Background In 2017, three sequential hurricanes—Harvey, Irma, and Maria—created an unprecedented demand for federal disaster response and recovery resources. According to the Federal Emergency Management Agency (FEMA), these hurricanes ranked among the top five costliest on record, costing $125 billion (Harvey); $90 billion (Maria); and $50 billion (Irma). As a result of these storms, Florida, Texas, and Puerto Rico faced hardships, including devastation to infrastructure, such as highways and bridges. The island of Puerto Rico in particular was severely affected, which created multiple challenges for federal response efforts. Specifically, within a 2-week period Puerto Rico was hit by both hurricanes Irma and Maria, resulting in power outages that lasted up to 11 months and the need for commodities, such as food and water, and requiring one of the largest recovery efforts in history. The federal response was complicated by several factors, including the remoteness of the island, limited local preparedness, outdated infrastructure, and workforce capacity constraints. The Emergency Relief Program provides assistance to repair or reconstruct highways and bridges on federal-aid highways and roads and bridges on federally owned public lands that have sustained serious damage from natural disasters or catastrophic failures. FEMA is responsible for providing funds to repair and replace roadways damaged as a result of disasters that are not eligible for federal-aid highway funding. For natural disasters or other events to be eligible for emergency relief funding, the President must declare the event to be an “emergency” or a “major disaster” under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, or the governor must declare an emergency with the concurrence of the Secretary of Transportation. Damage to highways must be severe, occur over a wide area, and result in unusually high expenses to the highway agency. Congress has provided funds for highway emergency relief since at least 1938 and, since 1972, has authorized $100 million annually in “contract authority” for the Emergency Relief Program to be paid from the Highway Trust Fund. Accordingly, FHWA may obligate up to $100 million of funds from the Highway Trust Fund in any one fiscal year for the program. Congress also regularly provides funds to the Emergency Relief Program from general revenues through supplemental appropriations. Most recently, Congress passed the Bipartisan Budget Act of 2018 in February 2018, and the Additional Supplemental Appropriations for Disaster Relief Act, 2019 in June 2019, which included more than $3 billion for the FHWA Emergency Relief Program to repair damages caused by a number of natural disasters. According to FHWA officials, these funds will be used to address damaged related to the 2017 hurricanes. FHWA’s Emergency Relief Program regulations further define policies for the program and the eligibility requirements for selecting projects. These regulations state that emergency relief funds are not intended to correct preexisting deficiencies or duplicate assistance available under another federal program or compensation from insurance or other sources. Emergency relief projects are to be promptly constructed, and construction funds must be obligated within two years (i.e., by the end of the second fiscal year following the disaster) unless suitable justification is provided to FHWA. Emergency relief regulations specify the activities that emergency relief funds may be used for as well as those activities they may not be used for, such as reconstruction of facilities affected by long-term, predictable developing situations or deficient bridges scheduled for replacement with other funds. Because the statute and its regulations are, by necessity, fairly broad, FHWA publishes guidance to further assist the agency in administering the Emergency Relief Program. The Emergency Relief Manual, updated in 2013, is a guide for FHWA and state and local agency personnel for requesting, obtaining, and administering emergency relief funds. The manual provides additional information and examples of the types of activities and projects that are both eligible and ineligible for funding, the process for states to apply for emergency relief funding, and the documents and reports that are required to be prepared. FHWA’s Emergency Relief Order, issued in 2016, further defines the application and review process and the roles and responsibilities of FHWA and state personnel. As with other federal-aid highway programs, the Emergency Relief Program is a partnership in which states plan and execute projects to complete necessary repairs, and FHWA provides assistance to states in applying for funds and conducts oversight to determine eligibility and ensure that federal requirements are met. States and territories are required to conduct damage inspections, submit documentation to their respective FHWA division office to determine if repairs are eligible for federal funds, enter into project agreements, and complete final project inspections. The FHWA division office is responsible for reviewing damage inspections to determine whether proposed projects are eligible for emergency relief funds. FHWA headquarters officials use the information collected from these inspections to allocate funds to each state or territory for particular events; division offices obligate those funds and ultimately reimburses the states for allowable expenses. The Emergency Relief Program’s authorizing statute and FHWA’s regulations and guidance distinguish between federal share payable for emergency and permanent repairs. Specifically, according to FHWA regulations, emergency repairs are undertaken during or immediately after a disaster to restore essential traffic, minimize the extent of damage, or protect the remaining facilities. Emergency repairs are eligible to receive 100 percent federal reimbursement if they are accomplished within 180 days of the disaster. By statute, this deadline may be extended taking into consideration any delay in the ability of the state to access damaged facilities to evaluate damage and the cost of repair. FHWA and federal regulations also state that emergency repairs can be completed by state and local maintenance workforces, and qualify for categorical exclusions from the National Environmental and Policy Act’s (NEPA) requirements. FHWA’s Emergency Relief Manual further characterizes emergency repairs as repairs that can be completed relatively quickly, may be temporary in nature, and typically require little preliminary engineering or design effort, e.g., erecting barricades and detour signs. States and local transportation agencies may begin emergency repairs without prior FHWA authorization. Permanent repairs are undertaken after the occurrence of a disaster to restore the highway to its pre-disaster conditions. Permanent repairs receive a federal share, between 80 and 90 percent, depending on the type of roadway being repaired. However, in response to the level of devastation in Puerto Rico, Congress provided a 100 percent federal share for all emergency relief projects, including permanent repairs, necessary to address damage caused by hurricanes Irma and Maria in Puerto Rico. FHWA’s regulations state that permanent repairs are to be done through a competitively bid contract, unless the state demonstrates that another method is more cost effective (e.g., the use of abbreviated plans or a shortened advertisement period). In addition, many, but not all, permanent repairs meet the criteria for categorical exclusions from NEPA’s requirements. FHWA’s Emergency Relief Manual indicates that typically permanent repairs (1) should have obligated funds for construction within 2 years, (2) require the development of plans, specifications, and estimates, and (3) must receive prior FHWA authorization. Our prior work has raised concerns about FHWA’s management and oversight of the Emergency Relief Program. In 2007 we reported on the expanding scope of eligible activities funded by the Emergency Relief Program over time, resulting in projects that went beyond the original intent of the program. We recommended to FHWA and suggested that Congress consider tightening the program’s eligibility standards, but this recommendation has not been implemented and FHWA does not plan to do so. In 2012, we raised concerns about FHWA’s partnership relationship with the states, particularly its oversight of the Emergency Relief Program, which we first reported in November 2011. For example, we were unable to determine the basis of FHWA’s eligibility decisions on 81 emergency relief projects representing $193 million in federal funds because of missing or incomplete documentation. In addition, we identified cases where FHWA showed a lack of independence in decisions, placing its partners’ interests above federal interests. For example, FHWA allowed two states to retain unused Emergency Relief Program allocations to fund new emergencies, despite FHWA’s policy that these funds are made available to other states with potentially higher- priority emergencies. We concluded that while FHWA’s partnership relationship with the states yields benefits such as proactively identifying issues before they become problems, it also poses risks. Thus we recommended that FHWA develop a strategy to mitigate these risks. In March 2014, FHWA announced it had established an enhanced risk- based oversight approach that, while not targeting the specific risks we identified related to state partnerships, addressed the intent of our recommendation to increase transparency and consistency. To Date, States and Puerto Rico Have Identified $1 Billion in Highway and Bridge Damages Caused by the 2017 Hurricanes Following hurricanes Harvey, Irma, and Maria, state and local officials prepared damage assessments that identified more than 2,500 projects eligible for emergency relief funds costing approximately $1 billion. Projects range in size and cost from replacing signage and traffic signals to multi-million dollar bridge and highway repairs (see fig. 1). Following a number of natural disasters in 2017—including hurricanes Harvey, Irma, and Maria—Congress appropriated more than $1 billion to the Emergency Relief Program in February 2018 to help states repair and rebuild federal-aid highways. As of September 2019, FHWA has allocated $634 million to repair hurricane-related damage in Florida, Texas, and Puerto Rico. Specifically, immediately following the hurricanes in August, September, and November 2017 FHWA allocated $122.5 million in quick release funding to Florida, Texas, and Puerto Rico. In April 2018, FHWA allocated an additional $242 million to Florida, Puerto Rico, and Texas. Further, on February 6, 2019 FHWA allocated $130 million more to Puerto Rico for damages caused by hurricanes Irma and Maria (see fig. 2). FHWA subsequently de-allocated $69 million from Florida on February 27, 2019, because state officials determined the funds were no longer necessary for hurricane-related repairs. Most recently, in September 2019, FHWA allocated an additional $208 million to Puerto Rico. While the estimated repair costs exceed the amount of funds allocated by FHWA, officials stated that additional emergency relief funds are allocated and reimbursed approximately every 6 months and states and territories will be reimbursed for all eligible expenses related to hurricanes Harvey, Irma, and Maria as they are completed. These funding decisions are to be made as FHWA continues to review and approve projects and Congress appropriates additional funds. As we have noted in prior work, the $100 million in annual authorized funding has not been enough to meet the needs of the program. Therefore, states