consumer groups representing persons with disabilities. 

We selected large urbanized areas that (1) had significant fiscal year 
2006 New Freedom funds and were in different phases of program 
implementation, including different stages of preparing and processing 
grant applications, and (2) were among the highest in initial program 
spending. 

We selected three states for their proximity to two of the large urban 
sites selected (Chicago and Washington, D.C.), expecting that these 
states might play a role in selecting projects for the New Freedom 
program. Furthermore, regardless of their role in project selection, 
these states would need to include New Freedom projects selected in the 
large urban areas we chose in their state transportation improvement 
programs. In addition, the states differed in their abilities to 
provide matching fund assistance for New Freedom projects. 

Our results for these selected areas may not be generalized to the 
nation as a whole. 

We conducted our work from December 2006 through March 2007 in 
accordance with generally accepted government auditing standards.

[End of Section]

Enclosure II: Contact and Staff Acknowledgments: 

GAO Contact: 

Kay Brown, (202) 512-7215 or brownke@gao.gov: 

Staff Acknowledgements: In addition to the contact named above, Rita 
Grieco, Assistant Director; Ashley Alley; Richard Calhoon; H. Brandon 
Haller; Richard Jorgenson; and Joshua Ormond made key contributions to 
this report. 

[End of section] 

FOOTNOTES 

[1] This is known as complementary paratransit service because it is 
comparable to the level of service provided to individuals who use the 
fixed-route service. 

[2] Triennial reviews are conducted at least once every 3 years on 
urbanized area formula grantees to evaluate formula grant management 
performance and grantee compliance with FTA and other federal 
government requirements. State management reviews assess states' 
implementation and management of the Elderly and Persons with 
Disabilities program, the Nonurbanized Area Formula program, and other 
programs to ensure they are being administered in accordance with FTA's 
requirements and are meeting program objectives. Triennial and state 
management reviews are part of FTA's established program oversight 
mechanisms. 

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