Transit program: opportunities exist to ensure transit funding is aligned with statewide needs

Performance Audit Report No. 15-09

November 2015

Georgia Department of Audits and Accounts
Performance Audit Division
Greg S. Griffin, State Auditor Leslie McGuire, Director

Why we did this review
The Georgia Department of Transportation's (GDOT) Transit Program administers over $40 million annually in federal grants to assist local areas in transit planning and the delivery of public transit services in rural and small urban areas of the state. This audit determines if the program has sufficient planning and management tools in place to ensure local transit needs are being met. The audit also evaluates the program's process for sub-allocating funds to local transit agencies. Lastly, the audit assesses the program's timeliness in carrying out grant administration responsibilities and the program's monitoring efforts to ensure compliance with regulations.
About the Transit Program
The mission of GDOT's Transit Program is to "identify and support cost-effective, efficient and safe transportation systems." To achieve its mission, the program administers Federal Transit Administration (FTA) grants, most of which are directed to rural and small urban areas of the state to assist with the planning, operating, and capital costs of their public transit systems.
According to the most recent data from the National Transit Database, Georgia has 79 rural transit systems that operate 461 vehicles and provide over 1.7 million passenger trips. In addition, Georgia has six small urbanized transit systems that operate 117 vehicles and provide over 5 million passenger trips.

Transit Program
Opportunities exist to ensure transit
funding is aligned with statewide needs
What we found As it currently operates, program staff are largely focused on the day-to-day responsibilities associated with administering the various grant programs that provide financial support for new and existing transit systems. Any decision-making related to transit planning and the provision of transit services is a locally (or regionally) driven effort with minimal input from program staff. As a result, our review found there is no unified, comprehensive approach to ensuring the availability of adequate transit services statewide. In addition, we identified several operational issues regarding the program's grant administration responsibilities.
The Transit Program is the most likely entity to assume responsibility for a more comprehensive view of public transit, but currently lacks basic information needed to do so. Specifically, our review found the program lacks a process for routinely evaluating transit needs across the state. In addition, the program lacks a statewide transit plan that provides an inventory of existing services, establishes goals, and identifies strategies for improving public transit. Statewide, there are documented gaps in transit service related to service availability, service area, and hours of operation. Furthermore, 37 counties and 5 small urban areas lack public transit systems altogether. The program's efforts at expanding transit in these unserved areas have been limited.
The lack of needs assessment and strategic planning efforts also impacts the program's ability to ensure a fair and equitable distribution of funds. The program's process for distributing funds among rural areas is not clearly documented, but staff reported that it is primarily based on the prior years' allocation. While staff indicated that it has been able to fund all requests in the past using

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its current allocation method, they acknowledged that growing demand for services may limit their ability to do so in the future.
Our review also found that the program's policies and procedures are outdated, and there is a need for improved oversight of staff working in district offices to better ensure sub-recipient compliance. In addition, the program is not carrying out key processes, such as contract execution and vehicle procurement, in a timely manner. These delays can create cash flow and operational issues for subrecipients that are unable to receive reimbursements or replace vehicles with excessive mileage. Lastly, the program's lack of an adequate grants management system creates inefficiencies and limits management's ability to streamline various processes.
Program management is in the process of addressing some of the transit planning and management issues, as well some of the operational concerns. Currently, GDOT is procuring transit consulting services. According to the Request for Qualifications, the consultant may be tasked with developing plans and guides that may include a statewide transit plan, performance metrics, and data collection, research and analysis. The consultant will also be required to assist in updating policies and procedures.
What we recommend
We recommend that the program focus its efforts on assessing transit needs statewide and taking action to address these needs. Specifically, the program should: revise its goals, objectives, and performance measures; identify strategies for expanding transit in under-served areas; and re-evaluate its process for distributing grant funds. Each of these elements can be incorporated into a statewide transit plan that establishes a framework for enhancing transit services. We also recommend that the program carry out grant administration activities (e.g., application process, contract execution, etc.) in a timelier manner. Lastly, we recommend that the program implement additional controls to ensure that sub-recipients are in compliance with federal and state regulations. A full list of specific recommendations is included in Appendix A.
GDOT Response: In its response, GDOT indicated its acceptance of the performance audit and stated that "as is noted in the report, the Department had previously identified areas for improvement to strengthen the [Transit] program and is currently working to develop and implement plans to address these areas."

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Table of Contents

Purpose of the Audit

1

Background

Program Overview

1

Public Transit

1

GDOT's Transit Program

2

Grant Administration Process

3

Organization and Staffing

5

Activity Data

6

Financial Data

7

Findings and Recommendations

The Transit Program should focus its efforts on assessing transit needs across the

State. In addition, the program should develop a statewide transit plan that outlines

strategies for meeting the identified needs.

10

The program should refine its goals, objectives, and performance measures so

management can better assess outcomes, identify areas for improvement, and focus

resources where needed.

12

The program should implement a strategy for expanding public transit services to

the 37 counties and 5 small urbanized areas that currently lack service.

16

The program should consider revising its funding process for the Rural Grant to

better ensure a fair and equitable allocation of funds.

20

The program should formalize its procedures for re-distributing Urban Grant funds

and clearly communicate this process to all eligible sub-recipients.

23

The program should better ensure that it is obtaining and utilizing all available

federal funds in a timely manner.

24

The program should better ensure that key grant administration processes are

carried out in a timely manner.

27

The program should improve controls to better ensure that sub-recipients are in

compliance with regulations.

29

The program should implement a grants management system to improve efficiency

and enable program management to better monitor the various aspects of grant

administration.

31

Georgia differs from many other states in how transit grant administration

responsibilities are split among state and local entities and in the limited state

funding available for transit.

33

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ii

Appendices

Appendix A: Table of Recommendations

35

Appendix B: Objectives, Scope, and Methodology

38

Appendix C: Transit Service Data for Rural Areas

40

Appendix D: Transit Service Data for Small Urbanized Areas

42

Transit Program

1

Purpose of the Audit
This report examines the efficiency and effectiveness of GDOT's Transit Program. Specifically, the audit determined the extent to which the program:
1. Has sufficient planning tools and management practices in place to ensure that transit needs are being met;
2. Awards grant funds in a fair and equitable manner and provides sufficient guidance to sub-recipients;
3. Carries out its responsibilities in a timely manner; and 4. Effectively monitors sub-recipients to ensure that they are in compliance with
requirements.
A description of the objectives, scope, and methodology used in this review is included in Appendix B. The audit focused on two grants, the Non-Urbanized Area Formula Grant (referred to as the "Rural Grant") and the Urbanized Area Formula Grant (referred to as the "Urban Grant"). Because GDOT primarily works with rural and small urban areas, transit services in large urban areas, including metropolitan Atlanta, were not included in this review.
A draft of the report was provided to GDOT for its review. In its response, GDOT indicated its acceptance of the performance audit and stated that "as is noted in the report, the Department had previously identified areas for improvement to strengthen the [Transit] program and is currently working to develop and implement plans to address these areas."
Background
Program Overview
Public Transit Public transit provides mobility for citizens who cannot drive or who choose not to drive. Public transit provides access to economic and community activities such as employment, education/training, health services, social/income maintenance services, and shopping and entertainment. In addition to improved mobility, public transit can have numerous benefits including reduced congestion, improved air quality, and a strengthened economy.
There are several types of transit, which include demand-response, fixed-route buses, commuter buses, vanpools, and rail, as shown in Exhibit 1. In a demand-response service system, passengers call ahead to request door-to-door service to a specific location at a certain time. Fixed-route bus service consists of scheduled stops along a pre-determined route. In Georgia, rural areas are generally served by demand-response transit, while urban areas have fixed-route systems. The metropolitan Atlanta area is also served by vanpools, commuter buses, and rail systems.

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2

Exhibit 1 Types of Public Transit Services

Demand Response
Service in which passengers request door-to-door or curb-
to-curb transportation at a certain time

Deviated Fixed-Route
Service operates along a fixed-route, but may deviate from the route to pick up or
drop off passengers

Vanp ool
Service that enables commuters with similar trip origins and destinations to
share rides

Fixed-Route
Service operates along a prescribed path on a fixed
schedule, serving preestablished stops and sometimes flag stops

Commuter Buses
Service that connects outlying areas to major employment centers in an urban core

Heavy Rail
Service operating on an electric railway with the capacity for a heavy volume of
traffic

Light Rail (Streetcar)
Service operating passenger rail cars singly or in short trains on fixed rails

Source: Agency documents, American Public Transportation Association Fact Book

GDOT's Transit Program
The mission of GDOT's Transit Program is to "identify and support cost-effective, efficient and safe transportation systems." GDOT's Transit Program carries out its mission by administering four Federal Transit Administration (FTA) grants that are authorized under the MAP-21 federal law.1 The grants are awarded to local government entities (sub-recipients) to assist with the planning, operating, and capital costs of transit systems. Each of the grant programs has different eligibility requirements, funding restrictions, and reporting requirements. An overview of the four grants is provided below.

Section 5307 Urbanized Area Formula Program (referred to as "Urban

Large Urbanized Area: Population of 200,000 or more
(e.g., Atlanta, Columbus)

Grant") The Urban Grant provides capital, planning, and operating assistance to support transportation in urbanized areas with populations over 50,000. Examples of eligible projects include investment in buses and planning, engineering design, and evaluation of transit projects. GDOT is only

Small Urbanized Area: Population of 50,000-199,999
(e.g., Albany, Rome)

responsible for administering funds apportioned to small urban areas with populations between 50,000 and 200,000. Large urban areas with populations of 200,000 and more receive funds directly from the FTA.

Rural Area: Population of less than 50,000
(e.g., Rabun County, Taylor
County)

Section 5311 Non-Urbanized Area Formula Program (referred to as "Rural Grant") The Rural Grant provides capital, planning, and operating assistance to support public transportation in rural areas with populations less than 50,000. The purpose is to enhance access to health care, business, commercial, and social activity centers. Examples of eligible projects include

1 Moving Ahead for Progress in the 21st Century (MAP-21) became effective October 1, 2012 and funds federally supported highway, transit and bridge programs.