have relied on supplemental appropriations to fund repairs caused by natural disasters and catastrophic events. FHWA Did Not Justify Key Decisions and May Have Inappropriately Classified Emergency Relief Projects We identified a number of cases in which FHWA did not document decisions to classify emergency relief projects as emergency repairs (those necessary to restore essential traffic, undertaken during or immediately after a disaster and generally accomplished within 180 days) as opposed to permanent repairs (those undertaken to restore a facility to pre-disaster conditions). Specifically, 22 out of 25 emergency repair projects we reviewed—which account for approximately $50 million in emergency relief funds—did not include a documented justification for classifying repairs as an emergency repair instead of a permanent repair. In addition, out of approximately 1,200 eligible projects in Puerto Rico, FHWA officials reported undertaking 34 more than 180 days after the hurricanes and continuing to classify them as emergency repairs without documenting the basis for doing so. Without documentation it is not possible to definitively determine the justification for why projects were classified as emergency repairs and we identified at least three projects that may have been inappropriately classified because they (1) may not have been necessary to restore essential traffic, or (2) were not undertaken during or immediately after the disaster. For example: The Lynchburg Ferry ($10.7 million project in Texas). This project rebuilt the ferry docks and landings, which are used to transport up to 10 passenger vehicles at a time across the Houston Ship Channel (1,100 feet). FHWA classified the project as an emergency repair to restore essential traffic but did not document the basis for this decision. When asked, FHWA officials from the Texas Division stated that engineers used their professional judgment to determine that the ferry route provided essential traffic. It is not clear, however, that the ferry was necessary to restore traffic as several alternative routes were available immediately following the disaster on existing highways that service the same locations and typically result in faster travel times than the ferry (see fig. 3). According to officials, engineers did not assess these alternative routes and there is no requirement for them to do so. This project was a significant commitment of emergency relief funds, representing approximately 11 percent of the emergency relief funding Texas received in the aftermath of Hurricane Harvey. Because the project was classified as an emergency repair, Texas was permitted to use a non-competitive bidding process to solicit and hire contractors to complete the work, instead of a competitive bidding process designed to achieve the best possible price and quality of work. The project was completed within the required 180 day time frame required to receive 100 percent federal reimbursement. FHWA’s oversight of this project raises issues we cited in past work concerning its partnership with the states, namely putting the partner’s interest above federal interests. Had FHWA classified this project as a permanent repair instead of an emergency repair, state and local agencies would have been responsible for paying approximately $2.1 million in matching funds on the $10.7 million project. Moreover, prior to the hurricane, the ferry docks and landings were in poor condition and local officials were in the initial stages of planning a project to replace it, including hiring a consultant to identify potential sources of federal funds. Because substantive planning and design work had not yet been completed, this project was eligible for emergency relief funds, which, according to officials, resulted in a new, state-of-the-art facility. Ciales Bridge ($4.9 million project in Puerto Rico). This project will install a temporary 80 meter long bridge over the Rio Grande de Manati River. FHWA classified this project an emergency repair to restore essential traffic and extended the project beyond 180 days but did not document the basis for either decision, as described below. FHWA officials said that they were not aware of another route to carry essential traffic at the time they approved the emergency repair. However, we identified an alternative route on a nearby roadway that uses another bridge less than a mile away. When we asked officials about this nearby route, they said that it is not sufficient for essential traffic, because it is too narrow to safely accommodate two-way traffic, has load limitations, and lacks lighting and pavement markings. Officials stated that the temporary bridge was necessary to quickly restore essential traffic until a new permanent bridge could be built. However, construction on the temporary bridge is not planned for completion until October 2019—more than 2 years after Hurricane Maria hit, raising questions about whether an emergency situation exists and the project is needed to quickly restore essential traffic. FHWA also continued to classify this project as an emergency repair even though the contract for the project was not signed within 180 days after the emergency occurred and FHWA did not document the rationale for doing so. By statute, emergency repair projects must be accomplished within 180 days to receive a 100 percent federal share, but may be extended taking into consideration any delay in the ability of the state to access damaged facilities. According to FHWA officials in Puerto Rico, while division offices should document decisions regarding emergency repair projects, the statutory provision that projects can only be extended beyond 180 days if the damaged facilities are inaccessible does not apply to Puerto Rico because it is funded at a 100 percent federal share, and therefore, such a determination and documentation was not necessary. There are, however, statutory and regulatory provisions other than the percentage of costs covered by the federal government that apply to emergency projects, including contracting and environmental requirements. Because this project was classified as an emergency repair, officials used a bidding technique—called short-list bid—that limited the number of firms which were permitted to submit proposals. This project also received a categorical exclusion for emergencies and was not subject to further environmental review under NEPA. However, although these projects went forward, FHWA’s policy regarding time limits on the use of expedited contracting and environmental procedures is not clear. After we raised this and similar issues on other projects with FHWA, officials stated that the administration’s position was that emergency repair projects using expedited contracting and environmental procedures are only permitted within the first 180 days of a disaster. According to these officials, as a matter of policy, 180 days after the disaster is a “pencils down” moment when projects should be subject to permanent repair requirements, including environmental and contracting requirements. Officials acknowledged this policy is not well documented, and stated they planned to address this gap in future updates to program guidance. These updates—initially planned for 2019—have taken more time than anticipated and are currently planned for 2020, but officials were unable to provide a specific timeline. The classification of the project as an emergency repair raises questions about whether the project was an efficient use of federal funds. The $4.9 million temporary bridge involves considerable construction such as building footings with 5-million pounds of concrete and reinforced steel (see fig. 4) and, as stated previously, is not planned for completion until October 2019. FHWA officials stated this structure will be torn down within a couple of years and replaced by a $6.4 million permanent structure. PR-14 Bridge ($1.4 million project in Puerto Rico). This project will construct a temporary bridge across one of a few main routes on the south-central side of the island that is located in one of Puerto Rico’s mountainous municipalities that is rural and relatively sparsely populated. FHWA officials classified the temporary bridge as an emergency repair to restore essential traffic, including the transportation of people and commercial goods but did not document the basis for this decision. According to officials, this bridge was necessary to restore essential traffic because damage caused by the hurricane led to a reduction in the vehicle load limit from 5 tons to 3 tons. However, the basis for this determination is not clear since the bridge was never closed to traffic and a reduced load limit from 5 to 3 tons would not significantly affect the type of vehicle traffic able to safely cross the bridge. For example, the pre-existing 5-ton limit would have already prevented most types of ambulances and commercial trucks from using the bridge, and the 3-ton limit still permits most passenger vehicles and some types of light-duty trucks. In addition, according to officials, one of the reasons for installing a temporary bridge instead of waiting on the planned installation of a permanent bridge was to quickly restore traffic. However, the temporary bridge will not be completed until February 2020—almost 2 and a half years after the hurricanes, which raises questions about whether or not the project was necessary to quickly restore essential traffic. As with the Ciales Bridge, FHWA did not document the basis for classifying this project as an emergency repair even though it was undertaken more than 180 days after the emergency occurred. The project was contracted using a pre-existing contract and not competitively bid and received a categorical exclusion from NEPA requirements. Similar to the Ciales Bridge, this $1.4 million temporary bridge will be torn down within a couple of years and replaced by a $4.2 million permanent structure. While officials did not document decisions to classify emergency relief projects as emergency repairs, FHWA did improve the documentation of emergency relief projects in some areas since the last time we examined the program in 2011. Specifically, we found more consistent documentation of the onsite damage inspections, cost estimates, and FHWA oversight of eligibility determinations. For example, 39 out of 39 emergency relief projects we reviewed included photographs of the damage and a repair cost estimate; whereas, only 24 out of 83 projects we examined in 2011 included this information. According to Federal Internal Control Standards, to achieve objectives and identify and respond to risks, management should clearly document all transactions and significant events, and define objectives clearly, including specific terms so that they can easily be understood. FHWA did not clearly document transactions and significant events because: (1) in the case of classifying projects as emergency repairs, there is no requirement to do so, and (2) in the case of extending emergency repair projects in Puerto Rico, existing requirements did not apply. FHWA officials stated that these decisions were made as part of an ongoing dialogue between FHWA, the states, and Puerto Rico that is done through emails and in-person and telephone meetings. However, by not documenting emergency repair decisions, such as whether alternative strategies or repairs were considered and the rationale for classifying projects as emergency repairs after the emergency has passed, FHWA lacks definitive explanations for its decisions. This, in turn, raises questions as to whether those decisions were appropriate. When questioned about individual projects, including the examples in Texas and Puerto Rico