oversight

Major Management Challenges and Program Risks: Department of Transportation

Published by the Government Accountability Office on 1999-01-01.

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

                United States General Accounting Office

GAO             Performance and Accountability
                Series




January 1999
                Major Management
                Challenges and Program
                Risks
                Department of
                Transportation




GAO/OCG-99-13
GAO   United States
      General Accounting Office
      Washington, D.C. 20548

      Comptroller General
      of the United States



      January 1999
      The President of the Senate
      The Speaker of the House of Representatives

      This report addresses the major performance and
      management challenges that have limited the
      effectiveness of the Department of Transportation (DOT)
      in carrying out its missions. It also addresses corrective
      actions that DOT has taken or initiated on some of these
      challenges and further actions that are needed. For many
      years, we and others have documented challenges for the
      performance and management of the Department that
      encompass major program areas—in acquisition
      management, Year 2000 compliance, and safety and
      security programs in the aviation area; acquisition
      management by the Coast Guard; the oversight of
      large-dollar highway and transit projects; and
      departmentwide financial management. In addition, we
      have documented unique challenges facing airline
      competition and Amtrak’s financial viability.

      Many of the challenges we identified are long-standing
      and will require sustained attention by DOT and the
      Congress. While DOT has efforts under way to address
      issues in some of its programs, these activities are in the
      early stages of implementation. It will take time to fully
      address the issues we and others have identified and to
      assess whether the Department has resolved them. We
      have designated as high risk two major challenges facing
      DOT—significant cost overruns, schedule delays and
performance shortfalls experienced by the
multibillion-dollar air traffic control modernization
program and serious financial management weaknesses
at the Federal Aviation Administration.

This report is part of a special series entitled the
Performance and Accountability Series: Major
Management Challenges and Program Risks. The series
contains separate reports on 20 agencies—one on each of
the cabinet departments and on most major independent
agencies as well as the U.S. Postal Service. The series
also includes a governmentwide report that draws from
the agency-specific reports to identify the performance
and management challenges requiring attention across
the federal government. As a companion volume to this
series, GAO is issuing an update to those government
operations and programs that its work has identified as
“high risk” because of their greater vulnerabilities to
waste, fraud, abuse, and mismanagement. High-risk
government operations are also identified and discussed
in detail in the appropriate performance and
accountability series agency reports.

The performance and accountability series was done at
the request of the Majority Leader of the House of
Representatives, Dick Armey; the Chairman of the House
Government Reform Committee, Dan Burton; the
Chairman of the House Budget Committee, John Kasich;
the Chairman of the Senate Committee on Governmental
Affairs, Fred Thompson; the Chairman of the Senate
Budget Committee, Pete Domenici; and Senator Larry



            Page 2              GAO/OCG-99-13 DOT Challenges
Craig. The series was subsequently cosponsored by the
Ranking Minority Member of the House Government
Reform Committee, Henry A. Waxman; the Ranking
Minority Member, Subcommittee on Government
Management, Information and Technology, House
Government Reform Committee, Dennis J. Kucinich;
Senator Joseph I. Lieberman; and Senator Carl Levin.

Copies of this report series are being sent to the
President, the congressional leadership, all other
Members of the Congress, the Director of the Office of
Management and Budget, the Secretary of
Transportation, and the heads of other major
departments and agencies.




David M. Walker
Comptroller General of
the United States




            Page 3               GAO/OCG-99-13 DOT Challenges
Contents



Overview                                             6

Major                                               16
Performance and
Management
Issues
Related GAO                                         66
Products
Performance and                                     73
Accountability
Series




                  Page 4   GAO/OCG-99-13 DOT Challenges
Page 5   GAO/OCG-99-13 DOT Challenges
Overview



                       With a budget of $48 billion in fiscal year
                       1999, the Department of Transportation
                       (DOT) faces critical challenges as it attempts
                       to ensure the safe and efficient movement of
                       people and the cost-effective investment of
                       resources in the nation’s transportation
                       infrastructure, including its highways and
                       transit systems, airports, airways, ports, and
                       waterways. While DOT has had many
                       successes in improving the nation’s
                       transportation systems, it has also
                       experienced problems that have impeded its
                       ability to achieve these objectives. We, DOT’s
                       Inspector General, and the Department itself
                       have documented these problems and
                       recommended solutions. Although some
                       actions have been taken to address these
                       recommendations, major performance and
                       management challenges remain.


The Challenges

Acquisition of Major   The Federal Aviation Administration’s (FAA)
Aviation and Coast     and the U.S. Coast Guard’s major acquisition
Guard Systems          programs continue to face significant
Lacks Adequate         challenges that require management
Management and
                       attention. Over the past 17 years, FAA’s
Planning
                       multibillion-dollar air traffic control
                       modernization program has experienced

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                      Overview




                      cost overruns, delays, and performance
                      shortfalls of large proportions. The Congress
                      has appropriated over $25 billion for the
                      program through fiscal year 1998, and FAA
                      estimates that the program will need an
                      additional $17 billion for fiscal years 1999
                      through 2004. Because of its size,
                      complexity, cost, and problem-plagued past,
                      we have designated this program as a
                      high-risk information technology initiative
                      since 1995. The Coast Guard is planning
                      potentially the largest acquisition project in
                      its history, a 20-year, $9.8 billion project to
                      replace or modernize many of its ships and
                      aircraft. However, we found that the Coast
                      Guard needs to more thoroughly address the
                      project’s justification and affordability. For
                      example, the remaining useful life of the
                      aircraft—and perhaps the ships—may be
                      much longer than the agency originally
                      estimated. We recommended that DOT and
                      the Coast Guard take several steps to
                      improve their planning process, such as
                      revising acquisition guidelines so future
                      projects are based on accurate and complete
                      data.


Serious Challenges    FAA  faces considerable challenges in making
Remain in Resolving   its computer systems ready for the year
FAA’s Year 2000       2000. In August 1998, we testified that FAA
Risks

                      Page 7                GAO/OCG-99-13 DOT Challenges
                       Overview




                       was unlikely to complete all critical tests in
                       time and that unresolved risks—including
                       those associated with data exchanges,
                       international coordination, reliance on the
                       telecommunications infrastructure, and
                       business continuity planning—threatened
                       aviation operations. The implications of FAA’s
                       not meeting the Year 2000 deadline are
                       enormous and could affect hundreds of
                       thousands of people through customer’s
                       inconvenience, increased airline costs,
                       grounded or delayed flights, or degraded
                       levels of safety.


FAA and the Nation’s   DOT and the Congress face a challenge in
Airports Face          reaching agreement on the amount and
Funding                source of long-term financing for FAA and the
Uncertainties          nation’s airports. The National Civil Aviation
                       Review Commission recently recommended
                       that the Congress fund FAA through a
                       combination of cost-based user charges, fuel
                       taxes, and general fund revenues. However,
                       we and others have noted that FAA lacks
                       sufficiently detailed and reliable cost data to
                       accurately determine the agency’s costs. In
                       addition, continued funding for airports will
                       be critical to ensuring adequate capacity for
                       the national airport system. From 1997
                       through 2001, planned development at
                       airports might require as much as $10 billion


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                      Overview




                      per year nationwide, which would need to be
                      obtained from a variety of public and private
                      sources. Several proposals to increase
                      airports’ funding have emerged in recent
                      years, including increasing the amount of
                      funding from FAA, but many of them are
                      controversial.


Aviation Safety and   Over the years, we have identified numerous
Security Programs     shortcomings in FAA’s safety and security
Need Strengthening    programs. Shortcomings in FAA’s safety
                      programs include the need for the agency to
                      improve its oversight of the aviation
                      industry, record complete information on
                      inspections and enforcement actions,
                      provide consistent information and adequate
                      training for users of weather information,
                      and resolve data protection issues to
                      enhance the proactive use of recorded flight
                      data to prevent accidents. In addition, while
                      progress has been made in strengthening
                      airport security, it will take years for FAA and
                      the aviation industry to fully implement
                      current initiatives.




                      Page 9                GAO/OCG-99-13 DOT Challenges
                       Overview




Lack of Aviation       Although airline deregulation is generally
Competition            considered to be a success by DOT and
Contributes to High    others, contributing to better service and
Fares and Poor         lower fares for most travelers, not all
Service for Some
                       communities have benefited from it. In a
Communities
                       number of small and medium-sized
                       communities, a lack of aviation competition
                       contributes to higher fares and poorer
                       service. Operating barriers—such as
                       exclusive-use gate leases and “slot” controls
                       that limit the number of takeoffs and
                       landings at certain congested
                       airports—contribute to higher fares and
                       service problems by deterring new entrant
                       airlines while fortifying established airlines’
                       dominance at key airports. Recently
                       proposed alliances between the nation’s six
                       largest airlines have raised additional
                       concerns about competition.


DOT Needs to           Many large-dollar highway and transit
Continue Improving     projects, each costing hundreds of millions
Oversight of Surface   to billions of dollars, continue to incur cost
Transportation         increases, experience delays, and have
Projects
                       difficulties acquiring needed financing. DOT’s
                       Federal Highway Administration provided
                       over $21 billion in fiscal year 1998 to assist
                       the states in building and repairing highways
                       and bridges. We have identified several
                       options to help improve the management of


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                     Overview




                     these projects, particularly those involving
                     large amounts of dollars, depending on the
                     oversight role that the Congress chooses for
                     the federal government. DOT’s Federal
                     Transit Administration (FTA)—with a budget
                     of $4.8 billion in fiscal year 1998—has
                     improved its oversight of federal transit
                     grants. However, the agency needs complete,
                     timely information to help ensure the
                     correction of deficiencies found during its
                     oversight reviews.


