Mica reports on rail grant transparency

Two independent government reports found that the Obama Administration failed to clearly justify its selections for so-called high-speed and passenger rail grants and TIGER transportation grants under the failed stimulus.

Two separate reports by the Government Accountability Office (GAO) highlighting the lack of transparency in the Administration’s grant selection process are being released today. Transportation and Infrastructure Committee Chairman John L. Mica (R-FL), Highways and Transit Subcommittee Chairman John J. Duncan, Jr. (R-TN), and Railroads, Pipelines and Hazardous Materials Subcommittee Chairman Bill Shuster (R-PA) have called for more transparency in the Administration’s grant-making process.

“The rationale for the Administration’s awards of billions of dollars under a failed high-speed rail program remains shrouded in mystery,” Mica said. “In the name of high-speed rail, the Administration has squandered limited resources on dozens of slow-speed rail projects across the country and simply provided more funding for modest Amtrak upgrades. Although we can develop cost-effective high-speed rail transportation in this country, I cannot imagine a worse beginning to a U.S. high-speed rail effort. Billions of dollars in rejected grants have been returned by recipient states, and it is critical that there be transparency for why these projects were selected in the first place and why any future projects will be selected.”

“GAO found that the Administration’s project selections for $1.5 billion in TIGER stimulus grants also lacked transparency, and now the President is asking for $2 billion more,” said Duncan. “Congress and the American people should not be forced to deduce why some of these projects were funded and others were not. We should be given a full accounting of how stimulus funds were allocated.”

“President Obama promised the American people that his administration would be the picture of transparency and openness, but reality betrays his rhetoric,” Shuster said. “We are under considerable budgetary pressure to cut spending and do more with fewer federal dollars. On high-speed rail funding, the GAO report correctly suggests that the Administration has been cloudy in its funding decisions. The number of states rejecting high-speed rail funding and the lack of a national coherent rail strategy demand that DOT and FRA come clean on how they are spending Americans’ tax money on high-speed rail projects.”

The GAO reports both found that there is insufficient documentation on the U.S. Department of Transportation’s (DOT) and the Federal Railroad Administration’s (FRA) selection of rail projects for $8 billion in stimulus funding and $1.5 billion in Transportation Investment Generating Economic Recovery (TIGER) grants.

According to the GAO, DOT and FRA applied their criteria during the first rounds of the project process, but the documented rationales were typically so vague that GAO could not verify whether the criteria were applied in final project selection. According to GAO’s report on rail projects, “Decision rationales provided little insight into selections.” The TIGER report echoed a similar concern.

Without transparency, the Administration cannot be held properly accountable for the project decisions it makes, whether they are justified or not. The rail report continues, “Documentation of agency activities is a key part of accountability for decisions. While the department documented its decisions, as required by its financial assistance manual guidance, the absence of an insightful internal record of the reasons behind award recommendations, and the final selections where they differ, can give rise to challenges to the integrity of the decisions made. Similar arguments apply for creating an internal record for amounts recommended for awards.”

GAO agreed with Mica, Duncan and Shuster’s calls for more transparency.

According to the GAO report on TIGER grants, the lack of documentation “can give rise to challenges to the integrity of the decisions DOT made and subject it to criticism that projects were selected for reasons other than merit.” GAO found that 115 TIGER project applications were rated by DOT as “highly recommended”, but half of the 51 projects ultimately selected by the Secretary for grants received a rating lower than “highly recommended.” In addition, GAO’s investigation found that DOT did not document the reasons for selecting lower rated projects over “highly recommended” projects and did not document meetings in which final decisions to award grants were made.

GAO recommends that DOT properly record and document rationales for grant award decisions in any potential future funding rounds for high-speed and passenger rail grants or TIGER grants, including substantive reasons why individual projects are selected or not selected, and for any changes to requested funding amounts.

The two GAO reports are entitled:

• “Recording Clearer Reasons for Awards Decisions Would Improve Otherwise Good Grantmaking Practices” (GAO-11-283) – GAO’s rail grants report.

• “Competitive Grant Programs Could Benefit from Increased Performance Focus and Better Documentation of Key Decisions” (GAO-11-234) – GAO’s TIGER grants report.

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