previously discussed, officials often could not provide concrete rationales for these decisions. In addition, because guidance in the Emergency Relief Manual is intentionally flexible and written to apply to a wide range of circumstances, key terms are not clearly defined and easily understood and applied. This is particularly true for the term “essential traffic,” which is being broadly applied to provide support for repairs necessary to restore any type of traffic without fully considering potential alternatives. While FHWA’s manual generally describes projects to restore essential traffic (e.g., detours that relieve excess traffic directly attributable to the disaster), it does not discuss how to determine whether a project will relieve excess traffic or require officials to evaluate alternative routes. Moreover, FHWA’s guidance and policy are not clear on the time frames for when emergency repair projects must adhere to contracting and environmental requirements. This lack of clearly defined and easily understood terms in emergency relief guidance could result in FHWA inappropriately classifying projects as emergency repairs, which affects: the federal fiscal exposure in a disaster, the level of FHWA oversight because projects may begin without prior authorization, the extent to which projects must be competitively bid, and potentially the level of environmental review accorded a project. Moreover, unclear guidance increases the chances that program guidance could be inconsistently applied, potentially giving access to emergency relief funds to one state and not another. We identified several instances in which officials in one Division Office made emergency repair decisions that differed from another division office. For example, FHWA officials in Florida did not include highway finishes, such as pavement markings, as part of emergency repair projects, while officials in the Puerto Rico Division did. FHWA officials in Puerto Rico also reported that FHWA officials from different division offices who came to assist in the aftermath of the 2017 hurricanes had substantively different interpretations of emergency relief guidance, including how to define emergency repairs and what was and was not essential traffic. Conclusions For many years, FHWA’s Emergency Relief Program has provided crucial funding to states and territories to rebuild transportation infrastructure, including in the aftermath of hurricanes Harvey, Irma, and Maria. The consecutive timing and scale of these disasters overwhelmed local, state, and territorial governments, and Puerto Rico was hit particularly hard. Given the level of devastation, it was imperative for the federal response to be quick and effective, and that essential services be quickly restored to help people rebuild and recover. However, it is not clear that emergency relief funds are always being used for the purposes intended or put to the highest use. In the absence of well-documented rationales for classifying projects, more clearly defined terms and circumstances for making these decisions, and time frames for accomplishing them, FHWA may have inappropriately classified projects as emergency repairs. While this represent a small percentage of projects undertaken in response to the 2017 hurricanes, FHWA’s actions may have resulted in the federal government forgoing millions of dollars in state contributions, thus increasing the federal fiscal exposure in disasters. Moreover, permitting projects to proceed under expedited contracting requirements many months after the disaster deprived the federal government of a valuable tool intended to ensure the best price for services it receives. Finally, in an environment where needs outweigh funding, multi-million dollar bridge projects are being constructed that will be torn down in a couple of years to make way for other multi-million dollar bridge projects. FHWA’s decision-making invites questions we have raised before about the partnership relationship between FHWA and the states. In high stress and politically sensitive situations like natural disasters in particular, the relationship could lead FHWA to put states’ interests before federal ones or give the appearance of having done so. If FHWA’s decisions are, in fact, appropriate, documentation and clearer guidance could reduce unnecessary skepticism, enhance transparency, and result in more effective use of limited resources. Recommendations for Executive Action We are making the following two recommendations to FHWA: The Administrator of FHWA should require FHWA division offices to document the rationale for classifying projects as emergency repairs, such as a description of why an emergency repair is necessary and which alternative strategies or repairs were considered, and to more clearly define the circumstances under which projects are classified as emergency repairs, including what constitutes restoration of essential traffic. (Recommendation 1) The Administrator of FHWA should identify a specific timeline for clarifying the policy on the acceptable time frames for accomplishing emergency repair projects undertaken under expedited contracting and environmental requirements, and require FHWA division offices to document the rationale for decisions to extend projects beyond these time frames. (Recommendation 2) Agency Comments We provided a draft of this report to DOT for review and comment. In comments, reproduced in appendix II, DOT concurred with our recommendations. DOT also provided technical comments, which we incorporated as appropriate. We are sending copies of this report to the appropriate congressional committees and the Secretary of the Department of Transportation. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-2834 or flemings@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix III. Appendix I: Results of GAO’s File Review of the Emergency Relief Project Documentation Available in Three FHWA Division Offices In 2011, we reported on how Federal Highway Administration (FHWA) officials applied Emergency Relief Program guidance to a selected group of projects that received funding. In that review, we selected a nongeneralizable sample of eligible Emergency Relief Program projects in three states—New York, Texas, and Washington—that matched criteria such as receiving more than $1 million in obligated federal funds and approval by FHWA between fiscal years 2007 through 2010. We reviewed those projects’ files to determine whether they included required or recommended documentation cited in federal statute, regulations, and FHWA program guidance. In our 2011 report, we found many instances of missing or incomplete documentation, such as required repair cost estimates, because FHWA lacked clear requirements for how states submitted and FHWA approved key project documentation, leading to FHWA division offices applying eligibility criteria differently. We recommended that FHWA standardize their procedures for reviewing emergency relief documentation and making eligibility decisions, including retaining damage inspection reports with detailed repair cost estimates. In response, FHWA issued an Order in February 2016 that included procedures to ensure that FHWA makes eligibility determinations consistently and transparently that we determined addressed our recommendation. To evaluate how FHWA officials applied Emergency Relief Program guidance to selected projects in recent emergency events and whether documentation had improved since our 2011 report, we conducted a file review of 39 nongeneralizable emergency relief projects—25 of which included emergency repairs—in Texas, Florida, and Puerto Rico. These projects, which FHWA determined were eligible for Emergency Relief Program funding, were necessary to repair damage caused by three 2017 hurricanes: Harvey, Irma, and Maria. The purpose of this review was to determine whether each project file included information showing the project met eligibility requirements or information required or recommended in federal statute, regulations, and FHWA program guidance. To select these 39 project files (13 projects each from Texas, Florida, and Puerto Rico), we used the following criteria: We reviewed those with the highest estimated cost to ensure the inclusion of projects likely to receive the most federal funds. The 39 project files we selected represented over 38 percent of Emergency Relief funds allocated to those three states for the 2017 hurricanes, as of February 2019. We selected a mix of road and bridge projects to ensure we reviewed a selection of projects that could include different types or amounts of documentation. States typically have more data and oversight processes in place for bridges than other roads, as most bridges are required to be inspected at least every 2 years. We selected a mix of a state and local agency projects to ensure we reviewed a selection of projects that may have been prepared with different levels of detail. Though state agencies ultimately submit all Emergency Relief Program requests to FHWA, local agencies prepare some of the paperwork for projects within their jurisdictions and could provide a different level of detail in their project files than state agencies. For each of the 39 projects in our review, the FHWA division offices in Texas, Florida, and Puerto Rico provided associated project files. Through discussions with state officials, we determined that FHWA’s Mobile Solution for Assessment and Reporting (MSAR) was sufficiently reliable for our purposes of obtaining documentation for file reviews for projects located in Texas. For Puerto Rico, because state officials acknowledged some files were not included in MSAR, we asked for state officials to directly send us additional documentation as needed. As Florida does not use MSAR to record project information or documentation, we asked for state officials to send us relevant project documentation directly. Project files from these locations included information on project type and estimated costs as well as other relevant documents, such as engineering reports, bridge inspection reports, or photographs of the damage. Two analysts reviewed those files for information that is required or recommended by statute or FHWA guidance. This information included much of the same information we had previously evaluated in our 2011 review. To conduct the review, one analyst reviewed the documentation provided by FHWA’s division offices and completed a data collection instrument, then a second analyst reviewed the same documentation to verify the results of that review. Afterwards, the two analysts discussed and resolved any discrepancies and questions. The analysts then analyzed and summarized the results for the 39 eligible projects of this review to determine whether each file included documentation for damage and cost information, emergency repair requirements, and eligibility determination, as detailed below: Damage and cost information: We reviewed whether the project file included a complete detailed damage inspection report (DDIR), which documents an on-site inspection of the damage. FHWA’s Emergency Relief Manual states that a complete DDIR should include a number of details including: the type of federal-aid highway, such as an interstate, freeway, or expressway; the average daily traffic or the typical traffic volume in a location over a 24-hour period; the nature or type of damage, such as a bridge collapse or landslide, and extent or amount of damage, such as fully or partially collapsed; a field site sketch or drawing that shows details of the damage site such as the width of the road or bridge; a total estimated cost for repair; and documentation related to an environmental review recommendation, which