Audit Reports

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FTA Has Not Fully Implemented Key Internal Controls for Hurricane Sandy Oversight and Future Emergency Relief Efforts

Required by the Disaster Relief Appropriations Act (DRAA) of 2013
Project ID: 

FTA has not fully implemented the processes and internal controls it established for the award and oversight of Hurricane Sandy funds, in response to the Disaster Relief Appropriations Act (DRAA) of 2013 and Federal guidelines. For example, FTA accepted grantee support for its use of their labor forces to carry out projects that did not meet established timeframes. In addition, FTA’s risk-based oversight process was not adequately documented or consistently applied. Furthermore, grantees’ Hurricane Sandy reports often lacked evidence of FTA review or complete and accurate information. While FTA established some controls to reduce the risk of duplicating Hurricane Sandy reimbursements, such as informally coordinating with FEMA, it has not formalized these controls to effectively respond to future emergencies. FTA did implement formal reporting and tracking procedures for insurance proceeds that grantees receive, but faces years of ongoing monitoring before settlements are reached, which could impact the final amount of Hurricane Sandy funds that grantees are entitled to receive. Finally, FTA has allocated most of the $10.2 billion in DRAA funds. However, factors—such as FTA’s review process and its decision to establish a competitive resilience program of several billion dollars in Hurricane Sandy grants—have slowed the pace of relief fund awards and grantee expenditures.

We made five recommendations to further develop and implement the processes FTA has established and to document the actions it will take in regard to its Hurricane Sandy funding and future ERP-related activities. FTA concurred with four recommendations and partially concurred with one recommendation.




Closed on 05.24.2016
No. 1 to FTA

Implement enhanced review processes for ERP grant applications and grant award approvals that are aligned with the ERP Toolkit's checklists and require documentation in FTA's grant management system in accordance with Federal internal control standards guidance.

Closed on 02.04.2016
No. 2 to FTA

Enhance internal control processes for future force account funding by establishing clear funding criteria for future emergency relief efforts, which include the specific types of applicant documentation required to receive this funding.

Closed on 05.24.2016
No. 3 to FTA

Improve FTA's risk assessment process for future grantee and project risk assessments by: a.) establishing criteria for assigning low, medium, and high risks and b.) requiring documentation that allows others to understand how these criteria inform specific risk assessment ratings and, if applicable, the reason(s) and decision-making for different risk levels assigned to grantee risk assessments and the grantees' project risk assessments.

Closed on 02.04.2016
No. 4 to FTA

Develop and implement enhanced controls to ensure that monthly ERP FFR and MPR review processes, as outlined in the ERP Toolkit, are fully implemented by regional office personnel and documentation is aligned with Federal internal control standards guidance.

Closed on 10.06.2016
No. 5 to FTA

Formalize FTA's process for coordination with FEMA to avoid duplicative payments in providing emergency and disaster-related assistance.