PUBLIC 

TRANSPORTATION

Federal Role Key to 

Rural and Tribal 

Transit

Report to the Committee on Banking, 

Housing, and Urban Affairs, 

U.S. Senate

June 2014

GAO-14-589

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-589, a report to the 

Committee on Banking, Housing, and Urban 

Affairs, U.S. Senate

June 2014

PUBLIC TRANSPORTATION

Federal Role Key to Rural and Tribal Transit

Why GAO Did This Study

Public transportation in rural areas can 

be critical to connecting people to jobs, 

shopping, and health services. FTA 

awarded approximately $600 million in 

grants in both fiscal year 2013 and 

2014 to support rural transit, including 

tribal transit. The current surface 

transportation authorization, enacted in 

2012, increased funding for tribal 

transit from about $15 to $30 million 

per year and changed how these funds 

are allocated.

The committee asked GAO to review 

FTA’s rural transit program. This report

examines (1) FTA’s funding, oversight, 

and other support for the rural transit

program; (2) changes in services, 

ridership, and costs since 2009; and 

(3) challenges that rural and tribal 

transit providers face and possible 

actions to address them. To address 

these topics, GAO reviewed program 

documentation and conducted about 

50 interviews with FTA officials,

national groups that have a 

relationship with rural transit providers,

state transportation officials, and 

officials from rural and tribal transit 

providers. GAO selected state officials 

and providers based on grant amounts, 

the types of services offered, the size

of transit systems, and geography, 

among other factors. Results are not

generalizable to all states and 

providers. Additionally, GAO analyzed 

FTA data on transit services, ridership, 

and costs from 2009 through 2012, the 

latest year data were available. This 

report contains no recommendations.

GAO provided a draft of this report to 

the Secretary of Transportation for 

review and comment. The Department 

of Transportation did not have any 

comments on the report.

What GAO Found

The Federal Transit Administration’s (FTA) Formula Grants for Rural Areas 

Program (rural transit program) is FTA’s only dedicated grant program for rural 

and tribal transit. FTA apportions nearly all program funds to states. State 

transportation agencies then allocate funding to rural and tribal transit providers 

as sub-grantees. The remainder of program funds—$30 million annually—

supports the Tribal Transit Program through direct apportionments to tribes

based on a new statutory formula ($25 million) used for the first time in fiscal year 

2013, or through discretionary grants ($5 million). Twenty-two of the 30 selected 

rural and tribal transit providers GAO spoke with indicated that rural transit

program funds are essential to sustaining transit in their communities, noting that

without these funds, transit service in their area would be reduced or, in some 

cases, eliminated. FTA’s oversight activities focus on state transportation 

agencies that oversee providers. FTA also offers support to providers, such as 

for training on safety, and providers generally agreed that this support is useful.

From 2009 through 2012, the types of services offered by rural and tribal transit 

providers have remained about the same. Demand-response service, in which

riders call in advance to schedule their trips, and fixed- or deviated-fixed-route 

service, in which a bus will deviate from an established route, are most typical in

rural areas (see fig.). In this period, ridership increased 4 percent, and operating 

costs increased 19 percent, according to FTA national data.

Rural Transit Service in 2012

Selected rural and tribal transit providers identified an array of operational and 

funding challenges. For example, 24 of the 30 providers GAO interviewed said 

that it was difficult to hire and retain qualified drivers, and 16 said that it was hard 

to secure local or state funds to meet the rural transit program’s funding-match 

requirements. Some providers GAO interviewed addressed these respective 

challenges by offering training and through dedicated local tax funding. GAO also 

found that the new Tribal Transit Program’s statutory formula—which 

emphasizes miles driven in providing transit services—resulted in some tribes 

receiving grant amounts that varied significantly from previous levels, with 

increases and decreases of 50 percent or more common. According to FTA 

officials, larger tribal transit systems tended to receive increased awards, while

smaller systems tended to receive reduced awards. FTA officials also indicated 

they anticipated that when implementing the formula for the first time that it would 

result in very different funding levels for some tribal transit providers. Accordingly, 

FTA conducted outreach and meetings with providers to educate them about 

these likely changes. Selected tribal transit providers and FTA have considered 

strategies to mitigate declines in Tribal Transit Program funding and are still in 

the process of adjusting to new funding levels. 

View GAO-14-589. For more information, 

contact David J. Wise at (202) 512-2834 or 

wised@gao.gov.

