Federal Transit Programs
Federal Transit Administration Has Opportunities to Improve Performance Accountability Gao ID: GAO-11-54 November 17, 2010Public demand and federal funding for transit have grown in recent years, yet most of this funding is not tied to performance. As Congress prepares for reauthorization of the federal surface transportation programs, GAO was asked to report on (1) the extent to which federal transit programs use performance information in making decisions about funding distribution and in evaluating the programs' effectiveness; (2) mechanisms for making these programs more performance based, and strategies for supporting their successful implementation; and (3) how selected U.S. and foreign transit agencies have used performance measurement in their planning and decisions, and their views on the federal role in transit. To do so, GAO analyzed legislation, federal documents, and literature; interviewed federal officials and transit experts; and conducted semistructured interviews with selected transit agencies using criteria that, for U.S. agencies, covered a variety of regions and population sizes and, for foreign agencies, multiple transit modes and English language capability.
Some federal transit programs distribute funds based partly on performance, but opportunities to improve grant recipients' performance accountability remain. Of the eight transit programs GAO reviewed--which represent 97 percent of total federal transit grants in fiscal year 2010 (excluding funds provided under the American Recovery and Reinvestment Act)--two are generally funded by congressional direction, while the remaining six are funded through legislatively defined grant formulas. Federal funding for the two nonformula programs GAO reviewed--the New Starts Program and the Bus and Bus Related Equipment and Facilities Program--is awarded in part according to performance. A small percentage of federal transit funding for the six formula programs is apportioned based on performance--according to GAO's analysis, about 5 percent, on average, of fiscal year 2010 funding. FTA does not, in general, analyze fully or use the performance data it collects from transit agencies to evaluate the effectiveness of its transit grant programs; thus, FTA is missing a valuable opportunity to evaluate the end results of its program activities and programs' funding formulas. GAO identified three performance accountability mechanisms for making federal transit programs more performance based, including providing financial rewards or penalties/sanctions, increasing or decreasing program flexibility as a performance incentive, and recognizing entities that achieve certain performance goals. These mechanisms have both potential advantages--most notably, they can encourage improved performance and help agencies make sound decisions when allocating limited funds--and potential disadvantages that can produce inequitable results or burden transit agencies with requirements to gather, maintain, and analyze data. GAO also identified several key strategies that can support the use of these mechanisms and mitigate their disadvantages, such as ensuring that mechanisms are of sufficient value and that appropriate measures are selected, among others. However, without FTA analysis of the appropriateness, feasibility, and potential impact of using various transit performance mechanisms, Congress may lack information to determine whether and how these mechanisms could be used to make transit funding more performance based as it prepares for the upcoming surface transportation reauthorization. Transit agencies that GAO interviewed use performance measurement to varying degrees, but they face challenges in linking performance with planning and decision making. All of these agencies measure performance in certain categories, such as ridership and on-time performance, but the extent to which they measure it in others--such as environmental impact, energy usage, and economic development--varies widely. Transit agency officials reported that measuring performance presents challenges, in part because it can be difficult to obtain relevant data and develop a sound methodology. They also said that linking performance to planning and decision making is challenging because of either limited funding or political priorities. These transit agencies and other experts suggested a variety of changes to the federal role in transit, including increasing investment in existing transit infrastructure; developing federal transit program goals that generally address broader issues, such as encouraging a shift from automobiles to public transit; and promoting livable communities around transit systems. The Federal Transit Administration (FTA) should (1) report to Congress on options for adding performance accountability mechanisms to transit programs to ensure efficient and effective federal transit programs and (2) further analyze and use transit agency data, when applicable, for evaluating federal transit program performance. DOT reviewed a draft of this report, provided technical clarifications, and said it would consider our recommendations.
RecommendationsOur 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.
Director: David J. Wise Team: Government Accountability Office: Physical Infrastructure Phone: No phone on recordGAO-11-54, Federal Transit Programs: Federal Transit Administration Has Opportunities to Improve Performance Accountability
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United States Government Accountability Office:
GAO:
Report to the Committee on Banking, Housing, and Urban Affairs, U.S.
Senate:
November 2010:
Federal Transit Programs:
Federal Transit Administration Has Opportunities to Improve
Performance Accountability:
GAO-11-54:
GAO Highlights:
Highlights of GAO-11-54, a report to the Committee on Banking,
Housing, and Urban Affairs, U.S. Senate.
Why GAO Did This Study:
Public demand and federal funding for transit have grown in recent
years, yet most of this funding is not tied to performance. As
Congress prepares for reauthorization of the federal surface
transportation programs, GAO was asked to report on (1) the extent to
which federal transit programs use performance information in making
decisions about funding distribution and in evaluating the programs‘
effectiveness; (2) mechanisms for making these programs more
performance based, and strategies for supporting their successful
implementation; and (3) how selected U.S. and foreign transit agencies
have used performance measurement in their planning and decisions, and
their views on the federal role in transit. To do so, GAO analyzed
legislation, federal documents, and literature; interviewed federal
officials and transit experts; and conducted semistructured interviews
with selected transit agencies using criteria that, for U.S. agencies,
covered a variety of regions and population sizes and, for foreign
agencies, multiple transit modes and English language capability.
What GAO Found:
Some federal transit programs distribute funds based partly on
performance, but opportunities to improve grant recipients‘
performance accountability remain. Of the eight transit programs GAO
reviewed-”which represent 97 percent of total federal transit grants
in fiscal year 2010 (excluding funds provided under the American
Recovery and Reinvestment Act)”-two are generally funded by
congressional direction, while the remaining six are funded through
legislatively defined grant formulas. Federal funding for the two
nonformula programs GAO reviewed”the New Starts Program and the Bus
and Bus Related Equipment and Facilities Program”is awarded in part
according to performance. A small percentage of federal transit
funding for the six formula programs is apportioned based on
performance”according to GAO‘s analysis, about 5 percent, on average,
of fiscal year 2010 funding. FTA does not, in general, analyze fully
or use the performance data it collects from transit agencies to
evaluate the effectiveness of its transit grant programs; thus, FTA is
missing a valuable opportunity to evaluate the end results of its
program activities and programs‘ funding formulas.
GAO identified three performance accountability mechanisms for making
federal transit programs more performance based, including providing
financial rewards or penalties/sanctions, increasing or decreasing
program flexibility as a performance incentive, and recognizing
entities that achieve certain performance goals. These mechanisms have
both potential advantages”most notably, they can encourage improved
performance and help agencies make sound decisions when allocating
limited funds”and potential disadvantages that can produce inequitable
results or burden transit agencies with requirements to gather,
maintain, and analyze data. GAO also identified several key strategies
that can support the use of these mechanisms and mitigate their
disadvantages, such as ensuring that mechanisms are of sufficient
value and that appropriate measures are selected, among others.
However, without FTA analysis of the appropriateness, feasibility, and
potential impact of using various transit performance mechanisms,
Congress may lack information to determine whether and how these
mechanisms could be used to make transit funding more performance
based as it prepares for the upcoming surface transportation
reauthorization.
Transit agencies that GAO interviewed use performance measurement to
varying degrees, but they face challenges in linking performance with
planning and decision making. All of these agencies measure
performance in certain categories, such as ridership and on-time
performance, but the extent to which they measure it in others”such as
environmental impact, energy usage, and economic development”varies
widely. Transit agency officials reported that measuring performance
presents challenges, in part because it can be difficult to obtain
relevant data and develop a sound methodology. They also said that
linking performance to planning and decision making is challenging
because of either limited funding or political priorities. These
transit agencies and other experts suggested a variety of changes to
the federal role in transit, including increasing investment in
existing transit infrastructure; developing federal transit program
goals that generally address broader issues, such as encouraging a
shift from automobiles to public transit; and promoting livable
communities around transit systems.
What GAO Recommends:
The Federal Transit Administration (FTA) should (1) report to Congress
on options for adding performance accountability mechanisms to transit
programs to ensure efficient and effective federal transit programs
and (2) further analyze and use transit agency data, when applicable,
for evaluating federal transit program performance. DOT reviewed a
draft of this report, provided technical clarifications, and said it
would consider our recommendations.
View [hyperlink, http://www.gao.gov/products/GAO-11-54] or key
components. For more information, contact David J. Wise at (202) 512-
2384 or wised@gao.gov.
[End of section]
Contents:
Letter:
Background:
Some Federal Transit Programs Distribute Funds Based Partly on
Performance, but Opportunities to Improve Grant Recipients'
Performance Accountability Remain:
Performance Accountability Mechanisms Can Improve Performance of
Transit Agencies, and although They Potentially Present Disadvantages,
Most of These Can Be Mitigated by Following Key Strategies:
Selected Transit Agencies Use Performance Measurement to Varying
Degrees and See a Role for the Federal Government in Transit but Cited
Challenges in Linking Performance with Planning and Decision Making:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Fiscal Year 2010 Apportionment Factors and Average Percentage
of Funding Based on Performance for FTA Formula Transit Programs:
Table 2: Types and Descriptions of Financial Mechanisms, Their
Potential Advantages, and Examples of Use:
Table 3: Type and Description of Nonfinancial Mechanisms, Their
Potential Advantages, and Examples of Use:
Table 4: Disadvantages of Performance Accountability Mechanisms and
How Key Strategies Can Help Overcome Them:
Table 5: Categories Where Performance Is Measured or Studied--Transit
Agency Responses:
Table 6: Transit Agencies Interviewed for GAO's Analysis:
Abbreviations:
APTA: American Public Transportation Association:
FTA: Federal Transit Administration:
DOT: Department of Transportation:
GPRA: Government Performance and Results Act of 1993:
HSIP: Highway Safety Improvement Plan:
JARC: Job Access and Reverse Commute:
MPO: metropolitan planning organization:
NHTSA: National Highway Traffic Safety Administration:
NTD: National Transit Database:
OVAE: Office of Vocational and Adult Education:
POP: Program of Projects:
SAFETEA-LU: Safe, Accountable, Flexible, Efficient Transportation
Equity Act: A Legacy for Users:
STIC: Small Transit Intensive Cities:
TRB: Transportation Review Board:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
November 17, 2010:
The Honorable Christopher J. Dodd:
Chairman:
The Honorable Richard C. Shelby:
Ranking Member:
Committee on Banking, Housing, and Urban Affairs:
United States Senate:
Public transit systems provide an important source of mobility for
many Americans while also helping to alleviate traffic congestion and
provide environmental benefits. From 1999 to 2009, ridership on
transit systems in the United States grew nearly 16 percent to reach
about 10.25 billion, and despite the recent economic recession, demand
for public transit has remained near record levels, reaching a peak of
10.4 billion passenger trips in 2008. Recent economic pressures have,
however, contributed to flat or reduced funding for many transit
agencies, as well as service cuts and higher fares.[Footnote 1] With
demand for transit service near record levels, the federal investment
in transit needs to be accompanied by strong performance
accountability to ensure that funds are being used efficiently and
effectively. We have previously raised concerns about the lack of
performance accountability in federal transportation programs,
including transit, and have called for steps to enhance the
accountability of federal investments in transportation
infrastructure.[Footnote 2]
The Safe, Accountable, Flexible, Efficient Transportation Equity Act:
A Legacy for Users (SAFETEA-LU), enacted in August 2005, authorized
over $286 billion for federal surface transportation programs from
fiscal years 2005 through 2009, including more than $52 billion for
federal transit programs, a 46 percent increase over the previous
funding authorization for transit programs.[Footnote 3] The Surface
Transportation Extension Act of 2010 extended the funding
authorization for SAFETEA-LU programs through December 31, 2010.