would include the potential effects of repairs on nearby species or waterways. For the 39 projects we included in our file review, we found that DDIR documentation generally improved compared to the 2011 review. For instance, each of the 39 projects included a DDIR, photographs of the damage, and the repair’s cost estimate; only 24 of the 83 eligible projects we reviewed in 2011 included each of those pieces of information. However, we found other recommended DDIR documentation to be lacking. For example, of the 39 projects in our review, 36 did not include Average Daily Traffic and 22 did not include the type of federal-aid highway. Figure 3 represents the results of our review of damage and cost information. Emergency repair requirements: We reviewed whether eligible emergency repair projects included a documented rationale or justification for classifying the project as an emergency repair instead of a permanent repair. As discussed in the body of this report, by statute, emergency repairs are repairs undertaken during or immediately after a disaster specifically to restore essential traffic, to minimize the extent of damage, or to protect the remaining facilities. As discussed in the body of this report, classifying a project as an emergency repair affects the percentage of costs covered by federal funds, level of FHWA oversight, and the extent to which environmental and contracting requirements apply. We found that of the 25 project files that included an emergency repair (out of the 39 in our review), 22 did not include a documented rationale or justification for classifying the project as an emergency repair instead of a permanent repair. Eligibility determination: We reviewed whether a representative of FHWA signed and recommended eligibility for Emergency Relief funding and whether the applicant or state representative signed and agreed with FHWA’s recommendation. The Emergency Relief Manual states that documentation should include an eligibility recommendation by an FHWA representative and acknowledgement of that recommendation by the applicant. For the 39 projects we included in our file review, we found that documentations of FHWA and applicant signatures generally improved compared to the 2011 review. In our current review, we found that the FHWA and applicant or state representatives signed each of the 39 eligible project files; in our 2011 review, only 36 of the 83 eligible projects included a signature from an FHWA representative and 47 of the 83 eligible projects included a signature from the applicant or state representative. Appendix II: Comments from the Department of Transportation Appendix III: GAO Contact and Staff Acknowledgments GAO Contact Staff Acknowledgments In addition to the contact named above, Steve Cohen (Assistant Director), Matthew Cook (Analyst in Charge), Pedro Almoguera, Aditi Archer, Danielle Ellingston, Lauren Friedman, Kathryn Godfrey, Hannah Laufe, Leslie Locke, Cheryl Peterson, Malika Rice, Amy Rosewarne, and Elizabeth Wood made key contributions to this report.


Background In 2017, transit agencies provided over 10 billion rides to people traveling to and from businesses, homes, and other locations throughout the United States, according to FTA. Transit infrastructure for those rides includes railways, roads, bridges, tunnels, and stations. According to the 2017 American Public Transportation Association’s (APTA) Fact Book, more than 6,700 organizations provided public transportation in a variety of modes in 2015. Transit modes include: fixed-route bus services—the most prevalent transit mode in the country—vehicles operate according to regular schedules along prescribed routes with designated stops; rail services—vehicles operating along railways; ferryboat services—vessels carrying passengers and/or vehicles over a body of water; paratransit services—generally, accessible, origin-to-destination transportation services that operate in response to calls or requests from riders; and other demand-response services—sometimes called “dial-a-ride.” Public transportation, or transit, is statutorily defined as regular, continuing shared-ride surface transportation services that are open to the general public or open to a segment of the general public defined by age, disability, or low income. This definition has multiple statutory exclusions including intercity bus service, school bus service, and charter bus service. The transit infrastructure requires appropriately trained personnel to operate, maintain, and oversee services and assets (e.g., vehicles). APTA estimated that, in 2015, U.S. public transit agencies employed more than 430,000 fulltime and part-time personnel, including contractors. The transit workforce consists of a variety of occupations, such as bus operators, train conductors, dispatchers, mechanics, supervisors, and other occupations (see fig. 1 for examples.) FTA supports transit agencies’ workforce development by providing financial and technical assistance, among other things. FTA’s financial assistance efforts include implementing the Innovative Public Transportation Frontline Workforce Development Program, which provides competitive grants to transit agencies (transit workforce grants) to assist with the development of innovative human resources activities. FTA awarded transit workforce grants in fiscal years 2011, 2012, and 2015. Grant-eligible projects included employment training, outreach to increase minority and female employment in transit, research on transit personnel and training needs, and training and assistance for minority business opportunities. Grant recipients included transit agencies, non- profit community groups, schools, and others. Additionally, recipients can use up to one-half of one percent of certain grant funds, such as Urbanized Area Formula Grants, for eligible human resources and training activities with the approval of DOT. FTA also administers the National Transit Database (NTD), which is intended to provide information to assist in transit planning efforts. All recipients and direct beneficiaries of grants from the Urbanized Area Formula Program and Rural Area Formula Program, such as local transit agencies, are required to report certain data to the NTD. FTA also encourages agencies not receiving grants from these programs to report voluntarily so the NTD can be more complete. In 2016, over 2000 transit agencies submitted full or partial reports to the NTD. The NTD stores information from local transit agencies, such as financial and operating data, to inform transit service planning for government agencies and other organizations. Some workforce data, such as the number of full-time and part-time transit agency employees, is reported to the NTD. NTD data provide information on the transit workforce at the time the data are reported, but are not used to project future transit workforce needs. FTA partners with the National Transit Institute (NTI), hosted and staffed by Rutgers University, to provide workforce development educational resources and training. NTI delivers over 300 courses per year nationwide to public transit employees and government transportation agency employees at all levels. These courses focus on compliance with federal regulations and developing skills to operate a transit agency. At the department level, in August 2015, DOT, DOL, and the Department of Education worked with industry stakeholders to project the employment and skill needs of the transportation industry from 2012 to 2022. Primary sources for the report included the DOL’s Bureau of Labor Statistics (BLS) employment projections, current population survey (demographics), and analysis from Economic Modeling Specialists International. The effort developed a variety of transportation workforce statistics and resulted in the Strengthening Skills Training and Career Pathways Across the Transportation Industry: Data Report on Future Transportation Workforce Needs (Transportation Industry Report). Among other things, the report: projected that an additional 4.6 million transportation workers will need to be hired to fill vacancies created by separations (occupational transfers, retirement, and other exits from the workplace), and net job growth from 2012 to 2022; provided data on current worker distribution (at that time) by age and sex for six transportation sectors and by race and ethnicity for selected transportation occupations; and included top job occupations by sector and projected industry and occupational job openings based on separations and job growth. Limited Information Exists on Future Transit Workforce Needs The extent of future transit workforce needs is unclear due to the absence of transit-specific workforce projections, unclear communication on the data that are available, and because the data that are available do not extend past 2022. The best information available on future transportation workforce needs, according to FTA officials is the August 2015 Transportation Industry Report. The Transportation Industry Report does have projections on transportation workforce needs, but the transit industry data are combined with other ground passenger transportation industries such as intercity buses, charter buses, taxis, school buses, and limousines. Thus, the report does not exclusively reflect the transit workforce. According to researchers who wrote the report, the transit and ground passenger transportation data were reported as one industrial sector because it would be a significant undertaking to focus solely on transit workforce data without funding a study for this specific area. The Transportation Industry Report was developed with data, in part, from BLS, which does not exclusively report on occupational projections for public transportation. BLS develops workforce projections of the U.S. labor market by industry, subsector, and occupational codes, including the number of employees and types of employers. BLS officials we interviewed said that industry and occupational data sets do not allow the level of specificity that would be needed to identify only transit agencies. The Transportation Industry Report predicted 1 million job openings in the transit and ground passenger transportation sector from 2012 to 2022 and listed the top 10 projected job openings. However, these projected job openings include a number of occupations within services that are statutorily excluded from the definition of transit. For example, the three largest categories of job openings—comprising about 72 percent of the projected openings—have the following key transit exclusions: School bus and special client bus drivers made up approximately 33 percent of the projected openings (330,699 job openings). However, school bus services are specifically excluded from the statutory definition of transit, as are sightseeing services, charter bus services, courtesy shuttle services for patrons of one or more specific establishments, and intra-terminal or intra-facility shuttle services. Transit and intercity bus drivers made up almost 20 percent of the projected openings (199,727 job openings). However, intercity bus service (for example, Greyhound bus service) is specifically excluded from the statutory definition of transit. Taxi drivers and chauffeurs made up almost 19 percent of the projected openings (188,895 job openings). However, these services may not meet the statutory definition of transit. However, when communicating about the report, FTA has not always made clear that the data in the Transportation Industry Report combine both transit and ground passenger transportation workforce projections, though this was not intentional, according to FTA officials. FTA has presented the combined data as representing the “transit” or “public transit” workforce in recent annual reports to Congress and a few public presentations. For example, one of the findings in the Transportation Industry Report is that the combined sector of transit and ground passenger transportation has the highest percentage of older workers who are at or nearing retirement age. However, in recent reports to Congress, FTA states that, public transit has the highest percentage of older workers at or nearing retirement age. However, this statement did not reflect that the percentages included transit and ground passenger transportation data. We also found similar information involving retirement percentages and job openings in a number of FTA presentations that are available to the public online. In addition, we found two examples of incorrect numbers in recent reports to Congress that FTA officials said were “typos” that have now been corrected in the most recent fiscal year 2017 report. FTA’s characterization of this data could confuse transit stakeholders, including Congress, on needs, retirements, and growth in the transit industry. When FTA identifies combined information as “transit” projections, the audience may not understand the extent to which the data reflect services that do not meet the statutory definition of transit. We found evidence that this may have already occurred to some extent. During our review, we found examples of stakeholders in the industry repeating the same statistics that FTA has presented as “transit” in publications and in our interviews with them, raising questions about whether the industry may have misconceptions about the future transit workforce. FTA officials told us that the combination of transit and ground passenger transportation is appropriate because of similarities in the industries and the common practice of transit agencies hiring contractors from ground passenger transportation to supplement workforce personnel. However, the context of this information has not always been clear in reports to external parties. Further, the Transportation Industry Report’s projections on the future transportation workforce are only estimated through 2022. DOT officials said that they do not have plans to update the report beyond 2022 or to develop a report that focuses solely on transit workforce projections. FTA officials told us that they plan to hire a data scientist to assist them with transit workforce issues. FTA officials also told us in November 2018, that the report was intended to provide trend information and that they do not plan to use the transit numbers from the Transportation Industry Report in future reports and presentations, and considering that the report will soon reach the end of its projections in 2022, we are not making a recommendation about how to communicate the context of the information in the Transportation Industry Report. Opinions on the need for additional transit workforce data and projections varied among transit stakeholders we interviewed. Several stakeholders cited the difficulties of collecting transit-specific projections or other types of data, while others pointed to the need for more data such as data identifying shortages in specific occupations and retirement age of transit employees. However, officials from the Community Transportation Association of America, which represents small and rural transit agencies, said that requiring additional data from transit agencies could be a time- consuming burden for local transit officials. The association officials suggested that transit stakeholders should work together to use existing workforce data from FTA or BLS to develop workforce projection data. Transportation Research Board officials also said that additional transit workforce data would be costly and difficult for transit agencies to provide. However, the Director of Eno’s Center for Transportation Leadership, a research organization, stated that it is extremely difficult to develop national policies, programs, and grants to address systemic workforce problems because of the gaps in transit workforce data. Federal Internal Control Standards highlight the importance of using quality information to make informed decisions and identifying the information requirements needed to do so while considering the expectations of internal and external users. While the views of stakeholders we interviewed varied on the extent to which additional transit workforce data and projections are needed, new transit workforce projections could inform decision-making on transit workforce planning to address potential future shortages or other needs. We have previously reported that agencies should weigh data collection decisions carefully, noting that there is a cost to data collection, and that only needed data should be collected. Working with stakeholders to understand what, if any, additional transit-specific workforce data transit stakeholders need and the related collection costs could enable FTA to weigh the complete costs and benefits of developing future data for the transit industry and to make informed decisions on allocating the appropriate resources toward those efforts. Selected Transit Stakeholders Are Taking Steps to Address Transit Workforce Needs and Cited Ongoing Recruiting and Retention Challenges Selected Stakeholders’ Actions Transit stakeholders we interviewed highlighted actions they are taking to address transit workforce needs but also noted continuing difficulties with recruiting and retaining staff. Examples of actions they have taken to address workforce needs, either with a transit workforce grant or with other funding include: Career enhancement: Los Angeles County Metropolitan Transportation Authority officials told us that they have developed a program that offers growth opportunities by providing “upskilling” resources at all levels of the agency including employee development, management/leadership, and transportation senior leadership, among other things. Courseware development: The Transportation Learning Center organized three industry consortiums to develop national standards- based courseware—Rail Car, Signals, and Elevator/Escalator Technicians, according to the Transportation Learning Center. For example, under the Signals Training Consortium, 25 new courses have been developed covering the inspection, maintenance, and troubleshooting of transit and commuter rail signaling equipment. The curriculum is planned to include both classroom and on-the-job training. Internships: The Conference of Minority Transportation Officials developed a program to prepare college, university, and vocational school students to enter transit and transportation-related fields, according to conference officials. In 2018, this program placed 29 interns nationwide in architectural and engineering firms as well as state and local government agencies. Managerial training: The Eno Center for Transportation provided classes for mid- and senior-level transit executives and has started one for first-line supervisors, according to an Eno official. This training includes lectures, classes, job shadowing, informal mentoring, field trips, and meetings with counterparts. Research: The Community Transportation Association of America reported on a survey it conducted of its members in June 2018 on the salary and benefits for professional transit positions in the industry. The survey’s 236 respondents provided information on hourly and/or salary information, operating budget, available benefits, services provided, and number of employees, among other things. According to the Association, the members asked for this survey because it helps them make staffing and employment decisions within their agencies. Technology education: Jacksonville Transportation Authority officials told us that they have established a “Workforce of the Future” working group whose charge is to prepare the workforce to incorporate emerging technologies as it transitions its aged elevated, automated people-mover system—the “Skyway”—to autonomous vehicle technology. The working group supports a public automated-vehicle test track as well as employee town halls to develop the tools to discuss these issues in their communities. Other Transit Workforce Grant-Supported Actions FTA’s transit workforce grants also supported stakeholder actions to address transit workforce issues including: In fiscal year 2011, FTA awarded 12 workforce grants totaling $3 million. For example, the Chicago Transit Authority received a grant to develop and validate a transit-manager competency model to help supervisors recognize and support skills and leadership potential in their staff. In addition, the Florida Department of Transportation received a grant for its Certified Transit Technician Program, which resulted in 13 hires, each receiving the opportunity for additional certification and a college degree. In fiscal year 2012, FTA awarded 17 grants totaling $7.05 million. For example, the Southwest Ohio Regional Transit Authority (Cincinnati) received a grant to develop a program that provided technical training in hybrid engine technology to improve its maintenance program and hybrid bus fleet. The Corporation to Develop Communities of Tampa, Inc. received a grant to recruit, train, and employ up to 30 people in the transit industry, including transit operations and maintenance workers. In fiscal year 2015, FTA awarded 16 grants for $8.1 million. For example, the Bay Area Rapid Transit District was awarded a grant to create a pathway to employment in the transit industry for traditionally under-represented individuals. The Workforce Development Council of Snohomish County, Washington, received a grant to bring together local partners to create a pipeline of skilled workers ready to enter the transit and construction industries. The partners have targeted women, minorities, and native tribes to access apprenticeships, social services, and job placement programs. Recruitment and Retention Challenges Notwithstanding these efforts, the transit stakeholders we spoke with identified ongoing recruiting and retention challenges as shown in table 1. FTA Helps Address Transit Workforce Needs, but Improved Strategic Planning Could Better Focus Assistance FTA Provides Transit Workforce Assistance FTA has taken a number of actions to assist transit agencies with future workforce needs including: FTA provides technical assistance, standards development, training, and workforce development projects for the transit workforce. In fiscal year 2017, the active projects totaled over $29 million. Almost 13.3 million (approximately 46 percent) of this funding went to technical assistance projects. For example, FTA spent almost $4 million to assist the National Aging and Disability Transportation Center with efforts that include developing online courses and training materials to assist certain FTA grant recipients with providing transportation services to older adults and people with disabilities. The funds were also used to present a podcast, as part of an online course on the Americans with Disabilities Act of 1990 (ADA). The podcast addressed common ADA questions related to customer service, wheelchairs on vehicles, and service animals. Over $8.3 million (approximately 28 percent) funded 17 active transit workforce development projects from the fiscal year 2015 transit workforce grants discussed previously for developing new training curriculums, or seeking to recruit and train specific groups, especially those who are underrepresented in the transit workforce. $5 million (approximately 17 percent) funded NTI development and delivery of training programs for federal, state, and local transportation employees. For example, NTI delivered 270 training courses throughout