Transportation Programs
Opportunities for Oversight and Improved Use of Taxpayer Funds Gao ID: GAO-03-1040T July 22, 2003It is important to ensure that longterm spending on transportation programs meets the goals of increasing mobility and improving transportation safety. In this testimony, GAO discusses what recently completed work on four transportation programs suggests about challenges and strategies for improving the oversight and use of taxpayer funds. These four programs are (1) the federal-aid highway program, administered by the Federal Highway Administration (FHWA); (2) highway safety programs, administered by the National Highway Traffic Safety Administration (NHTSA); (3) the New Starts program, administered by the Federal Transit Administration (FTA); and (4) the Essential Air Service (EAS) program, administered out of the Office of the Secretary of Transportation. Differences in the structure of these programs have contributed to the challenges they illustrate. The federal-aid highway program uses formulas to apportion funds to the states, the highway safety programs use formulas and grants, the New Starts program uses competitive grants, and the EAS program provides subsidies. For each program, GAO describes in general how the program illustrates a particular challenge in managing or overseeing long-term spending and in particular what challenges and strategies for addressing the challenges GAO and others have identified.
The federal-aid highway program illustrates the challenge of ensuring that federal funds (nearly $30 billion annually) are spent efficiently when projects are managed by the states. GAO has raised concerns about cost growth on and FHWA's oversight of major highway and bridge projects. Recent proposals to strengthen FHWA's oversight are responsive to issues and options GAO has raised. Options identified in previous GAO work provide the Congress with opportunities to build on recent proposals by, among other things, clarifying uncertainties about FHWA's role and authority. NHTSA's highway safety programs illustrate the challenge of evaluating how well federally funded state programs are meeting their goals. Over 5 years, the Congress provided about $2 billion to the states for programs to reduce traffic fatalities, which numbered over 42,000 in 2002. GAO found that NHTSA was making limited use of oversight tools that could help states better implement their programs and recommended strategies for improving the tools' use that NHTSA has begun to implement. The administration recently proposed performance-based grants in this area. FTA's New Starts program illustrates the challenge of developing effective processes for evaluating grant proposals. Under the New Starts program, which provided about $10 billion in mass transit funding in the past 6 years, local transit agencies compete for project funds through grant proposals. FTA has developed a systematic process for evaluating these proposals. GAO believes that FTA has made substantial progress by implementing this process, but our work has raised some concerns, including the extent to which the process is able to adequately prioritize the projects. The Essential Air Service (EAS) program illustrates the challenge of considering modifications to statutorily defined programs in response to changing conditions. Under the EAS program, many small communities are guaranteed to continue receiving air service through subsidies to carriers. However, the program has faced increasing costs and decreasing average passenger levels. The Congress, the administration, and GAO have all proposed strategies to improve the program's efficiency by better targeting available resources and offering alternatives for sustainable services.
GAO-03-1040T, Transportation Programs: Opportunities for Oversight and Improved Use of Taxpayer Funds
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Testimony:
Before the Committee on Transportation and Infrastructure, House of
Representatives:
United States General Accounting Office:
GAO:
For Release on Delivery Expected at 11:00 a.m. EDT:
Tuesday July 22, 2003:
Transportation Programs:
Opportunities for Oversight and Improved Use of Taxpayer Funds:
Statement of JayEtta Z. Hecker, Director Physical Infrastructure
Issues:
GAO-03-1040T:
GAO Highlights:
Highlights of GAO-03-1040T, a testimony before the Committee on
Transportation and Infrastructure, House of Representatives
Why GAO Did This Study:
It is important to ensure that long-term spending on transportation
programs meets the goals of increasing mobility and improving
transportation safety. In this testimony, GAO discusses what recently
completed work on four transportation programs suggests about
challenges and strategies for improving the oversight and use of
taxpayer funds. These four programs are (1) the federal-aid highway
program, administered by the Federal Highway Administration (FHWA);
(2) highway safety programs, administered by the National Highway
Traffic Safety Administration (NHTSA); (3) the New Starts program,
administered by the Federal Transit Administration (FTA); and (4) the
Essential Air Service (EAS) program, administered out of the Office of
the Secretary of Transportation.
Differences in the structure of these programs have contributed to the
challenges they illustrate. The federal-aid highway program uses
formulas to apportion funds to the states, the highway safety programs
use formulas and grants, the New Starts program uses competitive
grants, and the EAS program provides subsidies. For each program, GAO
describes in general how the program illustrates a particular
challenge in managing or overseeing long-term spending and in
particular what challenges and strategies for addressing the
challenges GAO and others have identified.
What GAO Found:
The federal-aid highway program illustrates the challenge of ensuring
that federal funds (nearly $30 billion annually) are spent efficiently
when projects are managed by the states. GAO has raised concerns about
cost growth on and FHWA‘s oversight of major highway and bridge
projects. Recent proposals to strengthen FHWA‘s oversight are
responsive to issues and options GAO has raised. Options identified in
previous GAO work provide the Congress with opportunities to build on
recent proposals by, among other things, clarifying uncertainties
about FHWA‘s role and authority.
NHTSA‘s highway safety programs illustrate the challenge of evaluating
how well federally funded state programs are meeting their goals. Over
5 years, the Congress provided about $2 billion to the states for
programs to reduce traffic fatalities, which numbered over 42,000 in
2002. GAO found that NHTSA was making limited use of oversight tools
that could help states better implement their programs and recommended
strategies for improving the tools‘ use that NHTSA has begun to
implement. The administration recently proposed performance-based
grants in this area.
FTA‘s New Starts program illustrates the challenge of developing
effective processes for evaluating grant proposals. Under the New
Starts program, which provided about $10 billion in mass transit
funding in the past 6 years, local transit agencies compete for
project funds through grant proposals. FTA has developed a systematic
process for evaluating these proposals. GAO believes that FTA has made
substantial progress by implementing this process, but our work has
raised some concerns, including the extent to which the process is
able to adequately prioritize the projects.
The Essential Air Service (EAS) program illustrates the challenge of
considering modifications to statutorily defined programs in response
to changing conditions. Under the EAS program, many small communities
are guaranteed to continue receiving air service through subsidies to
carriers. However, the program has faced increasing costs and
decreasing average passenger levels. The Congress, the administration,
and GAO have all proposed strategies to improve the program‘s
efficiency by better targeting available resources and offering
alternatives for sustainable services.
www.gao.gov/cgi-bin/getrpt?GAO-03-1040T.
To view the full product, including the scope and methodology, click
on the link above. For more information, contact JayEtta Hecker at
(202) 512-2834 or heckerj@gao.gov.
[End of service]
Mr. Chairman and Members of the Committee:
It is an honor to be here today to participate in your hearing on
strategies to reduce or prevent waste, fraud, and abuse in
transportation programs. As requested, I will be discussing what our
recently completed work on four transportation programs suggests about
challenges and strategies for improving the oversight and use of
taxpayer funds to ensure that long-term spending on transportation
programs meets the goals of increasing mobility and improving
transportation safety.