Amtrak’s Financial   Despite efforts to control expenses and
Condition Is         increase revenues, the National Railroad
Tenuous              Passenger Corporation’s (Amtrak) financial
                     condition has substantially deteriorated in
                     recent years. Since it began operations in
                     1971, Amtrak has received nearly $22 billion
                     in federal subsidies for operating and capital
                     expenses, and it is likely to remain heavily
                     dependent on federal assistance well into the
                     future. Amtrak loses about $2 for every
                     dollar it earns in revenues from its train
                     service, and only 1 of Amtrak’s 40 routes
                     covers its costs. Amtrak’s deteriorating
                     financial condition has raised the possibility
                     of both bankruptcy and liquidation. The
                     business decisions that Amtrak makes
                     regarding the structure of its route system
                     will play a crucial role in determining its


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                     Overview




                     long-term viability. While Amtrak has
                     proposed cutting routes to improve its
                     overall financial performance, it has
                     encountered opposition because of the
                     desire of local communities to see their
                     service continued. Because there is no clear
                     public policy that defines the role of
                     passenger rail in the national transportation
                     system and because Amtrak is likely to
                     remain dependent on federal assistance, the
                     Congress needs to decide on the nation’s
                     expectations for intercity rail and the scope
                     of Amtrak’s mission in providing that
                     service.


DOT Lacks            DOT’s lack of accountability for its financial
Accountability for   activities impairs its ability to efficiently and
Its Financial        effectively manage programs and exposes
Activities           the Department to potential waste, fraud,
                     mismanagement, and abuse. Since 1993,
                     when the Office of Inspector General began
                     auditing the financial statements of certain
                     agencies within the Department, it has been
                     unable to determine whether the reported
                     financial results are correct and has thus
                     been unable to express an opinion on the
                     reliability of these statements. The Inspector
                     General also has been unable to express an
                     opinion on the reliability of the
                     departmentwide statements since these


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               Overview




               statements were audited beginning with
               fiscal year 1996. A key issue affecting the
               ability to express an opinion on these
               financial statements has been DOT’s inability
               to reliably determine the quantities, the
               locations, and the values of property, plant,
               and equipment and inventory, reported at
               $28.5 billion as of September 30, 1997.
               Serious financial management weaknesses at
               FAA contribute to this situation.
               Consequently, we have designated financial
               management at FAA as high-risk. In addition,
               DOT lacks a cost-accounting system or an
               alternative means of reliably accumulating
               and reporting the full cost of specific
               projects and activities. Due to the effects of
               the property, plant, and equipment,
               inventory, and cost-accounting deficiencies,
               it is unlikely that DOT can accurately
               determine costs and meaningfully link costs
               to performance measures.


Progress and   Many of the challenges facing DOT are not
Next Steps     new to either the Department or the
               Congress. Individual agencies within DOT
               have efforts under way to address some of
               them, but more remains to be done. For
               example, FAA has initiated activities to
               address many of our concerns about its air
               traffic control modernization program, such


               Page 13              GAO/OCG-99-13 DOT Challenges
Overview




as developing a complete air traffic control
systems architecture, but none are
completed. FAA is also taking steps to
address its Year 2000 challenges, such as
working with the International Civil Aviation
Organization on international issues,
although much remains to be done. We are
continuing to review FAA’s progress in these
areas.

FAA  will need to continue efforts to fully
implement its cost-accounting system so that
it can use reliable and accurate data to
improve its management and performance
and to establish user fees as mandated by
the Congress. While FAA is taking some steps
to address shortcomings with its aviation
safety program, including totally revamping
its inspection program, eliminating the
shortcomings will take considerable time
and effort. We are also reviewing FAA’s
efforts in this area.

To improve FTA’s oversight of transit grants,
the agency needs to complete
implementation of a new information
tracking system. This system will enable
headquarters officials to better oversee
grantee’s performance. In addition, DOT has a
plan for resolving the financial management
deficiencies that were identified in its


Page 14              GAO/OCG-99-13 DOT Challenges
Overview




financial statement audits. However, the
Department faces significant challenges in
achieving its goal of receiving an unqualified
audit opinion on its financial statements
because of the numerous shortcomings that
need to be addressed. Although strategic and
annual performance plans, completed under
the Government Performance and Results
Act of 1993, discuss several of the challenges
we identified, these plans generally provide
insufficient details to address them.

Adequately addressing many of the
challenges we identified will require
sustained attention by DOT and the Congress.
For example, while DOT has attempted to
enhance airline competition by such efforts
as granting a limited number of additional
slots at two airports, further actions, some of
which are controversial, may be needed by
the Congress, DOT, and the private sector.
Finally, additional actions may be needed by
the Congress to address long-term financing
for FAA, the federal oversight role for
large-dollar highway projects, and the future
of Amtrak.




Page 15               GAO/OCG-99-13 DOT Challenges
Major Performance and Management
Issues


            With a budget of $48 billion in fiscal year
            1999, DOT is responsible for ensuring the safe
            and efficient movement of people and the
            cost-effective investment of resources in the
            nation’s transportation infrastructure,
            including its highways and transit systems,
            airports, airways, ports, and waterways. DOT
            employs about 100,000 civilian and military
            people across the country, and its programs
            are administered by 10 operating
            administrations and bureaus.1 While DOT has
            had many successes in improving the
            nation’s transportation systems, it has also
            faced challenges that have impeded its
            ability to achieve its objectives.

            Over the years, we, DOT’s Inspector General,
            the Department itself, and others have
            documented shortcomings with the
            performance and management of the
            Department and unique challenges facing air
            and passenger rail travel. This report
            summarizes our recent findings and
            recommended solutions concerning
            acquisition management by FAA and the
            Coast Guard, Year 2000 compliance by FAA,
            long-term funding for FAA and the nation’s

            1
             DOT’s administrations and bureaus are FAA, the Federal Highway
            Administration, the Federal Railroad Administration, FTA, the
            Maritime Administration, the National Highway Traffic Safety
            Administration, the Research and Special Programs Administration,
            the St. Lawrence Seaway Development Corporation, the U.S. Coast
            Guard, and the Bureau of Transportation Statistics.

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                    Major Performance and Management
                    Issues




                    airports, aviation safety and security,
                    aviation competition, oversight of surface
                    transportation projects, Amtrak’s financial
                    condition, and financial management issues.
                    This report also describes how DOT has
                    addressed some of its weaknesses through
                    plans that it has developed in response to the
                    Government Performance and Results Act.
                    In many cases, addressing the challenges we
                    identified will require a sustained effort by
                    DOT, working with other federal, state, and
                    local stakeholders and the Congress.


The Acquisition     FAA and the U.S. Coast Guard are
of Major Aviation   undertaking long-term, costly programs to
and Coast Guard     modernize and replace aging equipment. Our
Systems Lacks       work has shown that these agencies need to
Adequate            improve the management of these programs
                    to ensure that federal funds are effectively
Management and
                    and efficiently used.
Planning
The Inadequate      Faced with rapidly growing volumes of air
Management of Air   traffic and aging equipment to control air
Traffic Control     traffic, in 1981 FAA initiated an ambitious air
Modernization Has   traffic control modernization program. The
Led to Many
                    cost of this effort—which involves acquiring
Difficulties
                    a vast network of radar and automated
                    data-processing, navigation, and
                    communications equipment and air traffic


                    Page 17                 GAO/OCG-99-13 DOT Challenges
    Major Performance and Management
    Issues




    control facilities—is expected to total
    $42 billion through fiscal year 2004. The
    Congress has appropriated over $25 billion
    of the $42 billion through fiscal year 1998,
    and FAA estimates that the program will need
    an additional $17 billion for fiscal years 1999
    through 2004. Over the past 17 years, the
    modernization program has experienced
    cost overruns, delays, and performance
    shortfalls of large proportions. Because of its
    size, complexity, cost, and problem-plagued
    past, we designated the air traffic control
    modernization program as a high-risk
    information technology initiative in 1995.
    Many of the shortcomings we reported then
    remain unresolved, and we continue to
    believe this program remains at high risk.

    Our work has identified some of the root
    causes of the modernization program’s
    problems and pinpointed solutions to
    address them:

•   The many systems in the modernization
    program have been developed without the
    benefit of a complete systems architecture,
    or overall blueprint, to guide the program.
    The result has been unnecessarily higher
    spending to buy, integrate, and maintain
    hardware and software. We recommended
    that FAA develop and enforce a complete


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    Major Performance and Management
    Issues




    systems architecture and implement a
    management structure that is similar to the
    Chief Information Officer (CIO) provisions of
    the Clinger-Cohen Act of 1996.
•   FAA lacks the reliable cost-estimating
    processes and cost-accounting practices
    needed to effectively manage information
    technology investments, leaving it at risk to
    make ill-informed decisions on critical
    multimillion-, even billion-, dollar air traffic
    control systems. We recommended that FAA
    institutionalize defined processes for
    estimating the projects’ costs and develop
    and implement a managerial cost-accounting
    capability.
•   FAA’s processes for acquiring software, the
    most costly and complex component of air
    traffic control systems, are ad hoc,
    sometimes chaotic, and not repeatable
    across projects. As a result, FAA is at great
    risk of not delivering promised software
    capabilities on time and within budget.
    Furthermore, FAA lacks an effective
    approach to improve software acquisition
    processes. We recommended that FAA
    improve its software acquisition capabilities
    by institutionalizing mature acquisition
    processes and reiterated our prior
    recommendation that a CIO organizational
    structure be established.