[Footnote 4] Congress and the administration are currently debating
reauthorization of the entire surface transportation program,
including transit programs. In preparation for this reauthorization,
the Department of Transportation (DOT) recently conducted a series of
"listening sessions" with key stakeholders and interested citizens to
obtain their views. DOT plans to issue a detailed proposal for a
surface transportation reauthorization bill in February 2011.
While federal funding for transit has increased significantly in
recent years, most of this spending is not explicitly linked to
performance. In light of this, you asked us to examine ways to make
federal transit programs more performance based. Accordingly, this
report addresses the following questions: (1) To what extent do
federal transit programs use performance information in making
decisions about distributing funds and in evaluating the effectiveness
of transit programs? (2) What mechanisms exist for making federal
transit programs more performance based, including their potential
advantages and disadvantages, and what strategies exist for supporting
their successful implementation? (3) How have selected U.S. and
foreign transit agencies incorporated performance measurement into
their planning and decision making, and what are these agencies' views
on the federal role in transit?
To address the first objective, we reviewed 8 of the 18 federal
transit programs. These 8 programs account for nearly 97 percent of
all Federal Transit Administration (FTA) grant funds, excluding funds
provided under the American Recovery and Reinvestment Act.[Footnote 5]
We analyzed pertinent federal legislation and reports, including
SAFETEA-LU, the Government Performance and Results Act of 1993 (GPRA),
[Footnote 6] and FTA documents on grants programs that distribute
transit funds. We interviewed FTA officials to determine the extent to
which performance measurement/outcomes are factors in funding formulas
and decisions. We also compared FTA's practices with performance
system criteria found in GPRA, Transportation Research Board (TRB)
reports, and other sources. To simulate incentive tier apportionments
for formula programs, we analyzed FTA apportionment documents and
National Transit Database (NTD) data. To address the second objective,
we reviewed and synthesized literature--including GAO, FTA, TRB, and
other transportation reports--and interviewed transit agency officials
and industry experts to describe what mechanisms exist for making
federal transit programs more performance based, the advantages and
disadvantages of those mechanisms, and the strategies that exist for
overcoming disadvantages. Finally, to describe how selected U.S. and
foreign transit agencies incorporate performance measurement into
their planning and decision making and their views on the federal role
in transit, we conducted semistructured interviews with 10 U.S.
transit agencies, selected to ensure geographic distribution and
variation in the size of the population served, as well as 2 foreign
transit agencies, selected, in part, based on the number of
transportation modes offered by their system. The information we
gathered from these agencies, however, cannot be generalized across
all U.S. or foreign transit agencies. We also conducted interviews
with industry experts to obtain their views on how transit agencies
incorporate performance measurement into funding and strategic
decisions.
We conducted this performance audit from November 2009 through
November 2010 in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform
the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a
reasonable basis for our findings and conclusions based on our audit
objectives. See appendix I for more information about our scope and
methodology.
Background:
Federal Transit Programs:
Federal transit funds are distributed to recipients by formula,
through specific designations within the legislation, or on a
discretionary basis through individual grant programs. FTA administers
its programs according to the programmatic framework for the nation's
transportation infrastructure specified in SAFETEA-LU. FTA works in
partnership with the states and other grant recipients to administer
federal transit programs, providing financial assistance, policy
direction, technical expertise, and some oversight. State and local
governments are ultimately responsible for executing most federal
transit programs by matching and distributing federal funds and by
planning, selecting, and supervising infrastructure projects and
safety programs--all in accordance with federal requirements. The
eight federal transit programs we reviewed, which represent 97 percent
of FTA's total fiscal year 2010 grant funds (excluding funds provided
under the American Recovery and Reinvestment Act) and their respective
goals are as follows:
* The Urbanized Area Formula Grant Program makes funding available to
urbanized areas and to states for public transportation capital
projects and operating assistance for equipment and facilities in
urbanized areas and for transportation-related planning.[Footnote 7]
Funds are allocated based on a multitiered formula, which separates
urban areas with populations under 200,000 from those with populations
of 200,000 or more. Funds are first apportioned based on a formula
provided in law to designated recipients (typically metropolitan
planning organizations [MPO] or a state or regional authority that is
responsible for capital projects and for financing and directly
providing public transportation).[Footnote 8] Designated recipients
allocate the apportionment among eligible transit service providers in
the urbanized area, and then transit providers may submit grant
applications to FTA.[Footnote 9]
* The Nonurbanized Area Formula Grant Program provides funding to
states and Indian tribes for the purpose of supporting public
transportation capital projects and operating costs for equipment and
facilities in rural areas with populations of less than 50,000. Funds
are first apportioned to states and Indian tribes based on a formula
provided in law, then states and Indian tribes may submit applications
to FTA.[Footnote 10] Grant recipients may allocate funds to state or
local governmental authorities, or an operator of public
transportation or intercity bus service.
* The Fixed-Guideway Modernization Program makes federal resources
available for the purposes of modernizing or improving existing fixed-
guideway systems.[Footnote 11] Funds are first apportioned to
urbanized areas according to a seven-tier formula. Public transit
entities (transit authorities and other state and local governmental
authorities) in those urbanized areas to which the funds are
apportioned may submit applications to FTA.[Footnote 12]
* The Bus and Bus Related Equipment and Facilities Program provides
capital assistance for new and replacement buses, related equipment,
and facilities for expansion and maintenance purposes. The projects
funded by this program are generally determined by Congress. Funds may
be provided only to state and local governmental authorities. The Bus
Testing Facility Program--which has a single facility for testing new
bus models for maintainability, reliability, safety, performance, and
other factors--is also administered under this program.[Footnote 13]
* The New Starts Program provides funds for construction of new fixed-
guideway systems or extensions to existing fixed-guideway systems.
These grants are awarded for specific projects by congressional
directive based on FTA recommendations. Funds may be provided only to
state and local governmental authorities.[Footnote 14]
* The New Freedom Program provides funding for capital and operating
expenses for new public transportation services and alternatives
beyond those required by the Americans with Disabilities Act of 1990
that are designed to assist individuals with disabilities.[Footnote
15] Funds are first apportioned to designated recipients and states
based on a formula provided in law. Designated recipients and states
to which funds have been apportioned may submit grant applications to
FTA.[Footnote 16] The recipients of these grants, in cooperation with
the MPO, are responsible for conducting an areawide competitive
solicitation for grant applications from subrecipients (i.e.: state
and local governmental authorities, private nonprofit organizations,
or transit service operators).[Footnote 17]
* The Job Access and Reverse Commute (JARC) Program provides funding
for capital, planning, and operating expenses for projects that
transport low-income individuals to and from jobs and activities
related to employment and for reverse commute projects. Funds are
first apportioned to designated recipients and states based on a
formula provided in law. Designated recipients and states to which the
funds have been apportioned may submit grant applications to FTA.
[Footnote 18] The recipients of these grants, in cooperation with the
MPO, are responsible for conducting an areawide competitive
solicitation for grant applications from subrecipients (i.e.: state
and local governmental authorities, private nonprofit organizations,
or transit service operators).[Footnote 19]
* The Special Needs of Elderly Individuals and Individuals with
Disabilities Program provides funding to states for the purpose of
assisting private nonprofit groups in meeting the transportation needs
of elderly individuals and individuals with disabilities when current
transportation services are unavailable, insufficient, or
inappropriate for meeting these needs. Funds are first apportioned to
states based on a formula administered by the Secretary of
Transportation that considers the number of elderly individuals and
individuals with disabilities in each state. States forward an annual
Program of Projects (POP) and grant applications to FTA.[Footnote 20]
States may allocate apportioned funds to a private nonprofit
organization[Footnote 21] or a governmental authority.[Footnote 22]
While most people in the United States travel by motor vehicle, demand
for public transit continues to grow. According to the U.S. Census
Bureau, the number of people who commute to work using public transit
grew by about 1 million from 2005 to 2008 to reach approximately 7.21
million persons. Annual federal, state, and local investment in
transit grew nearly 77 percent between 1997 and 2006 to total almost
$31 billion. During the recent economic recession, however, investment
in transit did not keep pace with demand, according to the American
Public Transportation Association (APTA), a leading industry
organization. Moreover, according to a March 2010 survey conducted by
APTA, because of the economic downturn, more than half of the
country's largest transit agencies have recently cut service and/or
raised fares and many are also facing budget shortfalls in 2011.
[Footnote 23]
Transit organizations vary widely in size from large systems with
multiple modes of transportation, such as the New York City
Metropolitan Transit Authority, to smaller organizations, including
single-vehicle paratransit services.[Footnote 24] The governance
structure for these organizations varies and includes, among others,
entities that are units or departments of (1) city, county, or local
governments; (2) state governments; (3) private for-profit
corporations; and (4) university or college systems.
Performance Accountability:
Accountability for performance varies from grant program to grant
program. For the purposes of this report, performance accountability
is defined as the mechanisms by which individuals or organizations are
held accountable for meeting specified performance-related
expectations, such as goals. Performance measurement is the ongoing
monitoring and reporting of program accomplishments, particularly
progress toward established goals. In this report, we have focused on
specific mechanisms that are meant to encourage performance--such as
rewards given or penalties imposed. GPRA requires agencies
governmentwide to establish agency and program goals and performance
measures, and to report on their results in achieving those goals for
all their program activities, including grant programs. Performance
measures may address the type or level of program activities conducted
(process-oriented measures), the direct products and services
delivered by a program (output-oriented measures), and/or the results
of those products and services (outcome-oriented measures).
Performance information, for the purposes of this report, refers to
data on performance resulting from performance measurement. To improve
both grant performance and grantee performance accountability,
Congress, granting agencies, and grantees can use performance
accountability mechanisms, which are provisions or specific actions
that can be taken at different points in the grant life cycle.