Source: GAO analysis of Federal Transit Administration data. | GAO-14-589
Page i GAO-14-589 Public Transportation 

Letter 1

Background 3

FTA Funds Rural and Tribal Transit Programs Largely Through 

Formula Grants and Oversees and Provides Assistance to 

Grantees 8

Since 2009, Rural and Tribal Transit Providers’ Services Have 

Remained Generally the Same and Have Experienced 

Increased Ridership and Costs 16

Selected Providers Face Operational and Funding Challenges and 

Tribal Transit Funding Changes Have Created Some 

Uncertainty 23

Agency Comments 31

Appendix I Objectives, Scope, and Methodology 33

Appendix II GAO Contact and Staff Acknowledgments 36

Tables

Table 1: Federal Transit Administration’s (FTA) Programs That 

Provide Funding for Rural Transit, Other Than the Rural 

Transit Program, and Changes after MAP-21 6

Table 2: Frequently Cited Transit Challenges due to Operating in 

Rural Areas 23

Figures

Figure 1: Rural and Tribal Transit Providers Operate Smaller 

“Cutaways” and Larger Buses 4

Figure 2: Rural and Tribal Transit Providers Operate a Variety of 

Transit Services 5

Figure 3: Summary of Rural Transit Service in 2012 17

Figure 4: Average Fuel Prices per Gallon, 2009 through 2012, in 

2012 Constant Dollars 20

Figure 5: Average Increases and Decreases in Tribal Transit 

Funding Following Change from Discretionary to Formula 

Funding (Fiscal Years 2009-2012 versus Fiscal Years 

2013-2014) 30

Contents
Page ii GAO-14-589 Public Transportation 

Abbrevations

AASHTO American Association of State Highway and 

Transportation Officials 

CTAA Community Transportation Association of America 

GPS Global Positioning Systems

FTA Federal Transit Administration 

JARC Job Access and Reverse Commute 

MAP-21 Moving Ahead for Progress in the 21st Century Act

rural NTD rural National Transit Database 

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Page 1 GAO-14-589 Public Transportation 

441 G St. N.W.

Washington, DC 20548

June 24, 2014

The Honorable Tim Johnson

Chairman

The Honorable Mike Crapo

Ranking Member

Committee on Banking, Housing, and Urban Affairs

United States Senate

In rural areas, public transportation—typically some type of bus service—

can be critical to connecting people to jobs, education, shopping, and 

health services. Rural transit systems operate in various environments. 

Their service areas may span thousands of square miles in remote areas, 

be located in more developed rural areas surrounding major cities, or be 

in smaller urban areas with populations under 50,000. Regardless, 

compared to large urban transit systems, rural transit systems generally 

have low budgets, few employees, and small vehicle fleets. The 

approximately 1,400 rural transit providers in the country may face an 

array of challenges in their efforts to provide safe, cost-effective public 

transportation.1

Since 1978, the federal government has supported rural and tribal transit 

service through the Formula Grants for Rural Areas Program (rural transit 

program), administered by the Federal Transit Administration (FTA).

Seventy-five million people live in rural America; for those 

who cannot drive, these transit systems provide vital mobility and 

connections to essential services and community activities.

2

Since 2005, a portion of rural transit program funds have been specifically 

targeted to rural transit services for federally recognized tribes through 

the Tribal Transit Program.3

 1

The most recent edition of the Rural Transit Fact Book estimated that there were 

approximately 1,400 rural transit providers in the U.S. in 2011. Upper Great Plains 

Transportation Institute, North Dakota State University, Rural Transit Fact Book 2013

(Fargo, ND: July 2013).

The current surface transportation 

authorization act—Moving Ahead for Progress in the 21st Century (MAP21)—authorized about $600 million annually for fiscal year 2013 and 2014 

2

49 U.S.C. § 5311.

3

Safe, Accountable, Flexible, Efficient Transportation Equity Act—A Legacy for Users 

(SAFETEA-LU), Pub. L. No. 109-59, §§ 1119(g)(4), 3013, 119 Stat. 1144, amending 23 

