Mass Transit Grants:

Improved Management Could Reduce Misuse of Funds in UMTA's Region IX

RCED-92-7: Published: Nov 15, 1991. Publicly Released: Nov 15, 1991.

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GAO reviewed the Urban Mass Transportation Administration's (UMTA) management of $34.5 billion in active grants, focusing on: (1) compliance with federal requirements by selected grantees in UMTA Region IX; and (2) the effectiveness of the region's oversight of grantees' compliance with federal requirements.

GAO found that: (1) the majority of Region IX recipients did not have adequate management controls to ensure compliance with federal grant requirements and safeguard funds; (2) the Department of Transportation's (DOT) Office of Inspector General identified $84 million which eight Region IX grantees wasted, misspent, or mismanaged; (3) Region IX recovered about $10 million in grantee funds and agreed to alternative actions on about $59 million, but did not routinely compel grantees to correct the management deficiencies; (4) according to Region IX officials, limited staff resources prevented closer monitoring of grantees' adherence to federal requirements to protect federal funds; and (5) by not ensuring that grantees have adequate internal controls and not using oversight tools to force corrective actions, Region IX is allowing federal mass transit funds to be vulnerable to fraud, waste, and abuse. GAO also found that Region IX did not effectively use its monitoring tools and enforcement authorities, because the region did not: (1) review and follow up on quarterly project and financial reports; (2) verify compliance with federal requirements during triennial reviews; or (3) promptly close grants on completed projects.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: Until grantee certification can be shown to be reliable, UMTA Region IX should reduce its reliance on grantees' promises and increase its verification of actual performance. Therefore, the Administrator, UMTA, should direct the Manager, Region IX, to review compliance on existing grants and resolve significant noncompliance issues before awarding new grants.

    Agency Affected: Department of Transportation: Urban Mass Transportation Administration

    Status: Closed - Not Implemented

    Comments: FTA was expected to complete action in late 1994. Ongoing work was addressing the extent of FTA actions on this recommendation.

    Recommendation: Until grantee certification can be shown to be reliable, UMTA Region IX should reduce its reliance on grantees' promises and increase its verification of actual performance. Therefore, the Administrator, UMTA, should direct the Manager, Region IX, to require that triennial reviews evaluate, analyze, and test grantee compliance with federal requirements.

    Agency Affected: Department of Transportation: Urban Mass Transportation Administration

    Status: Closed - Not Implemented

    Comments: The "Triennial Review Handbook" has accomplished the objective of stressing data evaluation and analysis. Action will be completed after GAO verifies that triennial reviews evaluated, analyzed, and tested compliance with federal requirements. GAO work in this area is ongoing.

    Recommendation: Until grantee certification can be shown to be reliable, UMTA Region IX should reduce its reliance on grantees' promises and increase its verification of actual performance. Therefore, the Administrator, UMTA, should direct the Manager, Region IX, to verify that inadequate grantee performance is corrected, and, if it is not, take appropriate enforcement action to obtain compliance.

    Agency Affected: Department of Transportation: Urban Mass Transportation Administration

    Status: Closed - Not Implemented

    Comments: FTA is expected to complete action in late 1994. Ongoing work is addressing the extent of FTA actions on this recommendation.

    Recommendation: Until grantee certification can be shown to be reliable, UMTA Region IX should reduce its reliance on grantees' promises and increase its verification of actual performance. Therefore, the Administrator, UMTA, should direct the Manager, Region IX, to ensure that close-out reviews are conducted promptly upon completion of a project and that they verify that products were delivered as agreed, funds were used appropriately, and federal requirements were met.

    Agency Affected: Department of Transportation: Urban Mass Transportation Administration

    Status: Closed - Not Implemented

    Comments: FTA is expected to complete action in late 1994. Ongoing work is addressing the extent of FTA actions on this recommendation.

    Recommendation: Until grantee certification can be shown to be reliable, UMTA Region IX should reduce its reliance on grantees' promises and increase its verification of actual performance. Therefore, the Administrator, UMTA, should direct the Manager, Region IX, to use progress and financial reports to identify cost, schedule, and performance problems.

    Agency Affected: Department of Transportation: Urban Mass Transportation Administration

    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 identify cost and performance problems.

    Recommendation: To improve the reliability of grantee certifications and minimize the vulnerability of mass transit grants to waste and mismanagement, the Administrator, UMTA, should direct the Manager, Region IX, to ensure that all grantees have management control systems that adequately account for and protect federal mass transit investments. To achieve this, UMTA could verify the adequacy of grantees' systems. However, if UMTA determines that resource limitations would preclude the timely discharge of this function, it could request independent verification by state audit entities or require grantees to provide verification of their systems by independent public accounting firms to be eligible for UMTA grants.

    Agency Affected: Department of Transportation: Urban Mass Transportation Administration

    Status: Closed - Not Implemented

    Comments: FTA was expected to complete action in late 1994. Ongoing work was addressing the extent of FTA actions on this recommendation.

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