[Footnote 25]
Some Federal Transit Programs Distribute Funds Based Partly on
Performance, but Opportunities to Improve Grant Recipients'
Performance Accountability Remain:
Of the eight SAFETEA-LU transit programs we reviewed, two are
generally funded by congressional direction, while the remaining six
are funded through legislatively defined grant formulas.
Funding for Nonformula Programs under SAFETEA-LU, Including New
Starts, Is Based Partly on Performance:
Funding for the New Starts Program and the Bus and Bus Related
Equipment and Facilities Program--the two non-formula-based SAFETEA-LU
programs we reviewed--is based partly on performance.
* New Starts is often cited as a model for other federal
transportation programs because its grant evaluation process is used
to distinguish among proposed investments, though GAO and others have
also identified challenges related to the complexity and cost of this
process.[Footnote 26] New Starts funding is allocated by Congress to
specific projects according to FTA's recommendations to Congress.
FTA's recommendations are based on statutorily identified criteria
such as projected performance on land use, cost effectiveness, and
other criteria. By necessity, the New Starts proposed projects are
evaluated based on projected performance on the selected criteria,
rather than actual performance, because the projects have not yet
started.
* For the Bus and Bus Related Equipment and Facilities Program,
funding is generally directed by Congress, except most recently in
fiscal year 2007, when, according to agency officials, FTA allocated
funding in part based on transit agency performance on ridership and
bus load (i.e., actual ridership as compared with total capacity).
Only a Small Percentage of Federal Transit Funding for Formula
Programs under SAFETEA-LU Is Awarded Based on Performance
Considerations:
According to our analysis, the SAFETEA-LU formulas require that about
5 percent, on average, of fiscal year 2010 funding be awarded based on
transit agency performance for the six formula programs we reviewed
(see table 1). The remaining grant funding distribution is based on
infrastructure-related factors, such as total route miles and revenue
vehicle miles, or demographic factors, as shown in table 1.
Performance measures include measures of costs per passenger mile or
vehicle revenue miles per capita because they measure agencies'
activities against capacity, demand, or costs. To illustrate this,
using the example of costs per passenger mile, an agency with low
costs that is also providing a low level of service (i.e., a low
number of passenger miles) is not performing as well as an agency with
comparable population and population density that is able to provide a
high number of passenger miles while keeping costs per passenger mile
low.
Table 1: Fiscal Year 2010 Apportionment Factors and Average Percentage
of Funding Based on Performance for FTA Formula Transit Programs:
Program: Urbanized Area Formula;
Performance-related factors:
Apportionment factors: Areas under 200,000 in population;
* Passenger miles traveled per vehicle revenue mile;
* Passenger miles traveled per vehicle revenue hour;
* Vehicle revenue miles per capita;
* Vehicle revenue hours per capita;
* Passenger miles traveled per capita;
* Passenger trips per capita;
Apportionment factors: Areas with population of 200,000 or greater;
* Fixed-guideway passenger miles times fixed-guideway passenger
miles/operating cost;
* Bus passenger miles times bus passenger miles/operating cost;
Average percentage of funding based on performance[A]: 7.82%.
Program: Urbanized Area Formula;
Non-performance-related factors:
Apportionment factors: Areas under 200,000 in population;
* Population;
* Actual population multiplied by population density (measure of
actual population and population per mile);
Apportionment factors: Areas with population of 200,000 or greater;
* Population;
* Actual population multiplied by population density (measure of
actual population and population per mile);
* Revenue vehicle miles;
* Route miles.
Program: Fixed-Guideway Modernization;
Apportionment factors:
* Route miles;
* Revenue vehicle miles;
Average percentage of funding based on performance[A]: 0.
Program: New Freedom;
Apportionment factors:
* Ratio of population of individuals with disabilities in each
eligible area to the populations of individuals with disabilities in
all eligible areas;
Average percentage of funding based on performance[A]: 0.
Program: Job Access and Reverse Commute;
Apportionment factors:
* Ratio of low-income individuals and welfare recipients in each
eligible area to number of low-income individuals and welfare
recipients in all eligible areas;
Average percentage of funding based on performance[A]: 0.
Program: Nonurbanized Area Formula;
Apportionment factors:
* Ratio of nonurbanized population in each state to the nonurbanized
population of all of the states;
* Ratio of nonurbanized land area in each state to the nonurbanized
land area of all of the states;
Average percentage of funding based on performance[A]: 0.
Program: Special Needs of Elderly Individuals and Individuals with
Disabilities;
Apportionment factors:
* Population of elderly individuals and individuals with disabilities;
Average percentage of funding based on performance[A]: 0.
Total formula funding based on performance:
Average percentage of funding based on performance[A]: 4.87%.
Source: GAO analysis of fiscal year 2010 FTA appropriations and FTA
grant formula documents.
Note: Because the New Starts and Bus and Bus Related Equipment and
Facilities program grants are either awarded on a discretionary basis
or directed by Congress, they have been excluded from this analysis.
While these grant programs are based in part on performance, we were
not able to quantify the extent to which performance was considered
for these grant programs.
[A] Percentages are the average for all agencies. The actual
percentage of funding based on performance will vary by agency
depending on individual data.
[End of table]
One of the six formula grant programs we reviewed--the Urbanized Area
Formula Grant--bases funding, in part, on performance, per statutory
requirements,[Footnote 27] while the other five formula programs we
reviewed are funded entirely based on demographic and infrastructure-
related factors as shown in table 1. Under the Urbanized Area Formula
Grant Program, approximately 8 percent of the funding, on average, is
apportioned based on transit agency performance, although the actual
percentage of an individual transit agency's funding based on
performance varies. This program apportions funds to two groups of
agencies, as follows:
* For transit agencies in urbanized areas with populations under
200,000, (small cities), funding is apportioned based mostly on
demographic data. However, urbanized areas may be eligible for
additional incentive funding, which is apportioned in the following
way: For each of six performance measures for which the urbanized area
performs above the average performance of larger urbanized areas,
small city urbanized areas may receive additional funding in the
apportionment.[Footnote 28] In the end, only 1 percent of total
funding for this grant program is apportioned in this way.
* For urbanized areas with populations of 200,000 or greater, funding
is apportioned in part based on infrastructure-related measures and in
part through an incentive tier measuring passenger miles per dollar of
operating costs.[Footnote 29] The remaining 7 percent of performance-
based funding for this program is apportioned in this way. However,
the incentive for an agency to change its behavior to increase its
grant apportionment is small compared with its operating costs. GAO's
simulations of the incentive tier apportionment show that a 10 percent
increase in an urbanized area's passenger miles (while holding the
area's operating costs and data for all other urbanized areas
constant) typically results in additional funding of less than 0.5
percent of operating costs for the area. Several aspects of the design
of the transit formula incentive tier contribute to the relatively
small size of the incentive available to a transit agency. First, the
overall level of funding apportioned under the incentive tier is
relatively small, both as a fraction of total federal aid for the
Urbanized Area Formula Grant Program and also as a fraction of current
operating expenses. Second, because all the transit agencies within an
urbanized area are included in the passenger miles and operating costs
of the urbanized area, the incentive apportionment to a single transit
agency may be affected by changes in the behavior of other agencies
within the urbanized area. Additionally, even if a transit agency's
increased performance results in an increased apportionment amount for
the urbanized area, there is no guarantee that that transit agency
will benefit from the increased apportionment, as the designated
recipient is responsible for allocating the apportioned funds among
area agencies.[Footnote 30] As we discuss later in this report, when
an incentive is not of sufficient value, the expected return does not
outweigh the expected risk or costs, and recipients are not motivated
to pursue the performance improvement.
Once Grants Are Awarded, FTA Collects Performance Information on the
Programs as Required, but Generally Does Not Use Performance Data to
Evaluate the Effectiveness of FTA's Grant Programs:
FTA has developed some performance measures and targets related to
DOT's strategic goals. Some of these strategic goals and performance
measures are related to internal DOT and FTA performance (e.g.,
organizational excellence); others relate to how well DOT and FTA
programs are performing. FTA tracks performance against a set target.
For example, in DOT's Performance and Accountability Report and FTA's
budget documents, FTA provides information on the following goals and
measures:[Footnote 31]
* Related to DOT's safety goal, FTA measures transit fatalities and
injuries per 100 million passenger-miles traveled.
* Related to DOT's reduced congestion goal, FTA measures the average
percentage change in ridership for the 150 largest transit agencies,
as well as the percentage of bus fleets and rail stations compliant
with the Americans with Disability Act of 1990.[Footnote 32]
* Also related to DOT's reduced congestion goal, FTA measures the
number of jobs made accessible by the JARC program.
In addition to measuring and reporting performance in these areas, FTA
has implemented several initiatives aimed at improving grantee
performance. For instance, FTA's Transit State of Good Repair program,
which focuses on ensuring that local transit systems are maintained in
a state of good repair, initiated a national discussion about the
condition of the nation's infrastructure as an issue posing pressing
challenges for most of the nation's transit systems. The goals of this
initiative are to raise awareness of state of good repair issues
throughout the industry, bring stakeholders together to assess and
measure the scope of maintenance problems, and explore creative
approaches to financing necessary repairs and upgrades for aging
transportation assets. Additionally, FTA recognizes high-performing
transit agencies with nonfinancial awards through various programs.
For example, through 2008, FTA recognized transit agencies that
experienced significant increases in public transportation ridership.
The program was suspended in 2009 in response to the overall trend of
decreasing ridership.
FTA also collects performance data from about 2,000 transit agencies
through the National Transit Database (NTD)[Footnote 33] and other
reporting requirements.[Footnote 34] The reporting requirements vary
somewhat by program, as follows:
* Recipients of Urbanized Area Formula Grants and Nonurbanized Area
Formula Grants are required to submit information on performance and
other information to the National Transit Database. This includes
information on ridership, vehicle revenue miles, vehicle information
(such as the age and type of the vehicle), and financial information,
among other categories.