As you know, many transportation programs rely on dedicated long-term
funding to achieve specified program objectives. Such funding, which
generally comes from a trust fund financed by user fees, is designed to
match the long life, ongoing maintenance needs, and replacement and
rehabilitation expenditures of large transportation projects. However,
long-term funding creates certain challenges related to the effective
oversight and management of the programs, particularly because in some
cases, funds flow automatically to states, which use the funds to
implement their own projects. Without effective oversight, investments
of scarce federal funds in these transportation programs may not
achieve maximum mobility and safety benefits.
Transportation legislation has sought to balance the federal interest
in effective management and oversight with state and local interest in
flexibility to tailor decisions to local priorities. Transportation
legislation has also sought to promote multimodal systemwide decision-
making while continuing distinct modal trust funds. Recently, the
Comptroller General testified before the House Budget Committee on
opportunities for improving the oversight and use of taxpayer funds for
such spending programs.[Footnote 1] He described three tiers of review,
one of which--improving economy, efficiency, and effectiveness in
mandated federal spending programs--is especially pertinent to the
programs we will be discussing.[Footnote 2]
As agreed with your office, my remarks today will focus on four federal
transportation programs: (1) the federal-aid highway program, (2)
highway safety programs, (3) the New Starts transit program, and (4)
the Essential Air Service program. The size and structure of these
programs vary considerably. For each program, I will discuss in general
how the program illustrates a particular challenge in managing or
overseeing long-term spending programs and in particular what
challenges and strategies for addressing these challenges we and others
have found in evaluating these programs.
Before I discuss each individual program, I'd like to point out how
structural differences in these programs have contributed to different
oversight challenges for each. For example, the federal-aid highway
program uses formulas to apportion federal funds to the states in
several distinct categories for the purpose of constructing and
improving highway facilities. Ensuring efficient expenditures of
federal funds for what can be large, long-term construction projects is
an important challenge that has grown as the Federal Highway
Administration (FHWA) has increasingly devolved its oversight
responsibilities to the states in recent years. The highway safety
programs, administered by the National Highway Traffic Safety
Administration (NHTSA), also use formulas and other criteria to
apportion funds for state programs designed primarily to improve safety
through changes in drivers' behavior. Determining the effectiveness of
the states' efforts is a key challenge for these programs, together
with assessing the efficiency of their expenditures. In contrast, the
New Starts transit program relies on financial and project
justification criteria to evaluate and select grant proposals for
transit projects through a competition for federal funds administered
by the Federal Transit Administration (FTA).[Footnote 3] While
oversight of funded projects is important for this program, a key
challenge that our work has addressed is how grant proposals should be
evaluated to identify the best projects for funding. Finally, the
Essential Air Service (EAS) program is statutorily based in the Airline
Deregulation Act of 1978. Administered out of the Office of the
Secretary of Transportation, it subsidizes air carriers' operations to
guarantee that certain isolated small communities served by air
carriers before deregulation continue to receive some scheduled air
service. As the aviation industry has changed over the years, questions
have arisen about the program's sustainability and efficiency.
My statement is based on a body of GAO reviews of these and other
transportation programs, many completed at the request of your
Committee or legislatively mandated. A complete list of related reports
appears in appendix I.
In summary:
* The federal-aid highway program illustrates the challenge of ensuring
that federal funds are spent efficiently through formula-based programs
that finance projects that are then largely managed and overseen by the
states. The program makes nearly $30 billion available to the states
for their transportation programs annually, including funding for major
highway and bridge projects. Over the years, we have documented cost
growth and management deficiencies on these major highway and bridge
projects, as have the Department of Transportation's Inspector General
and state audit and evaluation agencies. Additionally, in 1997, we
found that FHWA had done little to ensure that containing costs was an
integral part of states' project management--in part because FHWA did
not believe that encouraging or requiring practices to control costs
and better manage projects was part of its oversight mandate. Since
then, FHWA has developed strategies to strengthen its oversight,
including requirements for annual finance plans and greater use of
risk-based factors to focus its oversight efforts. The administration's
reauthorization proposal also includes strategies for strengthening
FHWA's oversight, and we believe these are positive steps that are
responsive to many of the issues we've raised in the past. Should the
Congress determine that enhancing federal oversight of major highway
and bridge projects is needed and appropriate, in previous work we have
identified options that provide the Congress opportunities to build on
the administration's proposal during the reauthorization process by,
among other things, clarifying uncertainties about FHWA's role and
authority.
* The highway safety programs administered by NHTSA illustrate the
challenge of evaluating how well federally funded and assisted state
programs are meeting their goals, as well as how efficiently the
federal funds are being spent. During fiscal years 1998 through 2002,
the Congress provided about $2 billion to the states for programs
designed to reduce the number of traffic fatalities, which totaled over
42,000 in 2002. NHTSA has tools for overseeing these programs,
including improvement plans to help states meet their safety goals and
management reviews to assess the programs' performance and use of
federal funds. However, evaluating how well the state programs are
meeting their highway safety goals is difficult because NHTSA's
guidance does not establish a consistent means of measuring progress.
Moreover, NHTSA's regional offices have made limited and inconsistent
use of improvement plans and management reviews, in part because
NHTSA's guidance does not specify criteria for conducting them. When
NHTSA's regional offices have conducted management reviews of the state
programs, they have sometimes found inefficient spending and weak
controls over federal funds. In April 2003, we recommended strategies
for improving NHTSA's use of these tools, including developing better
guidance on when they should be used. NHTSA has begun to implement
these recommendations. The administration's recent proposal to
reauthorize the Transportation Equity Act for the 21st Century (TEA-21)
calls for changes in the program that would provide even further
flexibility to states in using these funds. It would also create grant
programs based on state performance in two areas--reductions in
fatalities and safety belt laws and usage.
* FTA's New Starts transit program illustrates two management oversight
challenges: the challenge of developing effective federal processes for
evaluating grant proposals as well as the already described challenge
of overseeing projects' implementation. Under the New Starts program,
which provided about $10 billion in mass transit funding for fiscal
years 1998-2003 and was authorized by TEA-21, local transit agencies
apply and compete for project funds on the basis of specific financial
and project justification criteria. FTA reviews the grant applications
and then notifies the Congress that it intends to commit New Starts
funding to certain projects through full funding grant agreements.
[Footnote 4] Because many transit projects compete for New Starts
funding, and FTA awards relatively few full funding grant agreements
each year, it is crucial that the most promising projects are selected.
