Mass Transit Grants:

If Properly Implemented, FTA Initiatives Should Improve Oversight

RCED-93-8: Published: Nov 19, 1992. Publicly Released: Nov 19, 1992.

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John H. Anderson, Jr
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Pursuant to a congressional request, GAO reviewed the Federal Transit Administration's (FTA) grant program, focusing on: (1) the effect of FTA oversight weaknesses; (2) FTA and legislative initiatives designed to correct oversight problems; and (3) the mix of FTA regional office and headquarters staff and FTA use of contractors to conduct oversight activities.

GAO found that: (1) FTA failed to give high priority to grant oversight and relied on grantees' assurances for proper federal funds management; (2) FTA oversight inadequacies included noncompliance with federal reporting requirements, improper expenditures of grant funds, and grantee financial, technical, procurement, inventory, and management control deficiencies; (3) FTA failed to properly use management oversight tools including triennial reviews, single audits, quarterly progress and financial reports, procurement system reviews, third-party contracting activities, site visits, quarterly project review meetings, and contractor oversight; (4) FTA failed to withhold or suspend funds to compel grantees to comply with requirements and take corrective actions; (5) FTA initiatives and legislative requirements should strengthen grant management and oversight and help reduce grant fraud, waste, abuse, and mismanagement; (6) continued inconsistent, unfocused, and disproportionate staffing oversight problems jeopardized the implementation of new oversight strategies; and (7) FTA spent less than $17 million for contractor oversight responsibilities and failed to provide contractors with oversight guidelines.

Recommendation 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 action, GAO has removed FTA's high risk designation.

    Recommendation: To enhance the effectiveness of FTA oversight activities, FTA should implement prior GAO recommendations. In addition, the Administrator, FTA, should: (1) implement procedures to ensure that FTA contractors have adequate guidance for performing oversight tasks; and (2) develop consistent standards for staffing triennial reviews and other monitoring tasks to ensure that the new oversight strategy is implemented as FTA headquarters envisions.

    Agency Affected: Department of Transportation: Federal Transit Administration


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