* Recipients of several other transit grants are required to report
performance information specific to the goals of the program to help
FTA fulfill its obligations under GPRA.[Footnote 35] For example,
recipients of the Special Needs of Elderly Individuals and Individuals
with Disabilities grants are required to report data on gaps in
service filled and rides provided for elderly individuals or
individuals with disabilities as a result of the grant.[Footnote 36]
JARC recipients are required to report information on the number of
jobs made accessible and the number of rides provided as a result of
JARC funding.[Footnote 37] Recipients of the New Freedom grant program
are required to report on services and rides provided to individuals
with disabilities and changes made to infrastructure, technology, or
vehicles that affect the availability of transportation services as a
result of the New Freedom projects implemented in the current
reporting year.[Footnote 38]
FTA has set targets for some broad goals and has some initiatives
aimed at increasing grantee performance, but does not, in general, use
the performance data it collects to evaluate the effectiveness of its
grant programs. FTA officials stated that FTA's strategic goals and
objectives are generally determined based on their relationship to
DOT's strategic goals as well as the priorities of senior FTA
officials. We have previously reported that agencies can use
performance information to, among other things, identify problems or
weaknesses in programs, to try to identify factors causing the
problems, and to modify a service or process to try to address
problems.[Footnote 39] FTA officials use collected performance data to
track overall program trends and performance on a national level, but
not to determine the link between specific FTA program activities and
changes in performance. For example, FTA reports performance
statistics to Congress through its biennial report, Status of the
Nation's Highways, Bridges, and Transit: Conditions and
Performance.[Footnote 40] This report includes the change over time
for statistics such as average operating speed, vehicle use
statistics, frequency and reliability of services, condition of
transit assets and infrastructure, and safety, among others. However,
FTA does not explore the potential reasons for a change in performance
over time. Similarly, FTA officials stated that FTA does not conduct
analysis of changes in transit agency performance or set targets for
the measures that are incentivized in grant formulas to determine what
effect incentives have on transit agency performance (i.e., the extent
to which the incentive funding is having the desired outcome). As a
result, FTA is missing a valuable opportunity to evaluate the end
results of its program activities and SAFETEA-LU funding formulas.
Information on the effectiveness of formula incentive programs, in
particular, is necessary for determining how and when to make changes
to funding mechanisms in the future.
Performance Accountability Mechanisms Can Improve Performance of
Transit Agencies, and although They Potentially Present Disadvantages,
Most of These Can Be Mitigated by Following Key Strategies:
Potential Advantages of Using Performance Accountability Mechanisms
Are Encouraging Good Performance, Deterring Poor Performance, and
Helping Agencies Allocate Limited Funds:
Through our literature review, we identified major financial and
nonfinancial mechanisms for making federal transit programs more
performance based. Tables 2 and 3 describe the three types of
mechanisms we found and their potential advantages and provide
examples of how various federal and state agencies or programs use
them.
Table 2: Types and Descriptions of Financial Mechanisms, Their
Potential Advantages, and Examples of Use:
Type and description of financial mechanisms: Financial rewards or
penalties/sanctions;
These types of mechanisms involve an increase or decrease in funding:
* Entire amount can be tied to performance, or a portion of funding
above an established baseline (i.e., an incentive portion);
* A onetime cash bonus payment or a onetime reduction in payment
penalty;
* Longer-term increases or decreases in the funding term, per unit
reimbursement rate, or overall funding levels;
* Financial sanctions may also be imposed in one area to influence
actions in another area (crossover sanctions);
Ideally, under these financial mechanisms, program funds are allocated
based on the achievement of performance goals by:
* establishing a performance-based formula;
* providing bonus funding including the use of performance incentives,
or;
* imposing additional eligibility requirements for funding (e.g.,
requiring grant recipients to develop performance plans).
Potential advantages:
* Provides positive financial motivation for organizations to change
their behavior and encourages them to accomplish goals to obtain
additional funding;
* Creates clear links between performance and funding and helps hold
grant recipients accountable for achieving desired results and
outcomes;
* Financial penalties or sanctions penalize organizations financially
for not meeting requirements and are intended to help agencies make
sound decisions when allocating limited funds.
Examples:
Department of Education's grants for vocational education[A]:
These grants provide financial rewards and impose financial penalties
based on performance.[B] States are eligible to receive incentive
funds if they exceed performance goals for these grants. States not
meeting their performance levels for 2 years are subject to financial
sanctions, although no state has failed to meet its overall goals for
2 consecutive years.
Highway Safety Improvement Program (HSIP):
In implementing HSIP, SAFETEA-LU required state transportation
departments to prepare strategic highway safety plans.[C] The plans
were to address several key elements, including evaluating and
measuring states' performance toward the overall goal of reducing
traffic fatalities.d The states were required to submit their plans to
avoid incurring a financial penalty to their HSIP funds.[E]
State Safety Oversight Program[F]:
Under this program, FTA requires states to designate an agency to
oversee the safety and security of rail transit systems that receive
federal funding. State oversight agencies are responsible for
developing program standards that transit agencies must meet and
reviewing the performance of the transit agencies against those
standards. For example, the state oversight agency must establish a
safety program plan that outlines oversight and transit agency
responsibilities, review transit agencies' safety and security plans,
conduct safety and security audits, and investigate accidents. If a
state has not met the requirements of the State Safety Oversight
Program, FTA may withhold up to 5 percent of the state's appropriated
funds for the Urbanized Area Formula Grant Program.[G]
Virginia Department of Transportation Highway Maintenance[H]:
Budgets are tied to performance targets established for maintaining
each of the assets. Performance targets are expressed as a percentage
of assets meeting or exceeding the desired condition level. Funding is
allocated based on the desired system (asset) condition.
Source: GAO.
[A] The Office of Vocational and Adult Education (OVAE) administers
the federal vocational education grants that are authorized by the
Carl D. Perkins Vocational and Technical Education Act of 1998
(Perkins III). Perkins III defines major roles for OVAE and states in
establishing performance accountability systems for vocational and
technical education.
[B] States are responsible for developing performance goals and
measures and data collection systems related to four required core
performance indicators: academic and technical skill attainment,
course completion, job placement and retention, and nontraditional
participation and completion.
[C] 23 U.S.C. § 148.
[D] The plans were to address four key elements: (1) eight types of
stakeholders must participate in preparing the plan, (2) the plan must
define areas of safety emphasis through an analysis of state fatality
and serious injury data, (3) the plan must identify strategies and
projects that cover all aspects of highway safety (infrastructure,
behavioral, and emergency medical services), and (4) the plan must
provide for evaluating and measuring states' performance toward the
overall goal of reducing traffic fatalities.
[E] SAFETEA-LU added a requirement that states without a strategic
plan in place by October 2007 would still receive funds for highway
safety improvement, but the amount would be capped at the fiscal year
2007 level.
[F] 49 U.S.C. § 5330: 49 C.F.R. Part 659.
[G] FTA may agree to restore withheld formula funds if compliance is
achieved within two years. See, 49 C.F.R. § 659.7.
[H] Virginia's transportation system, the third largest in the nation,
is composed of 124,000 lane miles, over 12,000 bridges, four
underwater crossings, two mountain tunnels, four ferries, and a
portfolio of parking lots and rest areas. Responding to increasing
pressures to understand the condition, remaining useful life, funding
needed for replacement/repair, and performance targets for its assets,
the department developed an asset management system that it uses to
track and measure maintenance performance.
[End of table]
Table 3: Type and Description of Nonfinancial Mechanisms, Their
Potential Advantages, and Examples of Use:
Type and description of nonfinancial mechanisms: Increase or decrease
program flexibility as a performance incentive; Increase or decrease
in grantee's flexibility by issuing administrative, programmatic, or
financial waivers from requirements and restrictions or by adding
award conditions;
Potential advantages: Encourages good performance and may enhance
grantee's ability to use innovation in directing resources where
needed to solve problems;
Examples:
National Highway Traffic Safety Administration (NHTSA): SAFETEA-LU
established penalties for states that fail to enact federally required
laws to reduce the number of alcohol-related fatalities associated
with (1) repeat drunk driving offenders[A] and (2) open alcoholic
beverage containers in motor vehicles.b States that failed to adopt
these required laws were penalized by having a portion of their
federal highway construction funds transferred to highway safety
programs;
The Environmental Protection Agency affords states with high
environmental performance levels greater flexibility in spending their
grant funds, as part of the National Environmental Performance
Partnership System.
Type and description of nonfinancial mechanisms: Recognize those
entities that achieve certain performance goals; Public recognition of
good performance, for example, through the press, Web sites,
intranets, newsletters, hearings, testimony, and award ceremonies;
Potential advantages: Encourages and rewards good performance through
public recognition;
Examples: Federal Interagency Coordinating Council on Access and
Mobility's United We Ride Initiative implemented national community
leadership awards for transportation coordination. These are
nonmonetary awards that recognize states, localities, communities, or
organizations that have provided leadership and action toward
developing and/or implementing exemplary high-quality coordinated
human service transportation programs or systems.
Source: GAO.
[A] 23 U.S.C. § 164.
[B] 23 U.S.C. § 154.
[End of table]
In short, these mechanisms create a link between performance and
benefits by either rewarding good performance or penalizing poor
performance. However, the extent to which a reward or penalty
motivates performance depends on its importance to the agency--if a
financial reward or penalty is too small, for example, it may not
affect behavior. At the same time, a reward that is too small to
influence a large agency may be significant to a smaller agency.
Potential Disadvantages to Using Performance Mechanisms Are That They
Can Burden Transit Agencies, Produce Inequitable Results, and Raise
Other Concerns:
Our literature review found not only advantages associated with
performance accountability mechanisms but some potential downsides and
concerns as well.
* Most notably, to demonstrate that an incentive has been achieved or
that a penalty is not warranted, agencies have to gather, maintain,
and analyze data, and these tasks require resources. Therefore, to the
extent possible, the measure on which an incentive or penalty is
awarded or assessed should be based on readily available information,
or information that could be readily obtained. If not, it could place
a burden on the agency's resources.
* Additionally, when penalizing organizations for not meeting
requirements, there are concerns that (1) an organization may be
penalized before it has a chance to address its performance problems,
and (2) a punitive approach to performance accountability may be taken
rather than a constructive approach. For example, even if penalties
are employed to promote performance accountability, there should be a
constructive, collaborative approach to performance improvement that
both precedes and follows the penalty.
Our literature review also identified other disadvantages that relate
specifically to implementing financial performance accountability
mechanisms. These include the following:
* The zero-sum nature of performance-based allocations, particularly
under constrained resources, can cause inequity, as programs can
improve and still receive nothing. For example, all recipients might
improve their performance, so that those improving the least might not
be rewarded. Also, under resource constraints, performance-based
allocations are not likely to provide a meaningful incentive to
improve performance or may not be possible. For instance, a basic
reason behind tying the allocation of funding to performance is that
this will provide an incentive for funding recipients to perform
better (to either generate additional funds or avoid financial
penalties). However, according to a 2004 study on the use of
performance standards and measures for public transportation systems,
there is not much evidence that the various formulas used to fund
transit agencies actually produce this result.[Footnote 41] One reason
is that even if a single transit system were to make significant
performance improvements, the current apportionment formulas do not
result in much of a funding change from year to year (in part because
of the fact that the change in one system is but a small fraction of
the statewide or nationwide numbers that feed into the formulas).
* Well-funded grant recipients, with the staff and resources to
implement more sweeping changes, may be rewarded at the expense of
poorly funded ones that may have more pressing operational concerns.