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3

the construction or rehabilitation of transit facilities and the purchase of buses and vans.
Section 5339 Bus and Bus Facilities The Bus and Bus Facilities Program provides capital funding to purchase buses and related equipment and to construct bus-related facilities. The FTA also allows funds to be transferred to supplement the Urban Grant and the Rural Grant.
Section 5303/5304 Metropolitan and Statewide Planning Program (referred to as "Planning Grant") The Planning Program provides funding for transportation planning projects, such as feasibility studies and computer hardware and software needed for planning. The program emphasizes cooperative, continuous, and comprehensive planning that results in longrange plans and short-range programs of transportation investment priorities. The FTA apportions funds to GDOT, and then GDOT sub-allocates the funds to the Metropolitan Planning Organizations (MPOs) and regional commissions.
In addition to these four grant programs, GDOT is managing existing projects that were funded under three grant programs that were eliminated in 2012 the Job Access and Reverse Commute Program (JARC), the New Freedom Program, and the Capital Investment Program. The JARC Program was intended to help low-income people seek and maintain employment, and the New Freedom Program was targeted toward people with disabilities.2 The Capital Investment Program assisted in financing capital projects, including major bus projects.
Grant Administration Process
GDOT manages the entire grant process by determining eligibility, selecting projects, executing contracts, monitoring sub-recipients, and closing out the contracts. The process begins when the FTA releases the annual apportionment amount. Then GDOT issues a call for projects for each grant program. Once the local entities (subrecipients) submit grant applications, GDOT reviews them and compiles a Program of Projects (POP). The POP is submitted to the FTA for approval, and then GDOT prepares and executes the contracts with each sub-recipient. As the sub-recipients expend funds on designated projects, GDOT is responsible for reviewing reimbursement requests and performing other monitoring functions to ensure compliance. After all reimbursement requests are processed, the contract is closed out. This process is illustrated in Exhibit 2 and discussed in more detail below.
Determining Eligibility and Selecting Projects The sub-recipients first develop their budgets, which serve as the basis of their grant applications. As the sub-recipients complete the grant applications, program staff provide assistance as needed. Staff indicated that rural sub-recipients typically require more assistance than urban sub-recipients due to a lack of resources and specialized transit staff. Generally, GDOT's involvement in project selection is focused on ensuring that proposed projects meet federal and state

2 Projects that were eligible for JARC funds are now eligible for funding under the Urban and Rural grants. The New Freedom Program was consolidated with the Elderly and Disabled Program and is administered by the Georgia Department of Human Services.

Transit Program

4
eligibility requirements. Once projects are selected, GDOT submits the POP to the FTA for approval. Projects must be included in the Statewide Transportation Improvement Program (STIP), a document that identifies highway, bridge, transit, and other projects committed for federal funding by GDOT.
Preparing Contracts After the FTA approves the application, GDOT sets up the funding in its financial systems and prepares the contracts. Contract preparation is a multi-step process that involves review and approval by Transit Program staff and other support units within GDOT. Contracts are sent to the sub-recipients for signatures and returned to GDOT. GDOT executes the contracts and issues a notice to proceed.
Monitoring GDOT's primary monitoring activities include milestone reporting, reimbursement reviews, risk assessments, and compliance reviews. Sub-recipients submit quarterly project milestone reports that include a description of the project status, milestone completion dates, and information regarding problems or delays. GDOT also reviews monthly reimbursement requests and relevant documentation to ensure that only eligible expenses are paid. In addition to these on-going monitoring activities, GDOT conducts annual risk assessments that consider factors such as a history of poor performance, questionable financial stability, and staff experience. Based on the results of the risk assessments, the program is responsible for conducting compliance reviews to ensure that sub-recipients are in compliance with regulations.
Closing Out Contracts Operating contracts are based on a 12-month period, but capital contracts may extend for 18 to 24 months. For a contract to be closed out, all reimbursements must have been submitted and payments made against the contract. The sub-recipients submit a close-out letter and additional documentation for operating contracts (e.g., a final reimbursement request). After GDOT processes the close-out letter, no further reimbursement can be made against the contract.

Transit Program
Exhibit 2 Overview of Grant Administration Process

FTA

FTA releases the apportionments(1)

FTA approves the grants and
reserves funds.

5
GDOT submits reimbursement requests to the FTA and receives
funds.

GDOT

GDOT issues a call for projects for each grant program and distributes applications to local areas

GDOT reviews applications and
develops the Program of Projects for each grant program.

GDOT submits the Program of
Projects and grant application for each program to the FTA

GDOT issues project numbers
and prepares contracts

GDOT reviews reimbursement requests and makes payments to sub-recipients, in addition to other
monitoring activities

GDOT closes out the contract

Sub-recipients

Sub-recipient completes
application in consultation with GDOT, as needed.

Contracts are sent to the sub-recipient
for execution

Sub-recipient expends funds and
submits monthly reimbursement requests to GDOT

After final reimbursement,
sub-recipient submits close-out
letter.

1 Due to funding timing lags between federal and state fiscal years, the apportionment funding is from the prior year(s). Source: Agency records and interviews with program staff

Organization and Staffing
GDOT's Division of Intermodal manages the Transit Program with 13 staff in the Atlanta headquarters office and six regionally-based staff in the GDOT District Offices. GDOT's Transit Program Manager has oversight responsibility of the entire program. Under the Program Manager are the Urban and Rural Transit Group Leaders, Transit Planners, Public Transportation Coordinators, and the Fleet and Risk Manager. In addition, the program works with Contracts and Fiscal Services staff in a separate division. These positions are described below and shown in Exhibit 3 on the next page.
Transit Group Leaders The Urban Group Leader oversees grant development and administration of the Urban Grant, and the Rural Group Leader oversees grant development and administration for the Rural Grant. They both also have responsibilities related to existing projects under the Job Access and Reverse Commute Program and the New Freedom Program.
Transit Planners The Transit Planners provide oversight for the Urban Grant and the Planning Grant. Specific responsibilities include: distributing the local grant application package, overseeing project selection, compiling the statewide Program of Projects and application to the FTA, reporting project milestones, reviewing reimbursement requests, and providing technical assistance to local sub-recipients.
Public Transportation Coordinators Seven coordinators are responsible for implementing the Rural Grant through site visits and contact with sub-

Transit Program

6

recipients within their districts. They support applications, contracts, reimbursements, vehicle inspections, and compliance monitoring.
Fleet and Risk Manager The Fleet and Risk Manager is responsible for central procurement of all transit vehicles for the Rural Grant. (Urban subrecipients procure their own vehicles.) The Fleet and Risk Manager works with GDOT's Office of Procurement and the Department of Administrative Services on the procurement process.
Contracts and Fiscal Services The Contracts and Fiscal Services units support the Transit Program. The Contracts and Fiscal Services Manager, the Contracts Administrator, and the fiscal analyst have key roles including accounting, local contract (grant agreement) preparation, local payment processing, draw downs, and grant close-out.

Exhibit 3 Transit Program Organization Chart

Intermodal Division Director

Intermodal Program Administrator

Office Of General Accounting

Contracts Manager

Transit Program Manager

Fiscal Services Manager

Contracts Specialist
Extension of Staff - Consultant
Contract specialist

Urban Transit Group Leader
Transit Planners (3)

Rural Transit Group Leader

Public Transportation Coordinators (7)

Fleet Manager

Contracts & Grants Specialist
Accountant Professional 2

Source: Agency records

Activity Data
In fiscal year 2014, Georgia had 79 rural transit systems that ranged in size and service levels. Most of the rural transit systems are single-county systems, but four transit systems serve multiple counties and are administered by regional commissions (multicounty planning and development agencies). In total, the 79 transit systems operated 461 vehicles and provided over 1.7 million passenger trips (See Exhibit 4).3 The number of vehicles per system ranged from 1 to 74, with a median of three. The number of passenger trips also varied among systems, ranging from 1,754 to 275,927 with a median of 12,399. See Appendix C for activity data for each transit system.
In addition to the rural transit systems, Georgia also has six small urban transit systems. As shown in Exhibit 4, the six systems operated 117 vehicles and provided

3 The number of passenger trips include trips that were sponsored by funds other than the Rural Grant.

Transit Program

7

over 5 million passenger trips. The number of vehicles per system ranged from 3 to 33, with an average of 20. The number of passenger trips also varied among systems, ranging from 14,935 to 1,733,589 with an average of 843,235 passenger trips annually per system. See Appendix D for detailed activity data for each small urban transit system.

Exhibit 4 Service Data for Rural and Small Urban Transit Systems1

Rural Transit (FY2014)

Transit Systems
75 single-county systems
4 multi-county systems
(each serving 3-14 counties)

. Fleet
Total: 461 Median: 3 Range:1-74

Small Urban Transit (FY2013)

Transit Systems 6 small urban systems

. Fleet
Total: 117 Mean: 20 Range: 3 - 33

Passenger Trips
Total: 1,722,576 Median: 12,399 Range: 1,754 -
275,927

Revenue Miles
Total: 16,201,173 Median: 99,738 Range: 14,760 -
3,211,681

Passenger Trips
Total: 5,059,407 Mean: 843,235 Range: 14,935 -
1,733,589

1 Passenger trips includes trips funded through DHS and DCH. Source: National Transit Database

Revenue Miles
Total: 4,123,254 Mean: 687,209 Range: 116,389 -
1,598,072

Buses (and other vehicles) funded through GDOT's Transit Program can be used for trips paid for by other federal programs. Several counties have combined GDOT transit trips with trips paid for by the Department of Human Services (DHS) and the Department of Community Health (DCH). While GDOT-funded transit is open to the general public, most trips under DCH and DHS are for specific populations. For example, DHS provides trips for elderly and disabled populations. Such trips usually travel to common destinations and cover short distances. DCH trips are primarily for non-emergency medical trips and typically travel to unique destinations. The number of passenger trips reported above includes trips funded through DHS and DCH.
Financial Data
The FTA determines the annual dollar amount of each grant apportioned to the state based on factors such as population, land area, and vehicle revenue miles. FTA funds are available for two to five years (depending on the grant program) after the fiscal year in which the amount is apportioned. The FTA requires a match of 50% for operating expenses and 20% for capital projects, as shown in Exhibit 5. To offset a portion of the federal matching requirement, GDOT provides state funds to the subrecipients. GDOT matches 10% for capital and planning projects but does not provide any matching funds for operating.

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8

Exhibit 5 Funding Shares by Project Type

Project Type

Federal Share

State Share

Local Share

Operating Capital1

Up to 50% 80%

10%

50% or more 10%

Planning

80%

10%

10%

1 For certain projects (Americans w ith Disabilities Act, Clean Air Act, bicycle facilities) the federal share is 90% and the remaining 10% is split evenly betw een the state and local.
Source: Agency records

In federal fiscal year 2014, GDOT was apportioned over $40 million from the FTA, as shown in Exhibit 6. The Rural Grant and the Urban Grant account for the majority of funds 52% and 34%, respectively. The remaining 14% was accounted for by the Planning Grant (8%) and the Bus and Bus Facilities Grant (6%).
Exhibit 6 FTA Apportionments to GDOT by Grant Program Federal Fiscal Years 2013-20151

$45,000,000

$40,000,000

$35,000,000

$30,000,000

$25,000,000

$20,000,000

$15,000,000

$10,000,000

$5,000,000

$0 2013
Rural Grant Urban Grant

2014 Planning Grant

2015 (at 83%)
Bus and Bus Facilities Grant

1 MAP-21 expired September 30, 2014. Since that time, Congress has enacted short-term extensions allowing the FTA to continue its current programs. The most recent extension continues FTA's transit assistance programs through July 31, 2015 at approximately 83 percent of the FY 2015 levels.
Source: FTA website

After GDOT applies for its apportionment and the funds are reserved, GDOT then executes contracts with the sub-recipients. Because the apportionment funding is available for several years and GDOT first utilizes prior year remaining funds, the amount apportioned in a particular year does not reconcile with the value of the contracts.
After the contracts are executed, GDOT disburses grant funds on a costreimbursement basis. As shown in Exhibit 7, the program expended $50.7 million on grant disbursements and other administrative and operating expenses in fiscal year

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9

2015. Of the $50.7 million expended (including outstanding encumbrances), federal funds accounted for approximately 90% of the total.

