[Federal Register Volume 81, Number 196 (Tuesday, October 11, 2016)]
[Notices]
[Pages 70260-70264]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-24414]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Federal Transit Administration
[Docket No. FTA-2016-009]
Final Notice on Updates to the Uniform System of Accounts (USOA)
and Changes to the National Transit Database (NTD) Reporting
Requirements
AGENCY: Federal Transit Administration, DOT.
ACTION: Notice, response to comments.
-----------------------------------------------------------------------
SUMMARY: This Notice finalizes updates to the USOA and changes to NTD
Automatic Passenger Counter Certification requirements.
DATES: Full implementation required in report year 2018.
FOR FURTHER INFORMATION CONTACT: Maggie Schilling, National Transit
Database Deputy Program Manager, FTA Office of Budget and Policy, (202)
366-2054 or [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
A. Background
B. Response to Comments on Proposed Updates to the USOA and Changes
to NTD Reporting Requirements
C. Response to Comments on the Revised APC Certification Process
D. Overview of Final Updates to the USOA, NTD Reporting Requirements
and APC Certification
A. Background
On February 3, 2016, FTA published a Federal Register notice
(initial notice) (Docket No. FTA-2016-009) for comment on proposed
updates to the USOA and changes to NTD reporting requirements. The USOA
is the basic reference document that describes how transit agencies are
to report to the NTD. The USOA was originally published in 1977 when
NTD reporting began. While the NTD has undergone numerous and
substantial changes in the past 38 years, the USOA was last updated for
minor changes in 1995. The notice described various proposed changes to
the USOA to better align with today's NTD and accounting practices and
to address FTA data needs and common questions among NTD reporters. In
the initial notice, FTA proposed the following changes:
A. Separation of ``Passenger-Paid Fares'' and ``Organization-Paid
Fares''
B. Separation of ``Paid Absences'' from ``Fringe Benefits''
C. Consolidation of ``Casualty and Liability Costs'' under General
Administration Function
D. Expansion of Assets and Liabilities Object Classes (F-60)
E. Addition of ``Voluntary Non-Exchange Transactions''
F. Addition of ``Sales and Disposals of Assets''
G. Simplification of State Fund Reporting
H. Reorganization of B-30 Contractual Relationship
Additionally, the initial notice proposed changes to the NTD
reporting requirements that are not directly addressed in the updated
USOA, which are as follows:
I. Separation of Operators' and Non-Operators' Work Hours and Counts
J. Enhanced Auditor's Review
K. Revised Automatic Passenger Counter (APC) Certification Process
In the initial notice, FTA proposed that it would begin
implementing the proposed reporting requirements beginning with the FY
2017 NTD reporting cycle.
B. Response to Comments on Proposed Updates to the USOA and Changes to
NTD Reporting Requirements
The comment period for the initial notice closed on April 4, 2016.
The following is a summary of the comments from the initial notice
related to the updates to the USOA and NTD reporting requirements.
Comment: Three commenters raised a concern over the separation of
``Passenger-Paid Fares'' and ``Organization-Paid Fares.'' Commenters
opposed the separation of ``Passenger-Paid Fares'' and ``Organization-
Paid Fares'' stating that the additional information will add little,
if any, value to the NTD report. Commenters noted that adding these
additional reporting requirements will only increase the cost of
compliance for reporting agencies. One commenter specifically raised a
concern stating that the proposed
[[Page 70261]]
change would be especially burdensome for small rural reporters and
suggested that FTA rescind the proposed change for ``5311 providers in
areas less than 50,000 population.''
Response: FTA is sensitive to the concern that the proposed change
may require additional efforts by the reporting agencies. However, FTA
believes that the separation of ``Passenger-Paid Fares'' and
``Organization-Paid Fares'' will address a common source of confusion
among transit agencies. There are several different types of revenue
that count as fares, and the distinction between ``Passenger-Paid
Fares'' and ``Organization-Paid Fares'' attempts to clarify the sources
of funds that should be reported as fares. Additionally, this change
will help NTD analysts in identifying and understanding special
circumstances such as university towns where the farebox return is
relatively high because the agency has negotiated such contracts. In
developing these proposed changes, FTA conducted industry outreach
which indicated that most agencies already collect this information by
these categories and reporting these fares separately would not be an
excessive burden.
