oversight

Transportation Programs: Opportunities for Oversight and Improved Use of Taxpayer Funds

Published by the Government Accountability Office on 2003-07-22.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                             United States General Accounting Office

GAO                          Testimony
                             Before the Committee on Transportation
                             and Infrastructure, House of
                             Representatives

For Release on Delivery
Expected at 11:00 a.m. EDT
Tuesday July 22, 2003        TRANSPORTATION
                             PROGRAMS
                             Opportunities for Oversight
                             and Improved Use of
                             Taxpayer Funds
                             Statement of JayEtta Z. Hecker, Director
                             Physical Infrastructure Issues




GAO-03-1040T
                                                July 22, 2003


                                                TRANSPORTATION PROGRAMS

                                                Opportunities for Oversight and Improved
Highlights of GAO-03-1040T, a testimony         Use of Taxpayer Funds
before the Committee on Transportation
and Infrastructure, House of
Representatives




It is important to ensure that long-            The federal-aid highway program illustrates the challenge of ensuring that
term spending on transportation                 federal funds (nearly $30 billion annually) are spent efficiently when projects
programs meets the goals of                     are managed by the states. GAO has raised concerns about cost growth on
increasing mobility and improving               and FHWA’s oversight of major highway and bridge projects. Recent
transportation safety. In this                  proposals to strengthen FHWA’s oversight are responsive to issues and
testimony, GAO discusses what
recently completed work on four
                                                options GAO has raised. Options identified in previous GAO work provide
transportation programs suggests                the Congress with opportunities to build on recent proposals by, among
about challenges and strategies for             other things, clarifying uncertainties about FHWA’s role and authority.
improving the oversight and use of
taxpayer funds. These four                      NHTSA’s highway safety programs illustrate the challenge of evaluating how
programs are (1) the federal-aid                well federally funded state programs are meeting their goals. Over 5 years,
highway program, administered by                the Congress provided about $2 billion to the states for programs to reduce
the Federal Highway                             traffic fatalities, which numbered over 42,000 in 2002. GAO found that
Administration (FHWA); (2)                      NHTSA was making limited use of oversight tools that could help states
highway safety programs,                        better implement their programs and recommended strategies for improving
administered by the National                    the tools’ use that NHTSA has begun to implement. The administration
Highway Traffic Safety
Administration (NHTSA); (3) the
                                                recently proposed performance-based grants in this area.
New Starts program, administered
by the Federal Transit                          FTA’s New Starts program illustrates the challenge of developing effective
Administration (FTA); and (4) the               processes for evaluating grant proposals. Under the New Starts program,
Essential Air Service (EAS)                     which provided about $10 billion in mass transit funding in the past 6 years,
program, administered out of the                local transit agencies compete for project funds through grant proposals.
Office of the Secretary of                      FTA has developed a systematic process for evaluating these proposals.
Transportation.                                 GAO believes that FTA has made substantial progress by implementing this
                                                process, but our work has raised some concerns, including the extent to
Differences in the structure of                 which the process is able to adequately prioritize the projects.
these programs have contributed to
the challenges they illustrate. The
federal-aid highway program uses
                                                The Essential Air Service (EAS) program illustrates the challenge of
formulas to apportion funds to the              considering modifications to statutorily defined programs in response to
states, the highway safety                      changing conditions. Under the EAS program, many small communities are
programs use formulas and grants,               guaranteed to continue receiving air service through subsidies to carriers.
the New Starts program uses                     However, the program has faced increasing costs and decreasing average
competitive grants, and the EAS                 passenger levels. The Congress, the administration, and GAO have all
program provides subsidies. For                 proposed strategies to improve the program’s efficiency by better targeting
each program, GAO describes in                  available resources and offering alternatives for sustainable services.
general how the program illustrates
a particular challenge in managing
                                                Key Challenges and Strategies for Managing Four Federal Transportation Programs
or overseeing long-term spending
and in particular what challenges
and strategies for addressing the                                 Highway                 Highway            New Starts Essential Air
challenges GAO and others have                  Program           construction            safety             transit    Service
identified.                                     Challenges        Managing cost growth    Enhancing          Selecting best         Adjusting program to
                                                                  on major highway and    effectiveness of   projects for limited   changing conditions
www.gao.gov/cgi-bin/getrpt?GAO-03-1040T.                          bridge projects         state safety       funds
                                                                                          programs
To view the full product, including the scope                     Improve oversight and   Improve use of     Establish sound        Restructure program to
and methodology, click on the link above.       Strategies        reporting               monitoring tools   selection process      improve viability
For more information, contact JayEtta Hecker
at (202) 512-2834 or heckerj@gao.gov.
Mr. Chairman and Members of the Committee:

It is an honor to be here today to participate in your hearing on strategies
to reduce or prevent waste, fraud, and abuse in transportation programs.
As requested, I will be discussing what our recently completed work on
four transportation programs suggests about challenges and strategies for
improving the oversight and use of taxpayer funds to ensure that long-term
spending on transportation programs meets the goals of increasing
mobility and improving transportation safety.

As you know, many transportation programs rely on dedicated long-term
funding to achieve specified program objectives. Such funding, which
generally comes from a trust fund financed by user fees, is designed to
match the long life, ongoing maintenance needs, and replacement and
rehabilitation expenditures of large transportation projects. However,
long-term funding creates certain challenges related to the effective
oversight and management of the programs, particularly because in some
cases, funds flow automatically to states, which use the funds to
implement their own projects. Without effective oversight, investments of
scarce federal funds in these transportation programs may not achieve
maximum mobility and safety benefits.

Transportation legislation has sought to balance the federal interest in
effective management and oversight with state and local interest in
flexibility to tailor decisions to local priorities. Transportation legislation
has also sought to promote multimodal systemwide decision-making while
continuing distinct modal trust funds. Recently, the Comptroller General
testified before the House Budget Committee on opportunities for
improving the oversight and use of taxpayer funds for such spending
programs.1 He described three tiers of review, one of which—improving




1
 Federal Budget: Opportunities for Oversight and Improved Use of Taxpayer Funds,
(GAO-03-952T, June 2003)



Page 1                                                                GAO-03-1040T
economy, efficiency, and effectiveness in mandated federal spending
programs—is especially pertinent to the programs we will be discussing.2

As agreed with your office, my remarks today will focus on four federal
transportation programs: (1) the federal-aid highway program, (2) highway
safety programs, (3) the New Starts transit program, and (4) the Essential
Air Service program. The size and structure of these programs vary
considerably. For each program, I will discuss in general how the program
illustrates a particular challenge in managing or overseeing long-term
spending programs and in particular what challenges and strategies for
addressing these challenges we and others have found in evaluating these
programs.