Exhibit 7 Program Revenues and Expenditures Fiscal Years 2013-2015

2013

2014

2015

Revenues Federal Funds1

$38,763,861 70.3% $32,024,367 85.3% $43,879,822 86.1%

ARRA/Stimulus Funds $12,078,987 21.9%

$83,181 0.2% $3,116,729 6.1%

State Funds Other Funds2

$2,949,962 $1,370,081

5.3% $3,175,182 8.5% $3,271,591 6.4% 2.5% $2,240,469 6.0% $697,930 1.4%

Total Revenue

$55,162,891 100% $37,523,199 100% $50,966,072 100%

Expenditures

Grants and Benefits

$49,857,095 94.8% $27,249,060 91.4% $20,713,163 40.9%

Personal Services

$1,469,310 2.8% $1,320,476 4.4% $1,565,366 3.1%

Contracts

$660,511 1.3% $700,231 2.3% $209,594 0.4%

Regular Operating

$355,786 0.7% $543,219 1.8% $519,533 1.0%

Computer Charges Other3

$50,001 $179,781

0.1% 0.3%

$5,371 0.0% $0 0.0%

$209,577 0.4% $0 0.0%

Encumbrances

$0 0.0%

$0 0.0% $27,467,901 54.2%

Total Expenditures

$52,572,484 100% $29,818,358 100% $50,685,133 100%

1Includes Federal Transit Administration, Federal Highw ay Administration, and Federal Railroad

Adminstration Grant Funds.

2Includes bus rental income, general obligation bonds, sale of surplus equipment, local transit participation,

and miscellaneous income.

3Includes nonbudgeted activities, motor vehicle purchases, and capital outlay expenses.

Source: BudgetNet and Teamw orks Financials

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Findings and Recommendations

The Transit Program should focus its efforts on assessing transit needs across the State. In addition, the program should develop a statewide transit plan that outlines strategies for meeting the identified needs.

Overall, the Transit Program has a limited role in transit planning as staff time and efforts are primarily dedicated to managing various grant administration responsibilities to ensure compliance with state and federal regulations. Grant administration activities entail a range of tasks including managing the application processes, providing technical assistance, allocating and tracking funds, reviewing projects, and collecting and reporting required data. These responsibilities focus the program's efforts on compliance and monitoring rather than identifying and addressing transit needs across the State.

While state law does not specify the program's role in statewide transit planning, it is the most likely entity to undertake efforts to establish a unified, comprehensive approach to ensuring adequate transit services are provided across the state. Our review found that although other entities have responsibility for ensuring the state's mobility needs are met (e.g., MPOs, regional commissions, DHS, DCH), their responsibilities are limited to certain populations or geographic regions. For example, regional commissions (RCs) must evaluate transportation alternatives and determine if mobility needs in their respective regions are being met.4 However, neither RCs nor any other entity is responsible for planning for the coordinated provision of transit services for Georgia.

The lack of emphasis on statewide transit planning has contributed to gaps in transit services. Currently, 37 counties and 5 small urbanized areas lack public transit systems. In addition, there are unmet transit needs among those areas that do have transit systems. A 2011 study identified service gaps in transit availability, trip eligibility, service area, and hours of operation as weaknesses across the state.5 For example a transportation system in Middle Georgia only served 49% of the consumers needing service and 40% of their trip needs were met.

Sub-recipients
Local government entities, including city
and county governments and
regional commissions, that receive transit grant funds through GDOT.

To further identify transit needs among grant sub-recipients, the audit team surveyed 97 sub-recipients of the Urban and Rural grants and received responses from 70 (72%).6 As shown in Exhibit 8, half of the respondents indicated that additional resources are needed for their transit programs. The most commonly cited needs were for additional drivers (20 sub-recipients), additional buses (19 sub-recipients), and extended hours (15 sub-recipients). Many respondents who indicated a need for additional resources also reported that they do not receive guidance from GDOT regarding their needs. For example, only two of the 19 respondents who indicated

4 Regional commissions are contracted by the Department of Community Affairs to conduct activities related to implementing the Georgia Planning Act. The contract requires regional commissions to perform services mandated by the Act, such as reviewing local government comprehensive plans and preparing a regional plan.
5 HNTB Corporation, prepared for Georgia Department of Transportation, Division of Intermodal. Rural and Human Service Transportation Study-Phase I Needs Assessment, June 2011.
6 The 97 sub-recipients include both rural and small urbanized areas that received grant funding over the past three years.

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11

needing additional buses agreed or strongly agreed with the statement that GDOT "has advised our program to expand vehicle fleet size."

Exhibit 8 Sub-recipient Survey Results: Additional Resources Needed
N=701
8 8 9

Other
Fixed-route system Expanded coverage to areas outside of county

50% 50%

No Additional Resources Needed (34 Respondents)

Additional Resources
Needed (35 Respondents)2

15

Extended hours

19

Additional buses

20

Additional drivers

1 One respondent was unsure if additional resources were necessary. 2 Respondents cited additional resource needs in one or more categories.
Source: Audit team's sub-recipient survey
Georgia is not unique in its focus on monitoring and compliance over broader transit management. According to a 2007 research study,7 states report that program management decisions are based on time availability instead of advancing a preferred outcome. State program managers indicated that their time is consumed by responding to the FTA, which focuses their attention on monitoring rather than program management. As a result, program staff cannot adequately assist local communities with planning/service design, provide training to grant recipients, or work on statewide initiatives or issues such as statewide IT, coordination, and marketing information.
While state transit programs may face time and resource constraints, there are examples of other states taking a more pro-active role in managing transit. Five states that we reviewed California, Colorado, Maine, Minnesota, and South Carolina have implemented strategic plans or statewide transit plans that assess needs and establish strategies for addressing those needs. As shown in Exhibit 9, common elements of these plans include a summary of existing transit services, a description of the population and community, an evaluation of transit needs, and a financial analysis. Based on these factors, the plans include a strategic planning component that establishes goals, performance measures, specific recommendations for improvements, and implementation tactics.
7 KFH Group, Inc., in association with Cambridge Systematics, Inc. NCHRP Research Results Digest 314: State DOT Staff Resources for Administering Federal Public Transportation Programs, Transportation Research Board, April 2007.

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Exhibit 9 Common Elements of Statewide Transit Plans

Existing Systems:
-Types of Services - Availability
- Ridership trends - Coordination

Population/ C ommu nit y:

Strategic Directions:

- Population growth -Demographic changes (elderly, disabled, low-
incom e) -Employment trends

- Vision -Goals -Performance Measures -Recommendations

Transit Needs:
- Mobility gap calculation
- Spatial and temporal gaps in service
- Forecasting demand

Financial Analysis:
- Future cost estimates - Revenue projections
- Potential funding sources

Source: Review of other states' transit plans
RECOMMENDATIONS 1. The program should develop a process for regularly assessing transit needs statewide. For example, this process could entail a formal, comprehensive needs assessment on a regularly scheduled basis. In addition, the program could maintain an inventory of existing services by region (with service hours, coverage area, etc.) and increase communication with local sub-recipients and regional entities regarding transit needs.
2. The program should develop a statewide transit plan that highlights transit needs, establishes goals, identifies strategies for expanding coverage to meet needs, and addresses funding issues. These elements are discussed in greater detail in the following findings: Goals, objectives, and performance measures (page 12) Expanding transit services to areas without coverage (page 16) Ensuring a fair and equitable funding allocation (page 20)

The program should refine its goals, objectives, and performance measures so management can better assess outcomes, identify areas for improvement, and focus resources where needed.
The program has established goals, but the goals are limited to tasks and compliance issues without addressing broader efficiency and effectiveness outcomes. In addition,

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13

the program has not established formal objectives and its performance measures are not reflective of the program's core functions. Furthermore, program management does not routinely monitor and evaluate progress, which limits management's ability to identify areas for improvements and target resources. A performance-based approach requires a program to establish goals, objectives, and performance measures and then evaluate progress.
Goals and Objectives The program's goals focus on timeliness and compliance at the task-level, and the program lacks formal objectives. The program's goals include the following: timely preparation of contracts, closing out grants within the award period to prevent lapsing funds, providing subrecipients with timely reimbursements, reducing data collection findings by the FTA, and completing annual risk assessments. Timeliness and compliance issues are important, but the program could benefit from outcome related goals and objectives that assess the impact of the grants it administers.
The program does currently have one goal that is more related to transit outcomes to provide transit service in at least one additional county annually until all counties have public transit. However, the program lacks a clear strategy for achieving this goal, as discussed in the next finding on page 16.
Performance Measures The program's performance measures, which are reported to the Office of Planning and Budget, are not tied to its goals and do not clearly assess the extent to which the program is operating effectively. For example, the performance measures include the number of transit-related contracts executed by June 30th but provides no benchmark. Other performance measures are not reflective of the program's core functions. For example, one performance measure is the total number of riders on all transit including the Metropolitan Atlanta Rapid Transit Authority (MARTA), even though the Transit Program has no involvement with MARTA. Another measure assesses the average vehicle age of urban buses (excluding MARTA) but does not consider the vehicle age of rural transit vehicles.

Our review of a series of national research reports8 on public transit suggests that goals should be broad statements that describe a desired end state and objectives should be specific and measurable. For example, South Carolina's goals include enhancing the image of public transit through a comprehensive and continuing marketing/education program. Together, the goals and objectives define the agency's priorities. The research further suggests that performance measures should be reflective of the program's goals and objectives should be meaningful and trackable over time. As shown in Exhibit 10, common performance measure categories used by state DOTs include ridership, availability of services, internal cost and efficiency, quality of service experienced by the customer, asset management, and community impact (mobility, air quality, and energy savings).

8 ICF International, Inc. NCHRP Research Results Digest 358: Statewide Transit Goal Setting, Transportation Research Board, July 2011 and ICF International, Inc. NCHRP Research Results Digest 361: State DOT Public Transportation Performance Measures: State of the Practice and Future Needs, Transportation Research Board, September 2011.

