Rail Grant Oversight: Greater Adherence to Leading Practices Needed to Improve Grants Management
Highlights
What GAO Found
The Federal Railroad Administration (FRA) initially used a regional oversight and monitoring approach outlined in its Grants Management Manual (Grants Manual) to manage the grants funding the section 305 equipment procurement projects, but in the face of challenges that approach evolved to include additional project-level oversight. When FRA began awarding the grants for the section 305 equipment procurement projects in 2010, its grants management approach was defined by the Grants Manual —including routine and scheduled monitoring—and by the terms of the grant agreements funding the locomotive and bi-level passenger car projects (see figure). As the bi-level car project encountered significant challenges—including major schedule delays—FRA moved to a project structure including increased contractor support to better oversee the locomotive and bi-level car projects in response to problems identified in the bi-level car project's schedule. In August 2015, the bi-level car suffered a structural testing failure, and as of April 2016, production of the bi-level car was on hold, and the final equipment delivery date was unknown.
Depictions of Section 305 Locomotive and Bi-level Car Vehicles
FRA's grants management approach partially follows GAO-identified leading practices for performance monitoring, communication, training, and written documentation, but FRA's approach could be improved by better alignment with those practices. For example, while FRA stated that project progress is measured by tracking scope, schedule, and budget, it has not documented a process to identify project-specific goals and associated performance measures. Establishing a process that ensures project goals are identified, tracked, and fulfilled is a leading practice of effective grants management. Without explicit project goals and associated performance measures, it may be challenging for decision makers to track and assess a project's progress, make decisions about future efforts, and keep grantees accountable for outcomes. In addition, FRA has not provided documentation outlining grantees' expectations or developed written guidance specific to the section 305 equipment procurement projects. An effective grants management framework includes developing and maintaining written documentation as a means to obtain and retain organizational knowledge and to ensure accountability. According to FRA officials, the agency informs grantees of expectations through routine monitoring and technical assistance. However, the lack of written guidance, goals, and performance measures could result in FRA's not receiving sufficient and necessary information from its grantees to carry out its grant oversight activities.
Why GAO Did This Study
The Passenger Rail Investment and Improvement Act of 2008 (PRIIA) expanded FRA's role by, among other things, authorizing grant programs for intercity passenger rail. Section 305 of PRIIA established a Next Generation Equipment Committee to design, develop specifications, and procure standardized rail equipment. FRA awarded approximately $800 million in grant funding for two locomotive and bi-level passenger car procurement projects.
GAO was asked to review issues related to FRA's oversight of the grants funding the PRIIA section 305 equipment procurements. This report examines: (1) how FRA has carried out its grants management roles and responsibilities for the PRIIA section 305 equipment procurement projects, and (2) the extent to which FRA's approach has met leading practices and whether FRA's grants management practices could be improved. GAO reviewed grants management policies and practices and identified relevant and applicable leading practices to be used as criteria in assessing FRA's grants management.