the U.S. to 7,298 participants in fiscal year 2017. NTI also supported a workshop to help address industry issues as they arise, such as workforce shortages and issues in recruitment and retention. $2.5 million (approximately 9 percent) funded a Transit Standards Development Program at the Center for Urban Transportation Research (University of South Florida) to provide research and analysis on needs and gaps, and recommendations for new standards, or to modify existing standards. For example, one of the reports discussed fatigue management, among other things. According to FTA, the ultimate effects of this program are increased safety and reduced injuries and fatalities. FTA is collaborating with NTI to conduct an industry workforce needs assessment aimed at identifying training, skills, and educational gaps that exist in the industry as well as within current NTI programs. They are conducting this assessment because of transit’s changing workforce, technologies, and operating environment. This assessment is intended to result in a report that provides a road map for the transit workforce’s development and training and may identify some of the gaps in transit workforce needs. As of November 2018, NTI has held focus groups at key transit conferences, which have provided a preliminary picture of the transit industry’s critical need, according to FTA. NTI has also completed a draft of a survey of transit agency needs and FTA is reviewing it, according to an NTI official. The next steps include conducting the survey, mapping NTI’s curriculum and courses to desired key skills, and developing a national transit competency framework. The researchers are planning to use a statistically significant sample that represents the needs of the industry, both for urban and rural agencies, with estimated completion of the survey and analysis in early 2019. FTA is evaluating the effectiveness of the transit workforce grant program. FTA funded an evaluation of the 12 fiscal year 2011 transit workforce grants. The report discussed whether the projects met goals, the effect of the programs, and whether the programs were worth further investment. The report noted a number of outcomes including introducing 2,608 youth to transit, and training 1,527 people. FTA also plans to evaluate transit workforce grants awarded in fiscal years 2012 and 2015 and to create outreach materials from the grant projects for transit stakeholders. The evaluation is also intended to provide important best practices and lessons learned for other transit operators. FTA is researching the potential effects of automation on the transit workforce. In January 2018, FTA released the Strategic Transit Automation Research Plan, which established a research and demonstration framework. One of the research projects in the plan is an assessment of the effect of automation on the transit workforce. Specifically, the assessment is planned to provide a qualitative analysis of labor-related considerations with transit bus automation including potential workforce changes, perspectives of organized labor, statutory and regulatory provisions, and other societal factors. A follow-on project is planned to evaluate changes in staffing levels, job responsibilities, labor hours, and training needs to provide a quantitative approach to estimating automation’s effects on transit employment levels, workforce needs, and wages. FTA’s Transit Workforce Development Efforts Are Not Guided by a Strategy, Performance Goals, and Measures Strategy Although FTA has assisted transit stakeholders with workforce needs, it lacks key strategic planning practices that could ensure its efforts are as effective as possible. FTA reported in its fiscal years 2016 and 2017 annual reports to Congress that it planned to develop a transit workforce strategic plan. Federal Internal Control Standards indicate that plans, such as strategic plans, should set up the effective and efficient operations necessary to fulfill desired objectives. Effective operations produce the intended results from operational processes, while efficient operations do so in a manner that minimizes the waste of resources. However, FTA does not have a comprehensive strategy showing the operations and processes to be developed to guide FTA’s efforts to assist transit agencies with addressing future transit workforce needs. FTA has had a number of starts and stops in producing a transit workforce strategy since it first reported this intention to Congress in 2016, but no clear action has been taken to develop a strategy so far. In July 2018, FTA officials told us that the reason they had not yet drafted a comprehensive strategy is because they considered developing their strategy as part of an overall DOT strategy, rather than a transit workforce strategy as a stand-alone product. However, DOT does not currently plan to develop a comprehensive department-wide transportation workforce strategy. Nevertheless, DOT has consistently identified addressing the transportation workforce as a priority over time in key DOT documents, including its last three strategic plans and the last two performance plans. DOT officials told us that the strategic plan is not intended to provide such detail; rather, it is designed to be a top-level strategic plan that provides a broad framework for DOT. In November 2018, FTA officials told us that they intend to create a “workforce consortium” and a new technical assistance project that would result in a strategy. However, FTA officials did not provide a time frame for when these actions would be taken. Considering the importance of the transit workforce to efficient operation of the transit infrastructure, a transit workforce strategy would be consistent with internal controls, such as setting up effective operations, whether this strategy is developed as part of a department-wide strategy, as a stand-alone project, or through a workforce consortium. Without a comprehensive strategy to guide FTA’s ongoing activities to assist with transit workforce needs, FTA lacks a roadmap to ensure it is effectively leveraging its resources to help address future transit workforce needs. In addition, it may be difficult for Congress to understand the merits of investing in future transit workforce programs because it may not be clear absent a vision of how individual programs fit within the overall transit workforce strategy. Performance Goals and Measures In addition to not having a comprehensive strategy, FTA lacks key tools to demonstrate the extent to which individual workforce development efforts are addressing future transit workforce needs. In particular, FTA has not established clearly defined performance goals and measures for its transit workforce assistance efforts. Establishing clear goals and measuring progress toward them are consistent with the management principles set forth in GPRA, as enhanced by the GPRA Modernization Act of 2010, and our previous work. Setting long-term strategic goals is essential for results-oriented management, because such goals explain with greater specificity the results an agency is intending to achieve, as we have previously reported. FTA discussed the pending development of transit workforce goals at an October 2016 summit with transit stakeholders, but these goals were not finalized. Further, there are no performance goals for transit workforce development efforts in DOT’s current annual performance plan, and none is referenced in the current strategic plan. FTA has developed some performance measures for evaluating the outcomes of transit workforce grants—but not for its transit workforce development efforts at large. In addition, these measures are not tied to performance goals that FTA expects the grants to achieve. We have previously reported that results-oriented organizations first set performance goals to clearly define desired outcomes and then they develop performance measures that are clearly linked to the program goals and demonstrate the degree to which the desired results are achieved. For example, two of the performance measures for transit workforce grants are “total projected cost per direct participant,” and “number of people expected to be trained overall,” but FTA has not set a goal for what the projected cost per participant should be or the number of people who should be trained by grant awards. By establishing performance measures before establishing specific performance goals that FTA seeks to achieve, FTA may not ensure that the data gained from these performance measures are an effective use of resources. DOT officials said that performance goals and measures for FTA’s transit workforce grant program were not finalized because no funding has been identified for a subsequent round of these grants. However, FTA’s efforts to assist with transit workforce issues are larger than one grant program. Performance goals and measures are consistent with effective management practices with or without funding for a specific grant program. Without documented, clearly defined goals and performance measures linked to those goals, FTA is limited in its ability to make informed decisions about transit workforce development efforts. As a result, FTA risks expending resources on efforts that it may not be able to demonstrate are meeting intended goals. Focusing on the intended results of FTA’s transit workforce efforts can promote strategic and disciplined management decisions that are more likely to be effective because managers are better able to target areas most in need of improvement and to select appropriate interventions. Further, agency accountability can be enhanced when both agency management and external stakeholders—such as Congress—can assess an agency’s progress toward meeting its goals. Without performance goals and related performance measures, it will be more difficult for FTA to determine the success of its strategies, adjust its approach when necessary, and remain focused on results. Conclusions Much is unknown about the workforce needed in the future to operate the nation’s transit systems and to transport people to and from work, school, and other destinations. Disaggregating transit workforce data from other transportation data has proved to be challenging, and the best projections of the future transportation workforce needs will expire in 2022. Additionally, how vehicle automation and other technology advances will affect the future transit workforce is unclear, and FTA’s presentations on the transit workforce projections that do exist may have contributed to the lack of clarity on the future needs of the industry. Whether additional, refined data on transit workforce needs—for example, an updated version of the Transportation Industry Report—would provide greater benefits to the industry than the cost of collecting these data is something FTA can determine when it better understands the information the industry needs to make effective workforce decisions. At that point, FTA can decide what additional data need to be collected strategically, if any, and at what cost, as part of strategic planning efforts. FTA has identified the need to create a transit workforce strategy, and has expressed its intention to create one in a number of different ways, but has taken no clear action yet to ensure that FTA’s intention will be realized. By taking the initiative to develop a strategy to help address future transit workforce needs, FTA will be in a position to better manage its ongoing transit workforce activities. FTA is undertaking a number of efforts that could provide the foundation for sound strategic planning, including sponsoring an assessment of transit workforce needs, hiring a data scientist, starting a workforce consortium, and