DOT administered most Recovery Act funds through existing  transportation programs. For example, highway and transit  funds were to be fully obligated by September 30, 2010. Most Recovery Act Transportation Funds Have Been Obligated, and Expenditures for Infrastructure Continue to Increase

According to DOT data, as of March 31, 2011, DOT had obligated more  than $45 billion (about 95 percent) on over 15,000 projects and had  expended more than $26 billion (about 59 percent) of the $48.1 billion it  received under the Recovery Act (see table 1). States and other recipients continue to report using Recovery Act funds to  improve the condition of the nation’s transportation infrastructure, as well  as invest in new infrastructure. For example, according to DOT data,  highway funds have been primarily used for pavement improvement  projects, such as resurfacing, reconstruction, and rehabilitation of existing  roadways, and public transit funds have been used primarily for upgrading  transit facilities and purchasing new vehicles (see fig. 2). The Recovery Act Helped Fund Transportation Jobs, but Long-Term Benefits Are Unclear

Recovery Act funds helped pay for jobs across various transportation  modes. According to the most recent recipient reported  data, Recovery Act transportation projects supported about 50,000 FTEs  from October 2010 through December 2010. 3). For the most recent reporting quarter, highway projects accounted for  approximately two-thirds of the transportation FTEs reported, and the  remaining one-third of FTEs were attributed to transit and all other  transportation projects. Although recipients reported jobs funded, other long-term impacts of  Recovery Act investments in transportation are unknown at this point. Specifically, in the near term,  we recommended that FHWA and FTA determine the types of data and  performance measures needed to assess the impact of the Recovery Act  and the specific authority they may need to collect data and report on  these measures. DOT has not committed to assessing the long-term benefits of  Recovery Act investments in transportation. For Recovery Act high speed intercity passenger rail and TIGER grant  programs, DOT has set broad performance goals and required recipients to  identify potential project benefits. DOT is evaluating the best methods for  measuring objectives and collecting data and is working collaboratively  with applicants to weigh options for measuring performance. Maintenance of Effort and Economically Distressed Area Requirements Proved Challenging

Certain Recovery Act provisions not typically required under existing DOT  programs proved challenging for some states to meet. We have reported that there were numerous  challenges for DOT and states in implementing the transportation  maintenance-of-effort provision in the Recovery Act. A January 2011 preliminary DOT report indicated that 29  states met their planned levels of expenditure, and 21 states did not. States  had a monetary incentive to meet their certified planned level of spending  in each transportation program area funded by the Recovery Act because  those that fail will not be eligible to participate in the August 2011  redistribution of obligation authority under the Federal-Aid Highway  Program. Better Documentation Could Reduce Challenges to the Integrity of Selection Decisions for High Speed Intercity Passenger Rail and TIGER Grant Programs

We have reported that allocating federal funding for surface transportation  based on performance in general, and directing some portion of federal  funds on a competitive basis to projects of national or regional  significance in particular, can more effectively address certain challenges  facing the nation’s surface transportation programs. In our recent reports  on the high speed intercity passenger rail and TIGER programs, we found  that while DOT generally followed recommended grantmaking practices,  DOT could have documented more information about its award decisions. The Recovery Act and the Passenger Rail Investment and Improvement  Act of 2008 required FRA to implement a plan to award and oversee  billions of dollars for high speed intercity passenger rail grants. However, one area in which FRA could have done  better is to develop clearer records for how it made final grant award  decisions. Without a clear record of selection  decisions, FRA is vulnerable to criticism about the integrity of its  decisions. While DOT thoroughly documented the Evaluation Teams’ assessments  and the Review Team’s memorandum recommending projects to the  Secretary of Transportation for award described the strengths of projects  recommended for award, it did not document the Review Team’s final  decisions and its rationale for selecting recommended projects for half the  awards over highly recommended ones.
Why GAO Did This Study

The American Recovery and Reinvestment Act of 2009 (Recovery Act) provided more than $48 billion to the Department of Transportation (DOT) to be distributed through existing programs and through two new competitive grant programs--high speed intercity passenger rail and the Transportation Investment Generating Economic Recovery (TIGER) program. As requested, this testimony addresses the (1) status and use of Recovery Act transportation funds, (2) outcomes and long-term benefits of Recovery Act transportation investments, and (3) lessons learned from DOT's and states' experiences implementing the Recovery Act. GAO reviewed prior and ongoing work, federal legislation, and guidance. GAO also analyzed Recovery Act data and interviewed federal, state, and local officials.

What GAO Found

As of March 31, 2011, more than $45 billion (about 95 percent) of Recovery Act transportation funds had been obligated for over 15,000 projects nationwide, and more than $26 billion had been expended. States and other recipients continue to report using Recovery Act funds to improve the nation's transportation infrastructure. Highway funds have been primarily used for pavement improvement projects and transit funds have been primarily used to upgrade transit facilities and purchase new vehicles. Recovery Act funds have also been used to rehabilitate airport runways and improve Amtrak's infrastructure. DOT continues to obligate funds for its high speed intercity passenger rail and TIGER grant programs. As of March 31, 2011, DOT had obligated nearly all of the $1.5 billion in TIGER funds for 51 surface transportation projects. The Recovery Act helped to fund transportation jobs, but long-term benefits are unclear. For example, according to available data, Recovery Act transportation projects supported about 50,000 full-time equivalents (FTE) in the three months from October through December 2010. The most recent data showed that highway projects accounted for about two-thirds of the transportation FTEs reported, and the remaining one-third of the FTEs were attributed to transit and other transportation projects. However, the impact of Recovery Act investments in transportation is unknown, and GAO has recommended that DOT determine the data needed to assess the impact of these investments. Although DOT has set broad performance goals for its high speed intercity passenger rail and TIGER programs--and is currently evaluating the best methods for measuring objectives and collecting data--it has not committed to assessing the long-term benefits of the Recovery Act investments in transportation. Certain Recovery Act provisions meant to stimulate the economy, but not typically required under existing DOT programs, proved challenging. For example, GAO has reported on numerous challenges DOT and states faced in implementing the transportation maintenance-of-effort requirement, which required states to maintain their planned levels of spending over approximately 18 months or be ineligible to participate in the August 2011 redistribution of obligation authority under the Federal-Aid Highway Program. A January 2011 preliminary DOT report found that 29 states met the requirement while 21 states did not. In this report, DOT also discussed how the maintenance-of-effort provision could be improved. With regard to the high speed intercity passenger rail and TIGER programs, GAO found that while DOT generally followed recommended grant-making practices, DOT could have better documented its award decisions. For example, the Federal Railroad Administration could have developed clearer records for how it made award decisions. Without a clear record of selection decisions, DOT is vulnerable to criticism about the integrity of its decisions. Likewise, DOT did not clearly document its final decisions and rationale for selecting recommended TIGER projects. This testimony does not include new recommendations. In our past work, GAO recommended that the Secretary of Transportation take several actions, such as directing the Federal Highway and Federal Transit administrations to determine the data needed to assess the impact of Recovery Act projects; we recently recommended that the Federal Railroad Administration and DOT better document decisions regarding their competitive grant programs. DOT has addressed some GAO recommendations, but others remain open. We will continue to track them. GAO provided a draft of this statement to DOT and incorporated its comments where appropriate.