Changes in DOT's Grants to Public Transportation Projects in Nonurbanized Areas Would Be Beneficial

CED-82-24: Published: May 28, 1982. Publicly Released: Jun 2, 1982.

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Oliver W. Krueger
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In response to a congressional request, GAO reviewed the Department of Transportation's Formula Grant Program for Areas Other Than Urbanized Areas, referred to as the section 18 program. Specifically, GAO was asked to obtain information on: (1) how the program is working; (2) program requirements for labor protection, elderly and handicapped accessibility, and service to the general public; and (3) rural transportation coordination.

GAO found that: (1) the practice of funding operating costs and project administrative costs at the maximum allowable levels provides the opportunity for program funds to be substituted for funds previously provided by other sources; and (2) the opportunity for substitution could be eliminated by limiting section 18 funding to the increase in a transportation system's operating loss from what it was in its last year of operation before section 18 funding. However, it is uncertain whether funding from other sources could be maintained at previous levels in the face of recent and proposed funding cutbacks in the other Federal programs involving funds to rural transportation systems. The section 18 legislation does not prohibit the Federal Highway Administration (FHWA) from classifying certain noncapital costs as project administrative costs and funding them at a higher level than is allowed for the same type of costs under a similar program. FHWA guidance is not specific about what specialized transportation systems can do about serving the general public to qualify for section 18 funding. In the absence of more specific guidance, States are establishing differing requirements. Because of the numerous errors in the program expense categories, FHWA does not know how much of the program funds are being obligated nationwide for capital, administrative, and operating costs. Also, because the data it does collect are limited, monitoring and assessing program accomplishments is impeded. As a result, FHWA cannot accurately inform Congress about the program.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: FHWA believes that it has complied with the congressional intent for the program by providing a high degree of discretion to the States to tailor the program to meet their special needs.

    Recommendation: The Secretary of Transportation should direct the Administrator of FHWA to provide formal guidance on the public service requirement. Such guidance should clearly identify the full range of actions that specialized providers could take and that FHWA will accept as satisfying the public service requirement.

    Agency Affected: Department of Transportation

  2. Status: Closed - Not Implemented

    Comments: FHWA disagreed with the need to collect more project information on a continuing basis because it would be inconsistent with the congressional intention to reduce red tape. It stated that the errors in the section 18 information were the result of miscoding by field office staff; the field offices were instructed to correct these minor errors.

    Recommendation: The Secretary of Transportation should direct the Administrator of FHWA to identify the elements of information that are critical for program management and evaluation and to ensure that such data are collected. Also, to the extent possible, FHWA should correct the existing inaccuracies in the database and ensure that future data are accurately reported.

    Agency Affected: Department of Transportation


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