DOT Discretionary Grants:
Problems with Hurricane Sandy Transit Grant Selection Process Highlight the Need for Additional Accountability
GAO-17-20: Published: Dec 14, 2016. Publicly Released: Jan 13, 2017.
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What GAO Found
The Federal Transit Administration (FTA) evaluated and selected Hurricane Sandy transit resilience projects for award based on a multi-step process, but did not take sufficient steps to ensure the process was consistent or appropriately documented. First, four technical review teams with expertise in infrastructure projects, program management, and hazard mitigation evaluated and rated projects. FTA's program office then conducted a quality assurance review before forwarding the results to FTA and Department of Transportation (DOT) leadership for review and final selection decisions. However, the technical review teams were inconsistent in how they assigned cost-effectiveness ratings, and it is unclear the extent to which the teams screened projects for fulfillment of minimum program requirements, such as whether the project would be built to the appropriate flood standards. Additionally, since DOT lacks clear department-wide requirements for what should be documented when evaluating discretionary grant awards, FTA did not document key decisions including how it addressed high-level concerns, such as potential implementation challenges, raised by reviewers regarding 26 of the 40 funded projects. Without such documentation, FTA cannot definitively demonstrate the basis for many of its project selections—totaling $3.6 billion—and is vulnerable to questions about the integrity of the selection process.
FTA established the grant program's policy priorities in the notice of funding availability (NOFA), but funded projects that may not address the priorities and that may no longer be needed if other resilience projects in the region are implemented. For example, one policy priority concerned project types that would be outside the scope of the program. However, while reviewers questioned whether two rail bridge replacement projects were outside the program's scope, FTA awarded these projects $607 million. Program officials told GAO that the policy priorities were to help advise applicants on the project types FTA was seeking and that FTA did not consider them when evaluating or selecting projects for award. While the NOFA did not present the policy priorities as evaluation criteria, it also did not present them as advice and contained specific and clear language, for example, about project types outside the scope of the program. As a result, FTA may have discouraged applicants from submitting projects that may have been funded, and FTA cannot be certain that the selected projects will address its priorities. Another policy priority was that projects should promote a regional approach to resilience. To address this priority, FTA collected information from the U.S. Department of Housing and Urban Development and applicants on potential connectivity or coordination needed between submitted projects and other resilience efforts in the same area. However, FTA did not consider this information in the evaluation and selection process and funded projects that may have benefits that are duplicative of other resilience efforts in the region. Given that FTA has not yet fully obligated funding for most of these projects, determining the extent to which FTA's projects provide duplicative benefits could help ensure that the projects supported by FTA are effectively coordinated with other efforts and help identify cases where FTA-supported projects may need to be revised or may no longer be needed.
Why GAO Did This Study
In October 2012, Hurricane Sandy hit the Mid-Atlantic coast causing severe damage to transit systems in the New York City region. In response, the Disaster Relief Appropriations Act of 2013 provided approximately $10.9 billion for FTA's response, recovery, and resilience efforts. In December 2013, FTA announced discretionary grants to be awarded on a competitive basis for projects to increase the resilience of transit systems to withstand future disasters in the Sandy-affected areas. In November 2014, FTA announced 40 projects selected to receive about $3.6 billion.
GAO was asked to review FTA's discretionary transit resilience grants. This report examines FTA's process for evaluating and selecting projects and the extent to which the selected projects reflect the grant program's policy priorities. GAO reviewed program documents and guidance; analyzed project proposals; and interviewed FTA officials.
What GAO Recommends
GAO recommends that DOT issue a directive for discretionary grant programs that includes requirements to, among other things, document key decisions and align the grant programs' policy priorities with the evaluation process. GAO also recommends that DOT examine FTA-funded transit resilience projects for potential duplication with other efforts and determine if realigning or rescinding those funds is appropriate. DOT concurred with the recommendations but disagreed with aspects of GAO's findings. GAO continues to believe its findings are valid, as discussed in the report.
For more information, contact Mark Goldstein at (202) 512-2834 or email@example.com.