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    Major Performance and Management
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•   FAA’sorganizational culture has impaired the
    acquisition process. Employees have acted
    in ways that did not reflect a strong enough
    commitment to mission focus,
    accountability, coordination, and
    adaptability. We recommended that FAA
    develop a comprehensive strategy for
    addressing this issue.

    FAA is responding to many of these
    recommendations. Specifically, FAA has
    initiated activities to develop a complete air
    traffic control systems architecture, to
    institutionalize defined cost-estimating
    processes, to acquire a cost-accounting
    system, to improve its software acquisition
    capabilities, and to improve its
    organizational culture. Most recently, FAA
    has committed to hiring a CIO who would
    report directly to FAA’s Administrator, a
    structure similar to the provisions of the
    Clinger-Cohen Act of 1996. In addition, DOT’s
    1999 performance plan, which was
    submitted to the Congress in February 1998,
    describes FAA’s actions to improve certain
    aspects of the air traffic control
    modernization program, such as poor
    processes for estimating costs and poor
    accounting practices. However, the plan
    does not include goals for mitigating the
    risks associated with the modernization or


    Page 20                 GAO/OCG-99-13 DOT Challenges
Major Performance and Management
Issues




measures for determining progress towards
these goals.

Moreover, in an effort to restructure the
modernization program, FAA—in
consultation with the aviation
community—is developing a phased
approach to modernization, including a new
way of managing air traffic known as “free
flight.” Free flight would allow pilots more
flexibility in choosing routes for their
aircraft than the present system of highly
structured rules and procedures for air
traffic operations. Free flight, which will be
implemented in phases, is expected to
provide benefits to users and help improve
aviation safety and efficiency. The agency,
however, faces many challenges in
implementing free flight in a cost-effective
manner. The challenges for FAA include
(1) providing effective leadership and
management of modernization efforts,
(2) developing plans in collaboration with
the aviation community that are sufficiently
detailed to move forward with the
implementation of free flight, and
(3) addressing outstanding issues related to
the development and deployment of
technology.




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While improvements have been initiated,
FAA’s efforts to address our concerns are not
yet completed, and several major systems
development projects continue to face
challenges that could affect their costs,
schedules, and performance. For example, in
March 1998 we reported that the Standard
Terminal Automation Replacement
System—which entails replacing old
computers, controller workstations, and
related equipment at about 170 of FAA’s
terminal air traffic control facilities—is
facing difficulties staying within its cost
baseline. Costs for the new air traffic
controller workstations are increasing
because of such unexpected factors as the
need for additional resources to maintain the
program’s schedule and design changes that
air traffic controllers called for after
reviewing the equipment. These unexpected
factors led FAA to reprogram $29 million in
fiscal year 1998 funds for the project. In
addition, the project’s baseline schedule
called for equipment to become operational
at the first sites in December 1998. Since that
time, we have reported that FAA estimates
that the project’s cost has the potential to
increase from $294 million to $410 million
over the approved baseline and that the
project’s initial completion could be delayed
by almost 2-1/2 years.


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                       Issues




                       Additionally, we recently reported that FAA is
                       not effectively managing information
                       security for future air traffic control
                       modernization systems. The agency does not
                       consistently include well-formulated security
                       requirements in specifications for all new
                       modernization systems, as required by FAA
                       policy. Furthermore, FAA does not have a
                       well-defined security architecture, a security
                       concept of operations, or security
                       standards—all of which are needed to define
                       and help ensure adequate security
                       throughout our nation’s air traffic control
                       network. We recommended that FAA ensure
                       that specifications for all new air traffic
                       control systems include security
                       requirements based on detailed security
                       assessments and that the agency establish
                       and implement a security architecture, a
                       security concept of operations, and security
                       standards. The agency has not yet officially
                       responded to our recommendations.


The Coast Guard        The U.S. Coast Guard is planning what is
Needs to More          potentially the largest acquisition project in
Thoroughly Address     its history. This effort, the Deepwater
Acquisition-Planning   Capability Replacement Project, involves
Issues
                       replacing or modernizing many of the Coast
                       Guard’s 92 ships and 209 airplanes and
                       helicopters. However, in October 1998, we


                       Page 23                 GAO/OCG-99-13 DOT Challenges
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reported that the Coast Guard needs to more
thoroughly address the project’s justification
and affordability. The Coast Guard initially
estimated that the project would cost $9.8
billion (in constant dollars) over a 20-year
period. The project is still in its early stages,
but initial planning estimates call for
spending $300 million starting in fiscal year
2001 and $500 million each year over the
next 19 years.

Although the Coast Guard is correct in
starting now to explore how best to
modernize or replace its deepwater ships
and aircraft, the Deepwater Project’s only
formal justification that was developed at
the time of our review did not accurately or
fully depict the need for replacement or
modernization. In fact, the remaining useful
life of the Coast Guard’s deepwater
aircraft—and perhaps its ships—may be
much longer than the agency originally
estimated. The Coast Guard withdrew the
justification on the basis of concerns
expressed by the Office of Management and
Budget and is developing more accurate and
updated information. We recommended that
DOT and the Coast Guard take several steps
to improve their planning processes, such as
expediting the development and the issuance
of updated information on the remaining


Page 24                 GAO/OCG-99-13 DOT Challenges
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               Issues




               service life of ships and aircraft and revising
               its acquisition guidelines so that future
               projects are based on more accurate and
               complete data. In addition, the agency could
               face major financial obstacles in proceeding
               with a project that costs as much as initially
               proposed. At an estimated $500 million a
               year, expenditures for the project would
               take virtually all of the Coast Guard’s
               anticipated spending for capital projects. To
               align contractors’ proposals more
               realistically with the agency’s budget and
               other capital needs, we recommended that
               the Coast Guard evaluate whether
               contractors should base their proposals on a
               funding level that may be lower than
               $500 million each year. While Coast Guard
               officials seemed receptive to our
               recommendations, DOT has not officially
               responded to our report.


Key Contacts   John H. Anderson, Jr., Director
               Transportation Issues
               Resources, Community, and Economic
                 Development Division
               (202) 512-2834
               andersonj.rced@gao.gov

               Joel C. Willemssen, Director
               Civil Agencies Information Systems


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                  Accounting and Information Management
                    Division
                  (202) 512-6408
                  willemssenj.aimd@gao.gov


Serious           To perform its mission, FAA depends on an
Challenges        extensive array of information-processing
Remain in         and communications technologies. Without
Resolving FAA’s   these specialized computer systems, the
Year 2000 Risks   agency could not effectively control air
                  traffic, target airlines for inspection, or
                  provide up-to-date weather information to
                  pilots and air traffic controllers. For
                  example, each of FAA’s 20 en route air traffic
                  control facilities, which monitor aircraft at
                  the higher altitudes between airports,
                  depends on about 50 interrelated computer
                  systems to safely guide and direct aircraft.
                  The implications of FAA’s not meeting the
                  Year 2000 deadline are enormous and could
                  affect hundreds of thousands of people
                  through customers’ inconvenience,
                  increased airline costs, grounded or delayed
                  flights, or degraded levels of safety.

                  In early 1998, we reported that FAA was
                  severely behind schedule in implementing an
                  effective Year 2000 program and warned that
                  systems that support critical
                  operations—such as monitoring and


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controlling air traffic—could fail to perform
as needed unless proper date-related
calculations could be ensured. We made a
series of recommendations aimed at
assisting FAA in completing critical Year 2000
activities, including (1) completing an
agencywide plan that provides the FAA Year
2000 program manager with the authority to
enforce policy and that outlines the agency’s
overall strategy and (2) completing
inventories and assessments of all systems
and data interfaces. FAA agreed with these
recommendations and has made progress in
implementing them. For example, a Year
2000 program manager now reports directly
to FAA’s Administrator and oversees a
program plan with specific goals and
milestones.

More recently, however, we testified that FAA
still faces serious challenges in addressing
its Year 2000 problem. Specifically, in
August 1998, we testified that FAA was
unlikely to complete critical testing activities
in time because its projections for
completing testing and implementation
activities were based on very optimistic
schedules and because of the complexity of
the agency’s testing process. We also
reported that unresolved crosscutting
risks—including risks associated with data


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                    exchanges, international coordination,
                    reliance on the telecommunications
                    infrastructure, and business continuity
                    planning—threatened aviation operations.
                    FAA is taking steps to address these issues.
                    For example, FAA is working with the
                    International Civil Aviation Organization on
                    international issues. We are continuing to
                    review FAA’s progress in addressing these
                    risks.


