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Date Issued
Submitting OIG
Department of Transportation OIG
Agencies Reviewed/Investigated
Department of Transportation
Components
Federal Transit Administration
Report Number
FI2026001
Report Description

Our Objective(s)
To assess the status of the Federal Transit Administration's (FTA) unexpended Hurricane Sandy funds.

Why This Audit
In January 2013, FTA received $10.9 billion for the widespread damage Hurricane Sandy caused to transportation infrastructure when it hit the mid-Atlantic and Northeastern United States. FTA retained approximately $10 billion of these funds to obligate to grant recipients for Hurricane Sandy related recovery, relief, and resiliency programs. Yet, as of March 2024, approximately $3.8 billion (38 percent) remained unspent. Additionally, our Agency's prior work identified concerns with FTA's tracking and oversight of its Hurricane Sandy funds, including issues with timely recipient spending of the funds.

What We Found
Most of FTA's grants with unexpended Hurricane Sandy funds have prolonged project activity.
Twenty-eight grants in our audit universe have ongoing project activities with completion milestones from April 2025 to July 2030.
FTA heavily relies on recipients' self-reporting to obtain the status of and activity associated with their unexpended Hurricane Sandy funds.
We identified 14 grants for which recipients expended a total of approximately $95.4 million for costs incurred after the grants' periods of performance ended. This $95.4 million represent questioned costs.
FTA's oversight was not sufficient to encourage expedited spending of Hurricane Sandy funds or to reduce the risks of ineligible costs.

FTA's Hurricane Sandy grants with unexpended funds are not closed despite recipients completing all project activity.
We identified six FTA Hurricane Sandy grants, representing $96.9 million in unexpended funds, that remain open despite recipients completing all project activities anywhere from approximately 1 to 8 years ago.
The recipients extended project milestones without requesting extensions to the grants' performance periods to align with project activity updates.
Without an updated grant performance period that aligns with project completion milestones, FTA lacks a reliable benchmark to assess the timeliness of grant closeout.
Further, FTA has no guidance or timeframes for its recipients to carry out the steps needed between completing project activity and beginning the grant closeout process. As a result, the process for grant closeout and deobligation of unexpended funds may be inefficient.

Recommendations
We made 4 recommendations to improve FTA's management of unexpended Hurricane Sandy funds.

Report Type
Audit
Agency Wide
Yes
Number of Recommendations
4
Questioned Costs
$95,425,874
Funds for Better Use
$117,479,022
Report updated under NDAA 5274
No
External Link
https://www.oig.dot.gov/library-item/46994

Open Recommendations

This report has 4 open recommendations.
Recommendation Number Significant Recommendation Recommended Questioned Costs Recommended Funds for Better Use Additional Details
1 Yes $0 $0

Develop and implement enhanced monitoring mechanisms for all recipients with unexpended Hurricane Sandy funds that focus on identifying and addressing challenges and delays in managing the progress of grant project activity and closeout.

2 Yes $95,425,874 $0

Review and take corrective action to address the approximately $95.4 million in questioned costs based on recipients incurring new project costs during lapses in the grants' periods of performance.

3 Yes $0 $0

Develop and implement a standardized process to prevent grants' periods of performance from ending before project activities are completed. This should include required timeframes for recipients to request the extension based on the current grant performance end date and any revisions to project activity milestones.

4 Yes $0 $117,479,022

Update FTA guidance on conducting timely grant closeout, including potential delays in completing the steps recipients must take between project activity completion and beginning the grant closeout process and how to handle these delays. Implementing this recommendation could put up to $117.5 million in Federal funds to better use by improving FTA's ability to enforce timely grant closeout and deobligation of unexpended Hurricane Sandy grant funds.

Department of Transportation OIG

United States