September 9, 2019
Mandated by the Disaster Relief Appropriations Act of 2013
FTA Has an Opportunity To Improve the Integrity Monitor Program for Hurricane Sandy Grantees
What We Looked At
To support transportation-related recovery and relief efforts in areas damaged by Hurricane Sandy in October 2012, the Disaster Relief Appropriations Act of 2013 (DRAA) appropriated $10.9 billion to the Federal Transit Administration (FTA). Recognizing it needed to be especially diligent with DRAA funds, FTA required grantees that received over $100 million to hire independent integrity monitors as a safeguard against fraud, corruption, and cost abuse. DRAA also directed our office to support oversight of the funds. Accordingly, our audit objective was to assess FTA’s policies for the use of integrity monitors and evaluate FTA’s oversight of integrity monitors.
What We Found
While FTA performs ongoing collaborative reviews of grantee integrity monitor plans, it lacks formal processes for identifying known risks and determining integrity monitor independence. As a result, internal staff who serve as integrity monitors may have self-interest concerns. For example, integrity monitors participated in settlements that could have included Federal funds and did not always notify FTA of these settlements until late in the process or after the settlements were completed. FTA also has an opportunity to improve the way grantees manage integrity monitor performance. For example, Agency officials did not make sure that grantees resolved integrity monitor recommendations or developed controls to prevent problems from reoccurring—in part because FTA viewed the integrity monitor program as a grantee internal control. Still, FTA recently improved its guidance on the amount of detail grantees should include in their quarterly reports. Until this guidance is implemented by all DRAA grantees, however, FTA may not realize the full benefits of the integrity monitor program, and Hurricane Sandy funds may be at risk.
We made eight recommendations to improve FTA’s oversight of Hurricane Sandy relief funds, including a recommendation to recover an estimated $1.1 million in settlement funds. FTA concurred with seven and partially concurred with one.