Discretionary Transportation Grants: DOT Should Better Communicate Federal Share Requirements to Applicants
Fast Facts
Through a program currently known as "RAISE," the Department of Transportation has awarded $12 billion in grants for road, transit, and related projects. RAISE funds can be combined with funds from other sources, including other federal sources, to pay for projects—with rules around how much federal funding can be used.
DOT's public notices to applicants weren't consistently clear about key information such as how the "federal share" of project funding would be calculated, and how funds from other federal sources would be treated. We recommended improving this communication to help applicants better understand RAISE funding requirements.
RAISE Funding by Transportation Mode, Fiscal Years 2015-2021
Highlights
What GAO Found
The Department of Transportation (DOT) awards Rebuilding American Infrastructure with Sustainability and Equity (RAISE) grants to a range of road, transit, and other surface transportation projects. From fiscal years 2015 through 2021, DOT did not consistently communicate key information for the RAISE grant program, as required by Office of Management and Budget (OMB) guidance for grants management. Specifically:
- DOT's public notices of funding opportunity (notices) for RAISE grants did not inform applicants of specific eligibility information on how to calculate the federal government's portion of project costs (known as the federal share), as OMB guidance requires. The absence of an enhanced internal procedure to help ensure DOT's RAISE notices communicate this information creates the risk that applicants will contribute more non-federal funding than is necessary to be eligible for RAISE funding.
- DOT's notices for RAISE grants for fiscal years 2019 through 2021 did not disclose whether DOT would use an application's requested federal share as a merit selection criterion when evaluating applications, as required by OMB guidance. Beginning in fiscal year 2018 through fiscal year 2021, appropriations act provisions prohibited DOT from using an applicant's requested federal share as a criterion for selecting projects for awards. DOT said it followed the appropriations act prohibition for fiscal years 2018 through 2021. GAO found that DOT communicated this prohibition to applicants in its 2018 notice. However, since that time, DOT's notices have not explicitly stated whether DOT would use an applicant's federal share of costs as criteria when evaluating applications.
DOT's Communication of RAISE Federal Share Requirements in Notices Compared to OMB Requirements, Fiscal Years 2018 through 2021
Better communication from DOT on how it calculates the federal share for RAISE eligibility and whether DOT will consider an application's requested federal share in awarding grants, would improve transparency into DOT's grant decisions. Such communication would also help applicants make informed decisions on how to allocate scarce non-federal resources while pursuing federal funding.
Why GAO Did This Study
Since 2009, Congress has appropriated more than $12 billion to a DOT discretionary grant program currently known as RAISE. DOT has awarded hundreds of RAISE grants for a variety of surface transportation projects.
Appropriations act provisions have set the maximum federal share for funds made available under the RAISE program. For urban areas, the federal share may not exceed 80 percent of the project cost. Rural area projects can receive up to 100 percent federal funding.
The Infrastructure Investment and Jobs Act included a provision for GAO to examine RAISE's federal share requirements. This report evaluates the extent to which DOT's communication of RAISE's federal share requirements followed OMB guidance. GAO reviewed applicable statutes, OMB guidance, and DOT's notices for RAISE grants from fiscal years 2015 through 2021. It then compared the notices to OMB guidance. GAO also interviewed DOT officials and representatives of selected transportation industry associations.
Recommendations
GAO is recommending that DOT enhance its internal procedures to help ensure DOT communicates in its notices (1) how DOT calculates the federal share for RAISE grant eligibility purposes and (2) whether the federal share will or will not be a selection criterion and, if so, how it would be considered. DOT agreed with GAO's recommendations and provided technical comments, which GAO incorporated as appropriate.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Transportation | The Secretary of Transportation should enhance DOT's internal procedures to ensure that DOT's RAISE NOFOs clearly communicate how DOT calculates the federal share for eligibility purposes, in alignment with OMB Guidance, and ensure that DOT's supplementary materials for applicants are consistent with the information in the RAISE NOFOs. (Recommendation 1) |
As of July 2024, DOT has partially implemented this recommendation. First, DOT communicated the formula it used to calculate the federal share for eligibility purposes in the fiscal year 2023 RAISE NOFO. Second, DOT provided the same formula it used for eligibility purposes in supplementary material, such as on the program's frequently asked questions website. Third, DOT established the "DOT Navigator"-a new website to help applicants understand how to apply for grants. The website included detailed information about the non-federal match requirements-the portion of project costs not paid by federal funds. These actions improved clarity for applicants of the fiscal year 2023 RAISE round of funding. However, DOT has not yet enhanced its internal procedures to ensure that all future funding rounds clearly communicate the federal share requirement, as GAO recommended. DOT said it is updating the checklist it uses when drafting NOFOs to include whether or not federal share is a selection criterion and the checklist it uses to help ensure supplementary materials are consistent with information in the NOFOs. DOT plans to provide an update on this effort by October 2024. We will continue to monitor DOT's progress in enhancing internal procedures related to federal share requirements.
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| Department of Transportation | The Secretary of Transportation should enhance DOT's internal procedures to ensure that DOT discloses in its RAISE NOFOs whether an applicant's federal share will or will not be used as a criterion for selecting RAISE grants, and if so, how it will be considered. Such procedures could include a checklist to help ensure that NOFOs align with OMB Guidance for communicating federal share requirements. (Recommendation 2) |
As of July 2024, DOT has partially implemented this recommendation. DOT published its fiscal year 2023 RAISE NOFO and provided supporting materials, such as frequently asked questions that clearly stated the department will not use an applicant's cost share when evaluating applications on merit and that the department considers an applicant's cost share during the evaluation and selection process only to confirm eligibility requirements. Although these steps provided clarity to applicants of the fiscal year 2023 RAISE funding round, DOT has not yet enhanced its internal procedures to help ensure all future funding rounds communicate such information. DOT said it is updating the checklist it uses when drafting NOFOs to include whether or not federal share is a selection criterion and the checklist it uses to help ensure supplementary materials are consistent with information in the NOFOs. DOT plans to provide an update on this effort by October 2024. We will continue to monitor DOT's progress in enhancing internal procedures related to federal share requirements.
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