FTA is also responsible for overseeing funded projects. FTA has
implemented strategies to address the twin challenges of evaluating
projects and overseeing their implementation. First, it developed a
systematic process for evaluating potential New Starts projects
competing for federal funding that provides a framework for evaluating
and selecting projects. We believe that FTA has made substantial
progress by implementing this process, but our work in recent years has
raised some concerns, including the extent to which the process is able
to adequately prioritize the projects. Second, FTA has improved the
quality of its transit grants management oversight program by upgrading
its guidance and training of staff and grantees and by strengthening
oversight procedures. However, oversight remains an area of concern, as
major transit projects continue to experience cost, schedule, and
performance problems. The administration's fiscal year 2004 budget
proposal contains several initiatives that have both advantages and
disadvantages, with implications for the cost-effectiveness and
performance of proposed projects.
* The Essential Air Service (EAS) program illustrates the challenge of
considering modifications to statutorily defined programs in response
to changing conditions. Under the EAS program, small communities that
received scheduled commercial air service prior to the deregulation of
the airline industry in 1978 and that meet certain additional criteria
are guaranteed to continue receiving air service. Although the program
was originally intended to end in 1988, the Congress later permanently
authorized it. As the airline industry has evolved over the past 25
years, however, the EAS program has faced increasing challenges to
remain viable. Costs have tripled since 1995 because carriers' costs
have increased and revenues have declined as passenger ridership has
fallen; passengers often prefer to drive to other larger airports
nearby for better air service. In addition, the number of communities
eligible for EAS subsidies has increased and may continue to grow in
the near term. Within the past year, the Congress, the administration,
and we have all proposed various strategies to improve the EAS
program's overall efficiency and effectiveness by better targeting
available resources and offering alternatives for sustainable services,
such as allowing communities to spend subsidy funds on individually-
tailored transportation options that better meet their needs.
Options Exist to Address the Federal-Aid Highway Program's Oversight
Challenges:
The federal-aid highway program provides nearly $30 billion annually to
the states, most of which are formula grant funds that FHWA distributes
through annual apportionments according to statutory formulas; once
apportioned, these funds are generally available to each state for
eligible projects.[Footnote 5] The responsibility for choosing which
projects to fund generally rests with state departments of
transportation and local planning organizations. The states have
considerable discretion in selecting specific highway projects and in
determining how to allocate available federal funds among the various
projects they have selected. For example, section 145 of title 23 of
the United States Code describes the federal-aid highway program as a
federally assisted state program and provides that the authorization of
the appropriation of federal funds or their availability for
expenditure, "shall in no way infringe on the sovereign rights of the
States to determine which projects shall be federally financed.":
A major highway or bridge construction or repair project usually has
four stages: (1) planning, (2) environmental review, (3) design and
property acquisition, and (4) construction. While FHWA approves state
transportation plans, environmental impact assessments, and the
acquisition of property for highway projects, its role in approving the
design and construction of projects varies.[Footnote 6] The state's
activities and FHWA's corresponding approval actions are shown in
figure 1.
Figure 1: Figure 1: State and FHWA Actions on Highway Projects:
[See PDF for image]
[End of figure]
Challenges:
Given the size and significance of the federal-aid highway program's
funding and projects, a key challenge for this program is overseeing
states' expenditure of public funds to ensure that state projects are
well managed and successfully financed. Our work--as well as work by
the DOT Inspector General and by state audit and evaluation agencies--
has documented cost growth on numerous major highway and bridge
projects. Let me provide one example. In January 2001, Virginia's Joint
Legislative Audit and Review Commission found that final project costs
on Virginia Department of Transportation projects were well above their
cost estimates and estimated that the state's 6-year, $9 billion
transportation development plan understated the costs of projects by up
to $3.5 billion. The commission attributed these problems to several
factors, including, among other things, not adjusting estimates for
inflation and expanding the scope of projects.
Our work has identified weaknesses in FHWA's oversight of projects,
especially in controlling costs. In 1997, we reported that cost
containment was not an explicit statutory or regulatory goal of FHWA's
oversight.[Footnote 7] While FHWA influenced the cost-effectiveness of
projects when it reviewed and approved plans for their design and
construction, we found it had done little to ensure that cost
containment was an integral part of the states' project management.
According to FHWA officials, controlling costs was not a goal of their
oversight, and FHWA had no mandate in law to encourage or require
practices to contain the costs of major highway projects. More
recently, an FHWA task force concluded that changes in the agency's
oversight role since 1991--when the states assumed greater
responsibility for overseeing federal-aid projects--had resulted in
conflicting interpretations of the agency's role in overseeing
projects, and that some of the field offices were taking a "hands off"
approach to certain projects. In June 2001, FHWA issued a policy
memorandum, in part to clarify that FHWA is ultimately accountable for
all projects financed with federal funds. As recently as last month, a
memorandum posted on FHWA's Web site discussed the laws establishing
FHWA and the federal-aid highway program, along with congressional and
public expectations that FHWA "ensure the validity of project cost
estimates and schedules." The memorandum concluded, "These expectations
may not be in full agreement with the role that has been established by
these laws.":
In addition, we have found that FHWA's oversight process has not
promoted reliable cost estimates. While there are many reasons for cost
increases, we have found, on projects we have reviewed, that initial
cost estimates were not reliable predictors of the total costs and
financing needs of projects. Rather, these estimates were generally
developed for the environmental review--whose purpose is to compare
project alternatives, not to develop reliable cost estimates. In
addition, FHWA had no standard requirements for preparing cost
estimates, and each state used its own methods and included different
types of costs in its estimates. We have also found that costs exceeded
initial estimates on projects we have reviewed because (1) initial
estimates were modified to reflect more detailed plans and
specifications as projects were designed and (2) the projects' costs
were affected by, among other things, inflation and changes in scope to
accommodate economic development over time. We also found that highway
projects take a long time to complete, and that the amount of time
spent on them is of concern to the Congress, the federal government,
and the states. Completing a major, new, federally funded highway
project that has significant environmental impacts typically takes from
9 to 19 years and can entail as many as 200 major steps requiring
actions, approvals, or input from a number of federal, state, and other
stakeholders.[Footnote 8]
Finally, we have noted that in many instances, states construct a major
project as a series of smaller projects, and FHWA approves the
estimated cost of each smaller project when it is ready for
construction, rather than agreeing to the total cost of the major
project at the outset. In some instances, by the time FHWA considers
whether to approve the cost of a major project, a public investment
decision may, in effect, already have been made because substantial
funds have been spent on designing the project and acquiring property,
and many of the increases in the project's estimated costs have already
occurred.
Strategies:
Since 1998, FHWA has taken a number of steps to improve the management
and oversight of major projects in order to better promote cost
containment. For example, FHWA implemented TEA-21's requirement that
states develop an annual finance plan for any highway or bridge project
estimated to cost $1 billion or more and established a major projects
team that currently tracks and reports each month on 15 such projects.
FHWA has also moved to incorporate greater risk-based management into
its oversight in order to identify areas of weakness within state
transportation programs, set priorities for improvement, and work with
the states to meet those priorities.