Key Contact         Joel C. Willemssen, Director
                    Civil Agencies Information Systems
                    Accounting and Information Management
                      Division
                    (202) 512-6408
                    willemssenj.aimd@gao.gov


FAA and the         DOT and the Congress face a challenge in
Nation’s Airports   reaching agreement on the amount and
Face Funding        source of long-term financing for FAA and the
Uncertainties       nation’s airports. At present, FAA’s funding is
                    made available by the Congress from general
                    fund and Airport and Airway Trust Fund
                    appropriations, which was established to
                    finance FAA’s investments in the airport and
                    airway system, including construction and
                    safety improvements at airports and
                    technological upgrades to the air traffic


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control system. The Trust Fund receives
revenues from taxes on domestic and
international travel, domestic cargo
transported by air, and noncommercial
aviation fuel. With the uncommitted balance
in the Trust Fund estimated to increase to
over $40 billion by 2008, some have
advocated taking the fund off budget to
allow FAA to spend all of the revenues
collected from aviation taxes. Despite
several assessments over the past 2 years, a
consensus does not exist regarding how to
meet FAA’s future funding needs.2

The latest proposal for funding FAA comes
from the National Civil Aviation Review
Commission, which recommends that the
Congress fund FAA through a combination of
cost-based user charges, fuel taxes, and
general fund revenues. In the past, we and
others have noted that FAA has lacked
sufficiently detailed or reliable cost data.
These concerns are still relevant. The
Commission’s report acknowledges that
reliable, comprehensive cost-accounting
data are needed to accurately determine the
agency’s costs. FAA has begun implementing

2
 See Federal Aviation Administration: Independent Financial
Assessment, Coopers & Lybrand (Feb. 28, 1997); Avoiding Aviation
Gridlock & Reducing the Accident Rate, National Civil Aviation
Review Commission (Dec. 1997); and Air Traffic Control: Issues in
Allocating Costs for Air Traffic Services to DOD and Other Users
(GAO/RCED-97-106, Apr. 25, 1997).

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a cost-accounting system, which will be a
cornerstone for FAA’s improving its
efficiency. Program officials had planned to
begin collecting cost data for air traffic
services by October 1998, but complications
associated with the method used to allocate
costs have delayed this milestone. FAA will
need to continue with efforts to fully
implement its cost-accounting system so that
it can use reliable and accurate data to
improve its management and performance
and to establish user fees, as mandated by
the Congress.

Continued funding for airports will also be
critical to ensuring adequate capacity for the
national airport system and avoiding
congestion and delays. In April 1997, we
reported that planned development at
airports might cost as much as $10 billion
per year over the next 5 years. Airports rely
on a variety of public and private funding
sources to finance their capital development.
In 1996, $1.4 billion in federal funding was
made available for capital development from
the Airport and Airway Trust Fund. Other
major sources of funding include airport and
special facility bonds and passenger facility
charges paid on each airline ticket. The
amount and type of funding vary with each
airport’s size. While the need for funding at


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larger airports may be considerable, these
airports also have access to many funding
sources, particularly tax-exempt bonds. The
more difficult challenge may rest with
meeting the funding needs of smaller
airports. Smaller airports confront a
potential funding shortfall that, in
percentage terms, is far greater than for
larger airports. Moreover, these airports
have the fewest funding options, relying on
federal grants for half of their funding.
Maintaining the financial viability of these
smaller airports will require adequate
funding from existing federal and state grant
programs as well as more innovative
applications of existing funding.

Several proposals to increase airport funding
have emerged in recent years. These include
increasing the amount of funding for FAA’s
Airport Improvement Program, raising or
eliminating the ceiling on passenger facility
charges, and leveraging existing funding
sources. Many of these proposals are
controversial and vary in the degree to
which they help specific types of airports.
For example, increasing the amount of
funding for the Airport Improvement
Program would help smaller airports more,
while raising passenger facility charges
would help larger airports more. In addition,


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                  airports and airlines have disagreed on the
                  need to increase the ceiling on passenger
                  facility charges above its current $3.00 level.
                  Airport officials contend that many needed
                  projects are going unfunded, while airline
                  representatives dispute this, saying that
                  airlines are willing to fund important
                  projects through airline assessments. To
                  address the funding issue, FAA has been
                  testing several innovative funding
                  approaches through a small pilot program.
                  However, we believe that this pilot program
                  is likely to yield only marginal benefits
                  because of the limited participation by
                  airports.


Key Contact       John H. Anderson, Jr., Director
                  Transportation Issues
                  Resources, Community, and Economic
                    Development Division
                  (202) 512-2834
                  andersonj.rced@gao.gov


Aviation Safety   The aviation accident rate per mile traveled
and Security      has remained low but flat over the last 2
Programs Need     decades. Unless the accident rate is reduced,
Strengthening     however, as air travel continues to grow, the
                  actual number of accidents will increase. We
                  have identified numerous weaknesses in


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                   FAA’s inspection, oversight, and enforcement
                   activities. During the last year, we have also
                   noted shortcomings in other safety
                   programs, such as (1) the lack of consistent
                   information or adequate training for users of
                   weather information and (2) unresolved data
                   protection issues, which impede the
                   proactive use of flight data to prevent
                   accidents. While FAA is taking some steps to
                   address the shortcomings in its safety
                   programs, eliminating those shortcomings
                   will take considerable time and effort. In
                   addition, while progress is being made in
                   strengthening airport security, it will take
                   several years to address all problem areas,
                   and FAA’s weak computer security practices
                   present significant vulnerabilities to the air
                   traffic control system.


Weaknesses in      We have found substantial weaknesses in
Aviation Safety    FAA’s safety inspection, oversight, and
Programs Need to   enforcement activities. FAA’s aviation safety
Be Addressed       programs provide for the initial certification,
                   periodic surveillance, and inspection of
                   airlines, airports, repair stations, and other
                   aviation entities, as well as of pilots and
                   mechanics. These inspections are intended
                   not only to detect actual violations but also
                   to serve as part of an early warning system



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for identifying potential systemwide
weaknesses.

Over the years, we have examined FAA’s
inspection program and recommended
improvements. In our most recent report, we
pointed out that work performed by aviation
repair stations—the 2,800 facilities that
repair and maintain nearly half of all U.S.
passenger and cargo aircraft—was cited as a
factor in several accidents. About 600 of
FAA’s 3,000 inspectors are responsible for
inspecting repair stations to ensure that
work conducted by these facilities is
competently done. FAA is meeting its goal of
inspecting every repair station at least once
a year by relying primarily on reviews by
individual inspectors. However, when FAA
uses teams rather than individual inspectors
to review facilities, the review is more
effective, uncovering more systemic and
long-standing problems. Furthermore, we
could not find sufficient documentation to
determine how well FAA followed up to
ensure that the deficiencies found during the
inspections were corrected.

To improve its oversight of repair stations,
we recommended that FAA expand the use of
locally based teams to inspect them,
particularly those that are large, are


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complex, have higher rates of
noncompliance, or meet predetermined risk
indicators. In addition, we recommended
that FAA specify what documentation should
be kept on inspection results, monitor
efforts to improve the quality of data for its
new management information system, and
expedite efforts to upgrade regulations
concerning the oversight of repair stations.
FAA agreed with these recommendations but
has not indicated how or when they would
be implemented.

When FAA’s inspectors identify violations,
agencywide guidance requires that they be
investigated and appropriately addressed,
and program office guidance requires that
they be reported. We found that FAA’s
information on compliance in the aviation
industry is incomplete and of limited use in
providing early warning of potential risks
and in targeting inspection resources to the
greatest risks. Many inspectors do not report
all problems or violations they observe, and
many inspections are not thorough or
structured enough to detect many violations.
In addition, FAA cannot readily set risk-based
priorities for resolving enforcement cases, in
part, because its enforcement database does
not distinguish major from minor cases.
Finally, the impact of FAA’s enforcement


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actions on compliance is difficult to assess
because the agency has not followed up on
the aviation industry’s implementation of
corrective actions.

We recommended several actions to improve
the usefulness of FAA’s inspection and
enforcement databases and the coordination
of inspection and enforcement efforts,
including (1) revising FAA’s order on
compliance and enforcement to specify that
inspection staff are required to report all
observed problems and violations and
(2) providing guidance to inspectors on how
to distinguish major from minor violations
and to legal staff on how to identify major
legal cases. In response to our
recommendations and others’ criticisms, FAA
has developed and begun to implement a
fundamentally reengineered system—the Air
Transportation Oversight System—to
oversee airline safety. We are monitoring the
program’s implementation and will report on
its progress in the spring of 1999.

Poor weather conditions have been cited as
a cause or a contributing factor in nearly a
quarter of the aviation accidents during the
last 10 years. Because of the significant
impact of hazardous weather on aviation
safety and efficiency, improving the weather


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information available to all users of the
aviation system should be one of FAA’s top
priorities. However, a panel of experts that
we convened concluded that FAA has done a
poor job in addressing the most significant
concerns raised by previous reports by the
National Research Council and an FAA
advisory committee. For example, the panel
concluded that FAA has not exercised
leadership for aviation weather services,
partly because it has lacked a clear policy
defining its role in aviation weather activities
and partly because of organizational
inefficiencies. The panel also concluded that
providing consistent weather information
and training for users has remained a low
priority for FAA. The implementation plan FAA
proposes to issue later this year provides the
agency with an opportunity to respond to
these continuing concerns with stronger
evidence of its commitment to weather
issues.

The analysis of aircraft data recorded during
flight has played a crucial role in
determining the causes of crashes. Recently,
however, some airlines have begun to
proactively analyze flight data from
uneventful airline flights to identify potential
problems and correct them before they lead
to accidents. The early experiences of


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airlines that have established such
programs—called Flight Operational Quality
Assurance programs—attest to the ability of
such programs to enhance aviation safety. In
December 1997, we reported that 4 U.S.
airlines and 33 foreign airlines had
implemented such programs. The primary
factor impeding further implementation is
unresolved data protection issues. Airline
managers and pilots have raised concerns
about the use of such data by FAA for
enforcement or disciplinary purposes and
about disclosure to the media and public.
The Federal Aviation Administration
Reauthorization Act of 1996 directed the
Administrator to issue regulations protecting
data collected under the programs from
public disclosure. As of November 1998, FAA
had not issued a rulemaking to implement
policies on either enforcement or disclosure.