Moreover, for poorly funded recipients, the amount of improvements
required may not be realistically attainable through changes within
the recipients' control. For example, according to the previously
mentioned study done in 2004, some transit agencies would like to see
an increase in the funding provided from local, as opposed to state
and federal, sources.[Footnote 42] However, a funding stream that
includes a requirement for contribution of local dollars could be
particularly difficult to accomplish for rural systems with limited
revenue or for systems where local leaders do not support a
contribution of local dollars.[Footnote 43] This could result in a
transit system being penalized financially for a decision made outside
its control, with an ensuing decline in service quality. To be fair,
factors well beyond the control of the transit agency are often
drivers of performance (e.g., local economic problems leading to a
drop in employment that in turn leads to a drop in ridership).
* Grant recipients may be charged with meeting conflicting goals. For
example, if an important local goal for a transit agency is to
increase geographic service coverage, the achievement of this goal
might have negative impacts on performance as commonly defined--
efficiency and/or effectiveness. For a transit system that wants to
develop new evening or weekend service, generally such service will be
less productive than weekday service. Performance-based funding is
likely to provide a disincentive for providing such service.[Footnote
44]
* If not designed correctly, performance mechanisms can introduce
perverse incentives. For example, regarding a federal employment
program that has used incentive awards--the Workforce Investment Act's
Title I-B Program for Dislocated Workers--we reported in 2009 that
local agency officials receiving grants under the program may be
reluctant to provide services to job seekers that are less likely to
find and maintain a job, because the incentive award is tied to
achieving performance levels in placement and retention.[Footnote 45]
This is contrary to the program's objective, which is to assist all
job seekers in obtaining employment.
Finally, when considering the use of performance accountability
mechanisms for transit agencies, DOT officials noted that transit
grant recipients operate within the context of their local, state, and
regional government structures and funding sources. Therefore, some
changes may need to be enacted by other organizations to improve
transit service, and it may be appropriate to provide incentives to
these other government structures as well.
Key Strategies Can Help Overcome Some Disadvantages of Performance
Accountability Mechanisms and Help Ensure Successful Implementation of
Those Mechanisms:
Our earlier work discusses how five key strategies collectively
facilitate the effective selection, design, and implementation of
performance accountability mechanisms.[Footnote 46] They are as
follows:
1. Ensure mechanisms are of sufficient value. The value of the rewards
and penalties--whether financial or nonfinancial--and the cost of
improved performance are adequate to motivate desired behaviors and
provide a meaningful return to both the grantor and the grantee.
2. Periodically renegotiate and revise mechanisms and measures.
Provide for and use the flexibility to reevaluate performance
accountability mechanisms and associated performance measures at
regular, scheduled intervals and allow time to learn from each cycle
to improve performance.
3. Ensure appropriate measures are selected. Measures should represent
performance that is within the grantee's sphere of influence, and can
reasonably be achieved and evaluated within the specified time frame,
and should be tested over time to minimize the potential for
unintended consequences and perverse incentives. Additionally,
performance data should be tested and validated to make sure they are
credible, reliable, and valid. Absent these attributes, organizations
lack the basis for sound decisions about rewards and penalties.
4. Ensure grantor and grantee technical capacity. Grantors and
grantees should have the necessary knowledge about performance
accountability mechanisms and the ability to effectively implement
them.
5. Ensure phased implementation. Allow time to design, test, and
revise measurement systems before linking them to accountability
mechanisms.
These five key strategies can help mitigate the disadvantages we have
previously discussed related to using performance accountability
mechanisms, as shown in table 4.
Table 4: Disadvantages of Performance Accountability Mechanisms and
How Key Strategies Can Help Overcome Them:
Disadvantages of mechanism:
* Agencies have to gather, maintain, and analyze data, and these tasks
require resources;
Strategies for overcoming disadvantages:
* Ensure appropriate measures are selected. The performance measure on
which the incentive is awarded should be based on readily available
information, or information that could be readily obtained;
* Ensure phased implementation. The use of performance factors in
allocating funds could be phased in over several years to make sure
the data collection methods and application of the measures are
accurate and well understood by all parties.
Disadvantages of mechanism:
* An organization may be penalized before it has a chance to address
its performance problems, and a punitive approach to performance
accountability may be taken rather than a constructive approach;
Strategies for overcoming disadvantages:
* Ensure grantor and grantee technical capacity. Grantors should help
recipients solve their performance problems before being financially
penalized;
* Ensure phased implementation. The introduction of performance
factors could be phased in over several years to make sure the data
collection methods and application of the measures are accurate and
well understood by all parties. Additionally, phased implementation
would allow for agencies to measure performance and correct any
performance issues before being financially penalized.
Disadvantages of mechanism:
* The zero-sum nature of performance-based allocations can cause
inequity, as programs can improve and still receive nothing;
Strategies for overcoming disadvantages:
* Ensure mechanisms are of sufficient value. To the extent that a goal
of performance-based funding is to motivate better performance, if the
performance component of funding is to be effective, it must be large
enough to motivate behavior.
Disadvantages of mechanism:
* Well-funded grant recipients may be rewarded at the expense of
poorly funded ones;
Strategies for overcoming disadvantages:
* Ensure appropriate measures are selected. Choose measures that are
within the program recipients' sphere of influence and test the
performance targets to ensure they are attainable.
Disadvantages of mechanism:
* Grant recipients may be charged with meeting conflicting goals;
Strategies for overcoming disadvantages:
* Ensure appropriate measures are selected. Choose measures that are
within the program recipients' sphere of influence and test the
performance targets to ensure they are attainable.
Disadvantages of mechanism:
* Performance mechanisms can introduce perverse incentives;
Strategies for overcoming disadvantages:
* Ensuring appropriate measures are selected could mitigate the risk
of creating perverse incentives. Measures should be carefully linked
to program goals.
Source: GAO analysis.
[End of table]
Some of these strategies address multiple disadvantages. For example,
table 4 shows that ensuring appropriate measures are selected could
mitigate four of the six disadvantages. In addition, we found in our
literature review that to ensure financial stability, many sources
advocated for providing transit agencies with a baseline funding
amount that would enable grantees to know the minimum (or a baseline
amount) that they would receive each year, and then providing
additional funds that would be based on performance. Although not a
key strategy, this more specific option would help address the
following three disadvantages: the zero-sum nature of performance-
based allocations, well-funded grant recipients being rewarded at the
expense of poorly funded ones, and grant recipients being charged with
meeting conflicting goals.
Appropriateness of and Success in Using Performance Accountability
Mechanisms Depend on Program Goals, but Little Is Known about Using
These Mechanisms in Transit Programs:
Although performance mechanisms can provide advantages, and the
disadvantages can be mitigated, they are still not suitable for all
programs. As previously discussed, the eight federal transit programs
that we reviewed are designed to accomplish different goals, and the
use of performance accountability mechanisms is better suited to some
than to others. For example, discretionary grant programs such as New
Starts, which are designed to award funds to the best potential
performers, may be better suited to the use of performance
accountability mechanisms, while formula programs, such as the
Urbanized Area Formula Grant Program and Fixed-Guideway Modernization
Program, which are intended to support the financial stability of
transit agencies or distributional equity, may be less well suited. We
have found that performance accountability mechanisms need to be
tailored to specific situations, since not all mechanisms are
appropriate to all situations, and there is no "one-size-fits-all"
solution to performance accountability.[Footnote 47] Furthermore,
according to FTA, transit systems vary in size, resources, and
community needs, making it less productive to judge all systems on a
common set of performance measures or performance accountability
mechanisms.
Even though mechanisms are not all appropriate for all situations,
performance accountability mechanisms still hold promise. As we have
described in the previous section of this report, DOT is requiring
some transportation grants to be based on performance, with good
results in some departments. For example, NHTSA used performance
information on alcohol-related injuries and fatalities to target grant
funding and specific program strategies to states with the highest
impaired driver rates. However, DOT has only required transit grants
to be minimally based on performance. Expanding the use of performance
accountability mechanisms in the area of transit could help make
transit grants more performance based. The performance accountability
mechanisms described in this report suggest opportunities for FTA to
study their impact and potentially use them to make transit grants
more performance based--i.e., to identify grantee performance
problems, look for solutions, and make other important management
decisions, per leading practices.[Footnote 48]
Congress also has a role to play in increasing the use of performance
mechanisms in transit, as part of its process of setting national
priorities and allocating the resources to achieve them. Congress has
a number of opportunities to initiate the use of performance
mechanisms, such as when it establishes or reauthorizes a program,
during the annual appropriations process, and during hearings focused
on program and agency operations. Moreover, our 2006 report on
performance accountability mechanisms recommended that the federal
Office of Management and Budget encourage and assist federal agencies
in working with Congress to expand the effective use of performance
accountability mechanisms when federal grant programs are being
created or reauthorized. As noted earlier in this report, Congress and
the administration are currently debating reauthorization of the
entire surface transportation program, including transit programs.
However, without FTA analysis of the appropriateness, feasibility, and
potential impact of using various transit performance mechanisms,
Congress may lack the information needed to identify and implement the
most effective mechanisms and better help transit agencies maximize
their potential. Furthermore, because each mechanism may not be suited
to every program, such analysis may require careful study to ensure
the best link between mechanisms and transit programs.
Selected Transit Agencies Use Performance Measurement to Varying
Degrees and See a Role for the Federal Government in Transit but Cited
Challenges in Linking Performance with Planning and Decision Making:
All Transit Agencies We Interviewed Measure Performance in Some
Categories, but the Extent to Which They Measure It in Others Varies
Widely:
While officials from all 12 of the transit agencies we interviewed
told us they measure performance in certain categories, the extent to
which they measure other categories varied widely (see table 5).
Table 5: Categories Where Performance Is Measured or Studied--Transit
Agency Responses:
Category of performance measurement: Customer satisfaction;
Measures performance in category: 12;
Has studied or plans to study in ways other than performance
measurement: 0.
Category of performance measurement: Ridership;
Measures performance in category: 12;
Has studied or plans to study in ways other than performance
measurement: 0.
Category of performance measurement: On-time performance;
Measures performance in category: 12;
Has studied or plans to study in ways other than performance
measurement: 0.
Category of performance measurement: Safety;
Measures performance in category: 12;
Has studied or plans to study in ways other than performance
measurement: 0.
Category of performance measurement: Cost efficiency or effectiveness;
Measures performance in category: 11;
Has studied or plans to study in ways other than performance
measurement: 1.
Category of performance measurement: Level of service;
Measures performance in category: 10;
Has studied or plans to study in ways other than performance
measurement: 1.
Category of performance measurement: Accessibility for the elderly and
persons with disabilities;
Measures performance in category: 10;
Has studied or plans to study in ways other than performance
measurement: 0.