U.S.C. § 202 and 49 U.S.C. § 5311, authorized creation of the Tribal Transit Program.
Page 2 GAO-14-589 Public Transportation 

for the rural transit program for operating assistance and capital projects, 

among other purposes, and made several programmatic changes.4 For 

example, the legislation increased funding targeted to tribal transit to $30 

million per year from about $15 million per year and changed the 

allocation for $25 of the $30 million from the previous discretionary 

approach to a formula based largely on the number of miles traveled by 

transit systems.5

To determine how FTA’s rural grant program funds, oversees, and 

otherwise supports rural and tribal transit services, we reviewed FTA 

circulars, training, and guidance materials; reviewed state transportation 

agency program documentation; and interviewed FTA officials. To 

determine what is known about how rural transit services, ridership, and 

costs have changed since 2009, we analyzed data from FTA’s rural 

National Transit Database (rural NTD) for fiscal years 2009 through 2012, 

the most recent available year of national data. After determining that the 

data were sufficiently reliable at the national level for our purposes by 

independently assessing the data and interviewing FTA officials on 

validation procedures, we analyzed specific data elements in the rural 

NTD including: fleet size, type of transit service provided, passenger trips 

taken, and expenditures. Our review included both annual analyses for 

each year as well as assessing changes from fiscal years 2009 through 

2012. To determine the challenges that rural and tribal providers face and 

identify any potential actions that could address these challenges, we 

reviewed relevant literature and interviewed 2 national stakeholder groups 

that work closely with rural and tribal providers and state transportation 

agencies. Literature and interviewees identified some solutions to 

In addition to administering these rural transit program 

grants, FTA provides oversight of and support to grantees. You asked 

that we review the rural transit program and the provision of transit 

service in rural and tribal areas. This report examines (1) how FTA funds, 

oversees, and otherwise supports rural and tribal transit services in the 

rural transit program; (2) what is known about how services, ridership, 

and costs for rural and tribal transit have changed since 2009; and (3) 

what challenges rural and tribal transit providers face in providing transit 

service, and what actions could address these challenges.

 4

Pub. L. No. 112-141, § 20028, 126 Stat. 405, 726 (2012), codified at 23 U.S.C. 

§ 5338(a)(2)(E).

5

Five million dollars in Tribal Transit Program funds continue to be awarded on a 

discretionary basis. 49 U.S.C. §§ 5311(c)(1), 5338(a)(2)(E). 
Page 3 GAO-14-589 Public Transportation 

challenges faced, which we summarized. To provide additional 

information for all of these questions, we interviewed 15 state 

transportation agencies and 30 rural transit providers, including 8 tribal 

transit providers. We nonstatistically selected the state transportation 

agencies to provide a range of rural or tribal transit providers, grant 

amounts, and FTA regions. We selected rural and tribal transit providers 

to interview in selected states using data from the fiscal year 2011 rural 

NTD such as total operational expenditures and transit service provided.6

We conducted this performance audit from June 2013 to June 2014 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.

Additionally, we interviewed officials with 2 tribal transit providers not in 

selected states based on changes in funding these tribes received 

following MAP-21 reforms. The views and information obtained from 

these interviews are not generalizable to all states or rural and tribal 

transit providers. Finally, to assess challenges related to Tribal Transit 

Program funding, after determining data were sufficiently reliable for our 

purposes, we analyzed FTA award data from 2009 through 2014 to 

calculate changes in funding levels experienced by tribal transit providers. 

Appendix I contains a more detailed discussion of our objectives, scope, 

and methodology.

Rural and tribal transit agencies are diverse and may operate only one or 

two vehicles, a few dozen, or, for a few agencies, fleets with hundreds of 

vehicles. Transit systems in rural areas may cover large areas with low 

population densities, which means that trips may be long, and that there 

may be only a few riders at any given time. To operate transit services, 

rural and tribal transit providers typically use cutaway vehicles (a transit 

vehicle built on a van or truck chassis), buses, and vans. Figure 1 below 

shows a typical cutaway vehicle and a rural transit bus.

 6

The 2011 rural NTD was the most current information available at the time of interviewee 

selection. The 2012 rural NTD data were not yet available.

Background
Page 4 GAO-14-589 Public Transportation 

Figure 1: Rural and Tribal Transit Providers Operate Smaller “Cutaways” and Larger Buses

Rural and tribal transit providers operate a variety of transit services, 

including demand response, which is scheduled in response to calls from 

passengers; fixed routes, which are buses operating according to a set 

schedule; and deviated-fixed routes, which are fixed routes that allow for 

minor route deviations in response to passenger calls. Figure 2 below 

summarizes typical rural transit services operated.
Page 5 GAO-14-589 Public Transportation 

Figure 2: Rural and Tribal Transit Providers Operate a Variety of Transit Services

