Since 1972, Congress has authorized $100 million annually in contract  authority for the Emergency Relief Program to be paid from the Highway  Trust Fund. Additionally, obligations to a single state resulting from a single natural  disaster or a single catastrophic failure may not exceed $100 million. Supplemental Appropriations Comprise Most Emergency Relief Funding Provided to States, and a Backlog of Funding Requests Remains

		From Fiscal Years 2007 through 2010, Congress Provided More than $2.3 Billion for Emergency Relief Events and to Address a Backlog of Unfunded Requests

From fiscal years 2007 through 2010, Congress provided more than $2.3  billion to the Emergency Relief Program, including more than $1.9 billion  in three supplemental appropriations from general revenues and about  $400 million in contract authority paid from the Highway Trust Fund (see  fig. FHWA allocated the remaining 41 percent ($988 million) for events that occurred from  fiscal years 2001 through 2006. Emergency Relief Faces Risk from Escalating Costs of Events Occurring in Past Years

In recent years, Congress has provided significant supplemental funding  to the Emergency Relief Program, but as of June 2011, a $485 million  backlog of funding requests from states remained. This backlog did not  include funding requests for August 2011 damages from Hurricane Irene. In 2007 we recommended that FHWA revise its regulations to tighten  program eligibility criteria, which could include limitations on the use of  emergency relief funds to fully finance projects that grew in scope and  cost as a result of environmental and community concerns. Since 2007, FHWA has  In fiscal years 2010 and 2011, FHWA division offices coordinated with  states to identify and withdraw unused allocations representing  approximately $367 million in emergency relief funds from a total of 25  states and 2 territories. However, at least $63 million of the  unobligated balance is for older allocations, provided prior to fiscal year  2007. Without clear time frames for states to close out completed emergency  relief projects, FHWA lacks important information on the status of projects  and whether unexpended project funds are no longer needed and may be  deobligated to be made available for other emergency relief projects. Prior Concerns about Project Eligibility Have Yet to Be Addressed

FHWA has yet to address our longstanding concern about, and our 2007  recommendation for addressing, the use of emergency relief funds to  finance projects that have grown in scope beyond the original intent of the  program, which is to restore damaged facilities to predisaster   conditions. Incomplete Information in Emergency Relief Project Files in Three States Raises Concerns about FHWA’s Eligibility Decisions and Program Oversight

		Documentation for Many Project Files We Reviewed Was Missing, Incomplete, or Inconsistent

In our review of 83 selected emergency relief project files in three FHWA  division offices, we found that many of the project files reviewed did not  contain documentation called for in the Emergency Relief Manual to  support FHWA decisions that projects met program eligibility  requirements. We found that about half of the projects in our sample (42 of 83) did not  include repair cost estimates. See 23 U.S.C. Recommendations for Executive Action

To improve the accountability of federal funds, ensure that FHWA’s  eligibility decisions are applied consistently, and enhance oversight of the  Emergency Relief Program, we recommend that the Secretary of  Transportation direct the FHWA Administrator to take the following four  actions:
Establish specific time frames to limit states’ ability to request  emergency relief funds years after an event’s occurrence, so that  FHWA can better manage the financial risk of reimbursing states for  projects that have grown in scope and cost. Establish standardized procedures for FHWA division offices to follow  in reviewing emergency relief documentation and making eligibility  decisions. Such standardized procedures should include: clear requirements that FHWA approve and retain detailed  damage inspection reports for each project and include detailed  repair cost estimates; a requirement that division offices verify and document the  completion of emergency repairs within 180 days of an event to  ensure that only emergency work completed within that time frame  receives 100 percent federal funding; and consistent standards for approving betterments, including  guidance on what information the benefit-cost analyses should  include to demonstrate that the proposed betterment will result in  a savings to the Emergency Relief Program, and a requirement  that FHWA approval of funding for betterments be clearly  documented. DOT  officials provided technical comments by email which we incorporated into  the report, as appropriate. In response to our finding that the Emergency  Relief Program lacks a time limit for states to submit emergency relief  funding requests, and our recommendation to establish specific time  frames to limit states’ ability to request emergency relief funds years after  an event’s occurrence, DOT noted that the program does include general  time frames for states to submit an application and have work approved. To determine the extent to which selected emergency relief projects were  awarded in compliance with program eligibility requirements, we reviewed  federal statutes and regulations, and FHWA guidance on emergency  relief eligibility requirements. These states were selected based on  several criteria:  1. 2. We judgmentally  selected New York, Texas, and Washington state to reflect a geographic  dispersion of states. 3.
Why GAO Did This Study