initiating research on future automation that could provide more clarity regarding a key aspect of future transit that is, as of now, an unknown factor. Further, FTA has already drafted some performance measures for its transit workforce grants that it may be able to use as a foundation for creating goals and measures for transit workforce development at large. However, more specific strategic planning efforts that include developing a strategy and performance goals and measures can better enable FTA to effectively help transit agencies identify, prepare, and provide a sufficient workforce for the future. Recommendations for Executive Action We are making three recommendations to the FTA Administrator: The FTA Administrator should determine, in collaboration with transit stakeholders, whether additional transit workforce data are needed to identify potential future occupational shortages in the transit industry and whether the benefits of this collection would outweigh the cost of gathering it. (Recommendation 1) The FTA Administrator should develop and document a strategy that outlines how FTA will help address future transit workforce needs. (Recommendation 2) The FTA Administrator should develop and document clearly defined performance goals and measures for its transit workforce development efforts. (Recommendation 3) Agency Comments We sent a copy of this draft report to DOT for review and comment. DOT responded with a letter in which it concurred with our recommendations and discussed the successes of its Innovative Workforce Development Program. The letter is reprinted in appendix II. DOT also provided technical comments, which we incorporated in the report as appropriate. We are sending copies of this report to appropriate congressional committees and to the Secretary of Transportation. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staffs have any questions about this report, please contact me at (202) 512-2834 or goldsteinm@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who contributed to this report are listed in appendix II. Appendix I: Objectives, Scope, and Methodology This report addresses: (1) the extent to which information exists about future transit workforce needs, (2) the actions selected transit stakeholders are taking to address current and future transit workforce needs, and (3) the extent to which the Federal Transit Administration (FTA) assists with identifying and addressing current and future transit workforce needs. For all objectives, we analyzed key Department of Transportation (DOT) and FTA documents such as DOT strategic plans, annual reports to Congress in fiscal years 2017 and 2016, and public presentations, which discussed workforce needs, grant programs, and data involving the transit industry. We also interviewed government officials from DOT, including from FTA, the Office of the Secretary, and the Federal Highway Administration; from the Department of Labor (DOL) and its Bureau of Labor Statistics (BLS); and from the Department of Education. Further, we interviewed three transit stakeholders—the Eno Center for Transportation, the National Transit Institute (NTI), and the American Public Transportation Association (APTA) to understand available data sources, relevant studies, and grant programs focused on the transit workforce. Based on our research and recommendations from those interviews with those three stakeholders and FTA, we selected a non- generalizable sample of an additional eight transit stakeholders for interviews. These selected stakeholders included: two research organizations (Transportation Learning Center and the Transportation Research Board, which includes the Transit Cooperative Research Program and the Transit Research Analysis Committee); two unions (Amalgamated Transit Union and Transport Workers Union of America); two trade groups (Community Transportation Association of America and Conference of Minority Transportation Officials); and one membership association of workforce boards (National Association of Workforce Boards); one transportation subject-matter expert (Mort Downey Consulting, LLC). In addition, we selected and interviewed officials from six transit agencies to understand their perspectives regarding workforce issues such as recruiting and retention challenges, and efforts to address those challenges. We selected and interviewed three urban transit agencies: Los Angeles County Metropolitan Transportation Authority (CA); Regional Transportation District—Denver (CO); and the Jacksonville Transportation Authority (FL). We selected these agencies because (1) each was recommended by more than one transit stakeholder we interviewed for taking specific actions to address workforce issues; (2) as a group, they represented geographic diversity (western, central, and eastern United States); and (3) each was awarded at least one FTA transit workforce grant. In order to find smaller, more rural agencies for balance we selected three transit agencies: Advance Transit (Wilder, Vermont); Cache Valley Transit District (Logan, Utah); and the Ki Bois Area Transit System (Stigler, Oklahoma) based primarily on recommendations from the Community Transportation Association of America, which represents thousands of the rural and tribal transit agencies, and then considered geographic diversity (western, central, and eastern United States) and a mix of services offered. Although the views of these selected officials and stakeholders are not generalizable to those of all transit agencies and stakeholders, they represent a range of perspectives and expertise regarding the transit workforce. To determine the extent to which information exists about the future transit workforce, we evaluated the Transportation Industry Report, which projected the employment and skill needs of the transportation industry from 2012 to 2022. We evaluated the scope, methodology, and limitations of the Transportation Industry Report’s workforce projections, as that report provided the best available information according to FTA officials. We analyzed the report’s projected job openings data in the transit and ground passenger transportation sector to understand the extent to which the data represented transit-specific data. In addition, we reviewed FTA’s annual reports to Congress for fiscal years 2016 and 2017, and public presentations to document communication to the public involving transit workforce data. We also reviewed FTA’s National Transit Database (NTD) 2017 and 2016 calendar year data on transit agency employees. Further, we interviewed BLS officials and reviewed the most recent BLS employment projections from 2016–2026 to understand the extent to which the data could be separated to represent only transit- specific data. We reviewed the Standards for Internal Control in the Federal Government on communicating and preparing quality information and compared FTA actions to this information. To determine what actions selected transit stakeholders are taking to address current and future transit needs, we reviewed efforts to address transit workforce needs taken by stakeholders whom we interviewed. We also reviewed challenges involving recruiting and retaining transit workers discussed during our interviews with those stakeholders. We judgmentally included examples in our report to demonstrate the breadth of actions that are being taken. We analyzed various FTA reports on transit workforce grants awarded in fiscal years 2011, 2012, and 2015 and included examples to demonstrate the variety of projects that the transit workforce grants covered. We also included examples in our report of challenges that transit stakeholders we spoke with generally discussed, grouped under common themes. Themes that we included in the report were cited multiple times by stakeholders we interviewed. To determine the extent to which FTA is assisting transit agencies with identifying and addressing current and future workforce needs, we interviewed officials from FTA and DOT’s Office of the Secretary to document their efforts to identify and address current and future transit workforce needs. We compared FTA’s actions to address transit workforce needs to Federal Internal Control Standards, the Government Performance and Results Act of 1993 (GPRA), the GPRA Modernization Act of 2010, and our previous work. We conducted this performance audit from January 2018 to March 2019 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. Appendix II: Comments from the Department of Transportation Appendix III: GAO Contact and Staff Acknowledgments GAO Contact Staff Acknowledgments In addition to the contact named above, Heather MacLeod (Assistant Director); Amy Higgins (Analyst-in-Charge); Nelsie Alcoser; Melissa Bodeau; Lacey Coppage; Terence Lam; Josh Ormond; Pamela Vines; and Elizabeth Wood made key contributions to this report.


Background In April 2016, IRS released its most recent tax gap estimate, stating that taxpayers should have paid an average of about $2.5 trillion dollars per year in federal taxes for tax years 2008 to 2010. Of this amount, IRS estimated that taxpayers voluntarily and timely paid about 81.7 percent, or $2.04 trillion, leaving $458 billion in unpaid taxes per year, as shown in figure 1. The tax gap estimate is an aggregate estimate of the five types of taxes that IRS administers—individual income, corporation income, employment, estate, and excise taxes. For each tax type, IRS attempts to estimate the tax gap based on three types of noncompliance: (1) underreporting of tax liabilities on timely-filed tax returns; (2) underpayment of taxes due from timely-filed returns; and (3) nonfiling, when a taxpayer fails to file a required tax return altogether or on time. Underreporting of tax liabilities accounted for most of the tax gap estimate for tax years 2008 to 2010, making up 84 percent of the entire estimated gross tax gap, as shown in figure 2. Individual income taxes made up the largest portion ($264 billion) of underreporting. Underreporting of business income accounted for nearly half ($125 billion) of that amount, as shown in table 1. Business income underreporting includes income from sole proprietors, which accounted for the largest share ($78 billion) of individual income tax underreporting. IRS uses various approaches to estimate the different components of the tax gap. A primary source of information IRS uses is its National Research Program (NRP) study of individual tax returns. Through NRP, IRS examines a stratified, random sample of tax returns, and uses statistical modeling to produce estimates of noncompliance for the population of individual income tax return filers. Other areas of the tax gap are estimated using payment data or other statistical models. In 2016, IRS completed examinations for an NRP study on employment tax returns filed from tax years 2008 to 2010. IRS employees reported that they plan to start analyzing the results by June 2019. However, IRS has not provided plans for how it will use the results to update the current state of the employment tax gap estimate, as we previously recommended. The tax gap includes unintentional errors as well as intentional evasion, such as intentionally underreporting income, intentionally overreporting expenses, and engaging in abusive tax shelters or frivolous tax schemes. As we have previously reported, completely closing the tax gap is not feasible, as it would entail more intrusive enforcement and more burdensome recordkeeping or reporting than the public is willing to accept, and more resources than IRS is able to commit. However, even modest reductions would yield significant financial benefits and help improve the government’s fiscal position. Tax noncompliance, even when unintentional, could