Federal Management:

Challenges Facing the Department of Transportation

T-RCED/AIMD-99-94: Published: Feb 25, 1999. Publicly Released: Feb 25, 1999.

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John H. Anderson, Jr
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Pursuant to a congressional request, GAO discussed the critical management challenges facing the Department of Transportation (DOT), focusing on DOT's ability to: (1) achieve its goals of ensuring safe and efficient movement of people and goods; and (2) make cost-effective investments in the nation's transportation infrastructure.

GAO noted that: (1) the Federal Aviation Administration (FAA) faces considerable challenges in managing its multibillion-dollar air traffic control modernization program, making its computer systems ready for the year 2000, and addressing shortcomings in its safety and security programs; (2) additional challenges include funding uncertainties facing FAA and the nation's airports and the lack of airline competition in some communities; (3) while DOT has started to address some of these issues, more needs to be done; (4) for example, FAA has initiated activities to address many of GAO's concerns about its air traffic control modernization program but none are completed; (5) moreover, because of its size, complexity, cost, and past problems, since 1995, GAO has designated the air traffic control modernization program as a high-risk information technology initiative; (6) DOT and Congress face challenges in continuing to improve the oversight of highway and transit projects and in determining the future of passenger rail; (7) large-dollar highway and transit projects have experienced cost increases and delays and have had difficulties acquiring needed financing; (8) while some improvements can be made by DOT's agencies, others may require congressional action; (9) other improvements--such as addressing Amtrak's tenuous financial condition and changing the federal oversight role for large-dollar highway projects--will require congressional action; (10) the Coast Guard had not thoroughly addressed planning issues for its 20-year, $9.8 billion project to replace or modernize many of its deepwater ships and aircraft; (11) GAO found that the Cost Guard had not adequately addressed this project's justification and affordability, and GAO recommended that DOT and the Coast Guard take several steps to improve their planning process; (12) the Coast Guard has begun implementing GAO's recommendations, but it has not resolved issues concerning the projects affordability; (13) over the years, DOT's Inspector General has been unable to express an audit opinion on the reliability of the financial statements of the Department and some of its agencies; (14) DOT faces considerable challenges in achieving an unqualified audit opinion on its fiscal year 1999 financial statements due to the numerous problems that need to be addressed, and the serious financial management weaknesses at FAA have contributed to these problems; and (15) consequently, this year GAO designated financial management at FAA as a high-risk area.