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14

Exhibit 10 Examples of Performance Measures Used by Other States

Ridership

Availability

Passengers per capita Route percent of ridership Ratio of ridership growth to population growth Percent increase in rural ridership
Internal Cost and Efficiency
Cost per service hour Cost per trip
Riders per revenue mile Farebox recovery ratio
Asset Management
Average fleet age Maintenance costs Percent of remaining useful life for vehicles Number of mechanical failures

Service hours Ratio of revenue hours to service area population Average days per week with rural transit service available Percent of population with daily intercity transit service
Quality
On-time performance Transit incidents
Injury rate involving transit vehicles Fatality rate involving transit vehicles
Community
Percent of fleet transitioned to clean fuel Fuel economy average
Air pollutants: tons per day Percent of non-single occupancy vehicle commuters

Source: ICF International, Inc. NCHRP Research Results Digest 361: State DOT Public Transportation Performance Measures: State of the Practice and Future Needs, Transportation Research Board, September 2011

Statewide goals, objectives, and performance measures are key components of a performance-based planning approach (See Exhibit 11). Once goals, objectives, and performance measures are established, the program can identify targets and implement strategies for achieving the targets. The final step in a performance-based planning approach is monitoring, reporting, and evaluating performance. According to the national research cited earlier, this objectives-driven, performance-based planning approach for transit is becoming more prevalent among state DOTs. This same approach can be used to guide and evaluate state investments in transit and to support allocation of transit funding.

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15

Exhibit 11 Performance-Based Planning Process
Develop goals and objectives for the transportation system, generally through extensive outreach to stakeholders and the public.
Goals are broad statements that describe a desired end state while objectives are the specific and measurable means for achieving the goals; together they define the agency's priorities and provide
the foundation for the rest of the process.

Select performance measures that can be used to track progress toward the goals.
Performance measures should be identified with stakeholder support, particularly those who will be providing data or will be monitored. Performance measures may need to be adjusted to reflect what
information is available or can reasonably be collected and available analytical tools .

Set performance targets for each performance measure. Quantifiable targets allow an agency to track progress toward goals more specifically .

Select strategies and allocate resources to achieve performance targets . How agencies approach attainment of performance targets, goals, and objectives will depend on the
type of planning process involved.
Implement strategies. In the case of state DOTs, this may be done by the agency itself or by another agency with funding
and/or support from the DOT.
Monitor, report, and evaluate performance. There should be feedback loops in place that allow the evaluation of projects or agencies based on
their performance and achievement of objectives.
Source: National Cooperative Highway Research Program
RECOMMENDATIONS 1. The program should consider establishing additional goals and objectives that reflect the broader purposes of the grants that it administers. For example, the program could establish goals and objectives pertaining to improving service availability, increasing regional coordination, and promoting/marketing transit services.
2. The program should consider establishing additional performance measures that are tied to the goals and objectives. The performance measures should include outcome, as well as output measures. They should also be meaningful and trackable over time.
3. The program should regularly monitor and evaluate its performance and use this information to guide policy and funding decisions.

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The program should implement a strategy for expanding public transit services to the 37 counties and 5 small urbanized areas that currently lack service.
Although the program has a goal to expand transit to all counties in the state, it has not taken the necessary steps to do so. Currently, 37 of 159 counties do not utilize the rural grant funding and five small urbanized areas do not utilize urban grant funding (See Exhibit 12). Our discussions with officials representing rural counties that lacked transit services found that they either are unaware of the available grant programs or they believe their counties cannot afford the match requirement. Similarly, representatives of small urbanized areas without transit services had concerns about the match requirement, but acknowledged a need for public transit in their areas. It should also be noted that an analysis conducted by the audit team showed that typical variables, such as population density or median household income, do not influence the provision of transit.
As a result, the citizens residing in the non-participating counties and urban areas are not receiving benefits associated with public transit. According to a 2015 study, such benefits may include improved access to jobs, education, recreation, and healthcare.9 The study also states that communities with transit indirectly benefit from lower unemployment, reduced demand for other government services, and improved healthcare utilization.

9 Cambridge Systematics, Inc. NCHRP Research Results Digest 393: Selected Indirect Benefits of State Investment in Public Transportation, Transportation Research Board, April 2015.

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17

Exhibit 12 37 Counties and 5 Small Urbanized Areas Lack Public Transit

Dade

Catoosa Whitfield Murray

Fannin

Union

Towns

Rabun

Walker Chattooga

Gordon

Gilme r

Lumpkin

Habersham

White

St eph en s

Pickens

Dawson

Banks

Hart

Franklin

Floyd

Ba rt ow

Cherokee Forsyth

Hall

Jackson

Madison

Elbert

Polk Paulding

Cobb

Gwinnett

Barrow

Clarke Oconee

Oglethorpe

Har also n Carroll

Douglas

De Kalb Fulton
Clayto n

Walton

Newton

Morgan

Wilkes

Greene

Taliaf erro

Counties that do not receive the rural grant1
Cities that do not receive the urban grant
Lincoln
McDuffie Columbia

Hea rd

Fayette Cowet a

Henry

Spalding

Butts

Jasper Putnam

Warren

Hancock

Glascock

Richm on d

Troup

M er iwe the r Pike

Lamar

Monroe

Jon es

Baldwin

Jef ferson Washington

Burke

Harris

Talbot

Muscogee
Marion Chattahoochee

Upson Taylor

Crawford

Bibb

Peach

Wilkinson Twig gs

Houston

Ble ckle y

Laurens

Macon

Johnson Treut le n

Jenkins Emanuel

Scr eve n

Candler

Bulloch

Ef fingh am

Schley

St ewart

W ebst er

Su mt er

Qu it ma n

Terrell

Randolph

Lee

Dooly

Pulaski

Dodge

Wheeler

Crisp

Wilcox

Telfa ir

Turner

Ben Hill

Toombs

Evans Tat tna ll

Bryan Liberty

Appling

Long

Chatham

Clay

Calho un

Dougherty

Worth

Irwin

Tift

Coff ee

Early

Ba ker

Miller Seminole
Decatur

Mit che ll

Colquitt

Berrien

At kin son

Cook

Lanier

Grady

Thomas

Brooks

Lowndes

Clinch

Bacon

Wayne

Pierce

Ware

Brantley

McInt osh Glynn

Charlton

Cam de n

Echols

1 Three rural cities, Social Circle, Americus, and Cedartown operate a transit service only inside of the city limits. The rest of the county citizens in Walton, Sumter, Polk are not served by the program.
Source: Agency records

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18

Rural Areas
To identify reasons why counties do not offer public transit, the audit team interviewed county management at 12 of the 37 (32%) non-participating counties. We also interviewed the six Transit Program staff at GDOT's district offices who are responsible for communicating with the counties. Based on these interviews, the reasons for non-participation included a lack of information, lack of funding for the matching requirements, concerns regarding the demand for services, and the involvement of the regional commission.
General Lack of Information and Awareness Counties do not have the information required to make a decision. Two counties were not aware that the transit grant programs existed. Three other counties lacked information regarding the grants and could not provide a specific reason for not participating. Eleven of the 12 county officials indicated that they had not been contacted by GDOT.
GDOT's Transit Program staff are responsible for contacting counties annually and providing information, according to policies and procedures. However, program staff reported receiving little guidance on how to contact and educate non-participating counties. As a result, some staff reported no contact with non-participating counties while others described intermittent communication with non-participating counties.
Lack of Funding for the Match Four counties indicated that a lack of funding for the local matching requirement was the primary reason for not providing public transit. Our review of matching funds contributed by participants in transit found that the amount varies depending on the size of their transit programs. In fiscal year 2016, 13 counties contributed approximately $50,000 or less toward operating expenses. However, of all participating counties, operating expenses ranged from approximately $22,000 to $500,000 annually (not including contributions made by regional commissions).
Lack of Demand for Services Two counties reported that their local population did not need a transit program. Several other counties also noted concerns that a transit program would suffer from low utilization. However, most of the counties do not have a process for assessing transit needs.
Role of Regional Commissions Another factor that may influence whether or not a county has transit is the involvement of the regional commission. (There are 12 regional commissions that serve as multicounty planning and development agencies.)Transit Program staff in one district indicated that the regional commission has an integral role in providing transit for counties that otherwise would not have the resources or expertise to do so. However, other program staff indicated that the regional commissions in their districts have little or no involvement with GDOT's Transit Program.
One of the program's goals is to expand services to one county annually until all counties have transit. With no clear strategy and irregular communication with nonparticipants, the program is years away from its goal of transit in every county. Over the past five years the program has added three new counties and lost three counties,

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19

resulting in a net gain of zero counties (See Exhibit 13). The program reached its goal of adding at least one new county annually only once in the past five years.
Exhibit 13 Transit Program has Net Gain of Zero Counties over Five Years

3

2

1 2012
0

2013

2014

2015

2016

-1

-2

-3Source: Interviews and Agency Documents
Small Urbanized Areas Georgia has more small urbanized areas without transit service than any other state in the country. There are 11 small urbanized areas in Georgia that qualify for the urban grant funding but five areas lack public transit Brunswick, Cartersville, Dalton, Valdosta, and Warner Robbins. Nationally, only nine of 466 urbanized areas (including the five in Georgia) lack public transit, according to a 2010 FTA report.
We interviewed local management from the five small urbanized areas to identify reasons for non-participation. Three areas Brunswick, Valdosta, and Warner Robins cited a need for transit services but indicated that the associated operating cost is the main obstacle. Another area, Cartersville, is planning to conduct a study that will determine what type of transit system fits their need and will estimate the costs of a system. Lastly, Dalton had a transit study conducted several years ago that concluded there was not a need for a fixed-route system.10 However, staff noted that since then, Dalton State College started expanding and the area experienced industrial growth.
Officials from the small urbanized areas also expressed a need for additional guidance and assistance from GDOT. For example, several articulated the need for additional training on how to start a transit program, how to utilize grant funding, and who to contact in other metropolitan areas for guidance.

10 A fixed-route system operates along a prescribed path according to a schedule.

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20

RECOMMENDATIONS 1. The program should develop and implement a strategy to expand transit services to additional counties and small urbanized areas. Progress should be monitored and tracked.
2. As part of the strategy, program staff should actively contact nonparticipating counties and small urban areas to educate them about the grants and assist them in overcoming obstacles. For example, staff can discuss the benefits of transit, how to start a transit program, uses of funding, and bestpractice models throughout the state. Program staff could also work with these areas to identify transit needs within their communities.
3. Program staff should consider collaborating more with the regional commissions to explore options for expanding transit in unserved areas.
4. The program should identify which counties and small urbanized areas are best suited to implement transit services in the near future. Program staff should work with these localities to create an implementation timeline.