DOT’s 1999 performance plan includes a goal
to improve aviation safety by reducing by
80 percent the number of fatal aviation
accidents per 100,000 departures by 2007.
However, the plan needs baseline data from
which to measure the reduction.




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Challenges Remain   Over the last several years, the changing
in Addressing       threat of terrorist activities has heightened
Aviation Security   the need to improve domestic aviation
Issues              security. We and others have highlighted
                    improvements needed to address this threat.
                    As a result, FAA is implementing
                    recommendations made in February 1997 by
                    the White House Commission on Aviation
                    Safety and Security (the Gore Commission)
                    and mandates contained in the Federal
                    Aviation Administration Reauthorization Act
                    of 1996 to improve security at airports.
                    Expeditious implementation of the security
                    initiatives by FAA and the aviation industry is
                    crucial to improving the security of domestic
                    aviation.

                    FAA has made some progress in five critical
                    areas as recommended by the Gore
                    Commission and mandated by the Congress,
                    but, given the current implementation
                    schedule, it will take years for FAA and the
                    aviation industry to fully implement all the
                    initiatives. These five areas, which we
                    reported on in May 1998, are passenger
                    profiling, explosives detection technologies,
                    passenger-bag matching, vulnerability
                    assessments, and the certification of
                    screening companies and the performance of
                    security screeners. We reported that FAA had
                    encountered delays of up to 12 months in


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implementing these initiatives, in part,
because they are more complex than
originally envisioned and involve new and
relatively untested technologies. Delays have
also been caused by limited funding and
problems with equipment installation and
contractors’ performance.

While progress has been made in
strengthening aviation security, completing
the current initiatives will require additional
financial resources and a sustained
commitment by the federal government and
the aviation industry. For example, current
funding is sufficient to provide only a limited
percentage of the flying public at selected
airports with protection against concealed
explosives in checked baggage. Several years
ago, FAA estimated that the cost of acquiring
and installing the certified systems at the
nation’s 75 busiest airports could range from
$400 million to $2.2 billion, depending on the
number and the cost of the machines
installed.

Additional improvements in airport security
will need sustained, long-term efforts by FAA
and the aviation industry. To maintain
momentum, it is important for the Congress
to provide continual oversight and to
address funding issues. Starting with fiscal


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year 1998, FAA began including goals and
specific performance measures for its
security program in its annual budget
submissions. FAA also incorporated goals and
performance measures for airport security
into its 1998 strategic plan. By using these
established goals and performance
measures, the Congress can better oversee
FAA’s progress in improving airport security.


Securing our nation’s airports alone does not
ensure safe air travel. It is also critical to
secure FAA’s air traffic control computer
systems that provide information to air
traffic controllers and aircraft flight crews to
help ensure the safe and expeditious
movement of aircraft. A failure to adequately
protect these systems, as well as the
facilities that house them, could cause a
nationwide disruption of air traffic or even
the loss of life due to collisions. We found
that FAA is ineffective in all the critical areas
included in our computer security review of
its air traffic control computer systems.

In the area of physical security, known
weaknesses exist at many air traffic control
facilities. For example, a March 1997
inspection of one facility that controls
aircraft disclosed numerous physical
security weaknesses, including unauthorized


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personnel being granted unescorted access
to restricted areas. FAA did not know of
weaknesses that may have existed at other
locations because it had not assessed the
physical security controls at 187 facilities
since 1993. Similarly, FAA does not know how
vulnerable its operational air traffic control
systems are and cannot adequately protect
them until it performs the appropriate risk
assessments of these systems and certifies
and accredits them. In addition, the agency
does not consistently include
well-formulated security requirements in its
specifications for new modernization
systems. Finally, FAA’s management structure
and implementation of policy for air traffic
control computer security are not effective.
Security responsibilities are distributed
among three organizations, all of which have
been remiss in their security duties.

In December 1998, we reported that FAA
officials indicated that they had inspected all
368 facilities and had accredited over half of
these facilities. However, the agency still
needs to take action on our remaining
recommendations that included (1) ensuring
that all systems are assessed, certified, and
accredited at least every 3 years and
(2) establishing an effective management
structure for developing, implementing, and


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                   enforcing air traffic computer security
                   policy.


Key Contacts       John H. Anderson, Jr., Director
                   Transportation Issues
                   Resources, Community, and Economic
                     Development Division
                   (202) 512-2834
                   andersonj.rced@gao.gov

                   Joel C. Willemssen, Director
                   Civil Agencies Information Systems
                   Accounting and Information Management
                     Division
                   (202) 512-6408
                   willemssenj.aimd@gao.gov


Lack of Aviation   Deregulation of the airline industry in 1978 is
Competition        generally considered to be a success by DOT
Contributes to     and others, contributing to lower fares and
High Fares and     better service for most air travelers largely
Poor Service for   because of increased competition spurred by
                   the entry of new airlines into the industry
Some
                   and established airlines into new markets.
Communities        However, a number of small and
                   medium-sized communities have not
                   experienced such entry and thus have
                   experienced higher fares and/or less
                   convenient service since deregulation.


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Problems with access to certain airports and
the cumulative effect of marketing strategies
employed by established airlines have
contributed to higher fares and poor service.
To minimize congestion and reduce flight
delays, FAA has set limits since 1969 on the
number of takeoffs or landings—referred to
as slots—that can occur during certain
periods of the day at four congested
airports—Chicago’s O’Hare, Ronald Reagan
Washington National, and New York’s
Kennedy and LaGuardia. A few airlines
control most of the slots at these airports,
which limits new entrants. Furthermore, the
vast majority of gates at six airports in the
East and Upper Midwest are exclusively
leased—usually to just one airline—making
it very difficult for other airlines to gain
competitive access to these airports. In
addition, by prohibiting flights to and from
LaGuardia and National airports that exceed
certain distances, perimeter rules limit the
ability of airlines based in the West to
compete at these airports. These operating
barriers, combined with certain marketing
strategies by established carriers, have
deterred new entrant airlines while fortifying
established carriers’ dominance at key hubs.

In addition, recently proposed alliances
between the nation’s six largest airlines have


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also raised concerns about competition.
Three pairs of alliances have been
proposed—between Northwest Airlines and
Continental Airlines, Delta Air Lines and
United Airlines, and American Airlines and
US Airways. In June 1998, we testified that,
while the alliances might offer some benefits
to consumers, if all three occur, the number
of independent airlines providing service on
a significant number of domestic airline
routes could decline, potentially reducing
the choices for millions of passengers each
year. We are further reviewing the proposed
alliances and plan to report on them early in
1999.

Increasing competition and improving air
service at airports serving communities that
have not benefited from deregulation will
likely entail a range of solutions—some of
which are controversial—by DOT, the
Congress, and the private sector. To enhance
competition, DOT has begun to grant a limited
number of slots to new entrants at O’Hare
and LaGuardia airports. In addition, DOT has
expressed concerns about potentially
overaggressive attempts by some established
carriers to thwart new entry. According to
DOT, in recent years, there has been an
increasing number of alleged anticompetitive
practices—such as predatory


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conduct—aimed at new competition,
particularly at major hubs. In April 1998, DOT
issued a draft policy that identifies
anticompetitive behavior and factors that
DOT will consider if it decides to pursue
formal enforcement actions to correct such
behavior. The proposed guidelines have been
very controversial, and DOT has received
hundreds of comments about them. The
Omnibus Consolidated and Emergency
Supplemental Appropriations Act for Fiscal
Year 1999 requires DOT to send the final
guidelines to the Congress and stipulates
that they shall not become effective until at
least 12 weeks after receipt.

In addition, legislation was introduced, but
not passed, in the Congress in 1997 that
addressed several barriers to competition:
slot controls, perimeter rules, and predatory
behavior by air carriers. These issues are
expected to be raised again by the next
Congress. Other issues—such as improving
the availability of gates and determining
whether or not to relax restrictions on the
foreign ownership and control of U.S.
airlines—may also need to be considered.
DOT expects to complete a study in the spring
of 1999 that will address airports’ practices,
including the availability of gates, and their
effects on competition.


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Key Contact             John H. Anderson, Jr., Director
                        Transportation Issues
                        Resources, Community, and Economic
                          Development Division
                        (202) 512-2834
                        andersonj.rced@gao.gov


DOT Needs to            Many large-dollar highway and transit
Continue                projects, each costing hundreds of millions
Improving               to billions of dollars, continue to incur cost
Oversight of            increases, experience delays, and have
Surface                 difficulties acquiring needed financing. We
                        have found, particularly for large-dollar
Transportation
                        projects, that costs have increased and
Projects                financing has become more difficult at the
                        same time that federal, state, and local
                        governments must deal with the need for
                        balanced budgets and many competing
                        priorities. This situation is even more critical
                        in light of the recently passed 6-year,
                        $218 billion Transportation Equity Act for
                        the 21st Century, which will fund thousands
                        of new major highway and mass transit
                        projects.


Improvements            DOT’s Federal Highway Administration
Possible in Oversight   (FHWA) provided over $21 billion in fiscal
of Highway Projects     year 1998 to assist the states in repairing and
                        replacing their aging infrastructure and


                        Page 47                 GAO/OCG-99-13 DOT Challenges
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    enhancing the performance of their
    highways and bridges. In many cases,
    meeting these needs takes the form of
    projects costing hundreds of millions to
    billions of dollars. These projects
    traditionally take longer to build and have a
    greater potential to experience substantial
    cost increases and delays. For example, the
    Central Artery/Tunnel project in Boston is
    the most expensive and complex federally
    assisted highway project ever undertaken.
    Scheduled to be completed in 2004, the
    project will build or reconstruct about 7.5
    miles of urban highways, about half of which
    will be underground. The state of
    Massachusetts has been taking steps to
    contain costs, but, unless additional savings
    can be found, increased construction costs
    are likely to push the project’s total net cost
    higher than the current $10.8 billion
    estimate.