Comment: Five commenters raised a concern over separating ``Paid-
Absences'' from ``Fringe Benefits.'' Commenters opposed the separation
of ``Paid-Absences'' from ``Fringe Benefits'' stating that the
additional information will add little, if any, value to the NTD
report. Commenters noted that adding these additional reporting
requirements will only increase the cost of compliance for reporting
agencies. While one commenter did not specifically oppose this change,
the commenter explained that the organization does have this
information available but that method of reporting for NTD will result
in additional manpower during the initial reporting period as all
current calculations will need to be modified to capture this
additional requirement.
Response: FTA conducted industry outreach which indicated that the
proposed change to separate ``Paid Absences'' from ``Fringe Benefits''
better and more closely align with many transit agencies' current
accounting and reporting practices. FTA believes that collecting these
items separately will improve future analysis of this dataset by
providing additional clarity on costs that are under a transit agency's
control (e.g., paid absences) versus costs that are external and
outside the transit agency's control (e.g., fringe benefits such as
health care). FTA realizes that although the change may initially
require additional resources, these distinctions will ultimately
improve data quality and analysis by data analysts.
Comment: Two commenters expressed concern over the proposed change
to consolidate the ``Casualty and Liability Costs'' under the General
Administration function. Commenters expressed concern that if
``Casualty and Liability Costs'' are to be categorized and reported
under General Administration function as outlined in the proposal,
their transit agencies would lose Federal funds since this change would
shift the costs from a capital eligible operating expense requiring a
20 percent non-federal match to an operating cost requiring a 50
percent non-federal share.
Additionally, one commenter made a suggestion for FTA to consider
other non-litigious settlements to be considered in this category. For
example, an agency may have to provide a retroactive payment to its
labor union employees due to a contract negotiation. The commenter
explained that this lump sum outlay will greatly increase the perceived
expenses in a single fiscal year.
Response: The proposed change to consolidate ``Casualty and
Liability Costs'' under General Administration function aims to align
costs with their appropriate categories and simplify NTD reporting
requirements for reporters. FTA's prior decision to allow recipients to
use Section 5307 funds for preventative maintenance did not originally
anticipate this type of cost (i.e., casualty and liability costs) as an
eligible preventative maintenance cost. This change corrects the
unintended consequence of including these costs in the Vehicle
Maintenance function as preventative maintenance activities by moving
``Casualty and Liability Costs'' to its appropriate place. FTA
maintains that ``Casualty and Liability Costs'' are most sensibly
placed in General Administration function.
Per current reporting rules, retroactive payments made to employees
for prior reporting years as the result of a contract negotiation
should be reported as a reconciling item on F-40 form. Reconciling
items are reported as a sum amount and not by individual functions.
Retroactive payments made to employees for the current reporting year
should be reported on the F-30 form.
It is important to note that NTD reporting does not affect the
eligibility of these costs for grant reimbursement. The eligibility of
expenses for grant reimbursement depends on the nature or definition of
the expenses. If an agency has a settlement that it does not consider
as casualty and liability, the agency can reach out to its NTD analyst
for clarification on object class definitions and can contact its FTA
regional office to determine grant reimbursement procedures.
Comment: Eight commenters raised a concern over implementing the
proposed changes to the USOA and the NTD reporting requirements for the
FY 2017 NTD reporting cycle. Commenters explained that the proposed
implementation of FY 2017 does not allow for adequate time for transit
agencies to prepare for the change.
Response: FTA understands that some of the proposed changes may
require adjustments to current data collection practices. FTA concurs
with commenters that the proposed start date of FY 2017 may not provide
adequate time for some agencies to make adjustments to their NTD
reporting. FTA will delay the implementation of the proposed USOA
changes to FY 2018.
Comment: Three commenters raised concern over reporting pension and
Other Postemployment Benefits (OPEB) in light of the recently released
Governmental Accounting Standards Board (GASB) statements.