FTA’s rural transit program has provided federal support of public 

transportation in rural areas since 1978 by providing formula grants to 

states that, in turn, distribute funds to rural transit providers through state 

transportation agencies. The program defines rural areas as those areas 

with fewer than 50,000 people, as defined by the U.S. Census Bureau.7

 7

49 U.S.C. § 5302(16).

MAP-21 authorized $600 million annually for the rural transit program and

changed some aspects of the rural transit program, which are discussed 

Source: GAO | GAO-14-589
Page 6 GAO-14-589 Public Transportation 

below. In addition to the rural transit program, rural and tribal transit 

providers have been able to receive funding—particularly for capital 

assistance—from other FTA grant programs that are not specific to rural 

transit, although some of these other grant programs changed or were 

eliminated by MAP-21. For example, a portion of one FTA discretionary 

grant program that provided capital funding to transit providers for bus 

and bus facilities was eliminated and replaced by a new formula 

program.8 Also, the largest source of capital funding for transit providers 

in 2009 and 2010 was the American Recovery and Reinvestment Act of 

2009 (Recovery Act).9 With Recovery Act funds, FTA distributed

approximately $820 million in stimulus funds nationwide through various 

established FTA grant programs, including the rural transit program, for 

rural and tribal transit providers for capital assistance for transit vehicle 

purchases and rehabilitations, for example. Recovery Act grantees had to 

obligate Recovery Act funds by September 30, 2010.10

Table 1: Federal Transit Administration’s (FTA) Programs That Provide Funding for Rural Transit, Other Than the Rural 

Transit Program, and Changes after MAP-21

Table 1 below 

summarizes FTA programs other than the rural transit program that 

provided operating and capital funding to rural and tribal transit providers 

and their status after MAP-21.

Program name

Most recent funding 

provideda Description Status as of MAP-21

Enhanced Mobility of Seniors 

and Individuals with 

Disabilities 

$255 million in FY 2013 

for rural and urban transit

Formula grant program for capital 

assistance to increase the mobility of 

seniors and persons with disabilities. 

Since MAP-21, these funds can 

also be used for operating 

assistance.

Bus and Bus Facilities 

Program 

$66 million in FY 2013 

for states and territories 

to distribute to rural and 

small urban transit 

systems

Formula grant program for capital 

assistance to replace, rehabilitate, and 

purchase buses and related equipment, 

and to construct bus-related facilities.

New formula grant program since 

MAP-21 provided funds for the 

first time in fiscal year 2013.

Capital Investment Grant 

Program 

$1.8 billion in FY 2012 

for rural and urban transit

Discretionary grant program for major 

capital investments in new and 

expanded rail, bus rapid transit, and 

ferry systems.

The bus and bus facility element 

of this program was replaced by 

the new Bus and Bus Facilities 

Program for vehicle purchases in 

fiscal year 2013.b

 8

49 U.S.C. § 5339.

9

Pub. L. No 111-5, div. A, title xii, 123 Stat. 115, 209-211 (2009).

10Recovery Act, div. A, § 1603, 123 Stat., 302.
Page 7 GAO-14-589 Public Transportation 

Program name

Most recent funding 

provideda Description Status as of MAP-21

Job Access and Reverse 

Commute Program 

$19 million in FY 2012 

for rural transit

Grant program for capital and operating 

assistance to provide services to lowincome individuals to access jobs. 

This program was eliminated in 

fiscal year 2013 and its activities 

are now eligible for funding under 

the rural transit program and 

FTA’s urbanized area formula 

program.

Source: GAO. | GAO-14-589

Note: Moving Ahead for Progress in the 21st Century (MAP-21) is the current surface transportation 

authorization.

a

Funding amounts reported in this table represent the last fiscal year funds were available to rural and 

tribal transit providers. Where urban and rural funding levels are provided, it was not possible to 

determine how much of the overall amount went to rural transit providers.

b

Prior to the enactment of MAP-21, FTA provided discretionary grants for buses and bus facilities 

through its Capital Investment Grant Program (49 U.S.C. § 5309) to both urban and rural providers. 

MAP-21 replaced this program with a new formula grant program, the Bus and Bus Facilities 

Program, (49 U.S.C. § 5339) that provides $1.25 million annually to state transportation agencies to 

sub-allocate to small urban and rural providers for buses and bus facilities. The rest of the capital 

funds under the Bus and Bus Facilities program are distributed by formula to urban transit providers. 

Both the Capital Investment Grant Program and the Bus and Bus Facilities Program require a 20 

percent match of state or local funds.

FTA, a relatively small agency with just over 500 employees and an 

annual budget of just under $11 billion in fiscal year 2014 sets policies, 

develops guidance, and produces training materials for the rural transit 

program, among other programs.11 FTA’s 10 regional offices assist in 

implementing the program by working with state transportation agencies 

on grants and other activities.

