The Federal Transit Administration’s failed oversight of Hurricane Sandy grant program
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The Federal Transit Administration’s failed oversight of Hurricane Sandy grant program

Taxpayer funding is being wasted and important repairs are taking years to complete.

The limited oversight by the Federal Transit Administration (FTA) and the misuse of emergency funding by New York’s Metropolitan Transportation Authority (MTA) reveal an emergency transit funding system with the wrong type of staffing and poor oversight. Taxpayer funding is being wasted, and essential emergency repairs are taking years to complete. Government agencies need to reform their processes for providing emergency transportation funding. 

The 12th anniversary of Hurricane Sandy is in five months. Yet, according to the United States Department of Transportation (USDOT) Office of Inspector General (OIG), New York’s Metropolitan Transportation Authority still has not spent $3.8 billion of the $10.1 billion in Federal Transit Administration obligated-grant-funding in Hurricane Sandy recovery dollars. (Obligated dollars are revenue from approved grants that have been dedicated to a specific project but have not yet been spent). 

The OIG will try to answer how much of the $3.8 billion is not under contract or not completed. The Office of Inspector General wrote:

As of March 2024, approximately $3.8 billion remain unexpended. In the years since Hurricane Sandy, other major events and legislative appropriations may have shifted recipients’ spending plans and priorities of FTA Sandy funds. Further, our Agency’s prior work identified concerns with FTA’s tracking and oversight of its Hurricane Sandy funds, including issues with timely recipient expenditure of the funds. Given our previous findings, the significant amount of time that has passed since Hurricane Sandy, and the magnitude of dollars involved, we are initiating this audit to assess the status of FTA’s unexpended Hurricane Sandy funds.

Following Hurricane Sandy, there were two separate waves of grants. The first wave of $5.2 billion in recovery and relief grants was to fund activities and capital projects to restore assets and services adversely impacted by Sandy. Given the high priority of these projects, 100% of all work should have been completed, and all of these projects should have been back in service by the end of 2015. 

The second wave of $4.9 billion in resiliency grants was designed to prepare for future natural disasters. Over the past 12 years, numerous storms in the region have caused severe service disruptions. Yet, it is unclear how and if this money was used. 

Any funding for recovery, relief, or resiliency projects that could not meet these most reasonable timetables should be rescinded and returned to taxpayers. This could include drawdowns for other programs and holding funds for other grants.  

This delayed spending, inability to spend, or lack of need for funding should have been raised at FTA quarterly capital program progress review meetings, quarterly financial and milestone progress reports, project management oversight (PMO) monthly reports, triennial and other FTA independent consultant reviews.

As an FTA employee, now retired, I managed grants, including emergency funding. In my time, we would meet with larger agencies quarterly. Medium-sized bus operators would meet with us twice a year. All other smaller or one-time recipients of discretionary grants would meet with us once per year. At these meetings, grantees would have to explain why any FTA-funded projects were not yet awarded, why in-house staff was not assigned to the project, why the project was behind schedule, why the project was over the original approved budget or the noting of any contract change orders over $100,000. Recovery schedules, justification for cost increases, and significant contract change orders also had to be presented.  

There are several reasons why transit agencies may not have been able to manage a large downpour of funding following the hurricane. Most likely, MTA, New Jersey Transit and many of the other 14 transit agencies in question did not have the staffing to manage the funding from the supplemental and annual FTA assistance programs such as:

  • Formula Section 5307 Urbanized Area, Section 5337 State of Good Repair, Section 5309 Bus and Bus Facilities along with others; 

Federal Highway Administration funding under several programs, including:

  • Congestion Mitigation Air Quality (CMAQ), Surface Transportation Program (STP) that can be transferred to FTA; 
  • 100% Locally funded capital projects; and
  • Hurricane Sandy Recovery and Resilience funding: NY MTA, NJ Transit and other FTA recipients with ongoing Hurricane Sandy-funded capital projects may have lacked sufficient procurement, project managers, engineers, legal and force account employees, along with track outage availability, to proceed with all these projects in the same time frame.

FTA Acting Administrator Veronica Vanterpool should not wait for the OIG report to be issued. Instead, she should write a “Dear Colleague” letter to all FTA recipients who have active open Hurricane Sandy grants that implement:

  • A deadline of Sept. 2024 for the recipient to complete any grant applications so that FTA can obligate their share of the remaining $900 million in Hurricane Sandy funding not contained in any approved grant; 
  • A detailed recovery schedule within 30 days. Any grants still open in Oct. 2025 will be subject to de-obligation of any remaining funds, which will be returned to the Treasury; and 
  • A policy that any recipient with open Hurricane Sandy grants will no longer be eligible to receive any new capital investment new starts core capacity, bus and bus facilities discretionary or any other competitive discretionary program grant until all Hurricane Sandy capital projects are complete and grants are closed out. 

Without these sunset provisions and strong consequences, recipients will likely continue to administer Hurricane Sandy grants as usual.

FTA must perform the same detailed and timely attention it does for recipients’ grant development, review and approval as it does for oversight after grant approval. Taxpayers, riders, transit advocacy groups, NY MTA, NJ Transit, Congress, local elected officials and the U.S. Department of Transportation’s Office of the Inspector General should expect nothing less.

However, FTA and transit agencies are not the only actors at fault. Congress needs to take some of the blame for expanding a program focused on emergency response to mitigation of future hazards without considering staffing or knowledge levels. FTA had staffing and logistics challenges focusing on the first wave of grants alone. Expecting the agency to manage another $5 billion in funding was a recipe for disaster.