Response: After taking into consideration the recent GASB
statements related to pension and OPEB reporting and the delayed
implementation date of the USOA changes, FTA proposes to add line items
to account for ``Deferred Outflows of Resources'' and ``Deferred
Inflows of Resources'' on the F-60 form, as well as to rescind the
original proposed changes to add ``Pension Funds'' and ``OPEB
Adjustment'' USOA object classes.
Comment: One commenter raised a question on how to report sale of
an asset at a loss.
Response: If assets are sold at a loss, the amount received from
the sale of the asset should be reported as Sales and Disposals of
Assets. Per the NTD Policy Manual, transit agencies should not report
an accounting loss from a sale because no money was received for the
portion that is treated as an accounting loss.
Comment: Four commenters expressed opposition to the enhanced
auditor's review noting that the added cost detail and auditor
certifications will increase the costs to reporters who are already
strapped for cash due to reduced or frozen levels of Federal funding.
One commenter asked FTA to provide guidelines for the enhanced
review to aid auditors in effectively and efficiently reviewing agency
information.
[[Page 70262]]
Response: The auditor's review is to be performed only once every
ten years and, due to its limited scope, should not take more than a
day of an auditor's time. While FTA understands that this requirement
will create some additional burden, FTA believes that the improved data
quality and oversight justifies this requirement. In some cases,
reporters have not had their NTD reporting certified by an auditor
since the requirement for Independent Auditor's Statement--Financial
Data was first implemented over 30 years ago. FTA conducted outreach
while developing these updates which indicated that agencies believe
that business operations can change considerably in ten years and it
would be appropriate to require agencies to complete this review every
ten years. Additionally, the enhanced auditor's review does not apply
to rural reporters. Rural reporters should continue to comply with
existing rural reporting compliance requirements.
FTA publishes guidelines for the auditor's review in the NTD Policy
Manual which is updated and published every year.
Comment: One commenter expressed concern over changes to
maintenance categories for reporting on the F-30 and F-40 forms, as
Vehicle Maintenance and Non-Vehicle Maintenance functions are
sufficient.
Response: FTA is not proposing to expand or change the expenses
reported in these two maintenance categories. The term Non-vehicle
Maintenance is being replaced by the term Facilities Maintenance. Under
this current proposal, transit agencies will report expenses under the
following four functions in the NTD: Vehicle Operations, Vehicle
Maintenance, Facility Maintenance, and General Administration.
Comment: One commenter pointed out that the USOA refers to OMB
Circular No. A-87 and explained that for Federal funds awarded after
December 26, 2014, the new ``Uniform Guidance'' applies instead of OMB
Circular No. A-87.
Response: FTA will update the USOA to reflect the latest guidance.
The guidance provided with a reference to A-87 is not changed by the
``Uniform Guidance.''
Comment: Seven commenters raised concern over the new USOA
numbering scheme as they believe they would need to make significant
changes to their systems to match the new USOA numbers. While one
commenter did not specifically oppose the proposed change, the
commenter raised concern about whether the expectation is for the
agencies to change their chart of accounts structure to the new
numbering structure. This would be a monumental effort and would be
very difficult and costly. Also, it would make any comparative analysis
difficult since historical transactions would be reflected under the
old account structure. The commenter suggests that FTA allow for
mapping an agency's existing chart of accounts to the NTD reporting
instead of requiring that the existing chart of accounts be renumbered.
Response: FTA's intention in renumbering USOA object classes was to
provide a clearer numbering structure within the USOA and the NTD
reporting system. FTA is proposing updates to the USOA in an effort to
simplify and clarify reporting requirements which includes
restructuring the USOA object classes by merging, dividing, adding, or
deleting USOA object classes. FTA did not anticipate requiring transit
agencies to restructure their core accounting structure. Although it
was not intended or expected that transit agencies restructure their
chart of accounts to match the proposed changes, FTA understands that
the proposed USOA numbering scheme may cause confusion and therefore
rescinds the originally proposed USOA numbering scheme. Instead, FTA
will develop a new USOA numbering scheme that is more consistent with
the general logic of sequencing followed in the current USOA. The NTD
asks that an independent auditor review a reporter's chart of accounts
to determine that they either: (1) Match the USOA chart of accounts; or
(2) can map to the USOA accounts. This is a self-certification process.