 11According to the Federal Transit Administration’s fiscal year 2015 budget submission, 

the agency’s enacted budget for fiscal year 2014 was $10.8 billion and the agency had 

530 full-time equivalent staff positions. Department of Transportation, Federal Transit 

Administration, FY 2015 Budget Submission, Administrator’s Overview (Washington, 

D.C.).
Page 8 GAO-14-589 Public Transportation 

The rural transit program is FTA’s only dedicated funding program for 

rural and tribal transit. FTA apportions nearly all rural transit program 

funds to states through a formula based on various factors, including rural 

land area and the number of “vehicle revenue miles” that rural transit 

systems in their state drove.12 State transportation agencies then allocate 

funding to transit provider sub-grantees, who provide public transit 

services in their communities. Sub-grantees can be regional or local 

governments, non-profit organizations, or federally recognized tribes.13

To receive rural transit program grants, state and tribal grantees must

meet certain federal compliance, funding match, and reporting 

requirements. Per FTA requirements, states develop a State 

Management Plan that delineates how they will distribute funds to subFTA also awards rural transit program grants directly to federally 

recognized tribes through the Tribal Transit Program within the rural 

transit program.

 12In addition to all 50 states, the rural transit program provides grants to American Samoa, 

Guam, Northern Marianas, and Puerto Rico. FTA’s rural NTD glossary of terms defines 

“vehicle revenue miles” as miles driven providing transit services for passengers 

excluding, among other things, operator training or maintenance testing and “deadhead”

miles in which a transit vehicle travels to or from its route. 

13The Bureau of Indian Affairs lists 566 federally recognized tribes as of January 2014. 79 

Fed. Reg. 4748 (Jan. 29, 2014).

FTA Funds Rural and 

Tribal Transit 

Programs Largely 

Through Formula 

Grants and Oversees 

and Provides 

Assistance to 

Grantees

For Most Selected 

Providers, FTA’s Rural 

Transit Program is a Key 

Source of Funding
Page 9 GAO-14-589 Public Transportation 

grantees and administer the program.14 Additionally, state transportation 

agencies oversee their sub-grantees and ensure compliance with federal 

requirements. Grants may cover up to 50 percent of net operating costs 

of a project, for expenses such as fuel and wages, and 20 percent of the 

net costs of a capital project, for assets such as vehicles and facilities.15

Recent legislation has changed some aspects of the rural transit program. 

Enacted in 2012, MAP-21 increased funding for the rural transit program, 

from about $500 million to about $600 million annually, made planning 

activities an eligible activity for the first time, and added low income 

population as a factor in the formula that allocates grant funds to states.

The remainder, or match, must be made up from either the state 

transportation agency or local funding resources.

16

MAP-21 also doubled the funding level for the Tribal Transit Program 

from about $15 million to about $30 million annually.17

 14States are required to allocate a minimum of 15 percent of their rural transit grant to 

intercity bus transportation unless the Governor certifies that the intercity bus service 

needs of the State are being adequately met. 49 U.S.C. § 5311(f)(1).

The Tribal Transit 

Program also changed from an entirely discretionary award program to a 

split formula and discretionary program, with $25 million awarded by 

formula and $5 million that tribes can apply for and are awarded based on 

criteria established by FTA. Fifty percent of the formula funds for tribes 

are based on vehicle revenue miles, or transit system miles driven, as 

reported in the rural NTD; 25 percent of the formula is distributed equally 

among tribes with 200,000 or more vehicle revenue miles; and 25 percent 

is distributed to tribes with more than 1,000 low-income people. In 

general, federal surface transportation dollars are apportioned by formula, 

allowing recipients to select projects that reflect their priorities. FTA 

expects the formula to provide tribal transit providers with a more stable 

and reliable source of federal funding. Being a direct FTA grantee in the 

Tribal Transit Program does not preclude a tribe from also being a subgrantee of a state transportation agency through the rural transit program.

1549 U.S.C. § 5311(g)(1)(A), (2)(A).

1649 U.S.C. § 5311(b)(1)(A)(1), (3)(C)(iv).

17The administration’s 2014 surface transportation reauthorization proposal would 

incrementally increase Tribal Transit Program funds from $30 million in fiscal year 2015 to 

about $32.7 million in fiscal year 2018.
Page 10 GAO-14-589 Public Transportation 

According to officials with state transportation agencies and transit 

providers we interviewed, this program is an important source of federal 

funds for rural and tribal transit providers, though other funding sources 

also are used. Specifically, officials with 11 of the 15 state transportation 

agencies and 22 of the 30 rural or tribal transit providers that we 

interviewed indicated the program was essential to sustaining transit in 

their communities. Officials frequently indicated that without rural transit 

program funds, transit service in their area would be reduced or, in some 

cases, eliminated. For example, one provider in Oklahoma explained that 

without the approximately $137,000 in rural transit program funds they 

received in fiscal year 2013, they would not be able to finance the 200 to 

300 rides per day they currently provide.