Before I discuss each individual program, I’d like to point out how
structural differences in these programs have contributed to different
oversight challenges for each. For example, the federal-aid highway
program uses formulas to apportion federal funds to the states in several
distinct categories for the purpose of constructing and improving highway
facilities. Ensuring efficient expenditures of federal funds for what can be
large, long-term construction projects is an important challenge that has
grown as the Federal Highway Administration (FHWA) has increasingly
devolved its oversight responsibilities to the states in recent years. The
highway safety programs, administered by the National Highway Traffic
Safety Administration (NHTSA), also use formulas and other criteria to
apportion funds for state programs designed primarily to improve safety
through changes in drivers’ behavior. Determining the effectiveness of the
states’ efforts is a key challenge for these programs, together with
assessing the efficiency of their expenditures. In contrast, the New Starts
transit program relies on financial and project justification criteria to
evaluate and select grant proposals for transit projects through a
competition for federal funds administered by the Federal Transit




2
 The three levels of review the Comptroller General discussed also included addressing
vulnerabilities to fraud, waste, abuse, and mismanagement, particularly in high-risk federal
programs; and a fundamental re-examination of programs, policies, activities, and
processes. Because the programs we are discussing today are not on our high-risk list and
our work in these areas has not focused on fraud or abuse, we are discussing them in the
context of the longer-term goals of efficiency and effectiveness, which are key to
appropriately targeting scarce federal resources. Our scope today does not encompass a
fundamental re-examination of programs, which is also critical to ensuring the effective use
of federal funds.



Page 2                                                                      GAO-03-1040T
    Administration (FTA).3 While oversight of funded projects is important for
    this program, a key challenge that our work has addressed is how grant
    proposals should be evaluated to identify the best projects for funding.
    Finally, the Essential Air Service (EAS) program is statutorily based in the
    Airline Deregulation Act of 1978. Administered out of the Office of the
    Secretary of Transportation, it subsidizes air carriers’ operations to
    guarantee that certain isolated small communities served by air carriers
    before deregulation continue to receive some scheduled air service. As the
    aviation industry has changed over the years, questions have arisen about
    the program’s sustainability and efficiency.

    My statement is based on a body of GAO reviews of these and other
    transportation programs, many completed at the request of your
    Committee or legislatively mandated. A complete list of related reports
    appears in appendix I.

    In summary:

•   The federal-aid highway program illustrates the challenge of ensuring that
    federal funds are spent efficiently through formula-based programs that
    finance projects that are then largely managed and overseen by the states.
    The program makes nearly $30 billion available to the states for their
    transportation programs annually, including funding for major highway
    and bridge projects. Over the years, we have documented cost growth and
    management deficiencies on these major highway and bridge projects, as
    have the Department of Transportation’s Inspector General and state audit
    and evaluation agencies. Additionally, in 1997, we found that FHWA had
    done little to ensure that containing costs was an integral part of states’
    project management—in part because FHWA did not believe that
    encouraging or requiring practices to control costs and better manage
    projects was part of its oversight mandate. Since then, FHWA has
    developed strategies to strengthen its oversight, including requirements
    for annual finance plans and greater use of risk-based factors to focus its
    oversight efforts. The administration’s reauthorization proposal also
    includes strategies for strengthening FHWA’s oversight, and we believe
    these are positive steps that are responsive to many of the issues we’ve
    raised in the past. Should the Congress determine that enhancing federal
    oversight of major highway and bridge projects is needed and appropriate,



    3
     In contrast to the New Starts program, there are other transit programs that are formula
    funded; however, we have not evaluated these programs and therefore do not include them
    in our discussion today.



    Page 3                                                                    GAO-03-1040T
    in previous work we have identified options that provide the Congress
    opportunities to build on the administration’s proposal during the
    reauthorization process by, among other things, clarifying uncertainties
    about FHWA’s role and authority.

•   The highway safety programs administered by NHTSA illustrate the
    challenge of evaluating how well federally funded and assisted state
    programs are meeting their goals, as well as how efficiently the federal
    funds are being spent. During fiscal years 1998 through 2002, the Congress
    provided about $2 billion to the states for programs designed to reduce the
    number of traffic fatalities, which totaled over 42,000 in 2002. NHTSA has
    tools for overseeing these programs, including improvement plans to help
    states meet their safety goals and management reviews to assess the
    programs’ performance and use of federal funds. However, evaluating how
    well the state programs are meeting their highway safety goals is difficult
    because NHTSA’s guidance does not establish a consistent means of
    measuring progress. Moreover, NHTSA’s regional offices have made
    limited and inconsistent use of improvement plans and management
    reviews, in part because NHTSA’s guidance does not specify criteria for
    conducting them. When NHTSA’s regional offices have conducted
    management reviews of the state programs, they have sometimes found
    inefficient spending and weak controls over federal funds. In April 2003,
    we recommended strategies for improving NHTSA’s use of these tools,
    including developing better guidance on when they should be used.
    NHTSA has begun to implement these recommendations. The
    administration’s recent proposal to reauthorize the Transportation Equity
    Act for the 21st Century (TEA-21) calls for changes in the program that
    would provide even further flexibility to states in using these funds. It
    would also create grant programs based on state performance in two
    areas—reductions in fatalities and safety belt laws and usage.

•   FTA’s New Starts transit program illustrates two management oversight
    challenges: the challenge of developing effective federal processes for
    evaluating grant proposals as well as the already described challenge of
    overseeing projects’ implementation. Under the New Starts program,
    which provided about $10 billion in mass transit funding for fiscal years
    1998-2003 and was authorized by TEA-21, local transit agencies apply and
    compete for project funds on the basis of specific financial and project
    justification criteria. FTA reviews the grant applications and then notifies
    the Congress that it intends to commit New Starts funding to certain




    Page 4                                                          GAO-03-1040T
    projects through full funding grant agreements. 4 Because many transit
    projects compete for New Starts funding, and FTA awards relatively few
    full funding grant agreements each year, it is crucial that the most
    promising projects are selected. FTA is also responsible for overseeing
    funded projects. FTA has implemented strategies to address the twin
    challenges of evaluating projects and overseeing their implementation.
    First, it developed a systematic process for evaluating potential New Starts
    projects competing for federal funding that provides a framework for
    evaluating and selecting projects. We believe that FTA has made
    substantial progress by implementing this process, but our work in recent
    years has raised some concerns, including the extent to which the process
    is able to adequately prioritize the projects. Second, FTA has improved the
    quality of its transit grants management oversight program by upgrading
    its guidance and training of staff and grantees and by strengthening
    oversight procedures. However, oversight remains an area of concern, as
    major transit projects continue to experience cost, schedule, and
    performance problems. The administration’s fiscal year 2004 budget
    proposal contains several initiatives that have both advantages and
    disadvantages, with implications for the cost-effectiveness and
    performance of proposed projects.

•   The Essential Air Service (EAS) program illustrates the challenge of
    considering modifications to statutorily defined programs in response to
    changing conditions. Under the EAS program, small communities that
    received scheduled commercial air service prior to the deregulation of the
    airline industry in 1978 and that meet certain additional criteria are
    guaranteed to continue receiving air service. Although the program was
    originally intended to end in 1988, the Congress later permanently
    authorized it. As the airline industry has evolved over the past 25 years,
    however, the EAS program has faced increasing challenges to remain
    viable. Costs have tripled since 1995 because carriers’ costs have
    increased and revenues have declined as passenger ridership has fallen;
    passengers often prefer to drive to other larger airports nearby for better
    air service. In addition, the number of communities eligible for EAS
    subsidies has increased and may continue to grow in the near term. Within
    the past year, the Congress, the administration, and we have all proposed
    various strategies to improve the EAS program’s overall efficiency and
    effectiveness by better targeting available resources and offering
    alternatives for sustainable services, such as allowing communities to


    4
     A full funding grant agreement is a multiyear contractual agreement between FTA and
    project sponsors for a specified amount of funding. The full amount of funding is
    committed to the projects over a set period.