The administration's May 2001 reauthorization measure contains
additional proposed actions. It would introduce more structured FHWA
oversight requirements, including mandatory annual reviews of state
transportation agencies' financial management and "project delivery"
systems, as well as periodic reviews of states' practices for
estimating costs, awarding contracts, and reducing project costs. To
improve the quality and reliability of cost estimates, it would
introduce minimum federal standards for states to use in estimating
project costs. The measure would also strengthen reporting requirements
and take new actions to reduce fraud.[Footnote 9]
Many elements of the administration's proposal are responsive to
problems and options we have described in past reports and
testimony.[Footnote 10] Should the Congress determine that enhancing
federal oversight of major highway and bridge projects is needed and
appropriate, options we have identified in prior work remain available
to build on the administration's proposal during the reauthorization
process. However, adopting any of these options would require balancing
the states' right to select projects and desire for flexibility and
more autonomy with the federal government's interest in ensuring that
billions of federal dollars are spent efficiently and effectively.
Furthermore, the additional costs of each of these options would need
to be weighed against its potential benefits. Options include the
following:
* Have FHWA develop and maintain a management information system on the
cost performance of selected major highway and bridge projects,
including changes in estimated costs over time and the reasons for such
changes. Such information could help define the scope of the problem
with major projects and provide insights needed to fashion appropriate
solutions.
* Clarify uncertainties concerning FHWA's role and authority. As I
mentioned earlier, the federal-aid highway program is by law a
federally assisted state program, and FHWA continues to question its
authority to encourage or require practices to contain the costs of
major highway and bridge projects. Should uncertainties about FHWA's
role and authority continue, another option would be to resolve the
uncertainties through reauthorization language.
* Have the states track the progress of projects against their initial
baseline cost estimates. The Office of Management and Budget requires
federal agencies, for acquisitions of major capital assets, to prepare
baseline cost and schedule estimates and to track and report the
acquisitions' cost performance. These requirements apply to programs
managed by and acquisitions made by federal agencies, but they do not
apply to the federal-aid highway program, a federally assisted state
program. Expanding the federal government's practice to the federally
assisted highway program could improve the management of major projects
by providing managers with information for identifying and addressing
problems early.
* Establish performance goals and strategies for containing costs as
projects move through their design and construction phases. Such
performance goals could provide financial or other incentives to the
states for meeting agreed-upon goals. Performance provisions such as
these have been established in other federally assisted grant programs
and have also been proposed for use in the federal-aid highway program.
Requiring or encouraging the use of goals and strategies could also
improve accountability and make cost containment an integral part of
how states manage projects over time.
* Consider methods for improving the time it takes to plan and
construct major federal-aid highway projects--a process that we
reported can take up to 19 years to complete. Major stakeholders
suggested several approaches to improving the timeliness of these
projects, including (1) improving project management, (2) delegating
environmental review and permitting authority, and (3) improving agency
staffing and skills. We have recommended that FHWA consider the
benefits of the most promising approaches and act to foster the
adoption of the most cost-effective and feasible approaches.[Footnote
11]
* Reexamine the approval process for major highway and bridge projects.
This option, which would require federal approval of a major project at
the outset, including its cost estimate and finance plan, would be the
most far-reaching and the most difficult option to implement. Potential
models for such a process include the full funding grant agreement used
by FTA for the New Starts program, and, as I testified last year, a DOT
task force's December 2000 recommendation calling for the establishment
of a separate funding category for initial design work and a new
decision point for advancing highway projects.[Footnote 12]
NHTSA Makes Inconsistent and Limited Use of Oversight Tools:
Over the last 25 years, more than 1.2 million people have died as a
result of traffic crashes in the United States--more than 42,000 in
2002. Since 1982, about 40 percent of traffic deaths were from alcohol-
related crashes. In addition, traffic crashes are the leading cause of
death for people aged 4 though 33. As figure 2 shows, the total number
of traffic fatalities has not significantly decreased in recent years.
Figure 2: Figure 2: Total Traffic Fatalities and Fatality Rate, 1975-
2002:
[See PDF for image]
[End of figure]
To improve safety on the nation's highways, NHTSA administers a number
of programs, including the core federally funded highway safety
program, Section 402 State and Community Grants, and several other
highway safety programs that were authorized in 1998 by TEA-21. The
Section 402 program, established in 1966, makes grants available for
each state, based on a population and road mileage formula, to carry
out traffic safety programs designed to influence drivers' behavior,
commonly called behavioral safety programs. The TEA-21 programs include
seven incentive programs, which are designed to reduce traffic deaths
and injuries by promoting seatbelt use and reducing alcohol-impaired
driving, and two transfer programs, which penalize states that have not
complied with federal requirements for enacting repeat-offender and
open container laws to limit alcohol-impaired driving. Under these
transfer programs, noncompliant states are required to shift certain
funds from federal-aid highway programs to projects that concern or
improve highway safety. In addition, subsequent to TEA-21, the Congress
required that, starting later this year, states that do not meet
federal requirements for establishing 0.08 blood alcohol content as the
state level for drunk driving will have a percentage of their federal
aid highway funds withheld. During fiscal years 1998 through 2002, over
$2 billion was provided to the states for highway safety programs.
NHTSA, which oversees the states' highway safety programs, adopted a
performance-based approach to oversight in 1998. Under this approach,
the states and the federal government are to work together to make the
nation's highways safer. Each state sets its own safety performance
goals and develops an annual safety plan that describes projects
designed to achieve the goals. NHTSA's 10 regional offices review the
states' annual plans and provide technical assistance, advice, and
comments.[Footnote 13] NHTSA has two tools available to strengthen its
monitoring and oversight of the state programs--improvement plans that
states not making progress towards their highway safety goals are to
develop, which identify programs and activities that a state and NHTSA
regional office will undertake to help the state meet its goals; and
management reviews, which generally involve sending a team to a state
to review its highway safety operations, examine its projects, and
determine that it is using funds in accordance with requirements.
Challenges:
Among the key challenges in this area are (1) evaluating how well the
federally funded state highway safety programs are meeting their goals
and (2) determining how well the states are spending and controlling
their federal highway safety funds. In April 2003, we issued a report
on NHTSA's oversight of state highway safety programs in which we
identified weaknesses in NHTSA's use of improvement plans and
management reviews.[Footnote 14] Evaluating how well state highway
safety programs are meeting their goals is difficult because, under
NHTSA's performance-based oversight approach, NHTSA's guidance does not
establish a consistent means of measuring progress. Although the
guidance states that NHTSA can require the development and
implementation of an improvement plan when a state fails to make
progress toward its highway safety performance goals, the guidance does
not establish specific criteria for evaluating progress. Rather, the
guidance simply states that an improvement plan should be developed
when a state is making little or no progress toward its highway safety
goals. As a result, NHTSA's regional offices have made limited and
inconsistent use of improvement plans, and some states do not have
improvement plans, even though their alcohol-related fatality rates
have increased or their seat-belt usage rates have declined. Without a
consistent means of measuring progress, NHTSA and state officials lack
common expectations about how to define progress, how long states
should have to demonstrate progress, how to set and measure highway
safety goals, and when improvement plans should be used to help states
meet their highway safety goals.