    In February 1997, we reported several
    options that could improve the management
    of large-dollar highway projects, depending
    on the oversight role that the Congress
    chooses for the federal government.

•   One option—once DOT or the Congress
    establishes an appropriate dollar threshold
    and definition for large-dollar highway


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    projects—would be for states to prepare
    total cost estimates for such projects. We
    have found that one reason costs increase on
    large-dollar projects over time is that the
    initial cost estimates are preliminary and not
    designed to be reliable predictors of a
    project’s total costs.
•   Another option would be for states to track
    progress on these projects against their
    initial estimates of baseline costs. While cost
    growth has occurred on many large-dollar
    projects, the amount of and reasons for
    these increases cannot be determined
    because data are not readily available from
    FHWA or state highway departments.
    Preparing estimates of baseline costs and
    schedules could improve the management of
    large-dollar projects by providing managers
    with real-time information for identifying
    problems early and for making decisions
    about changes to the projects that could
    affect costs. Tracking progress could also
    create a database that would allow for the
    identification of problems commonly
    experienced by projects and would provide a
    better basis for estimating costs in the
    future.
•   Another option would be to establish
    performance goals and strategies for
    controlling costs as a large-dollar project



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    moves through its design and construction
    phases.
•   Finally, another option would be to establish
    a process for the federal approval of
    large-dollar projects. FHWA does not approve
    projects at their outset; its approval consists
    of a series of incremental approvals that
    occur over the years required to plan, design,
    and build them. Requiring federal approval
    at the outset—including the approval of cost
    estimates and finance plans—could provide
    greater certainty in state planning and could
    help ensure successful financing by
    providing additional assurances to potential
    funding sources.

    The Congress has recently taken steps to
    improve the management of large-dollar
    highway projects. The Transportation Equity
    Act for the 21st Century requires the states
    to submit finance plans for highway projects
    that are expected to cost $1 billion or more.
    However, it will be up to FHWA to develop
    regulations that indicate the specific
    standards and information requirements for
    these plans.




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Oversight of       The Federal Transit Administration
Transit Projects   (FTA)—with a budget of $4.8 billion for fiscal
Improving, but     year 1998—has improved its oversight of
Better Follow-Up   federal transit grants. However, the agency
on                 needs to continue to do more to help ensure
                   the timely correction of deficiencies found
Noncompliance
                   during its oversight reviews. In 1992, we
Needed             designated FTA’s management and oversight
                   of its grants as a high-risk area that was
                   especially vulnerable to fraud, waste, abuse,
                   and mismanagement. In 1995, as a result of
                   various initiatives that FTA was undertaking
                   to improve its grants management oversight,
                   we removed the agency from our high-risk
                   list with the understanding that we would
                   continue to monitor the progress of its
                   oversight initiatives. In April 1998, we
                   reported that FTA had strengthened its
                   oversight of federal transit grants. FTA is
                   continuing to enhance the quality and the
                   consistency of its oversight by improving
                   guidance and training for staff and grantees,
                   standardizing oversight procedures, and
                   effectively using contractor staff. In
                   particular, the agency’s risk assessment
                   process helps target limited oversight
                   resources and provides a strong foundation
                   for improved oversight. FTA is emphasizing
                   not only the local financial commitment of
                   grantees seeking federal funding for new
                   projects but is also hiring financial


                   Page 51                 GAO/OCG-99-13 DOT Challenges
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management contractors to review and
oversee the financial viability of projects
with existing grant agreements.

However, FTA needs to continue to do more
to help ensure the timely correction of
deficiencies found during its oversight
reviews of transit grants. We found that,
frequently, some grantees still did not meet
FTA’s time frames for corrective action and
that FTA had allowed compliance deadlines
to be revised, which enabled grantees to
delay corrective action. Also, FTA’s oversight
information system lacks complete, timely
data; hence, the information cannot be used
effectively by FTA’s headquarters officials to
manage and monitor grantees’ compliance
with the agency’s requirements. The system
is intended to track the resolution of
oversight findings and has the potential to be
a useful tool in monitoring compliance,
identifying problems, and assessing the
overall effectiveness of the oversight
program in meeting performance standards.
Currently, however, the information in the
system is not updated as required by
regional staff, nor is it used by headquarters
officials to help manage or monitor the
oversight activities of regional staff—leaving
FTA susceptible to and unable to quickly
respond to situations in its regional offices


Page 52                 GAO/OCG-99-13 DOT Challenges
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               that might compromise good oversight.
               According to FTA, a new tracking system has
               been developed to address these concerns,
               but it has not been fully implemented yet.


Key Contact    John H. Anderson, Jr., Director
               Transportation Issues
               Resources, Community, and Economic
                 Development Division
               (202) 512-2834
               andersonj.rced@gao.gov


Amtrak’s       Since it began operations in 1971, Amtrak
Financial      has never been profitable and, in recent
Condition Is   years, has had to borrow money to meet its
Tenuous        operating expenses. Since its inception,
               Amtrak has received nearly $22 billion in
               federal subsidies for operating and capital
               expenses. Despite efforts to control
               expenses and increase revenues, Amtrak’s
               financial condition has substantially
               deteriorated in recent years, and it is likely
               to remain heavily dependent on federal
               assistance well into the future. In fiscal year
               1998, Amtrak’s annual net loss was
               $854 million, $92 million more than its 1997
               net loss of $762 million.




               Page 53                 GAO/OCG-99-13 DOT Challenges
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Amtrak has stated that it will eliminate the
need for federal operating support by 2002. If
Amtrak requires federal operating subsidies
after December 2002, the Amtrak Reform
and Accountability Act of 1997 provides for
the Congress to consider either restructuring
or liquidating Amtrak. Predicting how
Amtrak might be restructured is difficult. In
a liquidation, not only might Amtrak’s
creditors (or their insurers) face losses, but
the 100 million passengers each year in the
Northeast Corridor, as well as millions of
others in the rest of the country, could face
disrupted rail service. At the time of
liquidation, the losses suffered by creditors
will depend on such circumstances as
Amtrak’s debt and financial obligations and
the market value of its assets, as well as the
proceeds from their sale. As of
September 1997, Amtrak’s data showed that
combined secured and unsecured debt
liability could be about $2.2 billion. We
believe, and DOT agrees, that the federal
government would not be legally liable for
secured and unsecured creditors’ claims in
the event of Amtrak’s liquidation.
Nevertheless, we recognize that creditors
could attempt to recover losses from the
United States.




Page 54                 GAO/OCG-99-13 DOT Challenges
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The financial performance of Amtrak’s
intercity routes is indicative of Amtrak’s
financial problems. In 1997, expenses for
Amtrak’s core intercity passenger services
were almost twice as great as revenues.3
Moreover, Amtrak’s expenses were at least
twice as much as its revenues for 28 of its 40
routes in that year. Amtrak’s expenses on 11
of these routes were 2-1/2 times or more
than its revenues for each route. Finally, 14
routes lost more than $100 per passenger
carried. Only one route—the Metroliner’s
high-speed service between Washington,
D.C., and New York City—was profitable.

Recently, Amtrak has focused on improving
its financial performance by identifying
growth opportunities rather than by
reducing service. In explaining the rationale
for not cutting Amtrak’s route system further
at this time, officials at Amtrak and the
Federal Railroad Administration (FRA)
pointed to Amtrak’s mission of maintaining a
national route system, noting that such a
system will consist of routes with a range of
profitability, including routes with lower
performance that may provide connecting

3
 Overall, Amtrak’s expenses were $1.86 for every dollar in
operating revenue that it earned. Core intercity passenger services
include mail and express merchandise services but exclude
revenues and expenses from Amtrak’s commuter operations, other
reimbursable activities, and commercial development. Expense
amounts include depreciation, which is a noncash expense.

Page 55                        GAO/OCG-99-13 DOT Challenges
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service with other routes or that may
provide public benefits, such as serving
small cities and rural areas. In the spring of
1998, Amtrak started a year-long market
analysis of the role and growth potential of
the national route system. The analysis is to
assess service, demand, and revenues on
Amtrak’s current route system and
alternative systems. The analysis will be
used to identify service amenities, price
changes, and changes to the existing route
system that may improve ridership and
revenues.

Because it loses money on 39 of its 40
routes, the business decisions that Amtrak
makes regarding the structure of its route
system will play a crucial role in determining
its long-term viability. However, Amtrak has
encountered opposition when it has
proposed to cut routes to improve its overall
financial performance because of the desire
of local communities to see passenger
service continued. FRA officials acknowledge
that no clear public policy currently defines
the role of passenger rail in the national
transportation system. As a result, the
Congress needs to decide on the nation’s
expectations for intercity rail and the scope
of Amtrak’s mission in providing that
service. These decisions require defining


Page 56                 GAO/OCG-99-13 DOT Challenges
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                       expectations for a route network,
                       determining the extent to which the
                       government would contribute funds, and
                       deciding on the way any remaining deficits,
                       if any, would be covered. We believe that
                       Amtrak, as currently constituted, will need
                       substantial federal operating and capital
                       support well into the future. Whether
                       Amtrak will be able to improve its position
                       substantially in the near term is doubtful. If
                       not, the Congress will be asked to provide
                       substantial sums of money each year to
                       support Amtrak. If the Congress is not
                       willing to provide such levels of funds, then
                       Amtrak’s future could be radically different,
                       or Amtrak may not exist at all.


