Mass Transit Grants:

Noncompliance and Misspent Funds by Two Grantees in UMTA's New York Region

RCED-92-38: Published: Jan 23, 1992. Publicly Released: Jan 23, 1992.

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

GAO found that: (1) UMTA gives grantees responsibility for appropriately using federal mass transit funds; (2) two Region II grantees reviewed did not have adequate systems to ensure compliance with federal requirements, and, because of limited UMTA oversight, the region did not effectively detect and correct grantee deficiencies; (3) the Department of Transportation's Office of Inspector General (OIG) identified more than $90 million in wasted, misused, or mismanaged funds since October 1987; (4) Region II was slow to detect and correct serious and long-standing procurement and quality assurance deficiencies in a major grantee construction project; (5) Region II did not comply with UMTA administrative requirements for closing out grants and reviewing overhead costs; and (6) Region II did not routinely receive copies of state and local audit reports regarding grantees or use the findings to enhance regional oversight or identify grantee management deficiencies or 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 effective grants management oversight of Region II grantees, the Administrator, UMTA, should direct the Region II Manager to act promptly to correct grantee noncompliance with federal requirements and withhold funds where appropriate.

    Agency Affected: Department of Transportation: Urban Mass Transportation Administration

  2. 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 effective grants management oversight of Region II grantees, the Administrator, UMTA, should direct the Region II Manager to establish milestones for closing out inactive and completed grants in accordance with UMTA guidelines.

    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 effective grants management oversight of Region II grantees, the Administrator, UMTA, should direct the Region II Manager to review New York City Transit Authority (NYCTA) overhead cost allocation plans and rates as required by UMTA rules.

    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 effective grants management oversight of Region II grantees, the Administrator, UMTA, should direct the Region II Manager to formalize coordination with state and local audit organizations responsible for Region II grantees so that the region can obtain and use their reports in its oversight activities.

    Agency Affected: Department of Transportation: Urban Mass Transportation Administration

 

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