The program should consider revising its funding process for the Rural Grant to better ensure a fair and equitable allocation of funds.
The program lacks a clear, formalized process for allocating funds among rural subrecipients. The FTA allows states to develop a methodology for allocating funds but requires them to ensure a fair and equitable distribution. The program's policies and procedures indicate that funding is based on population and land area; however, program staff reported that funding is actually based on sub-recipient requests and on the prior year's funding. Inconsistencies between FTA requirements, the program's policies and procedures, and the program's operations are discussed below.
Fair and Equitable Method The FTA requires states to ensure a fair and equitable distribution of funds. Although the FTA does not specifically define what constitutes a fair and equitable distribution, it "encourages states to use the increase in funding for rural transit under MAP- 21 to support expansion of transit service to areas without service and to improve the level of service or coverage in areas that have minimal service." The Transit Program's efforts at expanding services to counties without transit have been limited, and the program lacks a process for identifying areas with minimal service. (These issues are discussed in greater detail on page 10 and page 18.)
Documented Criteria The FTA also requires states to describe the criteria for distributing funds fairly and equitably in its policies and procedures. Whether it uses a formula or more discretionary selection process, the state should explain the policy rationale and the methods used.
The program does not utilize the distribution method described in its policies and procedures. According to the policies and procedures, funds are allocated based on the non-urbanized population and land area relative to the total for the state. However, program staff indicated funding allocation is primarily

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21

based on prior years. Staff review the amounts awarded and expended in recent years by each sub-recipient and may change that amount by a small percentage. Program management also noted that it has been able to fund all requests but that growing demand for services, combined with limited funding, is expected to constrain its ability to do so in the future.
Reporting Requirements The program's policies and procedures require an annual report comparing the actual distribution of funds by county with the proportions of rural population and land area in each area. However, the program does not report this data. According to program management, the size of the local transit program is a local decision and, therefore, will most likely not correlate to population.

To identify potential funding disparities, the audit team analyzed the federal operating funds awarded to each sub-recipient in fiscal year 2016. We found that per capita amounts varied among rural areas, ranging from $1 to $48 with a median of $4.45. As shown in Exhibit 14, 14 sub-recipients were allocated $9 or more per capita while 21 sub-recipients were allocated less than $3 per capita.

Exhibit 14 Per Capita Grant Funding Varies Among Rural Areas
30

25

Number of Sub-Recipients1

20

15

10

5

0 Up to $3

$3 up to $6

$6 up to $9

$9 or More

Federal Operational Funding Per Capita

1 Excludes regional commissions and counties with urbanized areas that qualify for the Urban Grant funding. Source: Agency records and 2010 census data

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22

To identify other methods for allocating funds among rural sub-recipients, the audit team reviewed policies and procedures from 14 other states Arizona, California, Colorado, Florida, Indiana, Iowa, Louisiana, Mississippi, Missouri, Nebraska, North Dakota, Oregon, South Carolina, and Washington. The other states allocated funds based on population, service/performance data, and/or a competitive application process.
Population-based Formulas Several states distribute funds primarily based on population. For example, Florida allocates funds to the district offices using a formula that considers the non-urbanized population of each county. Within each district, operating funds may be sub-allocated among recipients using a formula or based on merit and need. Missouri splits funding between the non-urban city systems (60%) and the county and regional systems (40%) and then by the population base served within each of these categories.

Service/Performance Data Other states utilize formulas that account for service or performance-related data. For example, Oregon has a three-part formula that includes a base amount, annual passenger trips, and annual service miles. The base amount ensures that smaller providers can offer a basic level of service, while passenger trips and service miles serve as measures of performance, efficiency, and need. To ensure the formula is resulting in a fair and equitable distribution of funds, Oregon has a process for periodic review.

Competitive Application Instead of or in addition to utilizing a formula, some states have a competitive application process with defined scoring criteria. In Arizona, sub-recipients are evaluated on criteria, such as the appropriateness and effectiveness of service, coordination of service, financial/management capability, local commitment to transit, and accessibility, safety and training. Colorado's application process includes both a merit score based on financial need, service need, and coordination and a performance score based on the level of improvement over the past three years. Both Colorado and Arizona have designated review committees that evaluate and rank applications.

RECOMMENDATIONS 1. The program should consider revising its funding methodology for rural areas to better ensure a fair and equitable allocation of funds. When developing a methodology, program management should consider: a. If potential methods are transparent, can be easily implemented, and result in the consistent treatment of sub-recipients. b. The potential impact on areas without transit services and areas with minimal service.
2. The program should ensure that the methodology is documented in the State Management Plan and clearly communicated to sub-recipients.
3. The program should clarify reporting requirements and consider periodically reviewing the methodology to determine the extent to which it is resulting in a fair and equitable distribution of funding.

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23

The program should formalize its procedures for re-distributing Urban Grant funds and clearly communicate this process to all eligible sub-recipients.
The program's method for re-distributing FTA apportionments among the small urbanized areas is not clearly documented. For the 11 small urbanized areas, the FTA determines the apportionment amount for each area. Because some of the areas are unable to utilize the apportionments, GDOT then re-allocates funds. However, the process for re-allocating funds is not clearly communicated to all eligible subrecipients.

The FTA determines the grant amount for each small urbanized area using a formula based on population, population density, and the number of low income individuals. Because five of the 11 small urbanized areas in Georgia do not have transit systems, GDOT then redistributes their funds to areas that do have transit. As a result, in fiscal year 2016, three urban areas were allocated more grant funding than was initially apportioned by the FTA Macon (98% more), Athens (60% more), and Albany (48% more). The FTA apportionment amounts and GDOT's allocations are shown in Exhibit 15.

Exhibit 15 Three Small Urbanized Areas Receive Funds in Excess of FTA Apportionment While Areas without Transit Forgo Funds1

FTA Apportionment

GDOT's Allocation Based on Requests (federal funds)

$4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000
$500,000 $0

1 FTA's federal fiscal year 2014 apportionment was used to fund state fiscal year 2016 projects. 2 Valdosta and Dalton do not have transit systems, but they are receiving funds for planning projects. Source: Agency records
According to the program's policies and procedures, funds are redistributed among small urbanized areas based on farebox recovery, revenue vehicle miles, unlinked trips, and trips per capita. However, program staff indicated that funds are actually redistributed based on the amounts requested by the sub-recipients. The formula is not being used because the total amount requested has been less than the total amount

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24

apportioned by the FTA and, therefore, the program has not had to deny sub-recipient requests based on a lack of funding.
If one of the five areas without transit does not want its funds redistributed, the program may allow the funds to be set aside for future use. For example, Cartersville had over $600,000 set-aside this year and plans to apply for these funds in fiscal year 2016. However, the program lacks formal procedures for setting aside funds. One official from a small urban area noted that GDOT did not explain how to get funding set aside, for how long, and under what conditions.

RECOMMENDATIONS 1. The program should clarify its method for redistributing funds among small urbanized areas in its policies and procedures.
2. The program should formalize procedures for allowing small urbanized areas without transit systems to set aside funds and should clearly communicate the process to all eligible sub-recipients.

The program should better ensure that it is obtaining and utilizing all available federal funds in a timely manner.
The program lacks sufficient controls to ensure that all FTA grant funds are applied for and utilized in a timely manner. The FTA requires states to apply for apportionment funding within a certain number of years (varies by program) or the funds will lapse. We identified issues with GDOT not applying for and not expending funds in a timely manner.
Applying for Grant Funds
For each grant program, the FTA establishes a period of availability, which is generally two to five years after the year of apportionment. Due to timing differences between the federal and state fiscal year, there is a lag between when the funds are apportioned and when GDOT applies for and obligates the funds. For example, the federal fiscal year 2014 apportionment for urbanized areas is currently being used for state fiscal year 2016 contracts.
Exhibit 16 shows the schedule of lapsing funds for the grant programs, with the amount apportioned, the amount available, and the lapse date. As shown, GDOT has not applied for over $6.7 million in Bus/Bus Facilities funds apportioned since fiscal year 2013. These funds could be used to purchase or rehabilitate buses or to construct bus-related facilities. Program management indicated that funds have not been applied for because GDOT needs to develop a policy for allocating and administering the funds. If GDOT does not apply for these funds by September 30, 2016, then the funds will begin to lapse.

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25

Exhibit 16 Schedule of Lapsing Funds

Federal Fiscal Year Apportioned Grant Program

Bus/Bus Facilities

2013

Planning

Urban

Bus/Bus Facilities

2014

Planning

Urban Rural2

20153

Bus/Bus Facilities Planning

Urban

Amount Apportioned
2,517,384 3,571,405 13,858,575 2,543,634 3,654,427 14,429,823 14,636,594 1,693,433 2,408,555 9,698,369

Amount Ava ila ble 1
2,517,384 1,134,965 3,712,892 2,543,634 3,654,427 1,864,270 14,636,594 1,693,433 2,408,555 9,698,369

Lapse Date 9/30/2016 9/30/2016 9/30/2018 9/30/2017 9/30/2017 9/30/2019 9/30/2017 9/30/2018 9/30/2018 9/30/2020

1 The amount available show s the amount of funding that has not yet been applied for and pulled into a grant, as of August 15, 2015. 2 Includes Rural Transportation Assistance Program and Appalachian f unds. 3 Figures represent 8/12ths of FFY 2015 apportionment.
Source: Agency records

Expending Grant Funds
Currently, the program is managing 32 open grants totaling $298.6 million for the various grant programs, including the Urban Grant, Rural Grant, Planning, Capital Investment, JARC, and New Freedom.11 Most of these grants are from prior years, going back to federal fiscal year 2007. Of the $298.6 million, $58 million is currently not obligated in a contract (i.e., assigned to a project). The remaining $240 million is obligated in contracts, but $39 million has not yet been expended and reimbursed. As shown in Exhibit 17, the Rural Grant accounts for the largest portion of the total grant funds, as well as the largest portion of funds unassigned to projects or assigned but unexpended.
Grant funds may remain unexpended for various reasons, including projects being delayed, projects being completed under budget, and restrictions in how funds can be expended. For example, the FTA requires states to allocate 15% of the Rural Grant to fund intercity bus service.12 According to GDOT records, nearly $12 million from fiscal year 2011 and 2012 grants is reserved for intercity bus service. Program management indicated that they have not spent these funds because they need to evaluate potential projects and reinvigorate the program to improve rural connectivity.

11 Status as of March 2015.
12 This requirement can be waived if the state certifies that that intercity bus service needs are being met adequately.

