Mass Transit Grants

Noncompliance and Misspent Funds by Two Grantees in UMTA's New York Region Gao ID: RCED-92-38 January 23, 1992

The Urban Mass Transportation Administration's (UMTA) grants management oversight is among the 16 federal areas identified by GAO as being at high-risk for waste, fraud, abuse, and mismanagement. This report examines compliance with federal requirements by grant recipients in UMTA's Region II, headquartered in New York City, and the effectiveness of UMTA's oversight of Region II grantees. In reviewing two of the region's main grant recipients--the Long Island Railroad and the New York City Transit Authority--GAO found that Region II oversight failed to detect and correct problems highlighted by the Office of the Inspector General, the New York State comptroller's office, and others. Region II did not aggressively enforce UMTA regulations or force grantees to take corrective actions. As a result, the two grant recipients remained out of compliance, and longstanding deficiencies went uncorrected. In addition, federal funds are at risk of further mismanagement because the region has not complied with UMTA's administrative requirements to review grantee overhead costs, close out inactive grants, and deobligate unused funds. Until the region undertakes more assertive oversight, funds will continue to be misspent, and the region will continue to send a message to grantees that federal requirements are unimportant.

GAO found that: (1) UMTA gives grantees responsibility for appropriately using federal mass transit funds; (2) two Region II grantees reviewed did not have adequate systems to ensure compliance with federal requirements, and, because of limited UMTA oversight, the region did not effectively detect and correct grantee deficiencies; (3) the Department of Transportation's Office of Inspector General (OIG) identified more than $90 million in wasted, misused, or mismanaged funds since October 1987; (4) Region II was slow to detect and correct serious and long-standing procurement and quality assurance deficiencies in a major grantee construction project; (5) Region II did not comply with UMTA administrative requirements for closing out grants and reviewing overhead costs; and (6) Region II did not routinely receive copies of state and local audit reports regarding grantees or use the findings to enhance regional oversight or identify grantee management deficiencies or misspent funds.


Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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