Recommendations for Executive Action
Comments: DOT concurred with this recommendation and, in March 2019, issued a memo directing secretarial offices and operating administrations involved in awarding discretionary grants to implement our recommendations and to include them in their policies and procedures. In June 2019, we reported that, due to a number of issues, it is unclear how this action will address our recommendation. For example, we found that the memo was essentially limited to a repetition of our recommendation and that DOT did not take steps to ensure that the various affected offices consistently interpret and implement the recommendation. DOT officials told us they wanted to provide the affected offices flexibility to implement the recommendation, but that the Department would assess the need for additional guidance based on revisions to its Financial Assistance Guidance Manual. DOT completed these revisions effective January 2020, and all affected offices are expected to complete developing their policies and procedures by May 2020. We will continue to monitor the Department's actions and assess the extent to which they address our recommendation.
Recommendation: Given DOT's new discretionary grant programs and similar challenges we have found with previous DOT programs, the Secretary of Transportation should issue a directive that governs department-wide and modal administration discretionary grant programs. Such a directive should include requirements to: (1) develop a plan for evaluating project proposals in advance of issuing a notice of funding availability that defines the stages of the process, including how the process will be overseen to ensure a consistent review of applications; (2) document key decisions, including the reason for any rating changes and the officials responsible for those changes, and how high-level concerns raised during the process were addressed; and (3) align stated program purpose and policy priorities with the evaluation and selection process.
Agency Affected: Department of Transportation
Status: Closed - Implemented
Comments: The Disaster Relief Appropriations Act (DRAA) of 2013 provided approximately $10.9 billion for the Federal Transit Administration's (FTA) response, recovery, and resilience efforts in response to damage caused by Hurricane Sandy. In December 2013, FTA announced discretionary grants to be awarded on a competitive basis with DRAA funds for projects to increase the resilience of transit systems to withstand future disasters in the Sandy-affected areas. In November 2014, FTA announced 40 projects selected to receive about $3.6 billion. In 2016, GAO reported that FTA established the grant program's policy priorities in the notice of funding availability, but funded projects that may not address the priorities and that may no longer be needed if other resilience projects in the region are implemented. One policy priority was that projects should promote a regional approach to resilience. To address this priority, FTA collected information from the U.S. Department of Housing and Urban Development (HUD) and applicants on potential connectivity or coordination needed between submitted projects and other resilience efforts in the same area. However, FTA did not consider this information in the evaluation and selection process and funded projects that may have benefits that are duplicative of other resilience efforts in the region. Given that most of FTA's discretionary transit resilience grants were still in development and had not yet fully obligated funds, GAO found that FTA could evaluate the $3.6 billion in DRAA investments it had made toward resilience-including reviewing the information it collected from HUD, applicants, and reviewers-to determine the extent to which FTA-supported projects provide benefits that were duplicative of other regional resilience efforts. Therefore, GAO recommended that FTA examine the projects it funded under the discretionary transit resilience grant program for potential duplication with other resilience efforts and determine whether it is appropriate to realign or request a rescission of funds for any of the FTA-supported projects funds authorized under the DRAA. In 2018, GAO confirmed that FTA had taken sufficient actions to determine if its projects offered benefits duplicative of non-FTA resilience projects in the areas affected by Hurricane Sandy. FTA provided GAO with a report describing its analysis of FTA and non-FTA projects in the areas affected by Hurricane Sandy. As part of this analysis, FTA identified FTA- and non-FTA-supported projects in the areas affected by Hurricane Sandy; considered each project's location, scope, benefits, funding status, and implementation probability; and coordinated with relevant federal officials to identify potential intersections between FTA and non-FTA funded resilience efforts. FTA found no cases where the benefits of non-FTA funded resilience projects were duplicative of FTA discretionary transit resilience projects. As a result, FTA has demonstrated that it examined the projects supported by the agency and coordinated with other efforts, thus minimizing duplication with other resilience projects in the same area.
Recommendation: To better address FTA's stated policy priority of regional resilience and to minimize fragmentation of federal efforts, the Secretary of Transportation should direct the FTA Administrator to (a) examine the projects FTA funded under the Disaster Relief Appropriations Act of 2013 (DRAA) discretionary transit resilience grant program for potential duplication with other resilience efforts and (b) determine whether it is appropriate to realign funds for FTA-supported projects for other purposes authorized under the DRAA, or request a rescission of funds for any of the FTA-supported projects.
Agency Affected: Department of Transportation