To determine how well the states are spending and controlling their
federal highway safety funds, NHTSA's regional offices can conduct
management reviews of state highway safety programs. Management reviews
completed in 2001 and 2002 identified weaknesses in states' highway
safety programs that needed correction; however, we found that the
regional offices were inconsistent in conducting the reviews because
NHTSA's guidance does not specify when the reviews should be conducted.
The identified weaknesses included problems with monitoring
subgrantees, poor coordination of programs, financial control problems,
and large unexpended fund balances. Such weaknesses, if not addressed,
could lead to inefficient or unauthorized uses of federal funds.
According to NHTSA officials, management reviews also foster productive
relationships with the states that allow the agency's regional offices
to work with the states to correct vulnerabilities. These regions'
ongoing involvement with the states also creates opportunities for
sharing and encouraging the implementation of best practices, which may
then lead to more effective safety programs and projects.
Strategies:
To encourage more consistent use of improvement plans and management
reviews, we made recommendations to improve the guidance to NHTSA's
regional offices on when it is appropriate to use these oversight
tools. In commenting on a draft of the report, NHTSA officials agreed
with our recommendations and said they had begun taking action to
develop criteria and guidance for using the tools.
The administration's recent proposal to reauthorize TEA-21 would make
some changes to the safety programs that could also have some impact on
program efficiencies. For example, the proposal would somewhat simplify
the current grant structure for NHTSA's highway safety programs. The
Section 402 program would have four components: core program formula
grants, safety belt performance grants, general performance grants, and
impaired driving discretionary grants. The safety belt performance
grants would provide funds to states that had passed primary safety
belt laws or achieved 90 percent safety belt usage. In addition, the
general performance grant would provide funds based on overall
reductions in (1) motor vehicle fatalities, (2) alcohol-related
fatalities, and (3) motorcycle, bicycle, and pedestrian fatalities.
Finally, the Section 402 program would have an impaired driving
discretionary grant component, which would target funds to up to 10
states that had the highest impaired driving fatality numbers or
fatality rates. In addition to changing the Section 402 program, the
proposal would expand grants for highway safety information systems and
create new emergency medical service grants. The proposal leaves intact
existing penalties related to open container, repeat offender, and 0.08
blood-alcohol content laws, and establishes a new transfer penalty for
states that fail to pass a primary safety belt law and have safety belt
use rates lower than 90 percent by 2005.
The proposal would also give the states greater flexibility in using
their highway safety funds. A state could move up to half its highway
safety construction funds from the Highway Safety Improvement Program
into the core Section 402 program. A state would also be able to use
100 percent of its safety belt performance grants for construction
purposes if it had a primary safety belt law, or 50 percent if the
grant was based on high safety belt use. States could also use up to 50
percent of their general performance grants for safety construction
purposes.
The New Starts Transit Program Has Faced Challenges in Selection and
Oversight of Projects and Has Taken Steps to Address these Challenges:
The New Starts transit program identifies and funds fixed guideway
projects, including rail, bus rapid transit, trolley, and ferry
projects. The New Starts program provides much of the federal
government's investment in urban mass transportation. TEA-21 and
subsequent amendments authorized approximately $10 billion for New
Starts projects for fiscal years 1998 through 2003. The
administration's proposal for the surface transportation
reauthorization, known as the Safe, Accountable, Flexible, and
Efficient Transportation Equity Act of 2003 (SAFETEA), requests that
about $9.5 billion be made available for the New Starts program for
fiscal years 2004 through 2009.
Unlike the federal highway program and certain transit programs, under
which funds are automatically distributed to states on the basis of
formulas, the New Starts program requires local transit agencies to
compete for New Starts project funds on the basis of specific financial
and project justification criteria. To obtain New Starts funds, a
project must progress through a regional review of alternatives,
develop preliminary engineering plans, and meet FTA's approval for
final design. FTA assesses the technical merits of a project proposal
and its finance plan and then notifies the Congress that it intends to
commit New Starts funding to certain projects through full funding
grant agreements. The agreement establishes the terms and conditions
for federal participation in the project, including the maximum amount
of federal funds--no more than 80 percent of the estimated net cost of
the project.[Footnote 15] While the grant agreement commits the federal
government to providing the federal contributions to the project over a
number of years, these contributions are subject to the annual
appropriations process. State or local sources provide the remaining
funding. The grantee is responsible for all costs exceeding the federal
share, unless the agreement is amended.
To meet the nation's transportation needs, many states and localities
are planning or building large New Starts projects to replace aging
infrastructure or build new capacity. They are often costly and require
large commitments of public resources, which may take several years to
obtain from federal, state, and local sources. The projects can also be
technically challenging to construct and require their sponsors to
resolve a wide range of social, environmental, land-use, and economic
issues before and during construction.
Challenges:
It is critical that federal and other transportation officials meet two
particular challenges that stem from the costly and lengthy federal
funding commitment associated with New Starts projects. First, they
must have a sound basis for evaluating and selecting projects. Because
many transit projects compete for limited federal transit dollars--
there are currently 52 projects in the New Starts "pipeline"--and FTA
awards relatively few full funding grant agreements each year, it is
crucial that local governments choose the most promising projects as
candidates for New Starts funds and that FTA uses a process that
effectively selects those projects that most clearly meet the program's
goals.
Second, FTA, like FHWA, has the challenge of overseeing the planning,
development, and construction of selected projects to ensure they
remain on schedule and within budget, and deliver their expected
performance. In the early 1990s, we designated the transit grants
management oversight program as high risk because it was vulnerable to
fraud, waste, abuse, and mismanagement.[Footnote 16] While we have
removed it from the high-risk designation because of improvements FTA
has made to this program, we have found that major transit projects
continue to experience costs and schedule problems. For example, in
August, 1999, we reported that 6 of the 14 transit projects with full
funding grant agreements had experienced cost increases, and 3 of those
projects had experienced cost increases that were more than 25 percent
over the estimates approved by FTA in grant agreements.[Footnote 17]
The key reasons for the increases included (1) higher than anticipated
contract costs, (2) schedule delays, and (3) project scope changes and
system enhancements. A recent testimony by the Department of
Transportation's Inspector General indicates that major transit
projects continue to experience significant problems including cost
increases, financing problems, schedule delays, and technical or
construction difficulties.[Footnote 18]
Strategies:
FTA has developed strategies to address the twin challenges of
selecting the right projects and monitoring their implementation costs,
schedule, and performance. First, in response to direction in TEA-21,
FTA developed a systematic process for evaluating and rating potential
New Starts projects competing for federal funding.[Footnote 19] Under
this process, FTA assigns individual ratings for a variety of financial
and project justification criteria and then assigns an overall rating
of highly recommended, recommended, not recommended, or not rated.
