Better Administration of Capital Grants Could Reduce Unnecessary Expenditures on Mass Transit Projects

CED-82-22: Published: Apr 20, 1982. Publicly Released: Apr 20, 1982.

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GAO reviewed six capital grants awarded to the Massachusetts Bay Transportation Authority (MBTA) to determine how well the Urban Mass Transportation Administration (UMTA) was monitoring them and whether the program was cost effective.

MBTA received more than $1.8 billion in capital grants from fiscal years 1965 through 1981. GAO found that UMTA did not adequately monitor grant projects in accordance with its management guidelines and operating manual and did not have guidance on third-party funding of UMTA-supported projects. As a result, $2.3 million was spent to construct a rapid transit track that is not being fully used, and $5.6 million was spent to purchase and install power equipment that will not be used. Thus, nearly $8 million of federal funds was expended with only minimal benefits to the Authority. Furthermore, delays have occurred in the acquisition of automatic train control equipment which could increase equipment costs by more than $6 million. In addition, funds expected from third parties to help finance projects have not been obtained and may not be forthcoming. As a result, the Authority will have to scale down the project or ask UMTA for additional funds. Office of Management and Budget guidelines require grantees to submit quarterly progress reports to UMTA and require UMTA to make periodic visits to construction sites and to perform inspections. Due to staff shortages, UMTA did not follow its monitoring procedures. The quarterly reports were often incomplete and improperly analyzed. Inspections were not made as often as required, and trip reports were vague and incomplete.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: UMTA has entered into an agreement with MBTA requiring that the boilers be sold and that the federal government receive 80 percent of the proceeds. MBTA was not able to sell the boilers because the market is limited. MBTA is advertising for bids to scrap the boilers. At most, only a small recovery is likely.

    Recommendation: The Secretary of Transportation should direct the Administrator of UMTA to recover $5.6 million used to purchase and install three boilers for the MBTA Immediate Needs Power Program.

    Agency Affected: Department of Transportation

  2. Status: Closed - Not Implemented

    Comments: UMTA does not plan to take action on this recommendation. It believes that MBTA should not be penalized for delays in purchasing and installing automatic train control equipment because such delays were justified.

    Recommendation: The Secretary of Transportation should direct the Administrator of UMTA to limit UMTA participation in the acquisition of automatic train control equipment for the Orange Line to an amount equal to what UMTA participation would have been in 1978.

    Agency Affected: Department of Transportation

  3. Status: Closed - Not Implemented

    Comments: MBTA has agreed to apply for technical study funds to examine alternative uses of the express track. However, UMTA believes that recovering funds used to construct the track is not a realistic option because the initial decision to construct the track was a good one.

    Recommendation: The Secretary of Transportation should direct the Administrator of UMTA to negotiate with MBTA for better use of the Haymarket North project's express track. If a better use cannot be found, it should examine ways of recovering some of the track's costs.

    Agency Affected: Department of Transportation

  4. Status: Closed - Not Implemented

    Comments: Since this report was issued, Congress has made major legislative changes which affect grant administration and the appropriateness of this recommendation. It appears that the intent of this recommendation may be satisfied with the new legislative requirement for annual and triennual audits of UMTA grantees. GAO will examine the adequacy of UMTA regulations to implement these provisions.

    Recommendation: The Secretary of Transportation should direct the Administrator of UMTA to redistribute project managers' grant workloads by having them concentrate on major grants and monitor minor grants on a sample basis until procedures are in place to carry out a project monitoring plan and a system of punishment and rewards based on grantee performance.

    Agency Affected: Department of Transportation

  5. Status: Closed - Not Implemented

    Comments: Since this report was issued, Congress has made major legislative changes which affect grant administration and the appropriateness of this recommendation. It appears that the intent of this recommendation may be satisfied with the new legislative requirement for annual and triennual audits of UMTA grantees. GAO will examine the adequacy of UMTA regulations to implement these provisions.

    Recommendation: The Secretary of Transportation should direct the Administrator of UMTA to require grantees to include a project monitoring plan as part of the grant application. At a minimum, the plan should include UMTA requirements for monitoring projects. UMTA could then certify the plan and randomly spot check the grantee's monitoring performance using either project managers or independent evaluators. UMTA should insist on a minimum level of acceptable performance and that a grantee's performance be tied to future grant awards. UMTA should adopt a system of penalties and incentives that would either punish or reward grantees based on performance.

    Agency Affected: Department of Transportation

  6. Status: Closed - Not Implemented

    Comments: UMTA plans no action on this recommendation. It disagreed with the GAO interpretation of the facts which support the need for this recommendation.

    Recommendation: The Secretary of Transportation should direct the Administrator of UMTA to establish guidelines for UMTA-supported projects involving external funding to ensure that sufficient funds will be available to complete projects.

    Agency Affected: Department of Transportation

 

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