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26

Exhibit 17 A Significant Portion of Federal Grant Funds Have Not Been Expended1

$160,000,000

$140,000,000

Amount Unobligated in Contracts

$120,000,000

Amount Obligated in Contracts But Unexpended
Amount Expended

$100,000,000

$80,000,000

$60,000,000

$40,000,000

$20,000,000

$0 Rural Grant

Urban Grant Job Access and Reverse Commute

Planning

Capital New Freedom Investment

Other(1)

1 Includes all open grants as of July 2015, including Flex Funds, State Safety Oversight, and American Recovery and Reinvestment Act grants Source: Agency records

RECOMMENDATIONS
1. The program should implement methods to ensure that federal grant funds are applied for in a timely manner. For example, the program should ensure that policies for applying for and allocating funds are in place for all grant programs, including the Bus/Bus Facilities Program.
2. The program should implement controls to better ensure that grant funds are expended in a timely manner. Examples include:
Policies regarding sub-recipients with unexpended funds Oregon has a policy for reducing the funding allocation for sub-recipients utilizing less than 90% of funds based on a three year average.
Processes for re-allocating funds According to Arizona's State Management Plan, remaining funds are automatically re-allocated at the end of the contract cycle if there has not been a contract extension.
Needs assessment activities By better identifying needs, the program could target funds at high priority projects in which funds could be spent expeditiously. The program should particularly focus on identifying intercity bus needs, as there is a significant amount of available funding reserved for this purpose. (Needs assessment activities are discussed in greater detail in the finding on page 10).

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27

The program should better ensure that key grant administration processes are carried out in a timely manner.
We identified various delays in the grant administration process, particularly with the Rural Grant. First, the program did not distribute application packages to the local sub-recipients in a timely manner and not all sub-recipients returned the completed applications to GDOT by the deadline. Second, there are significant delays in the contract execution process, and as a result, sub-recipients may have to incur the costs of operating transit systems without receiving reimbursements. Lastly, there have been significant delays in procuring vehicles for transit services, resulting in subrecipients continuing to utilize vehicles beyond their useful life. While some of these issues may be attributable to outside entities (sub-recipients, third-party operators, vendors), GDOT should establish additional controls to better monitor timeliness and address any delays.
Application Process According to program guidelines, sub-recipients should submit grant applications to GDOT in December and GDOT should submit its grant application to the FTA in March. However, this year GDOT did not distribute applications to the sub-recipients until January due to staffing and workload issues. GDOT's application to the FTA was not submitted until June. Delays in the application process may create further delays in executing contracts and expending funds.
Contract Execution Contracts with sub-recipients for transit operating expenses generally correspond with the state fiscal year (July through June). However, 30 of the 85 operating contracts for rural sub-recipients in fiscal year 2015 were not executed by the end of September (See Exhibit 18). Seven of these contracts were not executed by the end of December. According to program staff, reasons for the delays include problems determining funding eligibility and issues with the sub-recipients and/or third party operators. As a result of the delays, the sub-recipients expended funds on transit without receiving reimbursements, which could create cash flow issues for the subrecipients.
In addition to the delays in executing operational contracts, there are also delays for capital contracts. In fiscal year 2015, the program had 54 capital contracts with rural sub-recipients, and 22 were not executed until after January 1st (See Exhibit 18). Delayed capital contracts can result in transit vehicles not being replaced in a timely manner. This problem may be further exacerbated by vehicle delivery delays, as discussed on the next page.

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28

Exhibit 18 Many Fiscal Year 2015 Contracts Were Not Executed by the Start of the 2nd Quarter
60

50

Number of Contracts Executed

40

30

20

10

0
Operating Capital

Prior to July
2 0

Source: Agency records

July thru September
54
0

October thru December
23
32

January thru March 6
14

April or Later
1 8

Vehicle Delivery Once GDOT places a purchase order for a vehicle, the vehicle should be delivered within 120 days. However, in fiscal year 2014, only 3 of 113 (3%) vehicles ordered were delivered within 120 days (See Exhibit 19). On average, vehicles were delivered 237 days after the purchase order date. In fiscal year 2015, 85 vehicles were due to be delivered by the end of June. Only seven of the 85 vehicles were actually delivered by the end of June. According to program staff, the delays were due to an issue with the supplier. As a result of the delays, sub-recipients may continue to utilize vehicles with excessive mileage, which could lead to higher maintenance costs and safety concerns.

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29

Exhibit 19 Fiscal Year 2014 Vehicles Were Not Delivered On-Time

On-Time

1-50 Days Late

51-100 Days Late

101-150 Days Late

More than 150 Days Late

0

5

Source: Agency records

10

15

20

25

30

35

40

RECOMMENDATIONS The program should take action to improve timeliness throughout the grant administration process. Specifically, the program should:
1. Implement controls to ensure that applications are distributed on-time and work with sub-recipients to ensure that they are completed by the deadline.
2. Improve oversight of the contract execution process and related funding issues that may be creating delays.
3. Improve monitoring of the vehicle procurement process so vendor delays can be identified and addressed.
4. Regularly monitor the overall timeliness of key activities within all the grant programs to identify other areas for improvement.

The program should improve controls to better ensure that sub-recipients are in compliance with regulations.
Because transit grants entail numerous compliance and reporting requirements, the program needs additional controls to ensure proper oversight, particularly for the Rural Grants. Currently, the program lacks up-to-date policies and procedures and guidance for staff. Furthermore, program management in Atlanta does not have an adequate system in place for ensuring that all the routine monitoring activities are being completed in a timely and thorough manner by staff in the districts. These issues are discussed in more detail below.
Policies and Procedures The FTA requires states to document grant administration policies and procedures in a state management plan (SMP) and to regularly update the SMP to incorporate changes in program

Transit Program

30

management or new requirements. However, GDOT's SMP has not been updated during the past two years, and therefore, does not reflect more recent FTA guidance. Furthermore, the SMP is unclear regarding key processes such as compliance reviews. One section of the SMP states that high risk subrecipients will be reviewed annually, while another section indicates that high-risk sub-recipients are reviewed at a minimum of every three years.
In addition to the SMP, the program publishes administrative guides that provide general program information and application instructions for local grantees. However, the rural and urban grant administrative guides have not been updated since fiscal year 2012. Therefore, the guides do not reflect the new MAP-21 requirements or the revised grant application. Furthermore, some of the general program information does not appear consistent with current operations.
Program management acknowledged that these documents need revising. Currently, the program is in the process of procuring transit consulting services, and one of the consultant's tasks will be updating policies and procedures.

Oversight of Public Transportation Coordinators (PTCs) Oversight of rural sub-recipients is primarily the responsibility of the six PTCs in the districts.13 PTCs perform a wide range of monitoring activities, including reviewing grant reimbursement requests, collecting data for the National Transit Database (NTD), inspecting vehicles, monitoring insurance records, and inspecting park and ride facilities. Program staff in Atlanta track the completion of these activities in a piecemeal manner by collecting various documents and entering information into one of the data systems. There is no comprehensive tracking system for all areas of oversight.
Compliance Reviews No sub-recipient compliance reviews had been conducted in recent years in accordance with GDOT's policies and procedures. The program used to have staff positions dedicated to compliance reviews, and when these positions were eliminated, the reviews ceased. During the course of this audit, the program resumed compliance reviews for the small urbanized sub-recipients. However, the program has not conducted compliance reviews for rural sub-recipients, and there is no formal plan in place to continue these reviews according to a set schedule.
RECOMMENDATIONS
1. The program should continue its efforts to update policies and procedures and clarify key processes. Specifically, the program should update the State Management Plan to ensure it reflects current federal and state requirements for administering each grant program. Additionally, the program should update the administrative guides for each grant and/or develop additional guidance for program staff regarding key processes (e.g., application process, reimbursement reviews, risk assessments, etc.).

13 There are seven PTCs, but one PTC works in the Atlanta office and has a different set of responsibilities.

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31
2. The program should improve oversight of the PTCs to ensure that various subrecipient monitoring activities (vehicle inspections, drug and alcohol testing, etc.) are being performed in a thorough and timely manner. For example, program management should consider providing an up-to-date schedule of activities, providing additional training to the PTCs, and implementing a tracking system to ensure activities are completed.
3. The program should continue to resume sub-recipient compliance reviews and standardize this process. Specifically, program management should (a) establish a template for evaluating rural sub-recipients; (b) develop a schedule so all sub-recipients will be reviewed within an appropriate timeframe; and (c) implement controls to ensure that sub-recipients resolve findings in a timely manner.

The program should implement a grants management system to improve efficiency and enable program management to better monitor the various aspects of grant administration.
The program lacks a sufficient grants management system that integrates the various components of the grant administration process. Instead, staff manages the process through a combination of reviewing hard copies of documents, inputting information into multiple data and financial systems, and monitoring progress using Excel spreadsheets. The different data systems are described in Exhibit 20.
Exhibit 20 Data Systems Utilized by the Transit Program

Transit Services

Gr ant Administration

Financial Systems

RouteMatch A statewide dispatch
that locals use for scheduling transit services. It tracks vehicles, mileage, hours,
etc.

Intermodal XP GDOT system that tracks vehicle, financial, and operating data on the sub-recipients.

PeopleSoft The general accounting system used by GDOT to
expense funds.

Transportation Electronic Award and Management (TEAM)(1)
An FTA web-based application that GDOT uses to apply for and
execute grants and request budget revisions.

Electronic Clearing House Operation (ECHO)
A personal computer based application that processes draw down requests from and makes payments to FTA grantees.

1 The FTA plans to replace TEAM with the Transit Award Management System (TrAMS) in federal fiscal year 2016. Source: Agency documents and interviews with program staff

Transit Program

32

Utilizing multiple, isolated data systems creates inefficiencies and limits the program's ability to streamline and automate processes. For example, as part of the annual application process, rural sub-recipients first submit budget requests to staff in the district offices. Staff inputs this information into Intermodal XP. Program management in Atlanta also enters and tracks this information in Excel spreadsheets. The actual application form is a word document that is distributed to the subrecipients. The sub-recipients return completed hardcopy applications to the district staff, who scan the applications into a network drive. The extensive amount of information included in the application is not in a format that can be easily reviewed, analyzed, or compared across sub-recipients or across years. Exhibit 21 shows how various other tasks in the grant administration process are documented and monitored through a combination of paper files, electronic documents, and data and financial systems.

Exhibit 21 Grant Activities Are Managed Through Various Documents and Data and Financial Systems

Hard Copy Documents Electronic Word/PDF Documents Excel Spreadsheets Intermodal XP TEAM ECHO PeopleSoft

Grant Administration Activities

Notification of Grant Funding Availability



Pre-Award

Distribution of Applications to Subrecipients Sub-recipient Budget Submission Sub-recipient Application Submission









Development of Program of Projects

Submission of Program of Projects to FTA Contract Authorization/Execution Subrecipient records (e.g., Title VI plans)









Vehicle Inventories





PTC Monitoring Activities (e.g., drug/alcohol testing)



NTD Reporting





Post-Award

Milestone/Progress Reports Risk Assessments and Compliance Reviews Invoices/Reimbursement Reviews













Payments to Subrecipients

Payment Requests to FTA

Grant Balance Monitoring

Source: Intervi ews wi th progra m s taff























































Because transit grant administration is very procedural, best practice research indicates that a web-based management approach is beneficial. Other states are implementing systems that automate processes and enable management to oversee progress. Examples from Colorado, Minnesota, and South Carolina are discussed below.

