Transportation Disadvantaged: Progress in Implementing the New	 
Freedom Program Has Been Limited, and Better Monitoring 	 
Procedures Would Help Ensure Program Funds Are Used as Intended  
(19-JUL-07, GAO-07-999R).					 
                                                                 
The Americans with Disabilities Act (ADA) of 1990 seeks to ensure
equal opportunity for persons with disabilities in employment,	 
transportation, and other matters. ADA sets minimum standards for
the accessibility of public transportation systems. For example, 
for persons unable to use a fixed-route bus or rail system due to
disability, transit systems must provide service within 	 
three-quarters of a mile of the fixed-route service and during	 
the same hours as the fixed-route service. In February 2001, the 
Bush Administration announced the New Freedom Initiative, a	 
comprehensive program intended to extend and enhance efforts	 
begun under ADA to help bring Americans with disabilities into	 
mainstream life. According to the U.S. Census Bureau, in 2005	 
there were about 40 million noninstitutionalized persons over the
age of 5 with one or more disabilities. In August 2005, the Safe,
Accountable, Flexible, Efficient Transportation Equity Act--A	 
Legacy for Users (SAFETEA-LU) authorized the New Freedom program,
to be administered by the Department of Transportation's Federal 
Transit Administration (FTA). This program is designed to support
new public transportation services and public transportation	 
alternatives beyond those required by ADA. Congress appropriated 
$77.2 million for the New Freedom program in fiscal year 2006 and
$81.0 million in fiscal year 2007. Program funds are distributed 
through grants from FTA to entities designated by state 	 
governors, and these grants may be used for operating support or 
capital projects. Operating and capital project grants require	 
state/local matching funds. Projects eligible for New Freedom	 
grants must be derived from a locally developed coordinated	 
public transit-human service transportation plan (coordinated	 
plan) with input from a wide variety of state and local entities,
human service agencies, consumer groups, and others. On May 4,	 
2007, we briefed Congressional staff on the work Congress	 
requested related to FTA's New Freedom program. The objectives of
this work were to (1) determine the extent to which FTA has	 
implemented the New Freedom program and identify concerns, if	 
any, of selected state and local entities and (2) determine how  
FTA monitors program performance.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-999R					        
    ACCNO:   A72947						        
  TITLE:     Transportation Disadvantaged: Progress in Implementing   
the New Freedom Program Has Been Limited, and Better Monitoring  
Procedures Would Help Ensure Program Funds Are Used as Intended  
     DATE:   07/19/2007 
  SUBJECT:   Disadvantaged persons				 
	     Federal aid for transportation			 
	     Federal funds					 
	     Grants to states					 
	     Paratransit services				 
	     Persons with disabilities				 
	     Program evaluation 				 
	     Program management 				 
	     State-administered programs			 
	     Transportation law 				 
	     Transportation policies				 
	     Policies and procedures				 
	     Program implementation				 
	     New Freedom program				 

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GAO-07-999R

   

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July 19, 2007

The Honorable John W. Olver
Chairman
Subcommittee on Transportation, Housing and
Urban Development, and Related Agencies
Committee on Appropriations
House of Representatives

Subject: Transportation Disadvantaged: Progress in Implementing the New
Freedom Program Has Been Limited, and Better Monitoring Procedures Would
Help Ensure Program Funds Are Used as Intended

Dear Mr. Chairman:

The Americans with Disabilities Act (ADA) of 1990 seeks to ensure equal
opportunity for persons with disabilities in employment, transportation,
and other matters. ADA sets minimum standards for the accessibility of
public transportation systems. For example, for persons unable to use a
fixed-route bus or rail system due to disability, transit systems must
provide service within three-quarters of a mile of the fixed-route service
and during the same hours as the fixed-route service.1 In February 2001,
the Bush Administration announced the New Freedom Initiative, a
comprehensive program intended to extend and enhance efforts begun under
ADA to help bring Americans with disabilities into mainstream life.
According to the U.S. Census Bureau, in 2005 there were about 40 million
noninstitutionalized persons over the age of 5 with one or more
disabilities.

In August 2005, the Safe, Accountable, Flexible, Efficient Transportation
Equity Act--A Legacy for Users (SAFETEA-LU) authorized the New Freedom
program, to be administered by the Department of Transportation's Federal
Transit Administration (FTA). This program is designed to support new
public transportation services and public transportation alternatives
beyond those required by ADA. Congress appropriated $77.2 million for the
New Freedom program in fiscal year 2006 and $81.0 million in fiscal year
2007. Program funds are distributed through grants from FTA to entities
designated by state governors, and these grants may be used for operating
support or capital projects. Operating and capital project grants require
state/local matching funds. Projects eligible for New Freedom grants must
be derived from a locally developed coordinated public transit-human
service transportation plan (coordinated plan) with input from a wide
variety of state and local entities, human service agencies, consumer
groups, and others.

1This is known as complementary paratransit service because it is
comparable to the level of service provided to individuals who use the
fixed-route service.