discourage compliant taxpayers and undermines the integrity of the tax system and the public’s confidence in it. For example, consider two groups of taxpayers with similar tax situations—those who pay the full amount of tax due and those who do not. Those who do not pay taxes are not meeting their obligation to fund government services, which, in effect, shifts the fiscal burden to those who do pay. Further, IRS devotes resources to attempt to collect taxes due from noncompliant taxpayers—resources that could be used for other purposes. In addition, noncompliance can create an unfair competitive advantage among businesses because those that do not pay tax debts are avoiding costs that tax-compliant businesses are incurring. For example, our past investigations identified instances in which federal contractors with tax debts won awards based on price differentials over tax compliant contractors. Key Factors Contributing to the Tax Gap Include Limited Third-party Information Reporting, Resource Trade-offs, and Complexities in the Tax Code Limited Third-Party Information Reporting Our past work has found that three important factors contributing to the tax gap are the extent to which income is reported to IRS by third parties, IRS’s resource trade-offs, and tax code complexity. As we have previously reported, the extent to which individual income tax taxpayers accurately report their income is closely aligned with the amount of income that third parties report to them and to IRS. For example, according to 2008–2010 IRS data, taxpayers misreported more than half of the types of income for which there is little or no third-party information reporting, such as business income (see figure 3). In contrast, when employers both withheld taxes from, and reported information on, wages and salaries to employees and IRS (through Form W-2, Wage and Tax Statement), taxpayers misreported on only 1 percent of such income. Similarly, taxpayers misreported less than 10 percent of investment income that banks and other financial institutions reported to account holders and IRS (through Forms 1099). For items subject to substantial third-party information reporting, IRS is able to use automated processes to address noncompliance. The automated underreporter program, through which IRS matches amounts reported on tax returns with amounts reported on information returns submitted by third parties, is one such process. This computer matching program allows IRS to identify discrepancies between tax returns and information returns, and propose automatic changes to taxpayers. For items with little to no third-party information reporting, IRS must rely on more resource-intensive methods, such as correspondence or face-to- face examinations, to address noncompliance. While these examinations may be started by reviewing specific tax return line items, they may also be expanded to cover other areas of the tax returns if there are indications of misreporting in areas of the return not previously identified. However, it is harder for IRS to detect noncompliance in areas with little third-party information reporting. IRS Resource Trade-offs IRS’s budget declined by about $2.6 billion (18.8 percent) from fiscal years 2011 through 2019, and IRS’s budget for fiscal year 2019 is less than its fiscal year 2000 budget, after adjusting for inflation (see figure 4). Since fiscal year 2011, IRS staffing has fallen from 95,544 full-time equivalent employees to an estimated 75,676 in fiscal year 2019, a 20.8 percent reduction. At the same time, IRS faces increasing responsibilities, such as implementing relevant aspects of Public Law 115-97, which included significant changes to corporate and individual tax law. IRS also faces ever-evolving and significant challenges protecting taxpayer information, preventing identity theft and fraud, and modernizing an aging technology infrastructure. We previously reported that available staff has been a key factor in IRS decisions to scale back a number of program activities, such as examining tax returns, according to IRS officials. Our analysis of IRS data shows the rate of individual returns audited has declined between fiscal years 2011 and 2018 (see figure 5). Reducing examinations can reduce revenues collected through such enforcement action, and may indirectly reduce voluntary compliance. Tax Code Complexity The federal tax system contains complex rules that may be necessary to appropriately target tax policy goals, such as providing benefits to specific groups of taxpayers. However, this complexity imposes a wide range of recordkeeping, planning, computing, and filing requirements upon taxpayers. For example, taxpayers who receive income from rents, self- employment, and other sources may be required to make complicated calculations and keep detailed records. This complexity can lead to errors and underpaid or overpaid taxes. Complexity, and the lack of transparency that it can create, can also exacerbate doubts about the tax system’s integrity. Tax expenditures—tax credits, deductions, exclusions, exemptions, deferrals, and preferential tax rates estimated by the Department of the Treasury to reduce tax revenue by about $1.38 trillion in fiscal year 2018—can add to tax code complexity. In part, this is because taxpayers must learn about, determine their eligibility for, and choose between tax expenditures that may have similar purposes. For example, as we reported in 2012, about 14 percent of filers in 2009 (1.5 million of almost 11 million eligible returns) did not claim an education credit or deduction for which they appeared eligible. The complexity involved with tax expenditures may be acceptable if they achieve their intended purposes. However, in many cases, their effectiveness is questionable or unknown. With some exceptions, tax expenditures generally are not subject to reauthorization and the annual congressional budget processes. We have recommended greater scrutiny of tax expenditures since 1994, as periodic reviews could help determine how well specific tax expenditures achieve their goals, and how their benefits and costs (including complexity) compare to those of other programs with similar goals. Such actions would help facilitate oversight and accountability of tax expenditures more in line with the performance management and reporting requirements of other federal programs. Paid tax return preparers and tax software developers help taxpayers navigate the complexities of the tax code. However, some paid preparers may introduce their own mistakes. For example, in a limited study in 2014, we found that seven of 19 preparers who completed returns for our undercover investigators made errors with substantial tax consequences while, only two preparers calculated the correct refund amount. Likewise, using NRP data, which are statistically representative, we estimated that 60 percent of returns prepared by preparers contained errors. Multiple Strategies Are Needed to Reduce the Tax Gap IRS’s overall approach to reducing the tax gap consists of improving services to taxpayers, and enhancing enforcement of the tax laws. In spite of these efforts, the percentage at which taxpayers pay their taxes voluntarily and on time has remained relatively constant over the past three decades. Our past work has demonstrated that no single approach will fully and cost effectively address noncompliance since the problem has multiple causes and spans different types of taxes and taxpayers. In light of these challenges, we have made numerous recommendations to IRS that have not yet been implemented, as well as matters for congressional consideration. For example, in our most recent high-risk update, we highlighted various actions IRS should take to improve enforcement of tax laws and reduce the tax gap. Strategy for using compliance data. Developing and documenting a strategy that outlines how IRS will use data to update compliance strategies could help address the tax gap. For example, a strategy that outlines how IRS plans to use NRP data to update compliance programs and approaches would help IRS determine resource trade- offs and more fully leverage the investment it makes in compliance research, while providing Congress with a better understanding of the merits of the research it is being asked to fund. Voluntary compliance goal. A long-term, quantitative goal for improving voluntary compliance may provide IRS with a concrete target the agency can use in fulfilling its mission. Without a quantitative goal, it will be more difficult for IRS to determine the success of its strategies, adjust its approach when necessary, and remain focused on results, especially since factors that affect compliance change over time. Analyzing employment tax NRP study results. Developing and documenting plans to assess its NRP employment tax study results would help IRS (1) identify areas of noncompliance, (2) devise actions to address such noncompliance, and (3) update its employment tax gap estimate. Without completed analysis of the NRP employment tax study results, IRS risks using outdated data to make decisions about compliance and areas of the tax gap to pursue. Leveraging the Return Review Program. IRS’s Return Review Program (RRP) is a tool to detect and select potentially fraudulent returns to prevent the issuance of invalid refunds. Evaluating the costs and benefits of expanding RRP to analyze individual returns not claiming refunds could support other enforcement activities by streamlining the detection and treatment of other types of noncompliance and fraud. Given that the tax gap has been a persistent issue, reducing it will also require targeted legislative actions, such as those we highlighted in our 2019 high-risk update. Additional third-party information reporting. Expanding third-party information reporting to IRS could increase voluntary tax compliance. For example, reporting could be required for certain payments that rental real estate owners make to service providers, such as contractors who perform repairs on their rental properties, and for payments that businesses make to corporations for services. Enhanced electronic filing. Requiring additional taxpayers to electronically file tax and information returns could help IRS improve compliance in a resource-efficient way. For example, expanding the mandate for corporations to electronically file their tax returns could help IRS reduce return processing costs, select the most productive tax returns to examine, and examine fewer compliant taxpayers. Math error authority. Providing IRS with authority—with appropriate safeguards—to correct math errors and to correct errors in cases where information provided by a taxpayer does not match information in government databases, among other things, could help IRS correct errors and avoid burdensome audits and taxpayer penalties. Paid preparer regulation. Providing IRS with the authority to regulate paid tax return preparers could improve the accuracy of the tax returns they prepare. Chairman Neal, Ranking Member Brady, and Members of the Committee, this completes my prepared statement. I would be pleased to respond to any questions that you may have at this time. GAO Contact and Staff Acknowledgements If you or your staff have any questions about this testimony, please contact James R. McTigue, Jr. at (202) 512-9110 or mctiguej@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement. Key contributors to this testimony include Jeff Arkin, Assistant Director; Robyn Trotter, Analyst-in-Charge; A.J. Stephens; and Alicia White. Other staff who made key contributions to the reports cited in the testimony are identified in the source products. This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.