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HSR Grants Maintenance Problems Provide Further Proof that Administration Views Transportation as Political Handout

Baruch Feigenbaum
September 24, 2012, 10:21am

Last week’s audit of the Federal Railroad Administration's Grants Management Process illustrates that the President views transportation as a political spoils system. In reality, this administration has never considered transportation a priority. First, the President picked Ray LaHood as Secretary of Transportation. LaHood told the New York Times that he would be happier as Secretary of Agriculture. Then the administration suggested changing the Federal Transit Administration’s method of awarding grants by making the process subjective. The administration made this change because it claims that there is no good way to measure sustainability. Of course members of the President’s urban advisory board have written papers that prove otherwise. In addition, over the summer the President was missing in action as Congress negotiated a new surface transportation bill. Transportation analysts urged the White House to detail its transportation vision for the bill. Analysts are still waiting.

And then last week the Department of Transportation Office of Inspector General (OIG) issued an audit report of the Federal Railroad Administration (FRA) titled Completing a Grants Management Framework can Enhance FRA's Administration of the HSIPR Program that detailed the need for a Grants Management Framework for the administration’s high-speed-rail program. This strongly worded report shows the administration has dropped the ball on transportation yet again. 

According to the report, FRA obligated $9.6 billion in grants while it concurrently developed its grant management policies and procedures. It is rather challenging to monitor a program that lacks rules and guidelines. FRA gave out funding as if money was going out of style; but FRA had no accurate process to determine how the money was being spent. The OIG warned agencies about this exact problem in 2009 here. While FRA’s existing manual provided some guidance, it was mostly inadequate. While the administration formed workgroups to determine railroad guidance, it neither provided the groups with timelines to finish the work nor provided grantee feedback on how to improve the grants. 

Specifically, FRA has hired only 39 of the 51 staff the agency claims it needs. Over the past three years, the agency claims it has been unable to hire candidates with appropriate skills despite a national jobless rate that exceeded 8 percent. Worse, its current staff is improperly trained. FRA has not developed a training curriculum on the policies, procedures and guidance for high-speed-rail grants administration largely because the agency just recently released its Grants Management Guidance. Most troubling, the agency does not require any fraud awareness training. Fraud awareness training is designed to allow the FRA to detect everything from applicants asking for inflated grant amounts to contractors getting paid for work they did not do. 

The agency also lacks mechanisms for program and grantee assessment. While the agency has outlined rail goals in several documents the goals are inconsistent among documents. For many goals the inconsistencies cannot be reconciled making it challenging for grant makers, decision makers and Congressional members to know what the program is trying to achieve. The goals performance measures are so vague, it is impossible to determine program progress. For example, one goal is to improve existing intercity passenger corridors through reliability, speed and frequency. However, the goal does not include any measures that indicate progress such as trip time improvements, ridership gains or additional train service. FRA mechanisms for determining grantee performance are also severely lacking. The agency has no data on grantee performance and compliance. There is no way to determine if grantees meet submission deadlines for required grant documentation and progress reports. FRA’s current plan for monitoring grantee performance and compliance did not mention timelines or the resources needed to conduct such reports. Subsequently, the agency did not conduct performance and compliance reviews from 2009 to 2012 as the law required. 

As a result the inspector general recommended five actions. Theses actions include (1) establishing milestones for workgroups to complete guidance on grant management policies and procedures, (2) establishing a process for HSIPR grantees to provide feedback, (3) developing a comprehensive grants management training curriculum that includes a fraud training component, (4) establishing actual program goals, and (5) developing a standardized mechanism for collecting and tracking performance and compliance metrics.

As a result of the review, the agency agreed it needed to improve recommendations 1, 2, 3 and 5. Unbelievably, FRA claimed that the agency has actual goals that it provides to the Office of the Secretary but not to the public or the grantees; the FRA further requested this recommendation be closed. Thankfully, the Inspector General is requiring the FRA to provide copies of these mysterious goals to grantees and taxpayers. 

The Inspector General report is deservedly one of the harshest reports produced for a transportation program. The entire document is available here

The FRA’s grant management process is a disaster even by this administration’s standards. Clearly the administration wanted to spend stimulus money on rail. Dishing out funding for the 315 grants was apparently more important than setting up a management structure. The agency could not have determined how effectively the grants were used since its staff was not trained and the agency had no actual metrics to determine if its goals were met. But what is appalling is that since the agency had no actual goals, even if the employees were trained and the agency established actual metrics the employees still would have no goals to evaluate! Applicants have no idea what information they are supposed to provide to Washington since Washington will not tell them the program’s actual goals. FRA does not capture grantee performance but even if the agency did how would it compare the grants? The FRA cannot determine if the grantees are accomplishing nonexistent goals. Worst of all the agency told OIG that the Office of Secretary knows the goals of the program so it is okay for the administration  not to release information to grantees, Congressman or taxpayers. Here’s a newsflash for Secretary LaHood: your budget is paid by taxpayers and Congress appropriates the funds. In order to receive funding you need to explain that vision to someone outside the agency. The current communication process resembles Secretary LaHood sending psychic messages through the toaster. This mix of arrogance, feigned ignorance, and insulation is appalling. 

No matter how little the administration actually knows about transportation, its leaders are not stupid. While most citizens want actual transportation solutions, the Obama administration views transportation as a political handout. If the administration had an actual goal, actual metrics, or actual public information, it would have to distribute the grants based on needs. But this administration does not care about needs, it cares about a political slush fund that gives grants to friends or Democratic districts in swing states. This is the same problem that afflicts the TIGER Grants. In that program the administration will not detail how it awards grants because the administration is worried that applicants might game the system. Imagine the problems if an applicant with a federal aid highway bridge, that needs urgent repair receives funding instead of a multimodal station that serves two historic train routes in Nowhereville, OH. This administration has never had a transportation vision. The President only talks about transportation in campaign ads and then he greatly oversimplifies the issue. When this administration thinks transportation, it thinks of political outcomes not actual needs. There is no other explanation for how such a group of intelligent people could ruin a vital need. This fact should nauseate everybody in the transportation world.


Baruch Feigenbaum is Transportation Policy Analyst


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