Financial Oversight and Corrective Actions in Transit Administration

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Financial oversight and corrective actions play a crucial role in ensuring compliance and efficiency in transit administration. The Federal Transit Administration (FTA) Region 9's Office of Financial Management and Program Oversight works diligently to identify common deficiencies through triennial reviews and implement necessary corrective actions. With a focus on recipient compliance, the FTA assesses and promotes adherence to comprehensive oversight programs, including financial management, procurement system reviews, and specialized assessments. The monitoring activities for FY 2023 encompass various reviews and technical assistance initiatives aimed at improving public transit services. Through thorough financial management oversight, recipient systems are evaluated for adequacy, internal controls, and overall financial condition. Procurement system reviews are also conducted to maintain integrity and effectiveness in procurement processes. These efforts help strengthen recipient capacity and enhance public transit services.


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  1. Triennial Reviews Common Deficiencies & Corrective Actions CALACT Fall Conference, November 1, 2023 Darin Allan, Director Office of Financial Management and Program Oversight Region 9 Federal Transit Administration

  2. FTA Region 9 Office of Financial Management and Program Oversight (OFM) OFM works with the HQ Office of Program Oversight to support: National Oversight Program Needs Assessment Recipient Training Technical Assistance and Corrective Action support QA/QC Data Analysis & Reporting OTrak Indirect Costs reviews Single Audit Findings particularly OIG-flagged 2

  3. FTA Program Oversight Assess and Promote Recipient Compliance: Comprehensive Oversight Review and Technical Assistance Program (CORTAP) Triennial & State Management Reviews Specialized Reviews Financial Management Oversight (FMO) Procurement System Review (PSR) Civil Rights State Safety Oversight (SSO) Audits Tribal Transit Assessments Metropolitan TMA Certification & Statewide Planning Findings with FHWA Strengthen Recipient Capacity to Improve Public Transit Technical assistance and corrective action support Training 3

  4. FTA Program Oversight: FY 2023 Activities Oversight Activity FTA 202 12 5 47 17 47 330 Region 9 31 3 0 9 6 0 3 52 Triennial Review State Management Review Combined TR/SMR COVID-19 Financial Spot Reviews Financial Management Review Procurement System Review Technical Assistance (FMO, PSR, and CORTAP) Total 4

  5. Financial Management Oversight Reviews Examine a recipient s financial management system Determine if the financial management systems and internal controls are adequate Types of Reviews Full Scope Financial Management System Review Follow-up Reviews Cost Allocation Plan and Indirect Cost Rate Proposal Reviews Agreed Upon Procedures Consulting Engagement Financial Condition and Capability Assessment COVID-19 Financial Spot Reviews 5

  6. Procurement System Review (PSR) To determine if Recipients are meeting regulatory and policy requirements and identify any necessary corrective actions. Objectives: Encourage and facilitate improving recipient procurement operations Foster use of industry best/effective practices Identify and deliver technical assistance Spot emerging issues with recipients and identify mitigating solutions Identify trends and provide targeted training to address recurring or systemic issues Contribute to the development of policy and other guidance documents 6

  7. Comprehensive (Triennial) Reviews Required by statute: 49 U.S.C. 5307(f)(2) Any Recipient which, at any time, directly receives FTA 5307 Urbanized Area formula funding, including COVID-relief (CARES, CRSSAA, and ARP) Every 3 years 2020 Census more urbanized areas more TRs State Management Reviews For consistency, follow near-identical requirements as Triennial Reviews States and Territories Recipients of: FTA 5310 Enhanced Mobility of Seniors and Individuals with Disabilities FTA 5311 Rural Areas 7

  8. Comprehensive Review Areas 1. Legal 12. ADA General 2. Financial Management and Capacity 13. ADA Complementary Paratransit 3. Technical Capacity - Award Management 14. Equal Employment Opportunity 4. Technical Capacity - Program Management and Subrecipient Oversight 15. School Bus 16. Charter Bus 5. Technical Capacity Project Management 17. Drug-Free Workplace Act 6. Transit Asset Management 18. Drug and Alcohol Program 7. Satisfactory Continuing Control 19. Section 5307 Program Requirements 8. Maintenance 20. Section 5310 Program Requirements 9. Procurement 21. Section 5311 Program Requirements 10. Disadvantaged Business Enterprise 22. Public Transportation Agency Safety Plan 11. Title VI 23. Cybersecurity 8

  9. Comprehensive Review Contractors Manual Summary of Changes 23 Review Areas, detailed as: 1. Basic Requirement 2. Applicability 3. Explanation 4. Indicators of Compliance 5. Instructions for Reviewer 6. Governing Directives Comprehensive Review Contractors Manual 9 9

  10. Oversight Review Lifecycle FY 2023 lifecycle: Aug 2022 through Dec 2024 Update Contractor Manual and Review Processes Annual Program Set-up Pre-site Visit Site Visit Post-Site Visit Kick-off Meetings Recipient Information Requests (RIR) Scoping Meetings Workshops RIR Review Entrance Conference Recipient Interviews Enhanced Focus Review, if applicable Pre-exit Conference Exit Conference Assign Contractor Provide review materials Generate review record in OTrak Draft Report Final Report 10