While most transit officials we met emphasized the central importance of 

rural transit program funds, the program’s relative importance varied 

across states, providers, and tribes depending on the availability of other 

funding from state, local, and tribal governments. State officials in 4 of 15 

states indicated that state funding for rural transit exceeded FTA grant 

program funds. For example, the state of Michigan provided about onethird of the total operating expenditures in fiscal year 2012, according to 

state transportation agencies officials. Conversely, according to state 

transit officials in Georgia, the state of Georgia does not provide state 

transportation funds for rural transit. This may be the result, in part, from a 

provision in the Georgia Constitution that requires that all state motor fuel 

taxes be appropriated for highway purposes.18

 18Georgia Constitution, § IX, ¶ VI(b).

The availability of local 

sources of funds also varies considerably. Local sources of funds used by 

our selected transit providers included, for example, local general funds, 

dedicated local sales taxes, contracts with social service agencies that 

need transportation services for their clients, and fare box revenue. 

Officials with 7 of the 30 providers we interviewed indicated that state and 

local funds were adequate to support most of their operations. For 

example, we spoke with 2 providers in mountain resort communities that 

provide significant local funds to the transit system because affordable 

transportation for resort workers was deemed essential to the local 

economy. Conversely, officials from some other providers indicated that 

local government support for transit is difficult to secure, particularly given 

other budget priorities. In a few cases, transit providers we interviewed 

said they held fundraisers or solicited donations. For example, one 
Page 11 GAO-14-589 Public Transportation 

provider in Missouri noted that proceeds from bake sales and quilt raffles 

have helped them raise funds to purchase new vehicles. Among the tribal 

transit providers we interviewed, the availability of rural transit program 

funds to sub-recipients of the state transportation agency varied 

depending on the nature of the tribe’s relationship with the state. For 

example, some tribes reported a preference for working with their local 

state government as a sub-recipient whereas others strongly preferred 

working directly with the federal government because of strained tribestate relations.

Following several MAP-21 reforms, the role of the rural grant program has 

changed somewhat,19

• The new Bus and Bus Facilities Program provides each state with 

$1.25 million per year to distribute to any area within a state, including 

rural areas.

though according to FTA officials, it continues to be 

FTA’s most important funding program for rural and tribal transit.

20 According to FTA officials, this program replaces the 

previous Capital Investment Grant Program that provided 

discretionary grants to states for rural transit buses.21 According to 

some state transportation officials we interviewed, these changes 

have potentially reduced federal funding available for rural transit 

capital projects.

• The Job Access and Reverse Commute (JARC) program—which 

funded programs focused on transportation for low income people—

was eliminated and, according to FTA documentation on MAP-21 

changes, consolidated activities previously eligible for JARC funding 

into the rural transit program. State and transit officials expressed 

mixed views on the impact of this change. Officials in two states 

indicated that the consolidation should provide greater flexibility in 

service provision and reduce the number of federal grants they 

 1949 U.S.C. §§ 5311, 5339. 

2049 U.S.C. § 5339. Bus and bus facilities in urban areas are also funded through this 

program. The administration’s 2014 surface transportation reauthorization proposal 

increases § 5339 funding to $1.9 billion total in fiscal year 2015 for both urban and rural 

transit systems.

2149 U.S.C. § 5309(b)(3) (2012).
Page 12 GAO-14-589 Public Transportation 

administer.22 Conversely, a state transportation official in the state of 

New York explained that the consolidation could leave some rural 

transportation programs that provided service to low income people 

funded with JARC grants, without a federal funding source in the rural 

transit program because these programs do not offer transit services 

to the general public, as required by the rural transit program. To 

continue service, according to this official, some of these providers will 

try to partner with other existing transit providers.

