Sneak Preview: FHWA Urged To Help States Monitor Local Projects

March 13, 2014 | By Jerry Ashworth | Post a Comment

xsass_bookshot(The following was excerpted from an article in the Single Audit Information Service.) The Government Accountability Office encouraged the Department of Transportation, Federal Highway Administration to provide specific criteria to states to help them determine whether local entities are capable and equipped to administer federally funded highway projects. A recent GAO report found that many local public agencies lack the internal controls to properly administer such projects, while many state departments of transportation are not appropriately overseeing them.

FHWA provides federal funds to states to build and maintain highways and bridges. States may then make those funds available to a local public agency, such as a city or a county, to administer the projects. FHWA estimated that 7,000 local public agencies administer such projects. “However, FHWA neither collects information on which local agencies are administering federal-aid projects nor the capabilities of those agencies — information that would allow FHWA to identify the extent and magnitude of its risks and more effectively target its oversight of the states,” GAO found.

FHWA, across the agency, has recognized locally administered highway projects as a high-risk area, GAO said, adding that if local agencies lack adequate controls and procedures to adequately administer project funds, there is increased potential for noncompliance with federal requirements. Specifically, most local agency risk areas are related to:

  • inadequate quality of design and construction, including outdated design standards and insufficient quality assurance during the construction phase; and
  • inadequate contract and project administration, including noncompliance with federal requirements related to consultant procurement, materials selection, civil rights, payroll and documentation.

In addition, GAO said that while state DOTs are required to determine whether local agencies have adequate systems and controls to properly manage federal funds, FHWA has not provided clear direction how to implement this requirement. “FHWA has not developed minimum and uniform qualification criteria for state DOTs to use to assure local agencies are qualified to administer federal projects,” it added.  Such criteria “could help ensure that … federal funds are used in accordance with federal requirements.”

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