Transit agencies are not required to restructure their chart of
accounts/core accounting systems. Any proposed changes to the numbering
conventions would still allow transit agencies to map their current
chart of accounts to the USOA object classes. This mapping is
considered sufficient for self-certification.
Comment: Five commenters opposed the overall expansion of the NTD
reporting requirements. Commenters expressed concern that proposed
change will be costly and time-consuming, without providing additional
benefits.
One commenter specifically expresses concern for expanding the NTD
reporting requirements for small system reporters.
Response: FTA is committed to implementing reasonable NTD reporting
requirements to better align with today's accounting practices and to
address FTA data needs. The current USOA has been in place for 38 years
and in some cases no longer reflects current accounting practices and
transit business operations. FTA's goal with the changes to the USOA is
to address inconsistencies in the USOA due to changes in technology and
transit organization structure and to revise accounting principles and
object classes in the USOA to align with current accounting and
industry leading practices and standards. FTA identified at the list of
changes by conducting interviews with NTD reporters, NTD data analysts,
and subject matter specialists in areas that needed improvement. FTA
also followed up with several transit agencies to gather preliminary
feedback on the changes which revealed that agencies already have the
proposed information readily available. FTA recognizes that the changes
may initially require some changes to data collection and reporting.
However, all proposed changes are intended to simplify or clarify
reporting requirements or to address issues that are not addressed in
the current USOA.
Rural and urban reporters receiving a small systems waiver will see
limited changes to their reporting requirements.
C. APC Certification Process Changes
FTA received 15 comments on the proposed APC certification process.
Following is a summary of the comments related to APC.
Comment: Two commenters requested clarification on the rule
allowing agencies with data on greater than 98 percent of trips to
scale up the data.
Response: FTA believes that its original statement of the rule was
unclear. Agencies reporting to the NTD have two options when reporting
passenger miles and unlinked passenger trips. One option is a 100%
count and the other option is a sample. Agencies must report a 100%
count if it is available. FTA recognizes that a true 100% count is very
difficult to achieve; during the course of a year there may be
equipment failures or other problems that lead to missing data on some
trips. Thus, FTA permits agencies to report that they have a 100% count
of passenger miles or unlinked passenger trip data if they have data
for 98% or more of vehicle trips, or if a statistician approves their
method for factoring up existing data to fill in missing data. This is
a longstanding policy and FTA is not proposing to change it. Agencies
that collect data on less than 98% of trips, and do not have a
statistician to approve a factoring-up method, must instead report
using a sampling method.
Comment: One commenter noted that if an agency uses the proposed 5%
criterion for APC approval, and then
[[Page 70263]]
uses an NTD-approved sampling plan for NTD passenger miles reporting,
it may not meet FTA's long-held ``10% accuracy at 95% confidence''
standard.
Response: This comment assumes that the manual count against which
the APC is compared is in fact the true value; however, manual counts
are subject to error. Once the APC system has been approved, FTA
considers it to be the true value, and thus any NTD-approved sampling
plan would give data within 10% of the true value, at the 95%
confidence level. FTA further notes that many agencies with APC systems
will sample well in excess of the required sample size, and thus the
sampling error can be expected to decrease.
Comment: Two commenters recommended that agencies be permitted to
certify their APCs using a method different from the one prescribed by
FTA, provided it meets some statistical standard.
Response: FTA believes in the importance of allowing flexibility to
agencies and encouraging them to adopt practices that best meet their
individual needs. Thus FTA agrees with this suggestion. The final
policy will allow an agency to certify its APCs using either the method
prescribed by FTA, or any method certified by a qualified statistician
to show that the absolute value of the difference between manual and
APC data for unlinked passenger trips and passenger miles is less than
7.5% of the total of the manual data, at a 95% confidence level.
Comment: One commenter proposed that agencies be required to submit
a description of the results and methodologies in the acceptance
testing process, as well as an administrative control procedure
outlining responsibility within the agency for maintenance of the APC
system over time.