    Page 5                                                                   GAO-03-1040T
                       spend subsidy funds on individually-tailored transportation options that
                       better meet their needs.


                       The federal-aid highway program provides nearly $30 billion annually to
Options Exist to       the states, most of which are formula grant funds that FHWA distributes
Address the Federal-   through annual apportionments according to statutory formulas; once
                       apportioned, these funds are generally available to each state for eligible
Aid Highway            projects.5 The responsibility for choosing which projects to fund generally
Program’s Oversight    rests with state departments of transportation and local planning
                       organizations. The states have considerable discretion in selecting specific
Challenges             highway projects and in determining how to allocate available federal
                       funds among the various projects they have selected. For example, section
                       145 of title 23 of the United States Code describes the federal-aid highway
                       program as a federally assisted state program and provides that the
                       authorization of the appropriation of federal funds or their availability for
                       expenditure, “shall in no way infringe on the sovereign rights of the States
                       to determine which projects shall be federally financed.”

                       A major highway or bridge construction or repair project usually has four
                       stages: (1) planning, (2) environmental review, (3) design and property
                       acquisition, and (4) construction. While FHWA approves state
                       transportation plans, environmental impact assessments, and the
                       acquisition of property for highway projects, its role in approving the




                       5
                        How formulas are designed to distribute federal funds can itself affect the extent to which
                       federal funds encourage or leverage the Nation’s total level of highway investment and
                       promote the most efficient funding of transportation projects. These issues are outside the
                       scope of this testimony’s discussion; however, our recent reports Trends in Federal and
                       State Capital Investment in Highways (GAO-03-744R) and Trends in State Capital
                       Investment in Highways (GAO-03-915SP) provide information on federal, state, and local
                       investment in highways, and variations in states’ levels of ’ investment and effort over time.
                       Our follow-on work to that report will more closely examine the interaction between levels
                       of federal and state investment, including how the design of formulas may affect this
                       interaction.



                       Page 6                                                                        GAO-03-1040T
                                       design and construction of projects varies.6 The state’s activities and
                                       FHWA’s corresponding approval actions are shown in figure 1.

Figure 1: State and FHWA Actions on Highway Projects




                                       6
                                        FHWA exercises full oversight only of certain high-cost Interstate system projects. On
                                       projects subject to “full” oversight, FHWA prescribes design and construction standards,
                                       approves design plans and estimates, approves contract awards, inspects construction
                                       progress, and renders final acceptance on projects when they are completed. States either
                                       may assume or are required to assume responsibilities for all other types of projects. See
                                       U.S. General Accounting Office, Transportation Infrastructure: Cost and Oversight Issues
                                       on Major Highway and Bridge Projects, GAO-02-702T (Washington, D.C.: May 1, 2002) for
                                       a more complete description of FHWA’s and the states’ responsibilities.



                                       Page 7                                                                    GAO-03-1040T
Challenges   Given the size and significance of the federal-aid highway program’s
             funding and projects, a key challenge for this program is overseeing states’
             expenditure of public funds to ensure that state projects are well managed
             and successfully financed. Our work—as well as work by the DOT
             Inspector General and by state audit and evaluation agencies—has
             documented cost growth on numerous major highway and bridge projects.
             Let me provide one example. In January 2001, Virginia’s Joint Legislative
             Audit and Review Commission found that final project costs on Virginia
             Department of Transportation projects were well above their cost
             estimates and estimated that the state’s 6-year, $9 billion transportation
             development plan understated the costs of projects by up to $3.5 billion.
             The commission attributed these problems to several factors, including,
             among other things, not adjusting estimates for inflation and expanding
             the scope of projects.

             Our work has identified weaknesses in FHWA’s oversight of projects,
             especially in controlling costs. In 1997, we reported that cost containment
             was not an explicit statutory or regulatory goal of FHWA’s oversight.7
             While FHWA influenced the cost-effectiveness of projects when it
             reviewed and approved plans for their design and construction, we found
             it had done little to ensure that cost containment was an integral part of
             the states’ project management. According to FHWA officials, controlling
             costs was not a goal of their oversight, and FHWA had no mandate in law
             to encourage or require practices to contain the costs of major highway
             projects. More recently, an FHWA task force concluded that changes in
             the agency’s oversight role since 1991—when the states assumed greater
             responsibility for overseeing federal-aid projects—had resulted in
             conflicting interpretations of the agency’s role in overseeing projects, and
             that some of the field offices were taking a “hands off” approach to certain
             projects. In June 2001, FHWA issued a policy memorandum, in part to
             clarify that FHWA is ultimately accountable for all projects financed with
             federal funds. As recently as last month, a memorandum posted on
             FHWA’s Web site discussed the laws establishing FHWA and the federal-
             aid highway program, along with congressional and public expectations
             that FHWA “ensure the validity of project cost estimates and schedules.”
             The memorandum concluded, “These expectations may not be in full
             agreement with the role that has been established by these laws.”




             7
              U.S. General Accounting Office, Transportation Infrastructure: Managing the Costs of
             Large-Dollar Highway Projects, GAO/RCED-97-27 (Washington D.C.: Feb. 27, 1997).



             Page 8                                                                   GAO-03-1040T
             In addition, we have found that FHWA’s oversight process has not
             promoted reliable cost estimates. While there are many reasons for cost
             increases, we have found, on projects we have reviewed, that initial cost
             estimates were not reliable predictors of the total costs and financing
             needs of projects. Rather, these estimates were generally developed for
             the environmental review—whose purpose is to compare project
             alternatives, not to develop reliable cost estimates. In addition, FHWA had
             no standard requirements for preparing cost estimates, and each state
             used its own methods and included different types of costs in its
             estimates. We have also found that costs exceeded initial estimates on
             projects we have reviewed because (1) initial estimates were modified to
             reflect more detailed plans and specifications as projects were designed
             and (2) the projects’ costs were affected by, among other things, inflation
             and changes in scope to accommodate economic development over time.
             We also found that highway projects take a long time to complete, and that
             the amount of time spent on them is of concern to the Congress, the
             federal government, and the states. Completing a major, new, federally
             funded highway project that has significant environmental impacts
             typically takes from 9 to 19 years and can entail as many as 200 major
             steps requiring actions, approvals, or input from a number of federal, state,
             and other stakeholders.8

             Finally, we have noted that in many instances, states construct a major
             project as a series of smaller projects, and FHWA approves the estimated
             cost of each smaller project when it is ready for construction, rather than
             agreeing to the total cost of the major project at the outset. In some
             instances, by the time FHWA considers whether to approve the cost of a
             major project, a public investment decision may, in effect, already have
             been made because substantial funds have been spent on designing the
             project and acquiring property, and many of the increases in the project’s
             estimated costs have already occurred.