These criteria reflect a broad range of benefits and effects of the
proposed projects, including capital and operating finance plans,
mobility improvements, environmental benefits, operating efficiencies,
cost-effectiveness, land use, and other factors. According to FTA's New
Starts regulations, a project must have an overall rating of at least
"recommended" to receive a grant agreement. FTA also considers a number
of other "readiness" factors before proposing funding for a project.
For example, FTA proposes funding only for projects that are expected
to enter the final design phase and be ready for grant agreements
within the next fiscal year. Figure 3 illustrates the New Starts
evaluation and ratings process.
Figure 3: Figure 3: New Starts Evaluation and Ratings Process:
[See PDF for image]
Note: According to FTA, the optional criterion of "other factors" gives
grantees the opportunity to provide additional information about the
likelihood of a project's overall success.
[End of figure]
While FTA has made substantial progress in establishing a systematic
process for evaluating and rating potential projects, our work has
raised some concerns about the process. For example, to assist FTA in
prioritizing projects to ensure that the relatively few full funding
grant agreements go to the most important projects, we recommended in
March 2000 that FTA further prioritize the projects that it rates as
highly recommended or recommended and ready for New Starts
funds.[Footnote 20] FTA has not implemented this recommendation. We
believe that this recommendation is still valid because the funding
requested for the many projects that are expected to compete for grant
agreements over the next several years is likely to exceed the
available federal dollars. A further concern about the ratings process
stems from FTA's decision during the fiscal year 2004 cycle to propose
a project for a full funding grant agreement that had been assigned an
overall project rating of "not rated," even though FTA's regulations
require that projects have at least a "recommended" rating to receive a
grant agreement.[Footnote 21] Finally, we found that FTA needs to
provide clearer information and additional guidance about certain
changes it made to the evaluation and ratings process for the fiscal
year 2004 cycle.[Footnote 22]
In work that addressed the challenge of overseeing ongoing projects
once they are selected to receive a full funding grant agreement, we
reported in March and September 2000 that FTA had improved the quality
of the transit grants management oversight program through strategies
that included upgrading its guidance and training of staff and
grantees, developing standardized oversight procedures, and employing
contractor staff to strengthen its oversight of grantees. FTA also
expanded its oversight efforts to include a formal and rigorous
assessment of a grantee's financial capacity to build and operate a new
project and of the financial impact of that project on the existing
transit system. These assessments, performed by independent accounting
firms, are completed before FTA commits funds for construction and are
updated as needed until projects are completed. For projects that
already have grant agreements, FTA focuses on the grantee's ability to
finish the project on time and within the budget established by the
grant agreement.
The administration's fiscal year 2004 budget proposal contains three
New Starts initiatives--reducing the maximum federal statutory share to
50 percent, allowing non-fixed-guideway projects to be funded through
New Starts, and replacing the "exempt" classification with a
streamlined ratings process for projects requesting less than $75
million in New Starts funding. These proposed initiatives have
advantages and disadvantages, with implications for the cost-
effectiveness and performance of proposed projects. First, the reduced
federal funding would require local communities to increase their
funding share, creating more incentive for them to propose the most
cost-effective projects; however, localities might have difficulties
generating the increased funding share, and this initiative could
result in funding inequities for transit projects when compared with
highway projects. Second, allowing non-fixed guideway projects to be
funded under New Starts would give local communities more flexibility
in choosing among transit modes and might promote the use of bus rapid
transit, whose costs compare favorably with those of light rail
systems;[Footnote 23] however, this initiative would change the
original fixed guideway emphasis of New Starts, which some project
sponsors we interviewed believe might disadvantage traditional New
Starts projects. Finally, replacing the "exempt" classification with a
streamlined rating process for all projects requesting less than $75
million might promote greater performance-oriented evaluation since all
projects would receive a rating. However, this initiative might reduce
the number of smaller communities that would participate in the New
Starts program.
DOT's Essential Air Service Program Faces Possible Program
Modifications Due to Changing Conditions:
The Congress established the Essential Air Service (EAS) program as
part of the Airline Deregulation Act of 1978. The act guaranteed that
communities served by air carriers before deregulation would continue
to receive a certain level of scheduled air service. Special provisions
guaranteed service to Alaskan communities. In general, the act
guaranteed continued service by authorizing DOT to require carriers to
continue providing service at these communities. If an air carrier
could not continue that service without incurring a loss, DOT could
then use EAS funds to award that carrier a subsidy. Subsidies are to
cover the difference between a carrier's projected revenues and
expenses and to provide a minimum amount of profit. Under the Airline
Deregulation Act, the EAS program was intended to sunset, or end, after
10 years. In 1987, the Congress extended the program for another 10
years, and in 1998, it eliminated the sunset provision, thereby
permanently authorizing EAS.
To be eligible for subsidized service, a community must meet three
general requirements. It must have received scheduled commercial
passenger service as of October 1978, may be no closer than 70 highway
miles to a medium-or large-hub airport, and must require a subsidy of
less than $200 per person (unless the community is more than 210
highway miles from the nearest medium-or large-hub airport, in which
case no average per-passenger dollar limit applies). [Footnote 24]
Funding for the EAS program comes from a combination of permanent and
annual appropriations. Part of its funding comes from the Federal
Aviation Reauthorization Act of 1996 (P.L. 104-264), which authorized
the collection of user fees for services provided by the Federal
Aviation Administration (FAA) to aircraft that neither take off nor
land in the United States, commonly known as overflight fees. The act
also permanently appropriated the first $50 million of such fees for
EAS and safety projects at rural airports. In fiscal year 2003, total
EAS program appropriations were $113 million.
Challenges:
As the airline industry has evolved since the industry was deregulated
in 1978, the EAS program has faced increasing challenges to remain
viable. Since fiscal year 1995, the program's costs have tripled,
rising from $37 million to $113 million, and they are likely to
continue escalating. Several factors are likely to affect future
subsidy requirements. First, carriers' operating costs have increased
over time, in part because of the costs associated with meeting federal
safety regulations for small aircraft beginning in 1996. Second,
carriers' revenues have been limited because many individuals traveling
to or from EAS-subsidized communities choose not to fly from the local
airport, but rather to use other larger nearby airports, which
generally offer more service at lower airfares. On average, in 2000,
each EAS flight operated with just over 3 passengers.
Finally, the number of communities eligible for EAS subsidies has
increased over time, rising from a total of 106 in 1995 to 114 in July
2002 (79 in the continental United States and 35 in Alaska, Hawaii, and
Puerto Rico) and again to 133 in April 2003 (96 in the continental
United States and 37 in Alaska, Hawaii, and Puerto Rico). The number of
subsidy-eligible communities may continue to grow in the near term.
Figure 4 shows the increase in the number of communities eligible for
EAS-subsidized service between 1995 and April 2003.