Response: The proposed policy already requires agencies to submit a
description of the APC system used and benchmarking procedure. While
FTA encourages agencies to put thorough administrative procedures in
place, FTA believes it would be an unnecessary burden to require
agencies to submit these procedures for approval. In general, FTA does
not prescribe particular management procedures to agencies.
Comment: Two commenters requested clarification of the calculations
to be performed.
Response: To determine whether their APC data meets the
certification standard, agencies should take the total unlinked
passenger trips on the vehicle trips in the comparison sample collected
by manual methods, and the total unlinked passenger trips on those
vehicle trips collected by APCs. Agencies subtract these two totals and
take the absolute value of the difference. They then divide this
difference by the total unlinked passenger trips in the sample
collected manually to get the difference as a percentage of the total.
The difference as a percentage of the total should be less than 5% to
meet the certification standard. The same calculation is performed for
passenger miles.
Comment: One commenter noted that APCs need to be checked
continually, not just annually.
Response: FTA concurs that continual monitoring of APCs is a best
practice; however, the purpose of the new APC certification policy is
not to be an exhaustive list of all procedures necessary to collect
good APC data. Agencies are only required to submit results to FTA as
described in the policy; beyond this, FTA encourages agencies to follow
best practices.
Comment: One commenter raised the concern that data could be
improperly manipulated before being analyzed in the certification
procedure, and suggested that agencies be required to use procedures
that secure the data from such manipulation.
Response: FTA encourages agencies to follow data security best
practices; however, this certification will not carry additional
administrative requirements to verify that numbers were not tampered
with intentionally. As with other data collected by the NTD, FTA will
require the agency CEO to attest to the accuracy of the data in the APC
certification report.
Comment: Five commenters offered opinions on the 5% error standard.
One commenter suggested that larger agencies with higher ridership
should be held to tighter error standards. Two commenters suggested
that a looser standard (8% or 10%) would be reasonable. Two commenters
suggested that standard error be taken into account; one suggested
setting a maximum allowable standard error, while another suggested
requiring the 5% error standard to be valid at the 95% confidence
level.
Response: In setting the proposed 5% standard, FTA balanced the
capabilities of the technology, data needs of NTD data users,
statistical validity, and ease of calculation. FTA continues to believe
that the proposed standard best fits these competing needs.
Comment: Two commenters suggested that agencies be required to
count passengers already on board at the start of a sampled trip as
boardings at the first stop, and passengers still on board at the end
of the trip as alightings at the last stop.
Response: FTA concurs that this is a best practice and a common
source of error, and will include guidance to this effect in the
policy.
Comment: Two commenters suggested setting a maximum allowable
percentage of trips discarded due to suspected poor data quality.
Response: FTA concurs that a large proportion of trips with invalid
data are likely to indicate a deeper problem with the APC system. The
final policy will stipulate that at most 50% of vehicle trips may be
rejected by data cleaning algorithms.
Comment: One commenter noted that having a checker for each door is
only necessary on heavy-ridership trips; one checker per bus is
sufficient otherwise.
Response: This is consistent with the guidance in FTA's original
proposed policy: ``we recommend using a data collector at each door on
heavily-loaded trips.''
Comment: Three commenters had observations related to the APC
penetration rate, the proportion of APC-equipped vehicles in the fleet.
Two commenters suggested that agencies be required to distribute APC-
equipped vehicles throughout the system in such a way that high-
ridership routes are not overrepresented. One commenter suggested that
FTA provide more precise rules pertaining to the requirement, ``The
trips must be distributed over as much of the agency's fleet of APC-
equipped vehicles as possible.''
Response: While distribution of APC-equipped vehicles is a possible
source of error in the annual service consumed totals reported to the
NTD, it is not relevant to APC certification. Existing guidance on
sampling already stipulates that agencies must avoid sampling bias. FTA
believes that agencies can interpret the requirement to distribute
sampled trips widely without the need for an explicit rule.
Comment: One commenter suggested that the certification process use
raw data rather than processed APC data.
Response: FTA believes, based on industry input, that raw APC data
should not be considered reliable or useful. Agencies will report
processed data to the NTD, so it is reasonable that they should certify
the accuracy of the processed data.
Comment: One commenter asked whether agencies would be allowed to
report unlinked passenger trips collected using one method (e.g.,
registering farebox) and passenger miles using APC.