  11. FYs 2018 2022 Oversight Statistics

  12. Program Oversight: FYs 2018 2022 Activities Cohort Compare w/ 2022 2018 2022 2021 2019 Findings Issued Findings Issued Findings Issued Findings Issued Review Activity Reviews Reviews Reviews Reviews Triennial Review 223 1,529 196 1,358 212 819 214 1,321 State Management Review 15 85 10 86 15 136 13 113 Combined TR/SMR 3 14 5 60 7 57 3 29 N/A 68 47 COVID-19 Financial Reviews N/A N/A 118 96 N/A 9 43 14 68 7 Financial Management Review* 50 7 7 7 69 3 6 2 Procurement System Review* 45 11 6 Total 227 369 1,182 1,723 1,616 254 307 1,528 *FMO and PSR conducted across multiple FYs 12

  13. Comprehensive Review Findings: FYs 2018 2022 Findings 2,000 1,628 1,504 1,463 1,500 1,012 1,000 Avg Number of Findings 7.1 6.8 6.4 4.3 500 0 FY18 FY19 FY21 FY22 Note: Comprehensive Reviews include TR, SMR, or Combined TR/SMR. 13

  14. Comprehensive Review Findings: FYs 2018 2022 Findings 2,000 1,628 1,504 1,463 1,500 1,012 1,000 29.0% 500 % Reviews with No Findings 17.0% 15.4% 8.1% 0 FY18 FY19 FY21 FY22 Note: Comprehensive Reviews include TR, SMR, or Combined TR/SMR. 14

  15. Comprehensive Reviews: Repeat Findings Non- Repeat Findings % Fiscal Year Repeat Findings # of Reviews of Repeat Findings 2018 241 112 1,516 6.9% 2019 211 112 1,392 7.4% 2021 234 90 922 8.9% 2022 7.6% 230 111 1,352 Total 7.6% 916 425 5,182 15

  16. Program Oversight: Top 11 Findings FY 2022 FY18 FY21 FY22 FY19 Finding Review Area P11-1 - Missing FTA clauses Procurement DBE5-1 - DBE uniform reports contain inaccuracies and/or are missing required information Disadvantaged Business Enterprise P10-2 - Lacking required cost/price analysis Procurement Procurement P10-1 - Lacking independent cost estimate Procurement P4-1 - Responsibility determination deficiencies Procurement P5-1 - Incomplete written documentation of procurement history Disadvantaged Business Enterprise DBE6-1 - DBE goal achievement analysis and corrective action plan not completed P12-2 - Lobbying certifications not included in procurement solicitations or signed by bidders Procurement Title VI TVI2-1 - Language Assistance Plan implementation deficiencies Technical Capacity Award Management Financial Management and Capacity TC-AM5-1 - Inactive award/untimely closeouts F4-1 - ECHO documentation deficient 16

  17. SMR & Combined: Top 10 Findings FY 2022 FY18 FY21 FY22 FY19 Finding Review Area Disadvantaged Business Enterprise DBE5-1 - DBE uniform reports contain inaccuracies and/or are missing required information Technical Capacity Program Management & Subrecipient Oversight TC-PgM6-1 - FFATA reporting deficiencies Procurement P10-2 - Lacking required cost/price analysis Procurement P21-1 - Insufficient oversight of subrecipient procurements Procurement P11-1 - Missing FTA clauses Disadvantaged Business Enterprise DBE6-1 - DBE goal achievement analysis and corrective action plan not completed Procurement P10-1 - Lacking independent cost estimate P12-2 - Lobbying certifications not included in procurement solicitations or signed by bidders DBE12-1 - Insufficient documentation of monitoring DBE compliance of contractors Procurement Disadvantaged Business Enterprise Title VI TVI1-2 - Revisions to Title VI program not made 17

  18. Corrective Actions for Common Deficiencies 1/5 DEFICIENCY CODE P4-1: Responsibility determination deficiencies SUGGESTED CORRECTIVE ACTION: For any contracts where the recipient was found to have failed to verify that the contractor was responsible, the recipient must verify the responsibility of contractors. The recipient must submit to the FTA regional office documentation of an implemented process to make adequate responsibility determinations prior to award of a contract. For the next procurement, submit to the FTA regional office documentation that the required process was implemented. DEFICIENCY CODE P5-1: Incomplete written documentation of procurement history SUGGESTED CORRECTIVE ACTION: The recipient must submit to the FTA regional office evidence that the deficiencies identified in its record-keeping process have been corrected and that procurement staff have been trained on documenting procurement history. 18

  19. Corrective Actions for Common Deficiencies 2/5 DEFICIENCY CODE P10-1: Lacking independent cost estimate SUGGESTED CORRECTIVE ACTION: The recipient must submit to the FTA regional office documentation that it has updated its procurement procedures to include development of independent cost estimates prior to receipt of bids or proposals. For the next procurement, submit to the FTA regional office documentation that the required process was implemented. DEFICIENCY CODE P10-2: Lacking required cost or price analysis SUGGESTED CORRECTIVE ACTION: The recipient must submit to the FTA regional office documentation that it has updated its procurement procedures to include performing applicable cost or price analysis for procurements above the Federal Simplified Acquisition Threshold. For the next applicable procurement, submit to FTA regional office documentation that the required analysis was implemented. 19