Strategies   Since 1998, FHWA has taken a number of steps to improve the
             management and oversight of major projects in order to better promote
             cost containment. For example, FHWA implemented TEA-21’s requirement
             that states develop an annual finance plan for any highway or bridge



             8
             U.S. General Accounting Office, Highway Infrastructure: Stakeholders’ Views on Time to
             Conduct Environmental Reviews of Highway Projects, GAO-03-534 (Washington D.C.:
             May 2003).



             Page 9                                                                 GAO-03-1040T
project estimated to cost $1 billion or more and established a major
projects team that currently tracks and reports each month on 15 such
projects. FHWA has also moved to incorporate greater risk-based
management into its oversight in order to identify areas of weakness
within state transportation programs, set priorities for improvement, and
work with the states to meet those priorities.

The administration’s May 2001 reauthorization measure contains
additional proposed actions. It would introduce more structured FHWA
oversight requirements, including mandatory annual reviews of state
transportation agencies’ financial management and “project delivery”
systems, as well as periodic reviews of states’ practices for estimating
costs, awarding contracts, and reducing project costs. To improve the
quality and reliability of cost estimates, it would introduce minimum
federal standards for states to use in estimating project costs. The measure
would also strengthen reporting requirements and take new actions to
reduce fraud.9

Many elements of the administration’s proposal are responsive to
problems and options we have described in past reports and testimony.10
Should the Congress determine that enhancing federal oversight of major
highway and bridge projects is needed and appropriate, options we have
identified in prior work remain available to build on the administration’s
proposal during the reauthorization process. However, adopting any of
these options would require balancing the states’ right to select projects
and desire for flexibility and more autonomy with the federal
government’s interest in ensuring that billions of federal dollars are spent
efficiently and effectively. Furthermore, the additional costs of each of
these options would need to be weighed against its potential benefits.
Options include the following:


9
 In particular, the measure requires states or project sponsors to prepare a project
management plan for projects estimated to cost $1 billion or more that would detail
processes in place to provide timely information needed to manage projects’ scope, costs,
schedule, and federal requirements. It would also extend the requirement for annual
finance plans to projects receiving $100 million or more in federal funds, although approval
of those plans could be delegated to the states. In addition, among other provisions, the
proposal would require mandatory debarment of contractors convicted of fraud related to
federal-aid highway or transit programs, and the suspension of contractors indicted for
fraud.
10
 See, for example, U.S. General Accounting Office, Federal-Aid Highways: Cost and
Oversight of Major Highway and Bridge Projects—Issues and Options, GAO-03-764T
(Washington, D.C.: May 8, 2003); GAO-02-702T; and GAO/RCED-97-27.



Page 10                                                                     GAO-03-1040T
•   Have FHWA develop and maintain a management information system on
    the cost performance of selected major highway and bridge projects,
    including changes in estimated costs over time and the reasons for such
    changes. Such information could help define the scope of the problem
    with major projects and provide insights needed to fashion appropriate
    solutions.

•   Clarify uncertainties concerning FHWA’s role and authority. As I
    mentioned earlier, the federal-aid highway program is by law a federally
    assisted state program, and FHWA continues to question its authority to
    encourage or require practices to contain the costs of major highway and
    bridge projects. Should uncertainties about FHWA’s role and authority
    continue, another option would be to resolve the uncertainties through
    reauthorization language.

•   Have the states track the progress of projects against their initial baseline
    cost estimates. The Office of Management and Budget requires federal
    agencies, for acquisitions of major capital assets, to prepare baseline cost
    and schedule estimates and to track and report the acquisitions’ cost
    performance. These requirements apply to programs managed by and
    acquisitions made by federal agencies, but they do not apply to the federal-
    aid highway program, a federally assisted state program. Expanding the
    federal government’s practice to the federally assisted highway program
    could improve the management of major projects by providing managers
    with information for identifying and addressing problems early.

•   Establish performance goals and strategies for containing costs as projects
    move through their design and construction phases. Such performance
    goals could provide financial or other incentives to the states for meeting
    agreed-upon goals. Performance provisions such as these have been
    established in other federally assisted grant programs and have also been
    proposed for use in the federal-aid highway program. Requiring or
    encouraging the use of goals and strategies could also improve
    accountability and make cost containment an integral part of how states
    manage projects over time.

•   Consider methods for improving the time it takes to plan and construct
    major federal-aid highway projects—a process that we reported can take
    up to 19 years to complete. Major stakeholders suggested several
    approaches to improving the timeliness of these projects, including (1)
    improving project management, (2) delegating environmental review and
    permitting authority, and (3) improving agency staffing and skills. We have
    recommended that FHWA consider the benefits of the most promising



    Page 11                                                         GAO-03-1040T
                       approaches and act to foster the adoption of the most cost-effective and
                       feasible approaches.11

                   •   Reexamine the approval process for major highway and bridge projects.
                       This option, which would require federal approval of a major project at the
                       outset, including its cost estimate and finance plan, would be the most far-
                       reaching and the most difficult option to implement. Potential models for
                       such a process include the full funding grant agreement used by FTA for
                       the New Starts program, and, as I testified last year, a DOT task force’s
                       December 2000 recommendation calling for the establishment of a
                       separate funding category for initial design work and a new decision point
                       for advancing highway projects.12


                       Over the last 25 years, more than 1.2 million people have died as a result of
NHTSA Makes            traffic crashes in the United States—more than 42,000 in 2002. Since 1982,
Inconsistent and       about 40 percent of traffic deaths were from alcohol-related crashes. In
                       addition, traffic crashes are the leading cause of death for people aged 4
Limited Use of         though 33. As figure 2 shows, the total number of traffic fatalities has not
Oversight Tools        significantly decreased in recent years.




                       11
                        GAO-03-534; GAO-03-398; GAO-02-1067T.
                       12
                        GAO-02-702T.



                       Page 12                                                         GAO-03-1040T
Figure 2: Total Traffic Fatalities and Fatality Rate, 1975-2002




                                            To improve safety on the nation’s highways, NHTSA administers a number
                                            of programs, including the core federally funded highway safety program,
                                            Section 402 State and Community Grants, and several other highway
                                            safety programs that were authorized in 1998 by TEA-21. The Section 402
                                            program, established in 1966, makes grants available for each state, based
                                            on a population and road mileage formula, to carry out traffic safety
                                            programs designed to influence drivers’ behavior, commonly called
                                            behavioral safety programs. The TEA-21 programs include seven incentive
                                            programs, which are designed to reduce traffic deaths and injuries by
                                            promoting seatbelt use and reducing alcohol-impaired driving, and two
                                            transfer programs, which penalize states that have not complied with
                                            federal requirements for enacting repeat-offender and open container laws
                                            to limit alcohol-impaired driving. Under these transfer programs,
                                            noncompliant states are required to shift certain funds from federal-aid
                                            highway programs to projects that concern or improve highway safety. In
                                            addition, subsequent to TEA-21, the Congress required that, starting later
                                            this year, states that do not meet federal requirements for establishing 0.08
                                            blood alcohol content as the state level for drunk driving will have a
                                            percentage of their federal aid highway funds withheld. During fiscal years
                                            1998 through 2002, over $2 billion was provided to the states for highway
                                            safety programs.