[[Page 70264]]
Response: FTA concurs that in general this is allowed. However, if
the agency intends to use the average passenger trip length from a
sample to estimate passenger miles in subsequent years, the agency must
calculate the trip length using the unlinked passenger trips collected
by the method that will be used to report unlinked passenger trips to
the NTD.
Comment: One commenter asked whether agencies should use all valid
APC data, or should select a sample of vehicle trips from the available
valid APC data.
Response: FTA encourages agencies to use all valid data. However,
agencies need to account for the stratified nature of the sample in
this case. The set of all valid data may be biased toward certain
routes, vehicles, or trips, and thus cannot be considered a random
sample of the whole service. Instead agencies must determine average
unlinked passenger trips and passenger miles at a granular level (the
vehicle trip level, for example) and factor up each group (e.g.,
vehicle trip) individually. Alternatively, agencies are permitted to
use any NTD-approved sampling plan in conjunction with APCs. Any such
plan would include statistically valid procedures for replacing
selected trips on which data are not collected.
Comment: One commenter expressed concern that an agency may be
penalized by reduced formula funding if they perform their APC
maintenance check mid-year and find that the data no longer meet the
requirements.
Response: FTA reduced the required timeframe for the maintenance
check from one year to any convenient period. FTA expects that it will
typically take less than a month. An agency that performs the check and
finds that the error is over 5% should reexamine its APC data
collection procedures, make any needed adjustments, perform any needed
maintenance on the system, and retest. The shortened timeframe should
allow agencies to retest before the end of the year, thus ensuring that
an agency that encounters problems in its maintenance check can
nonetheless provide an uninterrupted set of data to the NTD. FTA will
clarify this point in its final policy.
Comment: One commenter suggested that FTA provide guidelines to
agencies for accuracy standards and testing that the agencies can write
into their RFPs when they procure APC systems.
Response: While FTA certainly encourages agencies to follow best
practices when procuring APC systems, FTA believes ample guidance is
available through other industry resources.
Comment: Two commenters commented on the proposed sample size. One
commenter recommended a minimum of 40 and a maximum of 70 vehicle
trips. The other commenter recommended that a minimum number of
boardings (e.g., 1,000) be mandated in addition to vehicle trips.
Response: In devising the proposed number of trips (15 to 50) FTA
balanced the need for good data with agency burden. FTA notes that the
proposed requirements are only a minimum; agencies are free to use a
larger sample if they believe it will provide better data.
Comment: One commenter requested that FTA provide a template that
performs the calculations.
Response: FTA designed the error criteria to be simple enough that
an agency should be able to calculate them without the need for a
template.
Comment: Eight commenters had comments about unbalanced error. One
commenter noted that the unbalanced error criterion would be harder for
small agencies to satisfy than large ones, and that unbalanced error
does not detect systemic bias. Three commenters believe the unbalanced
error criterion would be too difficult to meet. Three commenters noted
that unbalanced error is redundant since unlinked passenger trips are
already being tested. Two commenters requested clarification of the
definition of unbalanced error.
Response: FTA concurs with the concerns that commenters have raised
and will withdraw the unbalanced error criterion from the final policy.
D. Overview of Final Updates to the USOA and NTD Reporting Requirements
After considering the comments submitted on the proposed updates to
the USOA and changes to NTD reporting requirements, FTA will delay the
implementation of the original proposed USOA changes to FY 2018.
Additionally, FTA will add line items to account for ``Deferred
Outflows of Resources'' and ``Deferred Inflows of Resources'' on the F-
60 form, as well as rescind the original proposed changes to add
``Pension Funds'' and ``OPEB Adjustment'' USOA object classes. FTA will
also publish a new USOA numbering scheme that is more consistent with a
standard chart of accounts. These changes will be reflected in the
final Uniform System of Accounts.
The revised APC certification process is effective immediately. The
final requirements can be found on the NTD Web site:
www.transit.dot.gov/ntd.
Carolyn Flowers,
Acting Administrator.
[FR Doc. 2016-24414 Filed 10-7-16; 8:45 am]
BILLING CODE P