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May 1, 2019

Stronger Guidance and Internal Controls Would Enhance DOT’s Management of Highway and Vehicle Safety R&D Agreements

Directed by the Fixing America’s Surface Transportation Act of 2015
Project ID: 
ZA2019051
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What We Looked At
Research and development (R&D) is vital to advancing technology that can improve vehicle safety. From fiscal years 2012 to 2016, the Federal Highway Administration (FHWA), the National Highway Transportation Safety Administration (NHTSA), and the Office of the Assistant Secretary for Research and Technology (OST-R) awarded grants and cooperative agreements involving highway and vehicle safety R&D with a total maximum value of $501 million in Federal funds. In 2015, the Fixing America’s Surface Transportation Act directed our office to review the Department of Transportation’s (DOT) management and oversight of cooperative agreements and cooperative research and development agreements (CRADA), including R&D agreements between DOT and foreign governments. Our audit objective was to assess the Department’s policies and procedures for selecting and overseeing its highway and vehicle safety R&D agreements, including grants, cooperative agreements, and CRADAs.
 
What We Found
DOT can strengthen its policies and procedures for awarding and overseeing highway and vehicle safety R&D agreements. First, FHWA and NHTSA do not always follow DOT guidance or Governmentwide requirements for awarding R&D agreements with for-profit recipients, and the Agencies lack guidance which specifically addresses awarding R&D agreements with foreign recipients. Second, NHTSA did not follow DOT policy when it approved the award of cooperative agreements—worth a combined maximum total of $93.7 million—without full and open competition. Third, while FHWA, NHTSA, and OST-R have taken steps to strengthen their oversight of R&D agreements, some gaps remain. For example, OST-R does not routinely review support for grantee cost reimbursements; NHTSA lacks policies and procedures for managing high-dollar R&D agreements; and FHWA paid invoices that did not meet minimum requirements. Based on our findings and statistical projections, we identified $1.6 million in funds that could be put to better use. As a result of weaknesses in its policies and internal controls, DOT may not be able to ensure that it is receiving the best value when awarding new agreements and minimizing the risk of fraud, waste, or abuse of R&D funds.
 
Our Recommendations
We made 15 recommendations to the Department to improve its management of highway and vehicle safety R&D agreements, including one recommendation that could put $1.6 million to better use. The Department concurred with 13 recommendations and did not concur with 2.

Recommendations

Open

Closed

Closed on 08.13.2019
No. 1 to FHWA

Update financial assistance policies and procedures to address what administrative requirements apply to agreements with for-profitand foreign entities.

Closed on 05.03.2019
No. 2 to FHWA

Finalize and issue policies for signing and administering CRADAs.

Closed on 11.22.2019
$1,600,000
No. 3 to FHWA

Update policies and procedures to determine when it is appropriate to require approval of recipient subcontracts or subawards and communicate this requirement to recipients; review the $12,400 in unapproved subcontractor costs identified in this report; and recover any costs deemed unreasonable. Implementing this recommendation could result in $1.6 million in funds being put to better use.

Closed on 01.13.2020
No. 4 to FHWA

Update the checklist for agreement files that describes whatpre- and post-award documentation is required under current DOT and FHWApolicies.

Closed on 06.12.2020
No. 5 to NHTSA

Update financial assistance policies and procedures to address what administrative requirements apply to agreements with for-profit and foreign entities.

Closed on 06.12.2020
No. 6 to NHTSA

Update financial assistance policies and procedures to specify what level of review is required to approve a justification for making a financial assistance award without using full and open competitive procedures.

Closed on 06.12.2020
No. 7 to NHTSA

Update financial assistance policies and procedures to specifically address agreements using a work-order structure, including procedures to reduce the risk of using these agreements to circumvent the general requirement to award financial assistance using full and open competitive procedures.

Closed on 06.12.2020
No. 8 to NHTSA

Update the checklist for agreement files that describes what pre- and post-award documentation is required under current DOT and NHTSA policies.

Closed on 08.25.2021
No. 9 to OST

Provide guidance to OAs to reinforce a common definition of R&D for use when determining whether a financial assistance award needs to be identified as R&D.

Closed on 06.12.2020
No. 10 to OST

Develop and implement a risk-based methodology for reviewing a number of grantee reimbursement requests in detail on a regular basis.

Closed on 05.03.2019
$9,900
No. 11 to OST

Recover $1,900 in unallowable costs and take appropriate action to determine whether $8,000 in computer equipment costs was reasonable,and if not, seek recovery of these funds as well.

Closed on 08.21.2020
No. 12 to OST

Update the checklist for agreement files that describes what pre- and post-award documentation is required under current DOT and OST-R policies.

Closed on 11.05.2019
No. 13 to OST

Revise DOT financial assistance policies to require that OAsdefine what administrative requirements apply to agreements with for-profit andforeign recipients.

No. 14 to OST

Revise DOT financial assistance policies to specify what officials are authorized to approve justifications for awarding financial assistance without full and open competition.

No. 15 to OST

Develop and issue guidance to OAs for clearly identifying awards as R&D.