Figure 4: Increase in EAS-Subsidized Communities between 1995
and April 2003:
[See PDF for image]
Note: Data for April 2003 show the number of communities receiving EAS-
subsidized service and those where proposed subsidies are under
negotiation.
[End of figure]
Strategies:
Over the past year, the Congress, the administration, and we have each
identified a number of potential strategies generally aimed at
enhancing the EAS program's long-term sustainability. These strategies
broadly address challenges related to the carriers' cost of providing
service and the passenger traffic and revenue that carriers can hope to
accrue.
In August 2002, in response to a congressional mandate, we identified
and evaluated four major categories of options to enhance the long-term
viability of the EAS program.[Footnote 25] In no particular order, the
options we identified were as follows:
* Better match capacity with community use by increasing the use of
smaller (i.e., less costly) aircraft and restricting little-used flight
frequencies.
* Target subsidized service to more remote communities (i.e., those
where passengers are less likely to drive to another airport) by
changing eligibility criteria.
* Consolidate service to multiple communities into regional airports.
* Change the form of the federal assistance from carrier subsidies to
local grants that would allow local communities to match their
transportation needs with individually tailored transportation
options.
Each of these options could have positive and negative effects, such as
lowering the program's costs but possibly adversely affecting the
economies of the communities that would lose some or all of their
direct scheduled airline service.
This year's House-passed version of the FAA reauthorization bill, H.R.
2115, also includes various options to restructure air service to small
communities now served by the EAS program. The bill proposes an
alternative program (the "community and regional choice program"),
which would allow communities to opt out of the EAS program and receive
a grant that they could use to establish and pay for their own service,
whether scheduled air service, air taxi service, surface
transportation, or another alternative.
The complementary Senate FAA reauthorization bill (also H.R. 2115) also
includes specific provisions designed to restructure the EAS program.
This bill would set aside some funds for air service marketing to try
to attract passengers and create a grant program under which up to 10
individual communities or a consortium of communities could opt out of
the existing EAS program and try alternative approaches to improving
air service. In addition, the bill would preclude DOT from terminating,
before the end of 2004, a community's eligibility for an EAS subsidy
because of decreased passenger ridership and revenue.
The administration's proposal would generally restrict appropriations
to the $50 million from overflight fees and would require communities
to help pay the costs of funding their service. The proposal would also
allow communities to fund transportation options other than scheduled
air service, such as on-demand "air taxis" or ground transportation.
Mr. Chairman, this concludes my prepared statement. I would be pleased
to answer any questions you or other members of the Committee may have.
Contact and Acknowledgments:
For future contacts regarding this testimony, please contact JayEtta
Hecker at (202) 512-2834. Individuals making key contributions to this
testimony included Robert Ciszewski, Steven Cohen, Elizabeth
Eisenstadt, Rita Grieco, Steven Martin, Katherine Siggerud, Glen
Trochelman, and Alwynne Wilbur.
[End of section]
Appendix 1: Related GAO Products:
Federal-Aid Highways:
Federal-Aid Highways: Cost and Oversight of Major Highway and Bridge
Projects--Issues and Options. GAO-03-764T. Washington, D.C.: May 8,
2003.
Transportation Infrastructure Cost and Oversight Issues on Major
Highway and Bridge Projects. GAO-02-673. Washington, D.C.: May 1, 2002.
Surface Infrastructure: Costs, Financing, and Schedules for Large-
Dollar Transportation Projects. GAO/RCED-98-64. Washington, D.C.:
February 12, 1998.
DOT's Budget: Management and Performance Issues Facing the Department
in Fiscal Year 1999. GAO/T-RCED/AIMD-98-76. Washington, D.C.: February
12, 1998.
Transportation Infrastructure: Managing the Costs of Large-Dollar
Highway Projects. GAO/RCED-97-27. Washington, D.C.: February 27, 1997.
Transportation Infrastructure: Progress on and Challenges to Central
Artery/Tunnel Project's Costs and Financing. GAO/RCED-97-170.
Washington, D.C.: July 17, 1997.
Transportation Infrastructure: Central Artery/Tunnel Project Faces
Financial Uncertainties. GAO/RCED-96-1313. Washington, D.C.: May 10,
1996.
Central Artery/Tunnel Project. GAO/RCED-95-213R. Washington, D.C.:
June 2, 1995.
Highway Safety:
Highway Safety: Research Continues on a Variety of Factors That
Contribute to Motor Vehicle Crashes. GAO-03-436. Washington, D.C.:
March 31, 2003.
Highway Safety: Better Guidance Could Improve Oversight of State
Highway Safety Programs. GAO-03-474. Washington, D.C.: April 21, 2003.
Highway Safety: Factors Contributing to Traffic Crashes and NHTSA's
Efforts to Address Them. GAO-03-730T. Washington, D.C.: May 22, 2003.
Mass Transit:
Federal Transit Administration: Bus Rapid Transit Offers Communities a
Flexible Mass Transit Option. GAO-03-729T. Washington, D.C.: June 24,
2003.
Mass Transit: FTA Needs to Provide Clear Information and Additional
Guidance on the New Starts Ratings Process. GAO-03-701. Washington,
D.C.: June 23, 2003.
Mass Transit: FTA's New Starts Commitments for Fiscal Year 2003. GAO-
02-603. Washington, D.C.: April 30, 2002.
Mass Transit: FTA Could Relieve New Starts Program Funding Constraints.
GAO-01-987. Washington, D.C.: August 15, 2001.
Mass Transit: Project Management Oversight Benefits and Future Funding
Requirements. GAO/RCED-99-240. Washington, D.C.: August 19, 1999.
Mass Transit: Implementation of FTA's New Starts Evaluation Process and
FY 2001 Funding Proposals. GAO/RCED-00-149. Washington, D.C.: April 28,
2000.
Mass Transit: Challenges in Evaluating, Overseeing, and Funding Major
Transit Projects. GAO/T-RCED-00-104. Washington, DC: Mar. 8, 2000.
Mass Transit: Status of New Starts Transit Projects With Full Funding
Grant Agreements, GAO/RCED-99-240. Washington, D.C.: Aug. 19, 1999.
Mass Transit: FTA's Progress in Developing and Implementing a New
Starts Evaluation Process. GAO/RCED-99-113. Washington, D.C.: April 26,
1999.
Essential Air Service:
Commercial Aviation: Issues Regarding Federal Assistance for Enhancing
Air Service to Small Communities. GAO-03-540T. Washington, D.C.: March
11, 2003.
Commercial Aviation: Factors Affecting Efforts to Improve Air Service
at Small Community Airports. GAO-03-330. Washington, D.C.: January 17,
2003.
Commercial Aviation: Financial Condition and Industry Responses Affect
Competition. GAO-03-171T. Washington, D.C.: October 2, 2002.
Options to Enhance the Long-term Viability of the Essential Air Service
Program. GAO-02-997R. Washington, D.C.: Aug. 30, 2002.