On May 4, 2007, we briefed your staff on the work you requested related to
FTA's New Freedom program. Enclosure I contains the detailed briefing
slides that were presented to your staff on May 4, 2007. The objectives of
this work were to (1) determine the extent to which FTA has implemented
the New Freedom program and identify concerns, if any, of selected state
and local entities and (2) determine how FTA monitors program performance.
To accomplish these objectives, we reviewed pertinent legislation, interim
and final program guidance issued by FTA, and New Freedom grants approved
by FTA, and we interviewed FTA officials in headquarters and two regions.
We also interviewed officials in organizations designated as grant
recipients in three large urban areas--Chicago, Illinois; Orlando,
Florida; and Washington, D.C.--and in three states--Illinois, Maryland,
and Virginia. We selected urban areas that had significant fiscal year
2006 New Freedom funding and, among other things, were in different phases
of program implementation. The states were selected for their proximity to
and relationship with the urban areas selected and their differing
abilities to provide matching fund assistance. We conducted our work from
December 2006 to March 2007 in accordance with generally accepted
government auditing standards.

In general, we found that progress in implementing the New Freedom program
had been limited and that state and local officials we spoke with
identified implementation concerns. As of March 2007, FTA had awarded few
grants--13 grants representing about 3 percent of funds appropriated in
fiscal year 2006. FTA issued final program guidance in March 2007, after
engaging in a careful and deliberate but time-consuming process of
obtaining public and other stakeholder comments on interim versions of the
guidance issued in March 2006 and September 2006. FTA officials conducted
extensive outreach through listening groups and other mechanisms to help
develop the final program guidance. FTA officials said this and compliance
with the Administrative Procedures Act limited their progress in program
implementation. FTA officials also told us that after consulting with some
of its key stakeholders, FTA restricted project eligibility in its final
program guidance by requiring that New Freedom projects be both new and
beyond ADA requirements. In addition, FTA reported that few governors had
designated the entities to receive program funds. Moreover, state and
local officials we spoke with had made limited progress in developing
coordinated plans. State and local officials also voiced concerns about
the impact of matching fund requirements on project selection, the effect
of limited program funding on their ability to undertake large projects,
and the types of projects that qualify under the "beyond ADA"
requirements.

We also found that FTA had not fully developed policies and procedures for
monitoring and oversight of the New Freedom program. In particular, FTA
had not included specific provisions for the New Freedom program in its
triennial and state management reviews, nor had it developed guidance
about reviews of grantees not subject to triennial or state management
reviews (called "spot" reviews).2 FTA officials told us that they plan to
develop such procedures and had already begun to develop questions on the
New Freedom program to be incorporated into the agency's existing
oversight reviews. We believe that completing these procedures will be
important to ensuring that funds are being used in accordance with program
requirements and that recipients are being held accountable for their use
of program funds. Based on our findings, we recommend that the Secretary
of Transportation direct the FTA Administrator to develop and implement a
plan to oversee the New Freedom program that includes adding
program-specific provisions to the triennial and state management reviews
and specifying the role and frequency of spot reviews.

We provided a draft of this report and the briefing slides to the
Department of Transportation and FTA for comment. DOT officials, including
the FTA Director of the Office of Transit Programs, generally agreed with
the findings in the report and briefing slides and said they would
consider the recommendation as they move forward in implementing the New
Freedom program. They also noted that they have requested authority, in
the President's fiscal year 2008 budget, to use 1 percent of New Freedom
program funding for oversight. We believe that it will be important for
FTA to develop and implement an oversight plan for the New Freedom
program, regardless of whether FTA receives specific funding for oversight
of this program in its fiscal year 2008 budget.

                                 -- -- -- -- --

As agreed with your office, unless you publicly announce the contents of
this report earlier, we plan no further distribution until 10 days from
the report date. We will then send copies of this report to the Chairmen
and Ranking Minority Members of the Senate and House Subcommittees with
jurisdiction over FTA matters. We will also send copies to the Secretary
of Transportation and the Administrator of the Federal Transit
Administration and other interested parties. In addition, the report will
be available at no cost on the GAO Web site at [3]http://www.gao.gov .

If you or your staff have questions about this report, please contact me
at [4][email protected] or at (202) 512-7215. Contact points for our offices
of

2Triennial reviews are conducted at least once every 3 years on urbanized
area formula grantees to evaluate formula grant management performance and
grantee compliance with FTA and other federal government requirements.
State management reviews assess states' implementation and management of
the Elderly and Persons with Disabilities program, the Nonurbanized Area
Formula program, and other programs to ensure they are being administered
in accordance with FTA's requirements and are meeting program objectives.
Triennial and state management reviews are part of FTA's established
program oversight mechanisms.

Congressional Relations and Public Affairs may be found on the last page
of this report. Individuals making key contributions to this report are
listed in enclosure II.

Sincerely yours,

Kay E. Brown,
Acting Director, Physical Infrastructure Issues

Enclosures 2

Enclosure I: GAO Briefing to House Subcommittee

Enclosure II: Contact and Staff Acknowledgments

GAO Contact

Kay Brown, (202) 512-7215 or [5][email protected]

Staff Acknowledgements

In addition to the contact named above, Rita Grieco,
Assistant Director; Ashley Alley; Richard Calhoon; H. Brandon Haller;
Richard Jorgenson; and Joshua Ormond made key contributions to this
report.

(542106)

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