Mass Transit: Significant Federal Investment Is Not Adequately Protected

GAO discussed the Urban Mass Transportation Administration's (UMTA): (1) oversight of its grant programs; and (2) proposals to increase funding flexibility between mass transit and highways and to reduce the federal share for transit assistance. GAO noted that: (1) UMTA funds were vulnerable to fraud, waste, and mismanagement, since grantees lacked adequate financial and other management systems to ensure that funds were spent appropriately; (2) UMTA did not effectively use such monitoring tools as triennial reviews to oversee grantees' activities; (3) UMTA relied primarily on grantees' certifications of compliance with federal procurement and other requirements to ensure the proper spending of funds; (4) the implementation of a multimodal strategy to address surface transportation infrastructure needs and congestion problems would be ideal, but was not practical due to the Department of Transportation's practice of preparing separate budget and needs studies for mass transit and highways; (5) the UMTA proposal to eliminate operating assistance for some grantees failed to fully consider the financial burden placed on transit authorities to comply with recent environmental and disabled persons legislation; and (6) increased state and local financial interests could encourage transit authorities to build cost-beneficial projects, seek cost-effective alternatives, and minimize waste and misuse of federal funds.