Key Contact            John H. Anderson, Jr., Director
                       Transportation Issues
                       Resources, Community, and Economic
                         Development Division
                       (202) 512-2834
                       andersonj.rced@gao.gov


DOT Lacks          DOT’s lack of accountability for its financial
Accountability for activities impairs its ability to efficiently and
Its Financial      effectively manage programs and exposes
Activities         the Department to potential waste, fraud,
                       mismanagement, and abuse. Since 1993,


                       Page 57                 GAO/OCG-99-13 DOT Challenges
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                    Issues




                    when the Office of Inspector General began
                    auditing the financial statements of certain
                    agencies within the Department, it has been
                    unable to determine whether the reported
                    financial results are correct and thus has
                    been unable to express an opinion on the
                    reliability of those statements. The Inspector
                    General has also been unable to express an
                    opinion on the reliability of the
                    departmentwide statements since those
                    statements were audited beginning with
                    fiscal year 1996. In addition, DOT lacks a
                    cost-accounting system or an alternative
                    means of accumulating the full cost of
                    specific projects and activities. DOT has
                    efforts under way to correct its financial
                    management deficiencies, but its goal of
                    correcting all deficiencies for its fiscal year
                    1999 financial statement may be difficult to
                    attain because of the numerous problems
                    that need to be addressed.


The Accuracy of     On March 31, 1998, the Office of Inspector
Financial Data Is   General was unable to express an opinion on
Uncertain           the reliability of the departmentwide
                    financial statements for fiscal year 1997
                    because it could not verify the reliability of
                    the amounts for property, plant, and
                    equipment reported at $26.5 billion,
                    inventory reported at $2.0 billion,


                    Page 58                 GAO/OCG-99-13 DOT Challenges
Major Performance and Management
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postemployment benefits (primarily the
Coast Guard’s pension liability) reported at
$14.0 billion, and excise tax revenue
reported at $28.4 billion. Because of actions
by DOT and others, the latter two audit issues
have a reasonable chance of having been
corrected for fiscal year 1998. However,
serious financial management weaknesses at
FAA contribute to the remaining issues.


In its report, the Office of Inspector General
also cited problems with the Department’s
accounting systems, which prevented the
agency from complying with the Federal
Financial Management Improvement Act of
1996.4 The Inspector General concluded that
for the agency to comply with the act, it
needs to (1) modify its accounting systems
to be the primary source of financial
information to prepare the consolidated
financial statements and (2) complete
assessments of Year 2000 computer
problems.

For the property, plant, and equipment
account and inventory amounts reported, the
Inspector General concluded that FAA and

4
 This act requires agencies to implement and maintain financial
management systems that comply substantially with Federal
Financial Management System Requirements, applicable federal
accounting standards, and the U.S. Standard General Ledger at the
transaction level.

Page 59                        GAO/OCG-99-13 DOT Challenges
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the Coast Guard could not reliably determine
the quantities and the locations of these
assets or provide sufficient information to
verify their values. Specific deficiencies
included (1) the lack of comprehensive
physical inventories, (2) inaccurate general
ledger balances, (3) inadequate subsidiary
records, (4) the lack of supporting
documentation, (5) unreconciled
discrepancies between balances maintained
in their accounting systems and the detailed
subsidiary records, and (6) the lack of a
cost-accounting system.

We have reported that problems in
accounting for property, plant, and
equipment affect DOT’s ability to properly
manage these assets and may result in
operating inefficiencies. For example, in FAA,
mission-critical equipment, such as radar
and other air traffic control equipment, may
be difficult to locate when needed, which
could exacerbate an emergency situation.
Also, theft could go undetected, and funds
could be spent unnecessarily to acquire
equipment that is already on hand.

We have also reported that DOT’s lack of
inventory accountability can result in
program officials’ inability to make prudent
business decisions and to adequately


Page 60                 GAO/OCG-99-13 DOT Challenges
                      Major Performance and Management
                      Issues




                      safeguard assets. It may also impair
                      operational effectiveness. For example,
                      because of inaccurate inventory information,
                      funding requests may not be based on actual
                      needs, unnecessary purchases may be made,
                      and inventory may be overstocked or
                      hoarded because of concerns about
                      availability. The resulting excesses as well as
                      spare parts for equipment no longer in
                      service would require storage, inventory
                      control, and other activities that consume
                      operating resources. Inaccurate inventories
                      can also result in the shortage of or the
                      inability to locate essential parts necessary
                      to repair mission-critical systems.
                      Furthermore, these underlying data
                      deficiencies preclude DOT from accurately
                      determining the cost of its operations and
                      may permit undetected waste, fraud, and
                      abuse related to these assets.


Systems to            DOT  lacks a cost-accounting system or an
Determine Full Cost   alternative means to accumulate costs. This
Have Not Been         means that DOT’s financial reports (1) may
Implemented           not be capturing the full cost of specific
                      projects and activities and (2) may lack a
                      reliable “Statement of Net Cost,” which
                      includes functional cost allocations. The lack
                      of cost-accounting information limits FAA’s
                      and others’ ability to make effective


                      Page 61                 GAO/OCG-99-13 DOT Challenges
Major Performance and Management
Issues




decisions about resource needs and to
adequately control major projects, such as
the $42 billion air traffic control
modernization program. For example, we
have reported that without good cost
information, FAA cannot reliably measure the
actual cost of the modernization program
against established baselines and cannot
improve future cost estimates. Finally, the
lack of reliable cost information limits DOT’s
ability to meaningfully evaluate performance
in terms of efficiency and cost-effectiveness,
as called for by the Government
Performance and Results Act of 1993.

DOT, especially FAA, has made substantial
progress in developing its cost-accounting
system, but more still needs to be done. For
example, an August 1998 report by DOT’s
Inspector General identified four systems
design issues potentially involving billions of
dollars that FAA needs to address before its
cost-accounting system can accurately
account for the full cost of operations. These
issues include establishing a method to
identify and reflect (1) the cost of
accounting adjustments, (2) the cost for all
development projects, (3) the cost incurred
by other agencies for air traffic services, and
(4) the correct labor cost charged to
appropriate projects.


Page 62                 GAO/OCG-99-13 DOT Challenges
                   Major Performance and Management
                   Issues




Corrective         On May 26, 1998, the President requested
Actions Are        DOT, among other agencies, to submit to the
Under Way, but     Office of Management and Budget by July 31,
Progress in Some   1998, a plan for resolving the financial
Areas Is Slow      reporting deficiencies that were identified in
                   its financial statement audits. DOT submitted
                   the required plan, though not until
                   September 30, 1998. This plan (1) identified
                   actions by DOT, especially FAA and the Coast
                   Guard, to correct weaknesses reported in
                   the Inspector General’s audits and
                   (2) established the goal of an unqualified
                   audit opinion on DOT’s fiscal year 1999
                   financial statements. For example, the plan
                   called for completing physical counts of and
                   developing appropriate support for the
                   valuation of property, plant, equipment, and
                   inventory at FAA and the Coast Guard. It also
                   called for developing adequately
                   documented processes and reconciling
                   detailed records to summary accounts.

                   DOT  is taking actions outlined in its plan to
                   correct financial management deficiencies,
                   but it faces significant challenges owing to
                   the numerous problems that need to be
                   addressed. For example, FAA and the Coast
                   Guard have developed plans to improve cost
                   information, reconcile data, help ensure that
                   the integrity of information systems is
                   maintained, and prepare reliable financial


                   Page 63                 GAO/OCG-99-13 DOT Challenges
              Major Performance and Management
              Issues




              statements by September 30, 1999. However,
              progress has been slow in some areas, and
              much remains to be done. For example, FAA’s
              original plan called for full implementation
              of its cost-accounting system by October 1,
              1998; FAA subsequently revised this date to
              March 31, 1999, which has been described by
              the Inspector General as “very ambitious.” If
              DOT continues to fall behind in meeting its
              planned completion dates, it is questionable
              whether it will achieve its goal of receiving
              an unqualified audit opinion for fiscal year
              1999.

              The financial management weaknesses
              discussed above are particularly
              troublesome at FAA because of their
              long-standing nature and the agency’s slow
              progress in resolving them. Timely
              resolution is especially key, given that FAA is
              in the midst of a $42 billion program to
              modernize its air traffic control systems.
              Until FAA’s serious financial management
              problems are resolved, we will continue to
              designate financial management at the
              agency as high-risk.


Key Contact   Linda M. Calbom, Director
              Resources, Community, and Economic
                Development Division Accounting


              Page 64                 GAO/OCG-99-13 DOT Challenges
Major Performance and Management
Issues




  and Financial Management Issues
Accounting and Information Management
  Division
(202) 512-9508
calboml.aimd@gao.gov




Page 65                 GAO/OCG-99-13 DOT Challenges
Related GAO Products



Acquisition   Air Traffic Control: Status of FAA’s
Management    Modernization Program (GAO/RCED-99-25,
              Dec. 3, 1998).

              Coast Guard’s Acquisition Management:
              Deepwater Project’s Justification and
              Affordability Need to Be Addressed More
              Thoroughly (GAO/RCED-99-6, Oct. 26, 1998).

              National Airspace System: FAA Has
              Implemented Some Free Flight Initiatives,
              but Challenges Remain (GAO/RCED-98-246,
              Sept. 28, 1998).