• Funding increased for the Tribal Transit Program and changed from a 

discretionary program to a largely formula-based program. Since the 

enactment of MAP-21, FTA has awarded grants to more tribes than in 

prior years. For example, in fiscal year 2012, the last year only 

discretionary grants were awarded, FTA awarded grants totaling 

approximately $15.5 million to 72 tribes. In fiscal years 2013 and 2014 

since MAP-21, $25 million has been awarded in formula grants each 

year to 83 tribes and 110 tribes, respectively. Additionally, in fiscal 

year 2013, FTA also awarded discretionary grants totaling $5 

million.23 Of these discretionary grants, 9 are for planning activities 

that may lead either to new tribal transit systems or new services 

provided by existing tribal transit systems. Further, FTA and tribal 

transit officials whom we interviewed indicated that the number of 

tribes receiving FTA grants may increase in the future.

FTA oversees state transportation agencies and tribal transit program 

grantees through a range of activities. Responsibility for oversight of subgrantees (i.e., rural transit providers) is with state transportation agencies. 

Regional FTA officials explained that their oversight focuses on the 

activities of state transportation agencies, not rural providers. For 

example, the 34 staff in FTA’s region IV office in Atlanta, GA, administers 

and oversees the activities of eight states, Puerto Rico, and the U.S. 

Virgin Islands. In turn, state transportation agencies oversee rural transit 

 22GAO’s body of work on duplication, fragmentation, and overlap across the federal 

government addressed fragmentation in federal surface transportation programs, but does 

not identify specific programs for consolidation. GAO, Opportunities to Reduce Potential 

Duplications in Government Programs, Save Tax Dollars, and Enhance Revenue, 

GAO-11-318SP (Washington, D.C.: Mar. 1, 2011).

23Fiscal year 2013 grants were announced in March 2014 to 48 tribes and focus on 

planning and service expansion projects. Applications for fiscal year 2014 discretionary 

grants have not been solicited by FTA.

FTA’s Rural Transit 

Oversight Focuses on 

State and Tribal 

Transportation Agencies
Page 13 GAO-14-589 Public Transportation 

providers who are their sub-grantees. This is consistent with the view of

rural transit providers we spoke with who indicated that their respective 

state transportation agencies oversaw their operations and that they had 

very little direct interaction with FTA in an oversight capacity. FTA’s 

oversight activities begin with a review of how each state transportation 

agency plans to implement the rural transit program, as documented in a 

State Management Plan. After approved plans are in place, FTA’s 

primary means of assuring that states comply with federal requirements 

are State Management Reviews, which assess a state’s implementation 

of the rural transit program. These reviews occur about every 3 years and 

are conducted by FTA contractors.24

 24State Management Reviews are similar to FTA’s Triennial Reviews of urban transit 

systems. GAO, Public Transportation: FTA’s Triennial Review Program Has Improved, But 

Assessments of Grantees’ Performance Could Be Enhanced, 

State Management Reviews include 

an on-site visit with state transportation officials and document reviews to 

determine the extent that state policies and procedures meet federal 

requirements. These reviews address sub-grantee compliance indirectly. 

For example, as part of a State Management Review, FTA’s contractors 

may conduct a site visit to transit providers. Other FTA reviews may focus 

on specific areas, such as financial management, civil rights, and drug 

and alcohol testing of drivers, among others. FTA officials indicated that 

they focus their reviews on areas that may need greater attention using 

an internal risk-assessment tool that helps them identify areas of potential 

weakness. The review may result in recommendations for changes to 

state transportation agency practices that are determined to be 

inconsistent with federal requirements. Additionally, FTA conducts formal 

reviews on specific areas, such as procurement systems. FTA also helps 

states comply with federal requirements through informal activities. For 

example, FTA region X in the Pacific Northwest holds regular conference 

calls with the state transportation agencies in its region to discuss the 

implementation of their rural transit programs. FTA’s regional offices also 

oversee tribal grantees within each region to ensure compliance with 

federal requirements. Finally, states and tribes report annual operating 

and expenditure data such as transit system miles driven into the rural 

NTD, which FTA maintains. State transportation agencies collect this data 

from rural transit providers and submit it on their behalf. Because tribes 

can be either direct grantees of FTA or sub-grantees of the states, or 

both, some tribes report directly to FTA while other tribes report their data 

through their state transportation agency.

GAO-09-603 (Washington, 

D.C.: June 30, 2009).
Page 14 GAO-14-589 Public Transportation 

State and tribal transit officials we interviewed had mixed views on FTA’s 

oversight approach. Some (5 of 15) state transportation agency officials 

mentioned that the State Management Reviews have been beneficial in 

that they identified opportunities to improve the state’s administration of 

its rural transit program. For example, an official from one state 

transportation agency commented that these reviews have helped the 

state comply with changing federal requirements. Some (6 of 15) state 

officials, however, indicated that the emphasis and quality of these 

reviews can vary based on the region or contractor involved, be overly 

focused on processes or details, or that the criteria used in the review can 

be unclear. For example, officials in one state transportation agency 

observed that FTA’s risk assessment approach brings greater attention to 

higher-risk areas without a reduction in the time spent on low risk areas, 

resulting in what the officials believed to be longer reviews than 

necessary. Tribal transit officials also offered differing views on their 

oversight relationship with FTA, depending on factors such as the nature 

of the tribe’s relationship with the state transportation agency and the 

quality of the support provided by FTA regions.