Colorado The Colorado Transit and Rail Awards Management System (COTRAMS) serves as a central repository for all grants management information. COTRAMS processes applications and tracks progress through the grant close-out. The system includes a vehicle inventory, compliance

Transit Program

33

tracker, and NTD data collection component. In addition, staff indicated that they plan to link it to the financial systems to process reimbursements.

Minnesota Minnesota recently implemented a new database that is designed to improve the contracting process, enhance transit system reporting, track federal grants information, and communicate with the state's financial database. In addition, the new database will support project applications and statistics.
South Carolina South Carolina is implementing web-based systems to automate key processes. South Carolina's grants management system will allow local transit agencies to submit funding applications and manage their projects online and the Virtual Transit Enterprise system processes invoices electronically. In addition, the Performance Management System will enhance the reporting of statewide transit performance and allow for review of individual transit agencies.
RECOMMENDATIONS
1. The program should consider implementing a new grants management system that will improve efficiency and enable management to better monitor various grant administration processes. Ideally, the system would automate the application process, track monitoring and compliance activities, and enhance asset management capabilities. The system could further streamline processes if it is (a) integrated with financial systems to automate reimbursements; and (b) integrated with the transit scheduling software to automate data reporting.

Georgia differs from many other states in how transit grant administration responsibilities are split among state and local entities and in the limited state funding available for transit.
In most states, the transportation departments are responsible for administering the Enhanced Mobility for Seniors and Individuals with Disabilities Grant (5310), along with other transit grants. In Georgia, this grant is administered by the Department of Human Services (DHS). GDOT does, however, have the added responsibility of administering the Urban Grant for the small urbanized areas. In many other states, small urbanized areas receive funds directly from the FTA. Lastly, state funding for transit is limited in Georgia compared to other states. Each of these issues is discussed in more detail below.
Enhanced Mobility for Seniors and Individuals with Disabilities Grant This is an FTA grant that provides funding for the special needs of transitdependent populations. According to interviews with state and federal officials, it appears that, with the exception of Georgia and Oklahoma, this grant is administered within the state transportation departments. In Georgia, the grant program was transferred from GDOT to the Department of

Transit Program

34
Human Resources (DHR) in 1988.14 GDOT indicated that the reason was to improve insurance rates and enhance coordination and efficiency.
Small Urbanized Areas The FTA allows states to designate small urbanized areas as direct recipients of the Urban Grant. Unlike many other states, GDOT administers this grant for the small urbanized areas. According to GDOT, this is the best model for Georgia given its size, number of municipalities, urbanized/city areas, dense population pockets, and population growth. GDOT further noted that the grant administration responsibilities could be extremely taxing on a small system's resources as well as the regional FTA office.
State Funding Georgia provides less funding for public transit than other states. According to a survey conducted by the American Association of State Highway and Transportation Officials, Georgia ranks 44th in per capita state funding for transit.15 The median per capita investment in transit was $4.20, compared to $.29 in Georgia. Georgia reported that the general fund accounted for 100% of transit funding, while other states' fund sources included gas taxes, bond proceeds, registration/license/title fees, interest income, motor vehicle/ rental car sales tax, general sales tax, trust funds, and lotteries. In Georgia, funding options are constrained because the state constitution does not allow state motor fuel taxes to be used for public transit.
Since the survey's release, the state is preparing to sell $75 million in bonds to fund transit needs statewide. The transit bonds will be managed by the State Road and Tollway Authority (SRTA). SRTA intends to issue a call for project submissions in the fall of 2015 and select projects in the spring of 2016.
RECOMMENDATIONS Because the audit team did not evaluate the impact of the issues noted above, we do not have specific recommendations. However, GDOT and the General Assembly should take these issues into consideration in future decision-making regarding transit policy and funding.

14 DHR later became DHS.
15 The study was released in 2014 but was based on fiscal year 2012 data. The survey was directed at state DOTs (including the District of Columbia).

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35

Appendix A: Table of Recommendations

The Transit Program should focus its efforts on assessing transit needs across the State. In addition, the program should develop a statewide transit plan that outlines strategies for meeting the identified needs. (page 10)
1. The program should develop a process for regularly assessing transit needs statewide. For example, this process could entail a formal, comprehensive needs assessment on a regularly scheduled basis. In addition, the program could maintain an inventory of existing services by region (with service hours, coverage area, etc.) and increase communication with local sub-recipients and regional entities regarding transit needs.
2. The program should develop a statewide transit plan that highlights transit needs, establishes goals, identifies strategies for expanding coverage to meet needs, and addresses funding issues.
The program should refine its goals, objectives, and performance measures so management can better assess outcomes, identify areas for improvement, and focus resources where needed. (page 12)
3. The program should consider establishing additional goals and objectives that reflect the broader purposes of the grants that it administers. For example, the program could establish goals and objectives pertaining to improving service availability, increasing regional coordination, and promoting/marketing transit services.
4. The program should consider establishing additional performance measures that are tied to the goals and objectives. The performance measures should include outcome, as well as output measures. They should also be meaningful and trackable over time.
5. The program should regularly monitor and evaluate its performance and use this information to guide policy and funding decisions.
The program should implement a strategy for expanding public transit services to the 37 counties and 5 small urbanized areas that currently lack service. (page 16)
6. The program should develop and implement a strategy to expand transit services to additional counties and small urbanized areas. Progress should be monitored and tracked.
7. As part of the strategy, program staff should actively contact non-participating counties and small urban areas to educate them about the grants and assist them in overcoming obstacles. For example staff can discuss the benefits of transit, how to start a transit program, uses of funding, and best-practice models throughout the state. Program staff could also work with these areas to identify transit needs within their communities.
8. Program staff should consider collaborating more with the regional commissions to explore options for expanding transit in unserved areas.
9. The program should identify which counties and small urbanized areas are best suited to implement transit services in the near future. Program staff should work with these localities to create an implementation timeline.
The program should consider revising its funding process for the Rural Grant to better ensure a fair and equitable allocation of funds. (page 20)
10. The program should consider revising its funding methodology for rural areas to better ensure a fair and equitable allocation of funds. When developing a methodology, program management should consider: a. If potential methods are transparent, can be easily implemented, and result in the consistent treatment of sub-recipients. b. The potential impact on areas without transit services and areas with minimal service.
11. The program should ensure that the methodology is documented in the State Management Plan and clearly communicated to sub-recipients.
12. The program should clarify reporting requirements and consider periodically reviewing the methodology to determine the extent to which it is resulting in a fair and equitable distribution of funding.

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36

The program should formalize its procedures for re-distributing Urban Grant funds and clearly communicate this process to all eligible sub-recipients. (page 23)
13. The program should clarify its method for redistributing funds among small urbanized areas in its policies and procedures.
14. The program formalize procedures for allowing small urbanized areas without transit systems to set aside funds and should clearly communicate the process to all eligible sub-recipients.
The program should better ensure that it is obtaining and utilizing all available federal funds in a timely manner. (page 24)
15. The program should implement methods to ensure that federal grant funds are applied for in a timely manner. For example, the program should ensure that policies for applying for and allocating funds are in place for all grant programs, including the Bus/Bus Facilities Program.
16. The program should implement controls to better ensure that grant funds are expended in a timely manner. Examples include: a. Policies regarding sub-recipients with unexpended funds Oregon has a policy for reducing the funding allocation for sub-recipients utilizing less than 90% of funds based on a three year average. b. Processes for re-allocating funds According to Arizona's State Management Plan, remaining funds are automatically re-allocated at the end of the contract cycle if there has not been a contract extension. c. Needs assessment activities By better identifying needs, the program could target funds at high priority projects in which funds could be spent expeditiously. The program should particularly focus on identifying intercity bus needs, as there is a significant amount of available funding reserved for this purpose.
The program should better ensure that key grant administration processes are carried out in a timely manner. (page 27)
17. The program should implement controls to ensure that applications are distributed on-time and work with subrecipients to ensure that they are completed by the deadline.
18. The program should improve oversight of the contract execution process and related funding issues that may be creating delays.
19. The program should improve monitoring of the vehicle procurement process so vendor delays can be identified and addressed.
20. The program should regularly monitor the overall timeliness of key activities within all the grant programs to identify other areas for improvement.
The program should improve controls to better ensure that sub-recipients are in compliance with regulations. (page 29)
21. The program should continue its efforts to update policies and procedures and clarify key processes. Specifically, the program should update the State Management Plan to ensure it reflects current federal and state requirements for administering each grant program. Additionally, the program should update the administrative guides for each grant and/or develop additional guidance for program staff regarding key processes (e.g., application process, reimbursement reviews, risk assessments, etc.).
22. The program should improve oversight of Public Transportation Coordinators to ensure that various subrecipient monitoring activities (vehicle inspections, drug and alcohol testing, etc.) are being performed in a thorough and timely manner. For example, program management should consider providing an up-to-date schedule of activities, providing additional training to the PTCs, and implementing a tracking system to ensure activities are completed.

Transit Program

37

23. The program should continue to resume sub-recipient compliance reviews and standardize this process. Specifically, program management should (a) establish a template for evaluating rural sub-recipients; (b) develop a schedule so all sub-recipients will be reviewed within an appropriate timeframe; and (c) implement controls to ensure that sub-recipients resolve findings in a timely manner.
The program should implement a grants management system to improve efficiency and enable program management to better monitor the various aspects of grant administration. (page 31)
24. The program should consider implementing a new grants management system that will improve efficiency and enable management to better monitor various grant administration processes. Ideally, the system would automate the application process, track monitoring and compliance activities, and enhance asset management capabilities. The system could further streamline processes if it is a) integrated with financial systems to automate reimbursements and b) integrated with the transit scheduling software to automate data reporting.
Georgia differs from many other states in how transit grant administration responsibilities are split among state and local entities and in the limited state funding available for transit. (page 33)
25. Because the audit team did not evaluate the impact of a) GDOT not administering the Enhanced Mobility for Seniors and Individuals with Disabilities Grant, b) GDOT administering the Urban Grant for the small urbanized areas, and c) availability of state funding for transit, we do not have specific recommendations. However, GDOT and the General Assembly should take these issues into consideration in future decision-making regarding transit policy and funding.