Category of performance measurement: Capital planning;
Measures performance in category: 10;
Has studied or plans to study in ways other than performance
measurement: 1.
Category of performance measurement: Environmental impact and energy
use;
Measures performance in category: 7;
Has studied or plans to study in ways other than performance
measurement: 4.
Category of performance measurement: Health impact;
Measures performance in category: 5;
Has studied or plans to study in ways other than performance
measurement: 3.
Category of performance measurement: Economic development;
Measures performance in category: 4;
Has studied or plans to study in ways other than performance
measurement: 4.
Category of performance measurement: Connectivity between lines and
modes of transportation;
Measures performance in category: 3;
Has studied or plans to study in ways other than performance
measurement: 6.
Source: GAO.
[End of table]
For example,
* Officials at all 12 transit agencies told us that they measure
performance in the categories of customer satisfaction, ridership, on-
time performance, and safety.
* Officials from 7 of the transit agencies told us that they measure
performance in the category of environmental impact and energy use.
Officials from 1 of the agencies told us that they do this by tracking
greenhouse gas emissions from the agency's fuel consumption based on
methodology published in an FTA report.[Footnote 49] Officials at 4
other agencies said that they had studied or planned to study this
category, but they do not regularly measure performance in this
category.
* Officials from 4 of the transit agencies told us they measure
performance in the category of economic development. According to one
of these officials, to do so the agency tracks the value of property
developments around transit stations. Officials from 4 other agencies
told us that while their agencies do not regularly measure economic
development performance, they had either periodically studied the
agency's economic impact or were planning to do so. For example,
officials from 1 of these agencies said that they had studied, among
other things, the direct and indirect impact of their agency's current
and planned operations on the agency's local economy by tracking
factors such as the agency's capital investments and procurement of
goods and services. However, they do not regularly measure performance
in this category.
The transit agencies we interviewed determined performance measures
based on a variety of factors, including the following:
* Officials from all of the U.S. transit agencies said that federal
requirements provide the basis for at least some of their performance
measures. These officials added that their agencies are required to
report performance data to FTA's NTD and, hence, determine certain
measures of performance based on NTD requirements, as discussed
earlier.
* Officials from 10 of the transit agencies said that local priorities
were used to determine at least some of their performance measures.
For example, officials from 1 agency said that the local metropolitan
planning organization required that the agency report performance on
farebox recovery, which measures the agency's recovery of its costs
from fares.
* Officials from 8 of the transit agencies added that they determined
some of the performance measures based on industry best practices or
their agency's internal needs, such as measures used to track progress
toward an agency's strategic goals.
* Officials from 4 of the U.S. transit agencies said that state
reporting requirements, such as outlined in state legislation on their
agency, also formed the basis for determining some of their
performance measures.
* Officials from 2 of the transit agencies noted that public concerns
about various issues led to the development of some performance
measures. Specifically, officials from 1 agency told us that passenger
concerns about their security while using the transit system led the
agency to allocate more funding for its transit police force and to
develop and monitor the agency's performance on a "customer security
index." Officials from another said that concern about the status of a
new transit development led the agency to regularly measure and
publicize performance information on the development's status.
Challenges to Measuring Performance:
Transit agency officials we interviewed cited a variety of challenges
associated with measuring performance. Officials from 8 of the
agencies stated that measuring performance on outcomes was
particularly challenging. For example, officials from 5 of these
agencies told us that it is particularly challenging to determine a
method for measuring economic impact or to obtain relevant data. In
particular, officials from 1 agency added that measuring the agency's
impact on employment generation is challenging because it is difficult
to isolate the agency's effect on employment. Similarly, officials
from 5 of the transit agencies said it was challenging to measure
environmental impact generally because it was difficult to determine a
method for measuring it or to obtain relevant data. For example, an
official from 1 agency said that it is difficult to measure how much
pollution a bus generates compared with the pollution from passenger
vehicles that the bus is displacing, in part because emissions from
these passenger vehicles can vary widely and relevant data are
difficult to obtain. Moreover, we were told by officials from 7 of the
transit agencies that it is challenging to measure performance because
performance is affected by numerous factors that are out of a transit
agency's control, like economic conditions or weather. For example, an
official from 1 agency noted that ridership is affected by economic
conditions, such as employment. Officials from another agency also
said that ridership data can be influenced by the elimination of
funding for a route because, according to the officials, the
elimination of routes makes it difficult to measure annual changes in
overall ridership. Additionally, officials from 1 agency told us that
some transit systems operate in environments that an agency has less
control over, particularly bus systems, which can make measuring
performance on these systems more difficult than for dedicated systems
like subways. For example, the officials said that buses, unlike
subways, can travel different distances on any given day, making it
difficult to measure performance on a month-to-month basis.
Performance Measurement Affects Agencies' Planning and Decision
Making, but Other Factors Also Play a Role:
Officials from all 12 of the transit agencies we interviewed told us
that they use performance information for agency planning and decision-
making purposes. Officials at 9 of the agencies said that performance
information is used in decisions or planning related to funding
allocations. Officials from 1 agency explained that performance-based
funding allocations were critical because they help to inform the
agency's annual budget process and address problems, such as
deterioration of capital assets, before they can have a negative
impact on the agency's performance. Officials from 2 transit agencies
said that information on customer satisfaction helped them understand
customer perceptions about their system, which informed decisions and
planning regarding issues like funding allocations and setting of
strategic goals. For example, officials from 1 of these agencies said
customer perceptions about the transit system's security led the
agency to make decisions and plans that included allocating more
funding toward transit police, developing a customer security
performance measure, and setting a strategic goal of increasing
customer security. Similarly, officials from the other transit agency
said that measures of customer satisfaction regarding system
cleanliness led their agency to allocate funding for cleaning the
system and to set a strategic goal associated with system cleanliness.
While performance affects some transit agency decisions and planning,
other factors are also considered. For example:
* Funding availability: Officials from half of the transit agencies
said that funding shortfalls made it difficult to link performance
measurement to decisions and planning. For example, officials from 2
of these agencies said that the recent economic recession had reduced
sales tax revenue and consequently agency funding, resulting in
reduced service or plans for expansion.
* Political priorities: Officials from half of the transit agencies
added that local political priorities also challenge the agencies'
ability to link performance to decisions and planning. These officials
said that among other reasons, elected officials can affect decisions
and planning for routes or funding allocation based on political
priorities rather than performance information.
Transit Agencies and Experts See a Role for the Federal Government in
Transit, but See Challenges to Imposing National Performance Measures:
Officials from the 12 transit agencies and experts from the five
organizations we interviewed suggested a variety of changes to the
federal role in transit:
* Investment in existing transit infrastructure: Officials from 3 of
the transit agencies and experts from two of the organizations
suggested that the federal government address the declining condition
of transit agency infrastructure by focusing on state of good repair
needs. Officials from 2 of these transit agencies and one of the
organizations believed that federal grants for transit too often
focused on new capital investments rather than updating and
maintaining existing infrastructure.
* Short duration of federal grant funding: Officials from 3 of the
transit agencies stated that the duration of federal transit programs'
grant funding made it difficult for them to conduct long-term
strategic planning. According to officials from 2 of these agencies,
this long-term planning would benefit if grants were provided for 3-to
5-year periods.
* Flexibility in implementing federal transit grants: Some of the
transit agency officials and experts we spoke with stated that the
federal government should provide greater flexibility to transit
agencies or local transportation planning officials to decide how
federal grants should be used. Specifically, officials from 5 of the
transit agencies and experts from three of the organizations told us
that federal grants for transit systems should be less specific to
particular modes, such as bus or rail. Officials from 2 of the transit
agencies and experts from three of the organizations also told us that
transit agencies or local transportation planning officials should
have greater autonomy to determine which transportation solution would
be most efficient for their circumstances.
Current SAFETEA-LU programs provide funding for accomplishing goals
such as modernizing or improving existing transit equipment and
facilities, providing capital assistance for new transit systems or
expansion to existing systems, expanding access to elderly persons and
persons with disabilities, and transporting low-income individuals to
and from jobs. During interviews, experts from four of the
organizations and officials from 7 of the transit agencies told us
that the federal government should set goals that reflect broader
issues, such as promoting economic development or improving air
quality, in part to address the differences between transit agencies'
circumstances and priorities. However, officials from 3 of the
agencies and experts from three of the organizations told us that the
goals should address transit-specific issues, such as state of good
repair needs. As discussed earlier, federal transit programs focus on
these issues to some extent. The transit agency officials and transit
experts we interviewed offered a variety of suggestions for
consideration in developing federal transit program goals, including
the following:
* improve air quality;
* encourage economic growth and access to jobs;
* reduce roadway congestion;
* increase the safety of transit systems;
* provide increased mobility for populations, particularly in regions
with fast-growing populations;
* encourage modal shift from automobiles to public transit; and:
* promote livable communities around transit that reduces dependence
on foreign oil, encourage economic growth, and addresses environmental
challenges.
All of the transit agencies and expert organizations we interviewed
foresaw challenges to imposing national performance accountability
mechanisms on transit agencies, some of which we identified earlier in
our review. Officials from 10 of the agencies and experts from three
of the organizations told us that it would be challenging to account
for the varying priorities of transit agencies, such as differences in
the size or the density of the population they serve, or the ways in
which they measure performance. For example, officials from 4 of the
agencies noted a lack of consistency in how performance is measured,
which makes it difficult to compare agencies' performance. The agency
officials and transit experts cited a variety of other challenges that
they said should be considered when implementing a more performance-
based federal transit system, including the following:
* Some transit agencies, particularly in small cities or rural areas,
lack personnel or technical resources to measure performance.
* Some federal support should be based on need rather than performance
because of factors that could make it difficult for some agencies to
meet performance goals or maintain performance standards. For example,
officials from 1 of the transit agencies said that if the federal
support was based on performance alone, then areas with smaller
populations would not be positioned as well as agencies in larger,
more populated areas to perform on measures like passengers per mile
or recovery of costs from fares. Experts from one organization added
that some funding for transit agencies should be allocated if there is
a risk of decreased performance in the future in areas such as safety.
* For some categories of performance, like economic development, data
are more difficult to obtain or performance is more difficult to
measure.
* Goals attached to a federal performance mechanism could outweigh the
transit needs or priorities based on local circumstances.
Some of the transit agencies and experts we interviewed provided
suggestions for implementing federal performance accountability
mechanisms that would mitigate some of the challenges they discussed.
For example,
* Officials from 1 transit agency suggested that a voluntary pilot
program be implemented to test a rating system that would measure
participating agencies' median performance over several years on a
series of performance indicators. They said such a system would allow
the federal government to assess how each agency is performing over
time, rather than comparing agencies with differing circumstances or
evaluating agencies based on a single performance measure.