                                            Page 13                                                         GAO-03-1040T
             NHTSA, which oversees the states’ highway safety programs, adopted a
             performance-based approach to oversight in 1998. Under this approach,
             the states and the federal government are to work together to make the
             nation’s highways safer. Each state sets its own safety performance goals
             and develops an annual safety plan that describes projects designed to
             achieve the goals. NHTSA’s 10 regional offices review the states’ annual
             plans and provide technical assistance, advice, and comments.13 NHTSA
             has two tools available to strengthen its monitoring and oversight of the
             state programs—improvement plans that states not making progress
             towards their highway safety goals are to develop, which identify
             programs and activities that a state and NHTSA regional office will
             undertake to help the state meet its goals; and management reviews,
             which generally involve sending a team to a state to review its highway
             safety operations, examine its projects, and determine that it is using
             funds in accordance with requirements.


Challenges   Among the key challenges in this area are (1) evaluating how well the
             federally funded state highway safety programs are meeting their goals
             and (2) determining how well the states are spending and controlling their
             federal highway safety funds. In April 2003, we issued a report on NHTSA’s
             oversight of state highway safety programs in which we identified
             weaknesses in NHTSA’s use of improvement plans and management
             reviews.14 Evaluating how well state highway safety programs are meeting
             their goals is difficult because, under NHTSA’s performance-based
             oversight approach, NHTSA’s guidance does not establish a consistent
             means of measuring progress. Although the guidance states that NHTSA
             can require the development and implementation of an improvement plan
             when a state fails to make progress toward its highway safety performance
             goals, the guidance does not establish specific criteria for evaluating
             progress. Rather, the guidance simply states that an improvement plan
             should be developed when a state is making little or no progress toward its
             highway safety goals. As a result, NHTSA’s regional offices have made
             limited and inconsistent use of improvement plans, and some states do not
             have improvement plans, even though their alcohol-related fatality rates



             13
              The Federal Motor Carrier Safety Administration also has an oversight role in highway
             safety for motor carrier transportation.
             14
              U.S. General Accounting Office, Highway Safety: Better Guidance Could Improve
             Oversight of State Highway Safety Programs, GAO-03-474 (Washington, D.C.: Apr. 21,
             2003).



             Page 14                                                                   GAO-03-1040T
             have increased or their seat-belt usage rates have declined. Without a
             consistent means of measuring progress, NHTSA and state officials lack
             common expectations about how to define progress, how long states
             should have to demonstrate progress, how to set and measure highway
             safety goals, and when improvement plans should be used to help states
             meet their highway safety goals.

             To determine how well the states are spending and controlling their
             federal highway safety funds, NHTSA’s regional offices can conduct
             management reviews of state highway safety programs. Management
             reviews completed in 2001 and 2002 identified weaknesses in states’
             highway safety programs that needed correction; however, we found that
             the regional offices were inconsistent in conducting the reviews because
             NHTSA’s guidance does not specify when the reviews should be
             conducted. The identified weaknesses included problems with monitoring
             subgrantees, poor coordination of programs, financial control problems,
             and large unexpended fund balances. Such weaknesses, if not addressed,
             could lead to inefficient or unauthorized uses of federal funds. According
             to NHTSA officials, management reviews also foster productive
             relationships with the states that allow the agency’s regional offices to
             work with the states to correct vulnerabilities. These regions’ ongoing
             involvement with the states also creates opportunities for sharing and
             encouraging the implementation of best practices, which may then lead to
             more effective safety programs and projects.


Strategies   To encourage more consistent use of improvement plans and management
             reviews, we made recommendations to improve the guidance to NHTSA’s
             regional offices on when it is appropriate to use these oversight tools. In
             commenting on a draft of the report, NHTSA officials agreed with our
             recommendations and said they had begun taking action to develop
             criteria and guidance for using the tools.

             The administration’s recent proposal to reauthorize TEA-21 would make
             some changes to the safety programs that could also have some impact on
             program efficiencies. For example, the proposal would somewhat simplify
             the current grant structure for NHTSA’s highway safety programs. The
             Section 402 program would have four components: core program formula
             grants, safety belt performance grants, general performance grants, and
             impaired driving discretionary grants. The safety belt performance grants
             would provide funds to states that had passed primary safety belt laws or
             achieved 90 percent safety belt usage. In addition, the general performance
             grant would provide funds based on overall reductions in (1) motor

             Page 15                                                       GAO-03-1040T
                        vehicle fatalities, (2) alcohol-related fatalities, and (3) motorcycle, bicycle,
                        and pedestrian fatalities. Finally, the Section 402 program would have an
                        impaired driving discretionary grant component, which would target funds
                        to up to 10 states that had the highest impaired driving fatality numbers or
                        fatality rates. In addition to changing the Section 402 program, the
                        proposal would expand grants for highway safety information systems and
                        create new emergency medical service grants. The proposal leaves intact
                        existing penalties related to open container, repeat offender, and 0.08
                        blood-alcohol content laws, and establishes a new transfer penalty for
                        states that fail to pass a primary safety belt law and have safety belt use
                        rates lower than 90 percent by 2005.

                        The proposal would also give the states greater flexibility in using their
                        highway safety funds. A state could move up to half its highway safety
                        construction funds from the Highway Safety Improvement Program into
                        the core Section 402 program. A state would also be able to use 100
                        percent of its safety belt performance grants for construction purposes if it
                        had a primary safety belt law, or 50 percent if the grant was based on high
                        safety belt use. States could also use up to 50 percent of their general
                        performance grants for safety construction purposes.


                        The New Starts transit program identifies and funds fixed guideway
The New Starts          projects, including rail, bus rapid transit, trolley, and ferry projects. The
Transit Program Has     New Starts program provides much of the federal government’s
                        investment in urban mass transportation. TEA-21 and subsequent
Faced Challenges in     amendments authorized approximately $10 billion for New Starts projects
Selection and           for fiscal years 1998 through 2003. The administration’s proposal for the
                        surface transportation reauthorization, known as the Safe, Accountable,
Oversight of Projects   Flexible, and Efficient Transportation Equity Act of 2003 (SAFETEA),
and Has Taken Steps     requests that about $9.5 billion be made available for the New Starts
to Address these        program for fiscal years 2004 through 2009.

