Highway Emergency Relief:

Strengthened Oversight of Project Eligibility Decisions Needed

GAO-12-45: Published: Nov 8, 2011. Publicly Released: Dec 8, 2011.

Additional Materials:

Contact:

Phillip R. Herr
(202) 512-3000
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

The Federal Highway Administration (FHWA), within the U.S. Department of Transportation (DOT), administers the Emergency Relief Program to provide funds to states to repair roads damaged by natural disasters and catastrophic failures. In 2007, GAO reported that in recent years states' annual demand for emergency relief funds often exceeded the program's $100 million annual authorization from the Highway Trust Fund and required supplemental appropriations from general revenues to address a backlog of funding requests from states. GAO recommended that FHWA tighten eligibility standards and coordinate with states to withdraw unneeded emergency relief funds, among other actions. For this report, GAO reviewed (1) Emergency Relief Program funding trends since 2007, (2) key program changes made in response to GAO's 2007 report, and (3) the extent to which selected emergency relief projects were approved in compliance with program eligibility requirements. GAO reviewed projects in New York, Texas, and Washington state, states selected based on the amount and frequency of funding allocations since 2007, among other factors.

From fiscal years 2007 through 2010, the Emergency Relief Program received about $2.3 billion, of which $1.9 billion came from three supplemental appropriations compared with about $400 million authorized from the Highway Trust Fund. FHWA allocated this funding to 42 states and 3 territories to reduce the backlog of funding requests, with $485 million in unfunded requests remaining as of June 2011. This backlog list did not include funding requests for August 2011 damages from Hurricane Irene. Because the program lacks time frames to limit states from requesting funds years after events occur, the June 2011 backlog list includes about $90 million for events that occurred prior to fiscal year 1994. Without time limits for emergency relief funding requests, FHWA's ability to anticipate and manage future program costs is hindered. In response to GAO's 2007 report, FHWA withdrew about $367 million of unobligated emergency relief funds from states and redistributed most of this funding for other emergency relief needs. However, additional funding remains unused, including (1) at least $63 million allocated to states before fiscal year 2007 that has yet to be obligated to projects and (2) $341 million obligated between fiscal years 2001 and 2006 that remains unexpended. Due to a lack of time frames for states to close-out completed projects, FHWA lacks project status information to determine whether unexpended funding is no longer needed and could be deobligated. FHWA has not addressed GAO's 2007 recommendation to revise its regulations to limit the use of emergency relief to fully fund projects that have grown in scope and cost as a result of environmental or community concerns. The Emergency Relief Program faces the continued risk of escalating costs due to projects that have grown in scope beyond the program's goal of restoring damaged facilities to predisaster conditions. GAO's review of 83 emergency relief project files in three FHWA state offices found many instances of missing or incomplete documentation--as such, GAO was unable to determine the basis by which FHWA made many eligibility determinations. For example, about half of the project files did not include required repair cost estimates, and 39 of 58 (67 percent) emergency repair projects approved for 100 percent federal funding did not contain documentation of completion within 180 days--a requirement for states to receive 100 percent federal funding. FHWA lacks clear requirements for how states submit and FHWA approves key project documentation, which has resulted in FHWA state offices applying eligibility guidelines differently. Establishing standardized procedures for reviewing emergency relief documentation and making eligibility decisions would provide greater assurance that projects are in fact eligible and that FHWA makes eligibility determinations consistently and transparently. GAO makes several recommendations including that FHWA establish (1) time frames to limit states' requests for emergency relief funds and to close completed projects and (2) standardized procedures for reviewing emergency relief documentation and making eligibility decisions. DOT provided technical comments on project time frames and costs which GAO incorporated as appropriate.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To improve the accountability of federal funds, ensure that FHWA's eligibility decisions are applied consistently, and enhance oversight of the Emergency Relief Program, the Secretary of Transportation should direct the FHWA Administrator to establish clear time frames for states to close out completed projects in order to improve FHWA's ability to assess whether unexpended program funds are no longer needed and could be deobligated.

    Agency Affected: Department of Transportation

    Status: Open

    Comments: FHWA reported in June 2012 that it will clarify time limits for the use of emergency relief funds either through: (a) a regulatory proceeding, to be undertaken in the months after the enactment of MAP-21, signed by the President in July 2012; or (b) a revision to the Emergency Relief Program Manual, estimated to be completed by December 2012. FHWA also reported that it has begun a longer-term effort to identify unexpended program funding that is no-longer needed so that those funds may be deobligated and withdrawn.

    Recommendation: To improve the accountability of federal funds, ensure that FHWA's eligibility decisions are applied consistently, and enhance oversight of the Emergency Relief Program, the Secretary of Transportation should direct the FHWA Administrator to instruct FHWA division offices to no longer permit states to transfer unobligated allocations from a prior emergency relief event to a new event so that allocations that are no longer needed may be identified and withdrawn by FHWA.

    Agency Affected: Department of Transportation

    Status: Closed - Implemented

    Comments: In January 2012, FHWA issued written guidance to its staff directing them to no longer permit this practice. FHWA also instituted an internal control to track each states' balance of unused funds on a monthly basis so that unused funding can be more easily identified and withdrawn. Using this new practice, FHWA identified and withdrew a net present value of $231,217,468.80 in unused allocations in fiscal year 2012. According to FHWA officials, this savings was directly attributable to the directive prohibiting states from transferring unused allocations to new events and to the recommendation in GAO's November 2011 report and has led to improved FHWA financial oversight of Emergency Relief funds.

    Recommendation: To improve the accountability of federal funds, ensure that FHWA's eligibility decisions are applied consistently, and enhance oversight of the Emergency Relief Program, the Secretary of Transportation should direct the FHWA Administrator to establish specific time frames to limit states' ability to request emergency relief funds years after an event's occurrence, so that FHWA can better manage the financial risk of reimbursing states for projects that have grown in scope and cost.

    Agency Affected: Department of Transportation

    Status: Open

    Comments: FHWA reported that it plans to conduct a regulatory proceeding that would address this recommendation after the enactment of the surface transportation program authorization, Moving Ahead for Progress in the 21st Century (MAP-21), which was signed by the President in July 2012.

    Recommendation: To improve the accountability of federal funds, ensure that FHWA's eligibility decisions are applied consistently, and enhance oversight of the Emergency Relief Program, the Secretary of Transportation should direct the FHWA Administrator to establish standardized procedures for FHWA division offices to follow in reviewing emergency relief documentation and making eligibility decisions. Such standardized procedures should include: (1) clear requirements that FHWA approve and retain detailed damage inspection reports for each project and include detailed repair cost estimates; (2) a requirement that division offices verify and document the completion of emergency repairs within 180 days of an event to ensure that only emergency work completed within that time frame receives 100 percent federal funding; and (3) consistent standards for approving betterments, including guidance on what information the benefit-cost analyses should include to demonstrate that the proposed betterment will result in a savings to the Emergency Relief Program, and a requirement that FHWA approval of funding for betterments be clearly documented.

    Agency Affected: Department of Transportation

    Status: Open

    Comments: In June 2012, FHWA reported that it will revise its Emergency Relief program manual by December 2012 to address the issues identified in this recommendation. FHWA also reported in June 2012 that its program management improvement team imitated a national review of the Emergency Relief program and the results of that review will be used inform revisions to the Emergency Relief Program Manual.

    Apr 18, 2014

    Apr 8, 2014

    Feb 28, 2014

    Feb 12, 2014

    Feb 5, 2014

    Feb 3, 2014

    Jan 31, 2014

    Jan 16, 2014

    Looking for more? Browse all our products here