Most Recovery Act Transportation Funds Have Been Obligated and Expenditures for Infrastructure Continue to Increase, but Long-Term Outcomes Are Largely Unknown

According to DOT data, as of May 31, 2011, DOT had obligated nearly $45  billion (about 95 percent) on over 15,000 projects and had expended more  than $28 billion (about 63 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, 68  percent of highway funds have been used for pavement improvement  projects, such as resurfacing, reconstruction, and rehabilitation of existing  roadways, and almost 75 percent of transit funds have been used for  upgrading existing facilities and purchasing or rehabilitating buses (see  fig. According to data filed by recipients, Recovery  Act transportation projects supported between 31,460 and 65,110 FTEs  each reporting quarter from October 1, 2009, through March 31, 2011. In addition to the number of jobs funded by Recovery Act transportation  funds, federal, state, and local officials describe the following other benefits   Better coordination and streamlined processes: DOT officials told us tha er at  the Recovery Act encouraged more efficient ways of working togeth the federal, state, and local levels to select projects. Federal, State, and Local Auditors Continue to Review Use of Recovery Act Funds and No Major Issues Have Been Reported

Federal, state, and local oversight entities have continued their efforts to  ensure appropriate use of Recovery Act transportation funds, and recently  published reviews have not revealed major concerns. Finally, local auditors in states we visited that reviewed compliance with  Recovery Act requirements did not find problems with city use of  Recovery Act transportation funds. For this report, we focused our review on  the quality of data reported by transportation grant recipients and efforts  made by FHWA to validate that data. Likewise, as described earlier, the total  number of FTEs reported has also decreased over the past two reporting  quarters. DOT officials said that the decreases in the number of recipients  reporting any FTEs is likely due to several factors, including projects  being completed or functionally complete and awaiting financial closeout. DOT Continues to Perform Automated Checks to Help Improve Data but Is Not Planning to Use Recipient- Reported Data Internally

Each quarter, FHWA performs quality assurance steps on the data that  recipients provide to FederalReporting.gov and officials reported that the  data quality continues to improve. 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 would not be eligible to participate in the August 2011  redistribution of obligation authority under the Federal-Aid Highway  Program. The economically distressed area  provision proved difficult to implement because of changing economic  conditions and the difficulty of targeting assistance to economically  distressed areas, and it is unclear that it achieved its intended goal. 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. DOT  generally agreed with our findings and provided technical comments,  which we incorporated as appropriate. Appendix I: Objectives, Scope, and Methodology

The objectives of this report were to determine the (1) status, use, and  outcomes of the American Recovery and Reinvestment Act of 2009  (Recovery Act) transportation funding nationwide and in selected states;  (2) actions taken by federal, state, and local agencies to monitor and  ensure accountability of Recovery Act transportation funds; (3) changes in  the quality of jobs data reported by Recovery Act recipients of  transportation funds over time; and (4) challenges faced and lessons  learned from the Department of Transportation (DOT) and recipients. The recipient reporting section of this report responds to the Recovery  Act’s mandate that we comment on the estimates of jobs created or  retained by direct recipients of Recovery Act funds.
Why GAO Did This Study

This report responds to two GAO mandates under the American Recovery and Reinvestment Act of 2009 (Recovery Act). It is the latest report on the uses of and accountability for Recovery Act funds in selected states and localities, focusing on the $48.1 billion provided to the Department of Transportation (DOT) to invest in transportation infrastructure. This report also examines the quality of recipients' reports about the jobs created and retained with Recovery Act transportation funds. This report addresses the (1) status, use, and outcomes of Recovery Act transportation funding nationwide and in selected states; (2) actions taken by federal, state, and other agencies to monitor and ensure accountability for those funds; (3) changes in the quality of jobs data reported by Recovery Act recipients of transportation funds over time; and (4) challenges faced and lessons learned from DOT and recipients. GAO analyzed DOT and recipient reported data; reviewed federal legislation, guidance, and reports; reviewed prior work and other studies; and interviewed DOT, state, and local officials.

What GAO Found

As of May 31, 2011, nearly $45 billion (about 95 percent) of Recovery Act transportation funds had been obligated for over 15,000 projects nationwide, and more than $28 billion had been expended. 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 buses. Recovery Act funds have also been used to rehabilitate airport runways and improve Amtrak's infrastructure. The Recovery Act helped fund transportation jobs, but long-term benefits are unclear. For example, according to recipient reported data, transportation projects supported between approximately 31,460 and 65,110 full-time equivalents (FTE) quarterly from October 2009 through March 2011. Officials reported other benefits, including improved coordination among federal, state, and local officials. 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. Federal, state, and local oversight entities continue their efforts to ensure the appropriate use of Recovery Act transportation funds, and recent reviews revealed no major concerns. The DOT Inspector General found that DOT generally complied with Recovery Act aviation, highway, and rail program requirements. Similarly, state and local oversight entities' performance reviews and audits generally did not find problems with the use of Recovery Act transportation funds. GAO's analysis of Recovery.gov data reported by transportation grant recipients showed that the number of FTEs reported, number of recipients filing reports, and portion of recipients reporting any FTEs decreased over the past two reporting quarters as an increasing number of projects approached completion or were awaiting financial closeout. The Federal Highway Administration performs automated checks to help ensure the validity of recipient reported data and observed fewer data quality issues than in previous quarters but does not plan to use the data internally. Certain Recovery Act provisions proved challenging. For example, DOT and states faced numerous challenges in implementing the maintenance-of-effort requirement, which required states to maintain their planned level of spending or be ineligible to participate in the August 2011 redistribution of obligation authority under the Federal-Aid Highway Program. In January 2011, DOT reported that 29 states met the requirement while 21 states did not because of reductions in dedicated revenues for transportation, among other reasons. The economically distressed area provision also proved difficult to implement because of changing economic conditions. With regard to the high speed intercity passenger rail and Transportation Investment Generating Economic Recovery (TIGER) grant programs, GAO found that while DOT generally followed recommended grant-making practices, DOT could have better documented its award decisions. GAO updates the status of agencies' efforts to implement its previous recommendations but is making no new recommendations in this report. DOT officials generally agreed with GAO's findings and provided technical comments, which were incorporated as appropriate.