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Highlights

Pursuant to a congressional request, GAO reviewed the Federal Highway Administration's (FHwA) Disadvantaged Business Enterprise (DBE) Program, focusing on the: (1) nature and extent of program fraud and abuse; (2) results of FHwA investigations of DBE fraud and abuse cases; and (3) approaches FHwA and states used to minimize fraud and abuse.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Transportation 1. The Secretary of Transportation should direct the Administrator, FHwA, to expand its information system to annually obtain and compile pertinent summary information on the results of key program activities. The data could include the results of all investigations, certification and reassessment actions, and FHwA and states' monitoring reviews.
Closed - Not Implemented
FHwA disagrees with this recommendation. FHwA believes that this expanded system would place a tremendous administrative burden (cost and personnel resources) on FHwA and the states. Jointly with the Inspector General, GAO reported its finding as an internal control weakness to the FHwA Administrator.
Department of Transportation 2. The Secretary of Transportation should direct the Administrator, FHwA, to assist New York's Department of Transportation (DOT) in the development of a plan for annually reassessing the eligibility of certified businesses. Until the state agency can reduce the large number of certified businesses due reassessments and begin adhering to the required annual cycle, FHwA should require that the state give reassessment priority to examining the eligibility of businesses at the time they are actually awarded contracts.
Closed - Implemented
FHwA helped New York DOT develop a more effective recertification program.

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