Audit Reports

-A A +A

FTA Can Improve Its Oversight of Hurricane Sandy Relief Funds

Mandated by the Disaster Relief Appropriations Act (DRAA)
Project ID: 

The Disaster Relief Appropriations Act (DRAA) of 2013 appropriated over $10 billion to the Federal Transit Administration’s (FTA) Public Transportation Emergency Relief Program (ERP) for Hurricane Sandy-related recovery programs and directed our office to support oversight of those funds. Our office has conducted three previous audits since 2013 in response to this mandate. We conducted this audit to determine whether FTA provides effective oversight of grantees’ contracting practices using DRAA funds. Out of FTA’s top four grantees, the Metropolitan Transit Authority (MTA) received the majority (70 percent) of the $1.16 billion in funds disbursed as of November 30, 2015. We focused our review on New York City Transit (NYCT)—a subsidiary of MTA—which holds most of MTA’s DRAA-funded contracts. 

FTA’s oversight practices do not fully ensure that NYCT uses DRAA funds properly and in compliance with FTA procurement requirements. While FTA quickly and effectively assessed damage and assisted impacted transit agencies after Hurricane Sandy, we identified concerns with how it ensures NYCT’s use of DRAA funds for eligible expenditures and oversees change order approvals. NYCT drew down $17.7 million in DRAA funds for procurement actions that FTA determined were ineligible for inclusion in a grant. In addition, NYCT spent these DRAA funds on out-of-scope work, which is not permissible under FTA policies. Of the 205 change orders we reviewed, 154 change orders were not approved per FTA policy. After we notified FTA of our findings, FTA requested that NYCT return the $17.7 million in improper payments, which NYCT repaid in full with interest in April 2016. FTA also concurred with our five recommendations to help improve the Agency’s oversight of its grantees’ practices for proper use of Federal funds.  




Closed on 07.29.2016
No. 1 to FTA

Recover the $17.7 million in ineligible DRAA funds.

Closed on 08.10.2017
No. 2 to FTA

Implement oversight procedures to follow up on identified risks, such as expenditures denied for inclusion in a grant.

Closed on 03.16.2017
No. 3 to FTA

Implement procedures to ensure change order reviews conducted by FTA and integrity monitors include steps to evaluate whether change orders are approved in accordance with FTA policy.

Closed on 09.26.2016
No. 4 to FTA

Direct MTA and NYCT to implement procedures to ensure that change orders have documented management approvals and dated signatures before they are issued, per FTA policy.

Closed on 12.02.2016
No. 5 to FTA

Revise FTA's change order approval policy to address the use of blanket approvals to clearly state whether they are allowable or not. If allowable, establish parameters for their use.