Mass Transit Grants:

Scarce Federal Funds Misused in UMTA's Philadelphia Region

RCED-91-107: Published: Jun 13, 1991. Publicly Released: Jun 13, 1991.

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GAO reviewed the Urban Mass Transportation Administration's (UMTA) grants management practices, focusing on the UMTA Region III: (1) grants recipients' compliance with federal requirements; and (2) oversight of grantees.

GAO found that: (1) Region III grantees did not have effective financial, technical, and other management systems to ensure compliance with federal requirements or prevent the misuse of funds; (2) between 1988 and 1990, the UMTA Office of the Inspector General questioned $61.5 million of Region III grantees' expenditures and found numerous violations of federal requirements; and (3) grantees' noncompliant and questionable activities included rebudgeting of grants to other projects, failure to complete projects, and questionable expenditures. GAO also found that: (1) Region III reported that limited staff resources precluded closer grantee oversight, since its foremost priority was awarding new grants, not overseeing existing grants; (2) only one-third of grantees submitted required financial and progress reports to UMTA Region III, which did not ensure that it received, reviewed, or acted on reports; (3) UMTA triennial reviews of Region III grantees were too superficial to confirm the adequacy of their management systems; (4) Region III did not effectively use such grant-monitoring tools as procurement reviews, site visits, or single annual audits; (5) UMTA rarely used its enforcement authorities to require grantees to take corrective action; and (6) Region III grantees typically decided themselves whether to continue projects or return misspent funds.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Over the last few years, FTA has implemented a number of GAO recommendations and other initiatives resulting in substantial improvements to its process to oversee its $4.6-billion grant management program. FTA has implemented a risk assessment program, enhanced the training and guidance provided to both staff and grantees, and made organizational changes and increased staff size to become more proactive in overseeing hundreds of federal grants. In addition, FTA has made a concerted effort to change the attitudes of its oversight staff and grantees toward safeguarding federal funds. More importantly, FTA has used its most powerful enforcement tool, withholding funds, to sanction grantees found to be mismanaging their grants. Based on these and other actions, GAO has removed FTA's high-risk designation.

    Recommendation: To provide more focused and effective grant management and oversight and minimize the vulnerability of mass transit grants to waste and mismanagement, the Administrator, UMTA, should direct the Region III Manager to implement a system to track grantees' implementation of corrective actions recommended by various audit entities.

    Agency Affected: Department of Transportation: Urban Mass Transportation Administration

  2. Status: Closed - Implemented

    Comments: On July 14, 1992, DOT notified GAO that FTA has modified its Grants Management Information System to track quarterly progress report submission. The restructured triennial review process specifically includes the use of quarterly report information for the recommended purpose. Also, FTA headquarters and regional project managers have been directed to track cost and performance problems.

    Recommendation: To provide more focused and effective grant management and oversight and minimize the vulnerability of mass transit grants to waste and mismanagement, the Administrator, UMTA, should direct the Region III Manager to track the submission and completeness of grantees' quarterly reports and use the reports to identify cost, schedule, or performance problems.

    Agency Affected: Department of Transportation: Urban Mass Transportation Administration

  3. Status: Closed - Implemented

    Comments: Over the last few years, FTA has implemented a number of GAO recommendations and other initiatives resulting in substantial improvements to its process to oversee its $4.6-billion grant management program. FTA has implemented a risk assessment program, enhanced the training and guidance provided to both staff and grantees, and made organizational changes and increased staff size to become more proactive in overseeing hundreds of federal grants. In addition, FTA has made a concerted effort to change the attitudes of its oversight staff and grantees toward safeguarding federal funds. More importantly, FTA has used its most powerful enforcement tool, withholding funds, to sanction grantees found to be mismanaging their grants. Based on these and other actions, GAO has removed FTA's high-risk designation.

    Recommendation: To provide more focused and effective grant management and oversight and minimize the vulnerability of mass transit grants to waste and mismanagement, the Administrator, UMTA, should direct the Region III Manager to require that triennial reviews of existing grant recipients evaluate, analyze, and test compliance with federal requirements.

    Agency Affected: Department of Transportation: Urban Mass Transportation Administration

  4. Status: Closed - Implemented

    Comments: Over the last few years, FTA has implemented a number of GAO recommendations and other initiatives resulting in substantial improvements to its process to oversee its $4.6-billion grant management program. FTA has implemented a risk assessment program, enhanced the training and guidance provided to both staff and grantees, and made organizational changes and increased staff size to become more proactive in overseeing hundreds of federal grants. In addition, FTA has made a concerted effort to change the attitudes of its oversight staff and grantees toward safeguarding federal funds. More importantly, FTA has used its most powerful enforcement tool, withholding funds, to sanction grantees found to be mismanaging their grants. Based on these and other actions, GAO has removed FTA's high-risk designation.

    Recommendation: To provide more focused and effective grant management and oversight and minimize the vulnerability of mass transit grants to waste and mismanagement, the Administrator, UMTA, should direct the Region III Manager to evaluate management control systems of new grant recipients to ensure that they are consistent with federal requirements.

    Agency Affected: Department of Transportation: Urban Mass Transportation Administration

  5. Status: Closed - Implemented

    Comments: Over the last few years, FTA has implemented a number of GAO recommendations and other initiatives resulting in substantial improvements to its process to oversee its $4.6-billion grant management program. FTA has implemented a risk assessment program, enhanced the training and guidance provided to both staff and grantees, and made organizational changes and increased staff size to become more proactive in overseeing hundreds of federal grants. In addition, FTA has made a concerted effort to change the attitudes of its oversight staff and grantees toward safeguarding federal funds. More importantly, FTA has used its most powerful enforcement tool, withholding funds, to sanction grantees found to be mismanaging their grants. Based on these and other actions, GAO has removed FTA's high-risk designation.

    Recommendation: To provide more focused and effective grant management and oversight and minimize the vulnerability of mass transit grants to waste and mismanagement, the Administrator, UMTA, should direct the Region III Manager to review project status to ensure that grantees are in compliance with federal requirements before UMTA approves additional funding requests and withhold funds until problems are corrected.

    Agency Affected: Department of Transportation: Urban Mass Transportation Administration

 

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