              Air Traffic Control: Immature Software
              Acquisition Processes Increase FAA System
              Acquisition Risks (GAO/AIMD-97-47, Mar. 21,
              1997).

              Air Traffic Control: Complete and Enforced
              Architecture Needed for FAA Systems
              Modernization (GAO/AIMD-97-30, Feb. 3, 1997).

              Aviation Acquisition: A Comprehensive
              Strategy Is Needed for Cultural Change at
              FAA (GAO/RCED-96-159, Aug. 22, 1996).



Year 2000     Responses to Questions on FAA’s Computer
Compliance    Security and Year 2000 Program
              (GAO/AIMD-98-301R, Sept. 14, 1998).


              Page 66              GAO/OCG-99-13 DOT Challenges
            Related GAO Products




            FAASystems: Serious Challenges Remain in
            Resolving Year 2000 and Computer Security
            Problems (GAO/T-AIMD-98-251, Aug. 6, 1998).

            Air Traffic Control: FAA Plans to Replace Its
            Host Computer System Because Future
            Availability Cannot Be Assured
            (GAO/AIMD-98-138R, May 1, 1998).

            Year 2000 Computing Crisis: FAA Must Act
            Quickly to Prevent Systems Failures
            (GAO/T-AIMD-98-63, Feb. 4, 1998).

            FAA Computer Systems: Limited Progress on
            Year 2000 Issue Increases Risk Dramatically
            (GAO/AIMD-98-45, Jan. 30, 1998).


Aviation    Airfield Pavement: Keeping Nation’s
Financing   Runways in Good Condition Could Require
            Substantially Higher Spending
            (GAO/RCED-98-226, July 31, 1998).

            Airport Financing: Funding Sources for
            Airport Development (GAO/RCED-98-71, Mar. 12,
            1998).

            Transportation Financing: Challenges in
            Meeting Long-Term Funding Needs for FAA,
            Amtrak, and the Nation’s Highways
            (GAO/T-RCED-97-151, May 7, 1997).


            Page 67                GAO/OCG-99-13 DOT Challenges
                  Related GAO Products




                  Airport Development Needs: Estimating
                  Future Costs (GAO/RCED-97-99, Apr. 7, 1997).

                  National Airspace System: Issues in
                  Allocating Costs for Air Traffic Services to
                  DOD and Other Users (GAO/RCED-97-106,
                  Apr. 25, 1997).

                  Air Traffic Control: Improved Cost
                  Information Needed to Make Billion Dollar
                  Modernization Investment Decisions
                  (GAO/AIMD-97-20, Jan. 22, 1997).


Aviation Safety   Air Traffic Control: Weak Computer Security
and Security      Practices Jeopardize Flight Safety
                  (GAO/AIMD-98-155, May 18, 1998).

                  Aviation Safety: FAA Has Not Fully
                  Implemented Weather-Related
                  Recommendations (GAO/RCED-98-130, June 2,
                  1998).

                  Aviation Security: Progress Being Made, but
                  Long-Term Attention Is Needed
                  (GAO/T-RCED-98-190, May 14, 1998).

                  Aviation Security: Implementation of
                  Recommendations Is Under Way, but
                  Completion Will Take Several Years
                  (GAO/RCED-98-102, Apr. 24, 1998).


                  Page 68                GAO/OCG-99-13 DOT Challenges
              Related GAO Products




              Aviation Safety: Weaknesses in Inspection
              and Enforcement Limit FAA in Identifying and
              Responding to Risks (GAO/RCED-98-6, Feb. 27,
              1998).

              Aviation Safety: Efforts to Implement Flight
              Operational Quality Assurance Programs
              (GAO/RCED-98-10, Dec. 2, 1997).

              Human Factors: FAA’s Guidance and
              Oversight of Pilot Crew Resource
              Management Training Can Be Improved
              (GAO/RCED-98-7, Nov. 24, 1997).

              Aviation Safety: FAA Oversight of Repair
              Stations Needs Improvement (GAO/RCED-98-21,
              Oct. 24, 1997).


Aviation      Aviation Competition: Proposed Domestic
Competition   Airline Alliances Raise Serious Issues
              (GAO/T-RCED-98-215, June 4, 1998).

              Domestic Aviation: Service Problems and
              Limited Competition Continue in Some
              Markets (GAO/T-RCED-98-176, Apr. 23, 1998).

              Aviation Competition: International Aviation
              Alliances and the Influence of Airline
              Marketing Practices (GAO/T-RCED-98-131,
              Mar. 19, 1998).


              Page 69                GAO/OCG-99-13 DOT Challenges
                 Related GAO Products




                 Airline Deregulation: Barriers to Entry
                 Continue to Limit Competition in Several
                 Key Domestic Markets (GAO/RCED-97-4, Oct. 18,
                 1996).

                 Airline Deregulation: Changes in Airfares,
                 Service, and Safety at Small, Medium-Sized,
                 and Large Communities (GAO/RCED-96-79,
                 Apr. 19, 1996).


Surface          Mass Transit: Grants Management Oversight
Transportation   Improving, but Better Follow-Up Needed on
Infrastructure   Grantees’ Noncompliance (GAO/RCED-98-89,
                 Apr. 3, 1998).

                 Surface Infrastructure: Costs, Financing, and
                 Schedules for Large-Dollar Transportation
                 Projects (GAO/RCED-98-64, Feb. 12, 1998).

                 Transportation Infrastructure: Managing the
                 Costs of Large-Dollar Highway Projects
                 (GAO/RCED-97-47, Feb. 28, 1997).


Amtrak           Intercity Passenger Rail: Financial
                 Performance of Amtrak’s Routes
                 (GAO/RCED-98-151, May 14, 1998).




                 Page 70                GAO/OCG-99-13 DOT Challenges
             Related GAO Products




             Intercity Passenger Rail: Outlook for
             Improving Amtrak’s Financial Health
             (GAO/T-RCED-98-134, Mar. 24, 1998).

             Intercity Passenger Rail: Issues Associated
             With a Possible Amtrak Liquidation
             (GAO/RCED-98-60, Mar. 2, 1998).

             Intercity Passenger Rail: Financial and
             Operating Conditions Threaten Amtrak’s
             Long-Term Viability (GAO/RCED-95-71, Feb. 6,
             1995).


Financial    Financial Management: Federal Aviation
Management   Administration Lacked Accountability for
             Major Assets (GAO/AIMD-98-62, Feb. 18, 1998).

             Air Traffic Control: Improved Cost
             Information Needed to Make Billion Dollar
             Modernization Investment Decisions
             (GAO/AIMD-97-20, Jan. 22, 1997).


Other GAO    Results Act: Observations on the Department
Products     of Transportation’s Annual Performance
             Plan for Fiscal Year 1999 (GAO/RCED-98-180R,
             May 12, 1998).




             Page 71                GAO/OCG-99-13 DOT Challenges
Related GAO Products




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

Federal Management: Addressing
Management Issues at the Department of
Transportation (GAO/T-RCED/AIMD-97-172,
May 21, 1997).




Page 72                GAO/OCG-99-13 DOT Challenges
Performance and Accountability Series



             Major Management Challenges and Program
             Risks: A Governmentwide Perspective
             (GAO/OCG-99-1)

             Major Management Challenges and Program
             Risks: Department of Agriculture
             (GAO/OCG-99-2)

             Major Management Challenges and Program
             Risks: Department of Commerce
             (GAO/OCG-99-3)

             Major Management Challenges and Program
             Risks: Department of Defense (GAO/OCG-99-4)

             Major Management Challenges and Program
             Risks: Department of Education
             (GAO/OCG-99-5)

             Major Management Challenges and Program
             Risks: Department of Energy (GAO/OCG-99-6)

             Major Management Challenges and Program
             Risks: Department of Health and Human
             Services (GAO/OCG-99-7)

             Major Management Challenges and Program
             Risks: Department of Housing and Urban
             Development (GAO/OCG-99-8)




             Page 73             GAO/OCG-99-13 DOT Challenges
Performance and Accountability Series




Major Management Challenges and Program
Risks: Department of the Interior
(GAO/OCG-99-9)

Major Management Challenges and Program
Risks: Department of Justice (GAO/OCG-99-10)

Major Management Challenges and Program
Risks: Department of Labor (GAO/OCG-99-11)

Major Management Challenges and Program
Risks: Department of State (GAO/OCG-99-12)

Major Management Challenges and Program
Risks: Department of Transportation
(GAO/OCG-99-13)

Major Management Challenges and Program
Risks: Department of the Treasury
(GAO/OCG-99-14)

Major Management Challenges and Program
Risks: Department of Veterans Affairs
(GAO/OCG-99-15)

Major Management Challenges and Program
Risks: Agency for International Development
(GAO/OCG-99-16)




Page 74                    GAO/OCG-99-13 DOT Challenges
Performance and Accountability Series




Major Management Challenges and Program
Risks: Environmental Protection Agency
(GAO/OCG-99-17)

Major Management Challenges and Program
Risks: National Aeronautics and Space
Administration (GAO/OCG-99-18)

Major Management Challenges and Program
Risks: Nuclear Regulatory Commission
(GAO/OCG-99-19)

Major Management Challenges and Program
Risks: Social Security Administration
(GAO/OCG-99-20)

Major Management Challenges and Program
Risks: U.S. Postal Service (GAO/OCG-99-21)

High-Risk Series: An Update (GAO/HR-99-1)



The entire series of 21 performance and
accountability reports and the high-risk
series update can be ordered by using
the order number GAO/OCG-99-22SET.




Page 75                    GAO/OCG-99-13 DOT Challenges
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