Challenges              Unlike the federal highway program and certain transit programs, under
                        which funds are automatically distributed to states on the basis of
                        formulas, the New Starts program requires local transit agencies to
                        compete for New Starts project funds on the basis of specific financial and
                        project justification criteria. To obtain New Starts funds, a project must
                        progress through a regional review of alternatives, develop preliminary
                        engineering plans, and meet FTA’s approval for final design. FTA assesses
                        the technical merits of a project proposal and its finance plan and then
                        notifies the Congress that it intends to commit New Starts funding to
                        certain projects through full funding grant agreements. The agreement

                        Page 16                                                           GAO-03-1040T
             establishes the terms and conditions for federal participation in the
             project, including the maximum amount of federal funds—no more than
             80 percent of the estimated net cost of the project.15 While the grant
             agreement commits the federal government to providing the federal
             contributions to the project over a number of years, these contributions
             are subject to the annual appropriations process. State or local sources
             provide the remaining funding. The grantee is responsible for all costs
             exceeding the federal share, unless the agreement is amended.

             To meet the nation’s transportation needs, many states and localities are
             planning or building large New Starts projects to replace aging
             infrastructure or build new capacity. They are often costly and require
             large commitments of public resources, which may take several years to
             obtain from federal, state, and local sources. The projects can also be
             technically challenging to construct and require their sponsors to resolve a
             wide range of social, environmental, land-use, and economic issues before
             and during construction.


Challenges   It is critical that federal and other transportation officials meet two
             particular challenges that stem from the costly and lengthy federal funding
             commitment associated with New Starts projects. First, they must have a
             sound basis for evaluating and selecting projects. Because many transit
             projects compete for limited federal transit dollars—there are currently 52
             projects in the New Starts “pipeline”—and FTA awards relatively few full
             funding grant agreements each year, it is crucial that local governments
             choose the most promising projects as candidates for New Starts funds
             and that FTA uses a process that effectively selects those projects that
             most clearly meet the program’s goals.

             Second, FTA, like FHWA, has the challenge of overseeing the planning,
             development, and construction of selected projects to ensure they remain
             on schedule and within budget, and deliver their expected performance. In
             the early 1990s, we designated the transit grants management oversight
             program as high risk because it was vulnerable to fraud, waste, abuse, and




             15
              In response to language contained in a conference report prepared by the House
             Appropriations Committee, FTA adopted a 60 percent preference policy, which in effect
             generally reduced the level of New Starts federal funding share for projects from 80
             percent to 60 percent.



             Page 17                                                                  GAO-03-1040T
             mismanagement.16 While we have removed it from the high-risk
             designation because of improvements FTA has made to this program, we
             have found that major transit projects continue to experience costs and
             schedule problems. For example, in August, 1999, we reported that 6 of
             the 14 transit projects with full funding grant agreements had experienced
             cost increases, and 3 of those projects had experienced cost increases that
             were more than 25 percent over the estimates approved by FTA in grant
             agreements.17 The key reasons for the increases included (1) higher than
             anticipated contract costs, (2) schedule delays, and (3) project scope
             changes and system enhancements. A recent testimony by the Department
             of Transportation’s Inspector General indicates that major transit projects
             continue to experience significant problems including cost increases,
             financing problems, schedule delays, and technical or construction
             difficulties.18


Strategies   FTA has developed strategies to address the twin challenges of selecting
             the right projects and monitoring their implementation costs, schedule,
             and performance. First, in response to direction in TEA-21, FTA developed
             a systematic process for evaluating and rating potential New Starts
             projects competing for federal funding.19 Under this process, FTA assigns
             individual ratings for a variety of financial and project justification criteria
             and then assigns an overall rating of highly recommended, recommended,
             not recommended, or not rated. These criteria reflect a broad range of
             benefits and effects of the proposed projects, including capital and
             operating finance plans, mobility improvements, environmental benefits,
             operating efficiencies, cost-effectiveness, land use, and other factors.
             According to FTA’s New Starts regulations, a project must have an overall
             rating of at least “recommended” to receive a grant agreement. FTA also
             considers a number of other “readiness” factors before proposing funding



             16
              U.S. General Accounting Office, Mass Transit: Challenges in Evaluating, Overseeing,
             and Funding Major Transit Projects (GAO/T-RCED-00-104, Washington, DC: Mar. 8, 2000).
             17
              U.S. General Accounting Office, Mass Transit: Status of New Starts Transit Projects
             With Full Funding Grant Agreements, GAO/RCED-99-240 (Washington, D.C.: Aug. 19,
             1999).
             18
               See U.S. Department of Transportation, Statement of the Honorable Kenneth M. Mead,
             Inspector General, Management of Large Highway and Transit Projects (Washington,
             D.C.: May 1, 2002).
             19
               The exceptions to the ratings process are projects that are statutorily exempt because
             they request less than $25 million in New Starts funding.



             Page 18                                                                     GAO-03-1040T
                                        for a project. For example, FTA proposes funding only for projects that
                                        are expected to enter the final design phase and be ready for grant
                                        agreements within the next fiscal year. Figure 3 illustrates the New Starts
                                        evaluation and ratings process.

Figure 3: New Starts Evaluation and Ratings Process




                                        Note: According to FTA, the optional criterion of “other factors” gives grantees the opportunity to
                                        provide additional information about the likelihood of a project’s overall success.


                                        While FTA has made substantial progress in establishing a systematic
                                        process for evaluating and rating potential projects, our work has raised
                                        some concerns about the process. For example, to assist FTA in
                                        prioritizing projects to ensure that the relatively few full funding grant
                                        agreements go to the most important projects, we recommended in March
                                        2000 that FTA further prioritize the projects that it rates as highly
                                        recommended or recommended and ready for New Starts funds.20 FTA has
                                        not implemented this recommendation. We believe that this
                                        recommendation is still valid because the funding requested for the many



                                        20
                                         U.S. General Accounting Office, Mass Transit: Challenges in Evaluating, Overseeing,
                                        and Funding Major Transit Projects, GAO/T-RCED-00-104 (Washington, D.C.: Mar. 8,
                                        2000).



                                        Page 19                                                                                GAO-03-1040T
projects that are expected to compete for grant agreements over the next
several years is likely to exceed the available federal dollars. A further
concern about the ratings process stems from FTA’s decision during the
fiscal year 2004 cycle to propose a project for a full funding grant
agreement that had been assigned an overall project rating of “not rated,”
even though FTA’s regulations require that projects have at least a
“recommended” rating to receive a grant agreement.21 Finally, we found
that FTA needs to provide clearer information and additional guidance
about certain changes it made to the evaluation and ratings process for the
fiscal year 2004 cycle.22

In work that addressed the challenge of overseeing ongoing projects once
they are selected to receive a full funding grant agreement, we reported in
March and September 2000 that FTA had improved the quality of the
transit grants management oversight program through strategies that
included upgrading its guidance and training of staff and grantees,
developing standardized oversight procedures, and employing contractor
staff to strengthen its oversight of grantees. FTA also expanded its
oversight efforts to include a formal and rigorous assessment of a
grantee’s financial capacity to build and operate a new project and of the
financial impact of that project on the existing transit system. These
assessments, performed by independent accounting firms, are completed
before FTA commits funds for construction and are updated as needed
until projects are completed. For projects that already have grant
agreements, FTA focuses on the grantee’s ability to finish the project on
time and within the budget established by the grant agreement.