Transit Program

38

Appendix B: Objectives, Scope, and Methodology
Objectives
This report examines the Georgia Department of Transportation Transit Program. Specifically, our audit set out to determine the extent to which the Transit Program:
1. Has sufficient planning tools and management practices in place to ensure that transit needs are being met;
2. Awards grant funds in a fair and equitable manner and provides sufficient guidance to sub-recipients;
3. Carries out its responsibilities in a timely manner; and
4. Effectively monitors sub-recipients to ensure that they are in compliance with requirements.
Scope
This audit generally covered activity related to the Transit Program that occurred from fiscal years 2010 through 2015, with consideration of earlier or later periods when relevant. Information used in this report was obtained by: reviewing relevant laws, rules, and regulations; interviewing agency officials and staff from the GDOT Transit Program, local Georgia transit programs, as well as other states; and conducting a survey of transit grant sub-recipients. We also analyzed data and reports obtained from GDOT, the National Transit Database, and U.S. Census Bureau. Data obtained from these systems were deemed sufficiently reliable for the purposes of our review.
Government auditing standards require that we report the scope of our work on internal control that is significant within the context of the audit objectives. The work conducted for the last three objectives can be classified as an assessment of internal controls, also known as management controls, over Transit Program operations. The first objective addresses management planning tools, while the remaining objectives address the controls over administrative operations. Specific information related to the scope of our internal control work is described by objective in the methodology section below.
Methodology
Objective 1: To determine the extent to which the GDOT Transit Program has sufficient planning tools and management practices in place to ensure that transit needs are being met, we reviewed the program's goals, objectives, performance measures, and strategic plan. We interviewed GDOT program staff about planning tools and interviewed other states' transit program staff to identify best practices. We reviewed the Transit Program's practices to recruit non-participating counties and interviewed a sample of staff at non-participating counties. In addition, the audit team conducted a customer service survey of participating transit programs. The survey was sent to 97 sub-recipients of both the 5311 Rural Transit Program and 5307 Small Urbanized Transit Program and received a 72% participation rate (70 responses).
Objective 2: To determine the extent to which the GDOT Transit Program awards grant funds in a fair and equitable manner and provides sufficient guidance to sub-recipients, we reviewed management controls around the grant funding process in comparison to the FTA's definition of "fair and equitable" as well as other states' allocation methods. To accomplish this, we conducted interviews with

Transit Program

39

program staff, reviewed funding policy and history, and conducted an analysis of per capita grant funding by county. For the analysis, we used population data from the U.S. Census Bureau and allocation funding data from GDOT's internal data system.
Objective 3: To determine the extent to which the GDOT Transit Program carries out its responsibilities in a timely manner, we interviewed GDOT Transit Program staff members, and reviewed agency documentation to establish an event timeline, and then compared it to GDOT Transit Program data. We conducted four separate timeliness analyses using GDOT Transit Program data. First, we analyzed apportionment data from fiscal years 2013 through 2015 to establish a schedule of lapsing funds. Second, we calculated the amount of unspent funds available in each grant type. Third, we analyzed the number of contracts executed at various points throughout fiscal year 2015. Fourth, we calculated how long it took for purchased vehicles to be delivered in fiscal year 2014.
Objective 4: To determine the extent to which the GDOT Transit Program effectively monitors sub-recipients to ensure that they are in compliance with requirements, we reviewed the controls over monitoring sub-recipients. We reviewed the GDOT Transit Program State Management Plan and Administrative Guides. We discussed data collection and monitoring practices with GDOT Transit Program staff members.
We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

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40

Appendix C: Transit Service Data for Rural Areas Fiscal Year 2014

Subrecipient Bacon County Baldwin County Transit Banks County Transit Bartow Transit Berrien County Bleckley County Transit Brooks County Transit Burke County Transit Catoosa County Chattooga County Transit City of Americus City of Cedartown Clay County Coastal Regional Commission Columbia County Commission Transit Cook County Transit Coweta County Crawford County Transit Crisp County Transit Dade County Transit Dawson County Transit Dodge County Transit Dooly County Elbert County Fannin County Forsyth County Public Transportation Gilmer County Transit System Glascock County Transit Gordon County Transit Greene County Commission Transit Habersham County Transit Hancock County Transit Haralson County Transit Hart County Public Transit Heard County Transit Jackson County Jefferson County Transit Jenkins County Transit Jones County Transit Lincoln County Transit Lowndes County Lumpkin County Macon County Transit McDuffie County Commission Transit Montgomery County Transit Morgan County Transit Murray County Transportation System

Active

Counties

Total Vehicles

Served Population in Fleet

1

11,198

2

1

46,367

2

1

18,316

2

1

100,661

8

1

19,041

3

1

12,913

3

1

15,403

4

1

23,125

8

1

65,046

9

1

25,725

3

1

16,359

3

1

9,782

1

1

3,116

4

10

676,619

56

1

131,627

8

1

16,923

6

1

130,929

5

1

12,600

3

1

23,606

6

1

16,490

4

1

22,422

4

1

21,329

3

1

14,318

6

1

19,684

3

1

29,268

7

1

187,928

5

1

28,190

4

1

3,142

2

1

55,766

3

1

16,092

5

1

43,520

1

1

8,996

3

1

28,400

7

1

25,518

2

1

11,633

2

1

60,571

2

1

16,432

5

1

9,213

1

1

28,577

3

1

7,737

3

1

114,552

8

1

30,611

2

1

14,263

2

1

21,663

4

1

8,913

1

1

17,881

4

1

39,392

7

Annual Vehicle Revenue
Miles 33,583 72,955 74,225
226,795 104,929
62,437 159,647 159,793 182,002
71,487 71,769 17,508 192,414 2,342,910 228,228 255,011 187,713 70,490 217,379 114,517 91,278 99,981 308,000 94,083 115,769 170,723 107,610 32,868 70,509 227,722 26,776 127,595 93,101 39,592 69,711 105,186 191,763 22,240 59,091 41,574 336,294 37,347 62,217 104,405 25,908 119,203 177,053

Annual Vehicle Revenue Hours
3,322 4,097 3,570 13,820 6,200 5,592 8,954 8,418 13,178 5,292 5,861 1,816 8,477 132,905 13,028 13,733 11,738 5,359 12,987 7,600 5,967 5,594 14,665 5,814 8,237 9,821 6,865 3,647 4,296 9,291 1,955 6,504 4,968 2,579 4,845 4,933 12,134 1,856 5,296 5,809 21,097 3,293 4,962 6,951 1,915 7,918 13,479

Total Passenger
Trips 5,358
11,622 4,577
36,487 6,807 6,868
17,798 18,088 24,280 10,536 22,860
4,508 10,081 141,600 43,180 23,433 27,760
3,211 21,082 15,899
9,582 15,117 27,096
7,890 14,351 16,295 12,399
7,680 7,919 19,083 3,824 14,342 6,512 8,079 6,037 8,344 25,703 5,570 5,183 11,184 35,506 5,759 7,711 39,834 2,309 22,220 27,297

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41

Subrecipient Paulding County Peach County Transit Pickens County Pierce County Transit Pulaski County Transit Putnam County Commission Transit Rabun County River Valley Regional Commission Social Circle Area Transit Southwest Georgia Regional Commission Talbot County Transit Taliaferro County Board of Commissioners Taylor County Transit Telfair County Transit Thomas County Transit Three Rivers Regional Commission Tift Transit System Towns County Treutlen County Commission Troup County Transit Turner County Twiggs County Transit Union County Transit Walker County Ware County Warren County Commission Transit Wayne County Transit Wheeler County Transit Whitfield County W.T.S. Wilcox County Transit Wilkes County Commission Transit Wilkinson County Commission Transit Total

Active

Counties

Total

Vehicles

Served Population in Fleet

1

144,800

5

1

27,622

3

1

29,268

5

1

18,844

7

1

11,720

1

1

21,198

2

1

16,297

4

3

15,773

13

1

4,296

2

14

356,367

74

1

6,517

5

1

1,680

2

1

8,420

3

1

16,349

2

1

44,724

16

5

149,886

13

1

41,064

2

1

10,495

2

1

6,769

1

1

68,468

4

1

8,410

3

1

8,447

2

1

21,451

2

1

68,094

11

1

35,821

5

1

5,578

2

1

30,305

11

1

7,888

2

1

103,359

10

1

9,068

2

1

10,076

3

1

9,577

3

107

3,580,488

461

Annual Vehicle Revenue
Miles 140,098 95,042 69,950 250,710 21,535 81,094 99,738 806,850 33,057
3,211,681 179,740 39,126 138,598 34,751 532,863 538,214 58,856 28,701 14,760 99,192 107,795 68,415 50,599 487,699 178,615 42,703 348,034 61,729 262,607 143,522 92,583 78,925
16,201,173

Annual Vehicle Revenue Hours

Total Passenger
Trips

7,847

37,211

5,626

15,326

5,865

15,281

11,463

15,994

1,961

6,238

4,543

15,245

6,422

11,550

34,579

31,237

4,990

8,776

165,467

275,927

9,907

25,115

2,928

5,865

5,416

12,321

3,784

11,658

33,667

86,097

30,468

70,739

3,524

11,719

2,544

1,754

1,024

3,461

6,110

22,535

6,963

28,768

3,616

6,006

3,960

5,075

19,523

31,641

13,243

20,506

3,351

5,848

15,155

41,294

2,948

5,645

17,375

37,956

6,504

4,568

5,203

14,123

3,784

8,236

920,398 1,722,576

Source: GDOT records for the National Transit Database and U.S. Census Bureau

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Appendix D: Transit Service Data for Small Urbanized Areas Fiscal Year 2013

Subrecipient Albany Transit System Athens Transit System City of Rome Transit Department Hall Area Transit Liberty Transit Macon-Bibb County Transit Authority Total

Service

Total

Active Annual Vehicle

Area (Sq Mi) Population Vehicles Revenue Miles

17

95,779

11

601,993

Annual Vehicle Revenue Hours

Total Passenger
Trips

$37,247 1,019,215

44 128,754

25

818,417

$71,219 1,733,589

32

60,851

33

579,325

$40,554 1,079,010

38 130,846

17

409,058

$31,251

181,105

20

51,456

3

116,389

$9,258

14,935

70 137,570

28

1,598,072

$100,821 1,031,553

221 605,256

117

4,123,254

$290,350 5,059,407

Source: National Transit Database and U.S. Census Bureau

The Performance Audit Division was established in 1971 to conduct in-depth reviews of state-funded programs. Our reviews determine if programs are meeting goals and objectives; measure program results and effectiveness; identify alternate methods to meet goals; evaluate efficiency of resource allocation; assess compliance with laws and regulations; and provide credible management information to decision-makers. For more information, contact
us at (404)656-2180 or visit our website at www.audits.ga.gov.