* An official from 1 transit agency suggested that the federal
government support the development of a national transit benchmarking
system in which transit agencies could learn best practices from other
agencies to improve their performance, rather than applying national
performance targets that would have to account for the many
differences among transit agencies. The official cited an established
benchmarking system in which transit agencies can confidentially share
their performance information and compare it against that of other
agencies in similar groups, including large subway systems, medium
subway systems, and bus systems.
* Experts from two of the organizations also told us that the federal
government should offer capacity development opportunities such as
technical assistance to address the lack of resources or potential
burden that some transit agencies could experience with additional
federal requirements for performance measurement.
Conclusions:
In our 2008 report on surface transportation, we recommended that
Congress consider instituting processes to make grantees more
accountable by establishing more performance-based links between
funding and program outcomes.[Footnote 50] Implementing links between
transit funding and performance through the use of financial
performance accountability mechanisms and other tools and approaches,
as outlined in this report, could help create incentives to local
transit agencies to improve their performance. Although we have
identified challenges to making the federal transit program more
performance based, we have also identified ways to mitigate those
challenges--through the use of strategies for implementing performance
accountability mechanisms. As we have illustrated through examples and
through the concerns and suggestions of local transit agency and
expert officials, performance accountability mechanisms are not one-
size-fits-all. Nevertheless, with careful consideration, the
mechanisms and strategies highlighted in this report can be combined
to achieve a more accountable federal transit program and thus lead to
improved outcomes in transit and achievement of federal goals.
One FTA program, New Starts, is frequently cited as a model for other
federal transportation programs, because of its use of a rigorous and
systematic evaluation process to distinguish among proposed
investments based on projected performance. Other FTA programs have
afforded limited performance accountability, and thus little incentive
to ensure federal transit grants are being used effectively and
efficiently. Because of the lack of incentives of sufficient value to
grantees in formula programs, the federal transit grant system has
limited ability to influence the activities and priorities of local
grantees and to ensure that the goals and priorities of the federal
transit program are achieved. Further decreasing the federal
government's ability to positively affect the performance of local
transit agencies is FTA's limited analysis of the extent to which
transit grants, current formula incentives, and FTA program activities
have had an effect on transit agency performance. The Government
Performance and Results Act of 1993, as amended, emphasized managing
results and identifying opportunities to improve performance and
increase accountability.[Footnote 51] By not fully measuring and
analyzing the effects of transit grant programs and FTA program
activities on local transit agency performance, FTA is missing a
valuable opportunity to assess both its own activities and the transit
grant programs for needed changes.
As Congress and DOT prepare for the upcoming surface transportation
reauthorization, which includes the reauthorization of all federal
transit programs, the department and FTA have an opportunity to
enhance the performance of transit grant programs by incorporating
performance accountability mechanisms into those programs' legislative
requirements. Doing so could increase the federal government's ability
to ensure that federal transit grants are used efficiently and
effectively and achieve the goals established by Congress, keeping in
mind the challenges and strategies for mitigating those challenges
that we have identified. Since little is currently known about
applying these mechanisms to the transit sector, FTA could help fill
that knowledge gap by analyzing the feasibility and potential impacts
of options for using such mechanisms in federal transit programs and
report that information to Congress to help inform the congressional
deliberations on the ongoing surface transportation reauthorization.
Recommendations for Executive Action:
To enhance the performance of federal transit programs, we recommend
that the Secretary of Transportation direct the FTA Administrator to
study and report to Congress on options for adding performance
accountability mechanisms to transit grant programs. FTA should strive
to provide such information in time to be considered during the
reauthorization of the federal transit programs.
To improve FTA's ability to determine the extent to which transit
grants, current formula incentives, and FTA program activities have
had a positive effect on local transit agency performance--and to the
extent that FTA finds current data sources to be appropriate and
reliable for such purposes--we recommend that the Secretary of
Transportation direct the FTA Administrator to further analyze and use
data submitted to FTA by local transit agencies. As part of this
analysis, FTA may want to identify and evaluate, when applicable,
* the extent to which transit grant programs are accomplishing their
established goals,
* the areas of performance in which FTA should concentrate its program
activities to increase the performance of local transit agencies and
the federal transit program in general, and:
* the extent to which formula incentives and other performance
accountability mechanisms have influenced the activities and
performance of local transit agencies.
Agency Comments and Our Evaluation:
We provided a draft of this report to DOT for review and comment. DOT
officials provided technical clarifications, which we incorporated
into the report as appropriate, and DOT said it would consider our
recommendations.
We are sending copies of this report to the Secretary of
Transportation, the Administrator of the Federal Transit
Administration, and appropriate congressional committees. This report
is also available at no charge on the GAO Web site at [hyperlink,
http://www.gao.gov].
If you have any questions about this report, please contact me at 202-
512-2834 or wised@gao.gov. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last
page of this report. Major contributors to this report are listed in
appendix II.
Signed by:
David J. Wise:
Director, Physical Infrastructure Issues:
[End of section]
Appendix I: Scope and Methodology:
To address the first objective, on the extent to which federal transit
programs incorporate performance in funding distribution and
evaluating transit program effectiveness, we selected and reviewed 8
of 18 federal transit programs that account for nearly 97 percent of
all Federal Transit Administration (FTA) grant funds, excluding funds
provided under the American Recovery and Reinvestment Act.[Footnote
52] With respect to the distribution of transit funds in these
programs, we analyzed legislation and FTA documents and interviewed
FTA officials to determine the current factors used to establish the
level of grant funding under each of the transit programs and the
extent, if any, to which the funding is linked to performance. In
assessing the extent to which programs are funded based on
performance, we compared the factors used to allocate funding to the
programs against a definition of performance measures, which requires
the measurement of activities against capacity, demand, or costs. To
simulate incentive tier apportionments for the Urbanized Area Formula
Grant Program's bus tier, we analyzed FTA apportionment documents and
National Transit Database (NTD) data. Concerning the extent to which
performance information is incorporated into efforts to evaluate the
effectiveness of transit programs, we also analyzed FTA documents and
interviewed FTA officials. We relied on criteria found in the
Government Performance and Results Act, Transportation Research Board
reports, and other sources, which indicate, among other things, that
performance-based systems should have defined goals and objectives,
link performance measures and program activities, have steps to
monitor and report on performance, integrate performance results into
decision making, and review and update performance systems
periodically. We did not assess NTD or other FTA data to determine its
reliability or appropriateness for use in assessing the performance of
the Safe, Accountable, Flexible, Efficient Transportation Equity Act:
A Legacy for Users (SAFETEA-LU) transit programs.
To address the second objective, on mechanisms that exist for making
federal transit programs more performance based and strategies for
supporting their successful implementation, we conducted a literature
review to identify pertinent studies and reports and interviewed
transit agency officials and industry experts. We selected studies and
reports that focused on performance accountability mechanisms and
general practices that facilitated the effective use of accountability
mechanisms or provided examples of using performance accountability
mechanisms. Our literature search covered studies published from 2004
onward and was largely drawn from major electronic databases in
transportation, economics, and other fields (e.g., Transportation
Research Information Services, EconLit, ProQuest, WorldCat, and other
databases) and from our past work in surface transportation and
performance measures and management. We also interviewed transit
agency officials (see list of agencies in table 6) and a variety of
industry experts to obtain their views on performance accountability
mechanisms, their advantages and disadvantages, and strategies for
mitigating any disadvantages and for helping support their successful
implementation. We identified industry experts through a literature
review and interviews with officials from FTA. Collectively, these
experts were knowledgeable about the transit issues that we were
addressing.[Footnote 53] In addition to the literature review, the
examples of agencies or programs where the mechanisms have been
proposed for or actually used were identified from other sources,
including our previous work and interviews with transit agency
officials and experts.
To address the third objective, describing how selected U.S. and
foreign transit agencies incorporate performance measurement into
their planning and decision making and their views on the federal role
in transit, we conducted semistructured interviews with 12 transit
agencies--10 from the United States and 2 from foreign countries (see
table 6). We identified transit agencies for our analysis through a
literature review and interviews with officials from FTA and industry
organizations. We further narrowed the list by reviewing the transit
agencies' Web sites for information about their use of performance
measurement to ensure the transit agency would be able to discuss
performance measurement. The 10 U.S. agencies were selected to ensure
geographic distribution and variation in the size of the population
served. To select the 2 foreign transit agencies for our review, we
narrowed the list to include agencies that offer multiple modes of
transit and that were available to speak with us in English. Because
the agencies were selected as a nonprobability sample, the results
cannot be generalized to all transit agencies.[Footnote 54] However,
the information from these agencies is illustrative of the ways in
which transit agencies can incorporate performance measurement into
their planning and decision-making processes. We also conducted
interviews with industry experts, as previously discussed, to obtain
their views on the role of the federal government in transit:
Table 6: Transit Agencies Interviewed for GAO's Analysis:
Agency location: state or country: California;
Major area(s) served: San Francisco;
Transit agency name: Bay Area Rapid Transit.
Agency location: state or country: Canada;
Major area(s) served: Montreal;
Transit agency name: Société de transport de Montréal.
Agency location: state or country: Colorado;
Major area(s) served: Denver;
Transit agency name: Regional Transportation District.
Agency location: state or country: Illinois;
Major area(s) served: Chicago;
Transit agency name: Regional Transportation Authority.
Agency location: state or country: Kansas;
Major area(s) served: Wichita;
Transit agency name: Wichita Transit.
Agency location: state or country: Maryland, Virginia, Washington,
D.C.;
Major area(s) served: Washington;
Transit agency name: Washington Metropolitan Area Transportation
Authority.
Agency location: state or country: Oregon;
Major area(s) served: Portland;
Transit agency name: Tri-County Metropolitan Transportation District
of Oregon.
Agency location: state or country: Pennsylvania;
Major area(s) served: Philadelphia;
Transit agency name: Southeastern Pennsylvania Transportation
Authority.
Agency location: state or country: Texas;
Major area(s) served: Dallas;
Transit agency name: Dallas Area Rapid Transit.
Agency location: state or country: United Kingdom;
Major area(s) served: London;
Transit agency name: Transport for London.
Agency location: state or country: Utah;
Major area(s) served: Salt Lake City;
Transit agency name: Utah Transit Authority.
Agency location: state or country: Virginia;
Major area(s) served: Norfolk and Virginia Beach;
Transit agency name: Hampton Roads Transit.
Source: GAO.
[End of table]
We conducted this performance audit from November 2009 through
November 2010 in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform
the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a
reasonable basis for our findings and conclusions based on our audit
objectives.