The administration’s fiscal year 2004 budget proposal contains three New
Starts initiatives—reducing the maximum federal statutory share to 50
percent, allowing non-fixed-guideway projects to be funded through New
Starts, and replacing the “exempt” classification with a streamlined ratings



21
  According to FTA officials, this project could not be rated because its local travel
forecasting data and models did not support calculation of a new benefits measure required
for the fiscal year 2004 cycle. The officials told us that they decided to select this project
for a proposed grant agreement because they believed that the data problems would be
corrected, and the project would be able to achieve a “recommended” rating and be ready
for a grant agreement by the end of fiscal year 2004. They said that other proposed projects
that received overall ratings of “recommended” or higher would not be ready at that time.
22
 U.S. General Accounting Office, Mass Transit: FTA Needs to Provide Clear Information
and Additional Guidance on the New Starts Ratings Process, GAO-03-701 (Washington,
D.C.: June 23, 2003).



Page 20                                                                       GAO-03-1040T
                       process for projects requesting less than $75 million in New Starts funding.
                       These proposed initiatives have advantages and disadvantages, with
                       implications for the cost-effectiveness and performance of proposed
                       projects. First, the reduced federal funding would require local
                       communities to increase their funding share, creating more incentive for
                       them to propose the most cost-effective projects; however, localities might
                       have difficulties generating the increased funding share, and this initiative
                       could result in funding inequities for transit projects when compared with
                       highway projects. Second, allowing non-fixed guideway projects to be
                       funded under New Starts would give local communities more flexibility in
                       choosing among transit modes and might promote the use of bus rapid
                       transit, whose costs compare favorably with those of light rail systems;23
                       however, this initiative would change the original fixed guideway
                       emphasis of New Starts, which some project sponsors we interviewed
                       believe might disadvantage traditional New Starts projects. Finally,
                       replacing the “exempt” classification with a streamlined rating process for
                       all projects requesting less than $75 million might promote greater
                       performance-oriented evaluation since all projects would receive a rating.
                       However, this initiative might reduce the number of smaller communities
                       that would participate in the New Starts program.


                       The Congress established the Essential Air Service (EAS) program as part
DOT’s Essential Air    of the Airline Deregulation Act of 1978. The act guaranteed that
Service Program        communities served by air carriers before deregulation would continue to
                       receive a certain level of scheduled air service. Special provisions
Faces Possible         guaranteed service to Alaskan communities. In general, the act guaranteed
Program                continued service by authorizing DOT to require carriers to continue
                       providing service at these communities. If an air carrier could not continue
Modifications Due to   that service without incurring a loss, DOT could then use EAS funds to
Changing Conditions    award that carrier a subsidy. Subsidies are to cover the difference between
                       a carrier’s projected revenues and expenses and to provide a minimum
                       amount of profit. Under the Airline Deregulation Act, the EAS program
                       was intended to sunset, or end, after 10 years. In 1987, the Congress
                       extended the program for another 10 years, and in 1998, it eliminated the
                       sunset provision, thereby permanently authorizing EAS.

                       To be eligible for subsidized service, a community must meet three general
                       requirements. It must have received scheduled commercial passenger


                       23
                        GAO-03-729T.



                       Page 21                                                         GAO-03-1040T
             service as of October 1978, may be no closer than 70 highway miles to a
             medium- or large-hub airport, and must require a subsidy of less than $200
             per person (unless the community is more than 210 highway miles from
             the nearest medium- or large-hub airport, in which case no average per-
             passenger dollar limit applies). 24

             Funding for the EAS program comes from a combination of permanent
             and annual appropriations. Part of its funding comes from the Federal
             Aviation Reauthorization Act of 1996 (P.L. 104-264), which authorized the
             collection of user fees for services provided by the Federal Aviation
             Administration (FAA) to aircraft that neither take off nor land in the
             United States, commonly known as overflight fees. The act also
             permanently appropriated the first $50 million of such fees for EAS and
             safety projects at rural airports. In fiscal year 2003, total EAS program
             appropriations were $113 million.


Challenges   As the airline industry has evolved since the industry was deregulated in
             1978, the EAS program has faced increasing challenges to remain viable.
             Since fiscal year 1995, the program’s costs have tripled, rising from $37
             million to $113 million, and they are likely to continue escalating. Several
             factors are likely to affect future subsidy requirements. First, carriers’
             operating costs have increased over time, in part because of the costs
             associated with meeting federal safety regulations for small aircraft
             beginning in 1996. Second, carriers’ revenues have been limited because
             many individuals traveling to or from EAS-subsidized communities choose
             not to fly from the local airport, but rather to use other larger nearby
             airports, which generally offer more service at lower airfares. On average,
             in 2000, each EAS flight operated with just over 3 passengers.

             Finally, the number of communities eligible for EAS subsidies has
             increased over time, rising from a total of 106 in 1995 to 114 in July 2002
             (79 in the continental United States and 35 in Alaska, Hawaii, and Puerto
             Rico) and again to 133 in April 2003 (96 in the continental United States



             24
               The nation’s commercial airports are categorized into four main groupings based on the
             number of passengers boarding an aircraft (enplaned) for all operations of U.S. carriers in
             the United States. A nonhub has less than 0.05 percent of the total annual passenger
             enplanements in the United States in any given year. A small hub has at least 0.05 percent,
             but less than 0.25 percent, of total enplanements. A medium hub has at least 0.25 percent
             and less than 1.0 percent of total U.S. enplanements, and a large hub has 1.0 percent or
             more of total U.S. enplanements. These definitions are contained in statute.



             Page 22                                                                      GAO-03-1040T
             and 37 in Alaska, Hawaii, and Puerto Rico). The number of subsidy-eligible
             communities may continue to grow in the near term. Figure 4 shows the
             increase in the number of communities eligible for EAS-subsidized service
             between 1995 and April 2003.

             Figure 4: Increase in EAS-Subsidized Communities between 1995 and April 2003




             Note: Data for April 2003 show the number of communities receiving EAS-subsidized service and
             those where proposed subsidies are under negotiation.


Strategies   Over the past year, the Congress, the administration, and we have each
             identified a number of potential strategies generally aimed at enhancing
             the EAS program’s long-term sustainability. These strategies broadly
             address challenges related to the carriers’ cost of providing service and the
             passenger traffic and revenue that carriers can hope to accrue.

             In August 2002, in response to a congressional mandate, we identified and
             evaluated four major categories of options to enhance the long-term




             Page 23                                                                         GAO-03-1040T
    viability of the EAS program.25 In no particular order, the options we
    identified were as follows:

•   Better match capacity with community use by increasing the use of
    smaller (i.e., less costly) aircraft and restricting little-used flight
    frequencies.

•   Target subsidized service to more remote communities (i.e., those where
    passengers are less likely to drive to another airport) by changing
    eligibility criteria.

•   Consolidate service to multiple communities into regional airports.

•   Change the form of the federal assistance from carrier subsidies to local
    grants that would allow local communities to match their transportation
    needs with individually tailored transportation options.