Recommendations
GAO recommends, among other things, that the Secretary of Transportation direct FRA to enhance its process for monitoring project performance to include project goals and performance measures that directly link to those goals, and develop and provide written guidance to grantees outlining agency expectations and deliverables. The department concurred with the recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Transportation | To strengthen FRA's grants management practices, the Secretary of Transportation should direct the FRA Administrator to enhance the process outlined in the Grants Manual to monitor project performance for future grants to include: (1) performance measures directly linked to project goals, and (2) fully incorporating timely and actionable information on grantee performance into FRA's review process to help determine whether current efforts are in line with the overall project goals. | In 2010, the Federal Railroad Administration (FRA) began awarding grants for rail equipment procurement projects under section 305 of the Passenger Rail Investment and Improvement Act of 2008. FRA awarded approximately $800 million in grant funding for two locomotive and bi-level passenger car procurement projects. FRA's grants management approach for these-and other rail grants-was defined by the agency's Grants Management Manual (Grants Manual) and by the terms of the grant agreements funding the projects. In 2016, GAO reported that while FRA measured project progress by tracking scope, schedule, and budget, it had not documented a process to identify project-specific goals and... associated performance measures. In addition, GAO reported that FRA partially followed performance monitoring leading practices because while FRA outlined a monitoring process in its Grants Manual, it did not have project goals or performance measures linked to the grants funding the equipment procurement projects. Without explicit project goals and associated performance measures, it may be challenging for decision makers to track and assess a project's progress, make decisions about future efforts, and keep grantees accountable for outcomes. In addition, FRA did not fully evaluate and document results of monitoring activities, including plans for corrective action. According to the Federal Standards for Internal Control, management should evaluate the results of monitoring activities and remediate identified internal control deficiencies on a timely basis. Absent evaluating and documenting the results of monitoring activities in a timely manner, grant managers may not be able to address risks to a project's completion, a situation that could have a potential negative impact on the grant. Therefore, GAO recommended that the FRA Administrator enhance the process outlined in the Grants Manual to monitor project performance for future grants to include: (1) performance measures directly linked to project goals, and (2) fully incorporating timely and actionable information on grantee performance into FRA's review process to help determine whether current efforts are in line with the overall project goals. In 2019, GAO confirmed that FRA updated a section of its Grants Manual with rolling stock performance measures for rail equipment that has been put into service. In addition, FRA added a new section on performance measures in its Grants Manual update. For example, the performance measures section addresses the pre-award process for identifying the need for project performance measures, developing the performance measures (if required), and establishing reporting requirements for the performance measures so the grantee and federal government can assess if the project is achieving its anticipated benefits. FRA also added a requirement that grantees must quarterly report on performance metrics in progress reports in a timely manner. Going forward, FRA officials told us they will apply these performance measures to new grants funded through new grant programs and the relevant performance measures will be integrated into the final grant agreements as an attachment. In addition, FRA developed a Rolling Stock Checklist in July 2018. This checklist is to be used by the grants manager for grants selected for scheduled monitoring, as detailed in the Grants Manual. Finally, FRA officials provided GAO with a spreadsheet grants managers can use to identify the relevant checklist to be used (such as for a rolling stock procurement). Taken together, FRA has developed the guidance, goals, and performance measures needed to the Performance Measures section in the Grants Manual and the Monitoring Checklists will enhance FRAs ability to monitor grantee's project performance, make decisions about future efforts, and keep grantees accountable for outcomes.
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| Department of Transportation | To strengthen FRA's grants management practices, the Secretary of Transportation should direct the FRA Administrator to develop and provide written guidance to grantees to include FRA's expectations on the type of information grantees should provide, such as guidance specific to deliverables and milestones for each grant project. | In 2010, the Federal Railroad Administration (FRA) began awarding grants for rail equipment procurement projects under section 305 of the Passenger Rail Investment and Improvement Act of 2008. FRA awarded approximately $800 million in grant funding for two locomotive and bi-level passenger car procurement projects. FRA's grants management approach for these-and other rail grants-was defined by the agency's Grants Management Manual (Grants Manual) and by the terms of the grant agreements funding the projects. In 2016, GAO reported that although FRA had developed and maintained internal grants management policies and procedures, it had not outlined expectations or developed guidance...
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| Department of Transportation | To strengthen FRA's grants management practices, the Secretary of Transportation should direct the FRA Administrator to analyze training needs and formalize a training plan for grantees and agency staff, which could include training on grant-specific procedures and policies. | In 2010, the Federal Railroad Administration (FRA) began awarding grants for rail equipment procurement projects under section 305 of the Passenger Rail Investment and Improvement Act of 2008. FRA awarded approximately $800 million in grant funding for two locomotive and bi-level passenger car procurement projects. FRA's grants management approach for these-and other rail grants-was defined by the agency's Grants Management Manual (Grants Manual) and by the terms of the grant agreements funding the projects. In 2016, GAO reported that an effective grants management framework includes a mechanism that allows grant recipients and agency staff to establish and maintain a level of...
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