  20. Corrective Actions for Common Deficiencies 3/5 DEFICIENCY CODE P11-1: Missing FTA clauses SUGGESTED CORRECTIVE ACTION: The recipient must submit to the FTA regional office revised procurement procedures that address inclusion of all FTA-required third party contract clauses through use of a clause checklist or other mechanism. For the next procurement, submit to the FTA regional office documentation that the required process was implemented. DEFICIENCY CODE P12-2: Lobbying certifications not included in procurement solicitations or signed by bidders SUGGESTED CORRECTIVE ACTION: The recipient must submit to the FTA regional office procedures for obtaining signed lobbying certifications. The recipient must submit to the FTA regional office a copy of the signed lobbying certification with the next applicable procurement. 20

  21. Corrective Actions for Common Deficiencies 4/5 DEFICIENCY CODE TC-AM5-1: Inactive award/untimely closeouts SUGGESTED CORRECTIVE ACTION 1: The recipient must submit to the FTA regional office an award closeout plan. SUGGESTED CORRECTIVE ACTION 2: The recipient must submit to the FTA regional office more effective procedures for award management (spending older funds first, tracking project progress, identifying project balances, reprogramming unused project funds to other projects, reassigning older projects to newer awards, or closing out projects) to enable it to close awards more timely. SUGGESTED CORRECTIVE ACTION 3: The recipient must work with the FTA regional office to revise award budgets to ensure funds can be spent and drawn down in active awards. SUGGESTED CORRECTIVE ACTION 4: The recipient must work with the FTA regional office to deobligate funds and close awards if funds remain in inactive awards or if projects are indefinitely delayed. 21

  22. Corrective Actions for Common Deficiencies 5/5 DEFICIENCY CODE TC-PgM6-1: FFATA reporting deficiencies SUGGESTED CORRECTIVE ACTION: The recipient must report all missing information to FSRS and notify the FTA regional office when complete. The recipient must also submit to the FTA regional office procedures for reporting future subawards to FSRS timely. DEFICIENCY CODE F4-1: ECHO documentation deficient SUGGESTED CORRECTIVE ACTION: The recipient must submit to the FTA regional office procedures for documenting ECHO draws. Discuss with the FTA regional office if it wants to require the recipient to submit ECHO requests for prior approval. The recipient must document and work with the FTA regional office to reimburse FTA for ineligible expenses charged to awards, plus applicable interest*. The recipient must implement and submit to the FTA regional office documentation of training conducted of the appropriate staff on new policies and procedures. 22

  23. Recipient Resources for FTA Oversight Comprehensive Review Contractors Manual Key Procurement Deficiencies Webinars RTAP ProcurementPRO Triennial Review Workshops Financial Management + Procurement Workshops 23

  24. Oversight Tracking System (OTrak)

  25. Oversight Tracking System (OTrak) FTA s official system of record for program oversight data Civil Rights Comprehensive: Triennial Reviews (TRs), State Management Reviews (SMRs) COVID-19 Financial Spot Reviews Financial Management Oversight (FMO) Procurement System Review (PSR) State Safety Oversight (SSO) Audits Single Audits Tribal Transit Program Oversight activity data includes: Process Stages/Events (activity milestones with dates, ex: Final Report FTA to Recipient) Documents (ex: Final Reports, Corrective Action Closure Justifications) Deficiencies/Findings and Corrective Actions 25

  26. OTrak (continued) New version of OTrak launched for FTA staff and contractors April 26, 2021. Recipient integration: FY 2023 Pilot Program w/ 25 Recipients FY 2024 All recipients receiving a TR, SMR, Combined TR/SMR, or PSR. OTrak is on FTA s Appian TrIAD (Transit Integrated Appian Development) platform. From the TrIAD, all of the FTA Appian databases/systems you have been granted access to can be accessed. www.transit.dot.gov/OTrak 26

  27. Recipient Functionalities in OTrak User Management for OTrak through FTA s Access and Control Entry System (FACES) / annual recertification Assign Recipient Points of Contact (POCs) to the review in OTrak Recipient POCs will receive notifications Submit corrective action documentation / requests for closure Request corrective action due date extensions View / download final reports 27

  28. FTA Mission, Vision, Values www.transit.dot.gov VISION MISSION A Better Quality of Life for All Built on Public Transportation Excellence Improve America s Communities through Public Transportation Provide reliable, transparent, responsive, and anticipatory services to meet stakeholder needs SERVICE VALUES INTEGRITY Commitment to the highest professional and ethical standards INNOVATION Foster new ideas, concepts, and solutions for improved outcomes Optimize decisions, resources, and systems to make long-term positive impacts on the environment, infrastructure, and safety SUSTAINABILITY Remove barriers for systemically underserved communities to access all aspects of economic, social, and civic life EQUITY 28

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