    Each of these options could have positive and negative effects, such as
    lowering the program’s costs but possibly adversely affecting the
    economies of the communities that would lose some or all of their direct
    scheduled airline service.

    This year’s House-passed version of the FAA reauthorization bill, H.R.
    2115, also includes various options to restructure air service to small
    communities now served by the EAS program. The bill proposes an
    alternative program (the “community and regional choice program”),
    which would allow communities to opt out of the EAS program and
    receive a grant that they could use to establish and pay for their own
    service, whether scheduled air service, air taxi service, surface
    transportation, or another alternative.

    The complementary Senate FAA reauthorization bill (also H.R. 2115) also
    includes specific provisions designed to restructure the EAS program. This
    bill would set aside some funds for air service marketing to try to attract
    passengers and create a grant program under which up to 10 individual
    communities or a consortium of communities could opt out of the existing
    EAS program and try alternative approaches to improving air service. In
    addition, the bill would preclude DOT from terminating, before the end of



    25
     U.S. General Accounting Office, Options to Enhance the Long-term Viability of the
    Essential Air Service Program, GAO-02-997R (Washington, D.C.: Aug. 30, 2002).



    Page 24                                                                  GAO-03-1040T
                  2004, a community’s eligibility for an EAS subsidy because of decreased
                  passenger ridership and revenue.

                  The administration’s proposal would generally restrict appropriations to
                  the $50 million from overflight fees and would require communities to help
                  pay the costs of funding their service. The proposal would also allow
                  communities to fund transportation options other than scheduled air
                  service, such as on-demand “air taxis” or ground transportation.

                  Mr. Chairman, this concludes my prepared statement. I would be pleased
                  to answer any questions you or other members of the Committee may
                  have.


                  For future contacts regarding this testimony, please contact JayEtta
Contact and       Hecker at (202) 512-2834. Individuals making key contributions to this
Acknowledgments   testimony included Robert Ciszewski, Steven Cohen, Elizabeth Eisenstadt,
                  Rita Grieco, Steven Martin, Katherine Siggerud, Glen Trochelman, and
                  Alwynne Wilbur.




                  Page 25                                                      GAO-03-1040T
Appendix 1: Related GAO Products


                       Federal-Aid Highways: Cost and Oversight of Major Highway and
Federal-Aid Highways   Bridge Projects—Issues and Options. GAO-03-764T. Washington, D.C.:
                       May 8, 2003.

                       Transportation Infrastructure Cost and Oversight Issues on Major
                       Highway and Bridge Projects. GAO-02-673. Washington, D.C.: May 1,
                       2002.

                       Surface Infrastructure: Costs, Financing, and Schedules for Large-Dollar
                       Transportation Projects. GAO/RCED-98-64. Washington, D.C.: February
                       12, 1998.

                       DOT’s Budget: Management and Performance Issues Facing the
                       Department in Fiscal Year 1999. GAO/T-RCED/AIMD-98-76. Washington,
                       D.C.: February 12, 1998.

                       Transportation Infrastructure: Managing the Costs of Large-Dollar
                       Highway Projects. GAO/RCED-97-27. Washington, D.C.: February 27, 1997.

                       Transportation Infrastructure: Progress on and Challenges to Central
                       Artery/Tunnel Project’s Costs and Financing. GAO/RCED-97-170.
                       Washington, D.C.: July 17, 1997.

                       Transportation Infrastructure: Central Artery/Tunnel Project Faces
                       Financial Uncertainties. GAO/RCED-96-1313. Washington, D.C.: May 10,
                       1996.

                       Central Artery/Tunnel Project. GAO/RCED-95-213R. Washington, D.C.:
                       June 2, 1995.


                       Highway Safety: Research Continues on a Variety of Factors That
Highway Safety         Contribute to Motor Vehicle Crashes. GAO-03-436. Washington, D.C.:
                       March 31, 2003.

                       Highway Safety: Better Guidance Could Improve Oversight of State
                       Highway Safety Programs. GAO-03-474. Washington, D.C.: April 21, 2003.

                       Highway Safety: Factors Contributing to Traffic Crashes and NHTSA’s
                       Efforts to Address Them. GAO-03-730T. Washington, D.C.: May 22, 2003.




                       Page 26                                                    GAO-03-1040T
                        Federal Transit Administration: Bus Rapid Transit Offers
Mass Transit            Communities a Flexible Mass Transit Option. GAO-03-729T. Washington,
                        D.C.: June 24, 2003.

                        Mass Transit: FTA Needs to Provide Clear Information and Additional
                        Guidance on the New Starts Ratings Process. GAO-03-701. Washington,
                        D.C.: June 23, 2003.

                        Mass Transit: FTA’s New Starts Commitments for Fiscal Year 2003.
                        GAO-02-603. Washington, D.C.: April 30, 2002.

                        Mass Transit: FTA Could Relieve New Starts Program Funding
                        Constraints. GAO-01-987. Washington, D.C.: August 15, 2001.

                        Mass Transit: Project Management Oversight Benefits and Future
                        Funding Requirements. GAO/RCED-99-240. Washington, D.C.: August 19,
                        1999.

                        Mass Transit: Implementation of FTA’s New Starts Evaluation Process
                        and FY 2001 Funding Proposals. GAO/RCED-00-149. Washington, D.C.:
                        April 28, 2000.

                        Mass Transit: Challenges in Evaluating, Overseeing, and Funding Major
                        Transit Projects. GAO/T-RCED-00-104. Washington, DC: Mar. 8, 2000.

                        Mass Transit: Status of New Starts Transit Projects With Full Funding
                        Grant Agreements, GAO/RCED-99-240. Washington, D.C.: Aug. 19, 1999.

                        Mass Transit: FTA’s Progress in Developing and Implementing a New
                        Starts Evaluation Process. GAO/RCED-99-113. Washington, D.C.: April 26,
                        1999.


                        Commercial Aviation: Issues Regarding Federal Assistance for
Essential Air Service   Enhancing Air Service to Small Communities. GAO-03-540T.
                        Washington, D.C.: March 11, 2003.

                        Commercial Aviation: Factors Affecting Efforts to Improve Air Service
                        at Small Community Airports. GAO-03-330. Washington, D.C.: January 17,
                        2003.

                        Commercial Aviation: Financial Condition and Industry Responses
                        Affect Competition. GAO-03-171T. Washington, D.C.: October 2, 2002.

                        Page 27                                                    GAO-03-1040T
           Options to Enhance the Long-term Viability of the Essential Air Service
           Program. GAO-02-997R. Washington, D.C.: Aug. 30, 2002.

           Commercial Aviation: Air Service Trends at Small Communities Since
           October 2000. GAO-02-432. Washington, D.C.: August 30, 2002.

           Essential Air Service: Changes in Passenger Traffic, Subsidy Levels, and
           Air Carrier Costs. T-RCED-00-185. Washington, D.C.: May 25, 2000.

           Essential Air Service: Changes in Subsidy Levels, Air Carrier Costs, and
           Passenger Traffic. RCED-00-34. Washington, D.C.: April 14, 2000.




(544079)   Page 28                                                     GAO-03-1040T
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