Commercial Aviation: Air Service Trends at Small Communities Since
October 2000. GAO-02-432. Washington, D.C.: August 30, 2002.
Essential Air Service: Changes in Passenger Traffic, Subsidy Levels,
and Air Carrier Costs. T-RCED-00-185. Washington, D.C.: May 25, 2000.
Essential Air Service: Changes in Subsidy Levels, Air Carrier Costs,
and Passenger Traffic. RCED-00-34. Washington, D.C.: April 14, 2000.
FOOTNOTES
[1] Federal Budget: Opportunities for Oversight and Improved Use of
Taxpayer Funds, (GAO-03-952T, June 2003)
[2] The three levels of review the Comptroller General discussed also
included addressing vulnerabilities to fraud, waste, abuse, and
mismanagement, particularly in high-risk federal programs; and a
fundamental re-examination of programs, policies, activities, and
processes. Because the programs we are discussing today are not on our
high-risk list and our work in these areas has not focused on fraud or
abuse, we are discussing them in the context of the longer-term goals
of efficiency and effectiveness, which are key to appropriately
targeting scarce federal resources. Our scope today does not encompass
a fundamental re-examination of programs, which is also critical to
ensuring the effective use of federal funds.
[3] In contrast to the New Starts program, there are other transit
programs that are formula funded; however, we have not evaluated these
programs and therefore do not include them in our discussion today.
[4] A full funding grant agreement is a multiyear contractual agreement
between FTA and project sponsors for a specified amount of funding. The
full amount of funding is committed to the projects over a set period.
[5] How formulas are designed to distribute federal funds can itself
affect the extent to which federal funds encourage or leverage the
Nation's total level of highway investment and promote the most
efficient funding of transportation projects. These issues are outside
the scope of this testimony's discussion; however, our recent reports
Trends in Federal and State Capital Investment in Highways
(GAO-03-744R) and Trends in State Capital Investment in Highways
(GAO-03-915SP) provide information on federal, state, and local
investment in highways, and variations in states' levels of '
investment and effort over time. Our follow-on work to that report will
more closely examine the interaction between levels of federal and
state investment, including how the design of formulas may affect this
interaction.
[6] FHWA exercises full oversight only of certain high-cost Interstate
system projects. On projects subject to "full" oversight, FHWA
prescribes design and construction standards, approves design plans and
estimates, approves contract awards, inspects construction progress,
and renders final acceptance on projects when they are completed.
States either may assume or are required to assume responsibilities for
all other types of projects. See U.S. General Accounting Office,
Transportation Infrastructure: Cost and Oversight Issues on Major
Highway and Bridge Projects, GAO-02-702T (Washington, D.C.: May 1,
2002) for a more complete description of FHWA's and the states'
responsibilities.
[7] U.S. General Accounting Office, Transportation Infrastructure:
Managing the Costs of Large-Dollar Highway Projects, GAO/RCED-97-27
(Washington D.C.: Feb. 27, 1997).
[8] U.S. General Accounting Office, Highway Infrastructure:
Stakeholders' Views on Time to Conduct Environmental Reviews of Highway
Projects, GAO-03-534 (Washington D.C.: May 2003).
[9] In particular, the measure requires states or project sponsors to
prepare a project management plan for projects estimated to cost $1
billion or more that would detail processes in place to provide timely
information needed to manage projects' scope, costs, schedule, and
federal requirements. It would also extend the requirement for annual
finance plans to projects receiving $100 million or more in federal
funds, although approval of those plans could be delegated to the
states. In addition, among other provisions, the proposal would require
mandatory debarment of contractors convicted of fraud related to
federal-aid highway or transit programs, and the suspension of
contractors indicted for fraud.
[10] See, for example, U.S. General Accounting Office, Federal-Aid
Highways: Cost and Oversight of Major Highway and Bridge Projects--
Issues and Options, GAO-03-764T (Washington, D.C.: May 8, 2003);
GAO-02-702T; and GAO/RCED-97-27.
[11] GAO-03-534; GAO-03-398; GAO-02-1067T.
[12] GAO-02-702T.
[13] The Federal Motor Carrier Safety Administration also has an
oversight role in highway safety for motor carrier transportation.
[14] U.S. General Accounting Office, Highway Safety: Better Guidance
Could Improve Oversight of State Highway Safety Programs, GAO-03-474
(Washington, D.C.: Apr. 21, 2003).
[15] In response to language contained in a conference report prepared
by the House Appropriations Committee, FTA adopted a 60 percent
preference policy, which in effect generally reduced the level of New
Starts federal funding share for projects from 80 percent to 60
percent.
[16] U.S. General Accounting Office, Mass Transit: Challenges in
Evaluating, Overseeing, and Funding Major Transit Projects (GAO/
T-RCED-00-104, Washington, DC: Mar. 8, 2000).
[17] U.S. General Accounting Office, Mass Transit: Status of New Starts
Transit Projects With Full Funding Grant Agreements, GAO/RCED-99-240
(Washington, D.C.: Aug. 19, 1999).
[18] See U.S. Department of Transportation, Statement of the Honorable
Kenneth M. Mead, Inspector General, Management of Large Highway and
Transit Projects (Washington, D.C.: May 1, 2002).
[19] The exceptions to the ratings process are projects that are
statutorily exempt because they request less than $25 million in New
Starts funding.
[20] U.S. General Accounting Office, Mass Transit: Challenges in
Evaluating, Overseeing, and Funding Major Transit Projects, GAO/
T-RCED-00-104 (Washington, D.C.: Mar. 8, 2000).
[21] According to FTA officials, this project could not be rated
because its local travel forecasting data and models did not support
calculation of a new benefits measure required for the fiscal year 2004
cycle. The officials told us that they decided to select this project
for a proposed grant agreement because they believed that the data
problems would be corrected, and the project would be able to achieve a
"recommended" rating and be ready for a grant agreement by the end of
fiscal year 2004. They said that other proposed projects that received
overall ratings of "recommended" or higher would not be ready at that
time.
[22] U.S. General Accounting Office, Mass Transit: FTA Needs to Provide
Clear Information and Additional Guidance on the New Starts Ratings
Process, GAO-03-701 (Washington, D.C.: June 23, 2003).
[23] GAO-03-729T.
[24] The nation's commercial airports are categorized into four main
groupings based on the number of passengers boarding an aircraft
(enplaned) for all operations of U.S. carriers in the United States. A
nonhub has less than 0.05 percent of the total annual passenger
enplanements in the United States in any given year. A small hub has at
least 0.05 percent, but less than 0.25 percent, of total enplanements.
A medium hub has at least 0.25 percent and less than 1.0 percent of
total U.S. enplanements, and a large hub has 1.0 percent or more of
total U.S. enplanements. These definitions are contained in statute.
[25] U.S. General Accounting Office, Options to Enhance the Long-term
Viability of the Essential Air Service Program, GAO-02-997R
(Washington, D.C.: Aug. 30, 2002).