[End of section]
Appendix II: GAO Contact and Staff Acknowledgments:
GAO Contact:
David J. Wise, (202) 512-2834 or wised@gao.gov:
Acknowledgments:
In addition to the contact named above, Rita A. Grieco, Assistant
Director; Elizabeth H. Curda; Dwayne Curry; Robert J. Dinkelmeyer;
Katherine E. Hamer; James Leonard; Amy Rosewarne; Sara Ann W.
Moessbauer; and Mindi G. Weisenbloom made key contributions to this
report.
[End of section]
Footnotes:
[1] American Public Transportation Association, Impacts of the
Recession on Public Transportation Agencies, Survey Results
(Washington, D.C.: March 2010).
[2] GAO, Surface Transportation: Restructured Federal Approach Needed
for More Focused, Performance-Based, and Sustainable Programs, GAO-08-
400 (Washington, D.C.: Mar. 6, 2008), and Performance and
Accountability: Transportation Challenges Facing Congress and the
Department of Transportation, [hyperlink,
http://www.gao.gov/products/GAO-07-545T] (Washington, D.C.: Mar. 6,
2007).
[3] SAFETEA-LU, Pub. L. No. 109-59, 119 Stat. 1144 (Aug. 10, 2005).
[4] SAFETEA-LU expired at the end of fiscal year 2009. Since that
time, Congress has enacted the Surface Transportation Extension Act of
2010, title IV of Pub. L. No. 111-147, 124 Stat. 71 (March 18, 2010),
which continues the authorization of the federal transit programs
through December 31, 2010. Additionally, the Consolidated
Appropriations Act, 2010, div. A, title I of Pub. L. No. 111-117, 123
Stat. 3034 (Dec. 16, 2009), appropriated funds for Federal Transit
Administration funded programs for fiscal year 2010.
[5] Pub. L. No. 111-5, 123 Stat. 115 (Feb. 17, 2009).
[6] Government Performance and Results Act of 1993, Pub. L. No. 103-
62, 107 Stat. 285 (Aug. 3, 1993).
[7] An urbanized area is an area with a population of 50,000 or more
that is designated as such in the 2000 Census by the U.S. Department
of Commerce, Bureau of the Census.
[8] Designated recipients are entities designated by the chief
executive officer of a state, responsible local officials, and
publicly owned operators of public transportation to receive and
apportion amounts that are attributable to transportation management
areas. 49 U.S.C. § 5307(a)(2). The designated recipient is
responsible, among other things, for allocating annual apportionments
among recipients in an urbanized area or areas based on local needs
and arrangements, and in coordination with the MPO, submitting a grant
application for the Section 5307 Program of Projects, and/or
designating other eligible applicants to apply for all or part of the
apportionments, and notifying FTA of such designations. FTA C 9030 1D,
Urbanized Area Formula Program Guidance and Application Instructions,
Chapter II-3, section 5(a) and (c) (Washington D.C.: May 1, 2010).
[9] 49 U.S.C. § 5307.
[10] 49 U.S.C. § 5311.
[11] Fixed-guideway systems use and occupy a separate right-of-way for
the exclusive use of public transportation services. They include
fixed rail, exclusive lanes for buses, and other systems. See 49
U.S.C. § 5302 (4).
[12] 49 U.S.C. § 5309.
[13] 49 U.S.C. § 5309, 49 U.S.C. § 5318.
[14] 49 U.S.C. § 5309.
[15] 42 U.S.C. §12101 et seq.
[16] The designated recipient or state will apply to FTA for funding
on behalf of itself and any subrecipients within its area.
[17] 49 U.S.C. § 5317.
[18] The designated recipient or state will apply to FTA for funding
on behalf of itself and any subrecipients within its area.
[19] 49 U.S.C. § 5316.
[20] Local governmental authorities may be grant recipients when
Federal Highway Administration funds are flexed to Section 5310
support services for individuals with disabilities.
[21] A state may allocate amounts to a private nonprofit organization
if the public transportation service is unavailable, insufficient, or
inappropriate. 49 U.S.C. § 5310(a)(2)(A). A state may allocate funds
to a governmental authority that is approved by the state or certifies
that there are not any nonprofit organizations readily available in
the area to provide the services. 49 U.S.C. § 5310(a)(2)(B).
[22] 49 U.S.C. § 5310.
[23] American Public Transportation Association, Impacts of the
Recession on Public Transportation Agencies: Survey Results
(Washington, D.C.: March 2010).
[24] Paratransit services are transportation services that are
typically provided to targeted populations, such as the elderly or
those with disabilities, without fixed routes or timetables. See 42
U.S.C. § 12143.
[25] The grant life cycle includes the application, award, and
closeout phases.
[26] GAO, Public Transportation: Improvements are Needed to More Fully
Assess Predicted Impacts of New Starts Projects, [hyperlink,
http://www.gao.gov/products/GAO-08-844] (Washington, D.C.: July 25,
2008).
[27] See 49 U.S.C. § 5336.
[28] Under the Small Transit Intensive Cities (STIC) Program,
additional funding is apportioned to urbanized areas with populations
of fewer than 200,000 that meet or exceed, in one or more of six
performance categories, the industry average for all urbanized areas
with a population of at least 200,000 but not more than 999,999. The
measures for this program include vehicle revenue miles per capita and
passenger miles per vehicle revenue mile. 49 U.S.C. § 5336(i)(1) and
(j).
[29] A vehicle revenue mile is the distance traveled by a transit
vehicle between the time it is first available to the public and the
last passenger drop-off.
[30] Funding for urbanized areas with populations above 200,000 under
the Urbanized Areas Formula Program is apportioned and flows directly
to a designated recipient for the urbanized area and is then divided
among eligible transit agencies within the urbanized area. 49 U.S.C. §
5307(a)(2).
[31] Department of Transportation, FY2009 Performance & Accountability
Report (Washington, D.C: November 16, 2009).
[32] The Americans with Disabilities Act (ADA) of 1990 requires that
transit operators provide accessible paratransit service that is
comparable to their regular service for disabled individuals who are
unable to provide their own transportation or access the regular
transit system. See 42 U.S.C. § 12143.
[33] See 49 U.S.C. § 5335 for reporting requirements under the NTD.
Transit agencies that receive federal funding under specific programs
(Urbanized Area Formula Grants and Nonurbanized Area Formula Grants)
are required to submit data to the NTD, 49 U.S.C. § 5335(b).
[34] We have not analyzed the reliability or completeness of NTD or
other data collected by FTA for the purposes of assessing transit
agency performance or awarding grant funding based on transit agency
performance.
[35] Under GPRA, FTA is required to establish performance goals to
define the level of performance to be achieved and to establish
performance indicators to be used in measuring or assessing the
relevant outputs, service levels, and outcomes for each of its program
activities. 31 U.S.C. § 1115.
[36] FTA C 9070.1F, Elderly Individuals and Individuals with
Disabilities Program Guidance and Application Instructions, Chapter
II, Section 3 (a) and (b), (Washington, D.C.: May 1, 2007).
[37] FTA C 9050.1, The Job Access and Reverse Commute (JARC) Program
Guidance and Application Instructions, Chapter II, Section 3 (a) and
(b) (Washington, D.C.: May 1, 2007).
[38] FTA C 9045.1, New Freedom Program Guidance and Application
Instructions, Chapter II, Section 3 (a) and (b) (Washington, D.C.: May
1, 2007).
[39] GAO, Managing for Results: Enhancing Agency Use of Performance
Information for Management Decision Making, GAO-05-927 (Washington,
D.C.: Sept. 9, 2005).
[40] U.S. Department of Transportation, FHWA and FTA, 2008 Status of
the Nation's Highways, Bridges, and Transit: Conditions and
Performance Report to Congress.
[41] Cook, Thomas J., and Judwon Lawrie, Use of Performance Standards
and Measures for Public Transportation Systems, Institute for
Transportation Research and Education, North Carolina State
University, Final Report FHWA/NC/2004-10 (Raleigh, North Carolina:
September 2004).
[42] Cook, Thomas J., and Judwon Lawrie, Final Report FHWA/NC/2004-10
(2004).
[43] All of the FTA grants programs we reviewed require that grantees
provide sufficient funds or approved in-kind resources to serve as a
local match for federally assisted projects. For example, the Job
Access and Reverse Commute Program requires that the local share of
eligible capital and planning costs be no less than 20 percent of the
net program costs and the local share for eligible operating costs be
no less than 50 percent of net operating costs.
[44] Transit Cooperative Research Program (TCRP), Synthesis 56,
Performance-Based Measures in Transit Fund Allocation: A Synthesis of
Transit Practice, (Washington, D.C.: 2004).
[45] GAO, Vocational Rehabilitation Funding Formula: Options for
Improving Equity in State Grants and Considerations for Performance
Incentives, [hyperlink, http://www.gao.gov/products/GAO-09-798]
(Washington D.C.: Sept. 30, 2009).
[46] GAO, Grants Management: Enhancing Performance Accountability
Provisions Could Lead to Better Results, [hyperlink,
http://www.gao.gov/products/GAO-06-1046] (Washington D.C.: Sept. 29,
2006).
[47] [hyperlink, http://www.gao.gov/products/GAO-06-1046].
[48] [hyperlink, http://www.gao.gov/products/GAO-06-1046].
[49] Federal Transit Administration, Public Transportation's Role in
Responding to Climate Change. (Washington, D.C.: January 2010).
[50] GAO, Surface Transportation: Restructured Federal Approach Needed
for More Focused, Performance-Based, and Sustainable Programs,
[hyperlink, http://www.gao.gov/products/GAO-08-400] (Washington, D.C.:
Mar. 6, 2008).
[51] GAO, The Government Performance and Results Act: 1997
Governmentwide Implementation Will Be Uneven, [hyperlink,
http://www.gao.gov/products/GAO/GGD-97-109] (Washington, D.C.: June 2,
1997).
[52] The 8 programs include New Starts, the Bus and Bus Related
Equipment and Facilities Program, Fixed-Guideway Modernization, the
Urbanized Area Formula Program, the Nonurbanized Area Formula Program,
the Special Needs of Elderly Individuals and Individuals with
Disabilities Program, the Job Access and Reverse Commute Program, and
the New Freedom Program.
[53] The experts were from a variety of organizations including the
American Public Transportation Association, the Bipartisan Policy
Center, Transportation for America/Reconnecting America, the Railway
Transport and Strategy Center at Imperial College of London
(benchmarking programs), the Transit Finance Learning Exchange, and
the Metropolitan Washington Council of Governments.
[54] Results from nonprobability samples cannot be used to make
inferences about a population because in a nonprobability sample, some
elements of the population being studied have no chance or an unknown
chance of being selected as part of the sample.
[End of section]
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