The Federal Highway Administration (FHWA), within the U.S. Department of Transportation (DOT), administers the Emergency Relief Program to provide funds to states to repair roads damaged by natural disasters and catastrophic failures. In 2007, GAO reported that in recent years states' annual demand for emergency relief funds often exceeded the program's $100 million annual authorization from the Highway Trust Fund and required supplemental appropriations from general revenues to address a backlog of funding requests from states. GAO recommended that FHWA tighten eligibility standards and coordinate with states to withdraw unneeded emergency relief funds, among other actions. For this report, GAO reviewed (1) Emergency Relief Program funding trends since 2007, (2) key program changes made in response to GAO's 2007 report, and (3) the extent to which selected emergency relief projects were approved in compliance with program eligibility requirements. GAO reviewed projects in New York, Texas, and Washington state, states selected based on the amount and frequency of funding allocations since 2007, among other factors.

What GAO Found

From fiscal years 2007 through 2010, the Emergency Relief Program received about $2.3 billion, of which $1.9 billion came from three supplemental appropriations compared with about $400 million authorized from the Highway Trust Fund. FHWA allocated this funding to 42 states and 3 territories to reduce the backlog of funding requests, with $485 million in unfunded requests remaining as of June 2011. This backlog list did not include funding requests for August 2011 damages from Hurricane Irene. Because the program lacks time frames to limit states from requesting funds years after events occur, the June 2011 backlog list includes about $90 million for events that occurred prior to fiscal year 1994. Without time limits for emergency relief funding requests, FHWA's ability to anticipate and manage future program costs is hindered. In response to GAO's 2007 report, FHWA withdrew about $367 million of unobligated emergency relief funds from states and redistributed most of this funding for other emergency relief needs. However, additional funding remains unused, including (1) at least $63 million allocated to states before fiscal year 2007 that has yet to be obligated to projects and (2) $341 million obligated between fiscal years 2001 and 2006 that remains unexpended. Due to a lack of time frames for states to close-out completed projects, FHWA lacks project status information to determine whether unexpended funding is no longer needed and could be deobligated. FHWA has not addressed GAO's 2007 recommendation to revise its regulations to limit the use of emergency relief to fully fund projects that have grown in scope and cost as a result of environmental or community concerns. The Emergency Relief Program faces the continued risk of escalating costs due to projects that have grown in scope beyond the program's goal of restoring damaged facilities to predisaster conditions. GAO's review of 83 emergency relief project files in three FHWA state offices found many instances of missing or incomplete documentation--as such, GAO was unable to determine the basis by which FHWA made many eligibility determinations. For example, about half of the project files did not include required repair cost estimates, and 39 of 58 (67 percent) emergency repair projects approved for 100 percent federal funding did not contain documentation of completion within 180 days--a requirement for states to receive 100 percent federal funding. FHWA lacks clear requirements for how states submit and FHWA approves key project documentation, which has resulted in FHWA state offices applying eligibility guidelines differently. Establishing standardized procedures for reviewing emergency relief documentation and making eligibility decisions would provide greater assurance that projects are in fact eligible and that FHWA makes eligibility determinations consistently and transparently.

What GAO Recommends

GAO makes several recommendations including that FHWA establish (1) time frames to limit states' requests for emergency relief funds and to close completed projects and (2) standardized procedures for reviewing emergency relief documentation and making eligibility decisions. DOT provided technical comments on project time frames and costs which GAO incorporated as appropriate.