In 2012, we and the Department of Transportation Inspector General 

reviewed aspects of FTA’s oversight approach that apply to the rural 

transit program, as well as other FTA programs. We found that FTA’s 

approach for selecting transit providers for Americans with Disabilities Act 

of 199025 compliance reviews was not based on documented criteria, a 

critical element of maintaining the thoroughness and consistency of these 

reviews.26 Noting similar concerns, the Department of Transportation 

inspector general issued a report in 2012 that recommended that FTA’s 

oversight reviews—including State Management Reviews—be conducted 

in a consistent manner to reduce regional differences, among other 

improvements.27

 25Pub. L. No. 101-336, 104 Stat. 327 (1990), codified at 42 U.S.C. ch. 126.

In response to the inspector general’s recommendation, 

FTA is currently taking steps to increase the consistency of its oversight 

activities. For example, FTA officials explained to us that they have 

26GAO, ADA Paratransit Services: Demand Has Increased, but Little is Known about 

Compliance, GAO-13-17 (Washington, D.C.: Nov. 15, 2012). This report focused on FTA’s 

oversight approach for Americans with Disabilities Act compliance by urban transit 

systems, not rural transit systems. 

27Department of Transportation, Federal Transit Administration, Office of the Inspector 

General, Improvements Needed in FTA’s Grant Oversight Program, MH-2012-168 

(Washington, D.C.: Aug. 2, 2012).
Page 15 GAO-14-589 Public Transportation 

instituted new national procedures to assess contractors’ performance in 

conducting various oversight reviews.

FTA provides a range of training, guidance, and technical assistance to 

state transportation agencies and rural and tribal transit providers. 

According to FTA officials, the general focus of these activities is sharing 

program information, such as grant management requirements, and 

updates about FTA program changes. Specific training topics have 

included bus accident investigation, crime prevention, and safety 

management, among many others. Technical assistance, which may be 

formal (e.g., in presentations) or informal (e.g., in one-on-one 

conversations), is typically provided by FTA regional staff to state 

transportation agencies. According to nearly all state transportation 

agency officials and tribal transit officials we spoke with, FTA training has 

been helpful. Additionally, officials in all 15 selected states told us that 

they have a good working relationship with FTA regional staff and that 

FTA staff are available for technical assistance when needed. Officials 

with 6 of the 8 tribal transit providers we interviewed agreed that FTA is 

generally helpful, particularly when there is strong regional staff support. 

Two tribal transit officials, both for systems that received Tribal Transit 

Program funds directly from FTA, however, indicated that more effective 

FTA outreach is needed to keep tribes better informed of program 

changes. Rural and tribal providers also generally agreed that FTA 

offered beneficial training, though a few noted that FTA-sponsored 

webinars were sometimes full or that a lack of local or state travel funding 

prohibited participation in training. FTA also provides funds to state 

transportation agencies to pay for rural transit training and technical 

assistance through its Rural Transit Assistance Program.28 This program 

provides a minimum of $65,000 to each state annually. State and transit 

agency officials we met with told us that this funding has helped them 

attend FTA and other industry-sponsored training events, especially given 

limited state funds for such purposes.

 28Two percent of the rural transit program’s funding is reserved for the Rural Technical 

Assistance Program, which provides training funds to states and national training. 49 

U.S.C. § 5311(b)(3).

Most Selected State 

Transportation Agencies 

and Rural and Tribal 

Transit Providers Said 

FTA’s Assistance Is Useful
Page 16 GAO-14-589 Public Transportation 

From 2009 through 2012, to meet the transportation needs of their 

communities, rural and tribal transit providers offered similar types of 

services based on their passenger demographics, population density, and 

budget, among other factors. There are multiple ways to measure the 

change in rural and tribal transit service between fiscal years 2009 and 

2012; we examined national data on type of service, ridership, and miles 

traveled. Each of these measures shows consistent levels of service 

during this time. For example, reflecting the need for service flexibility in 

low population density rural areas, demand response service remained 

the most commonly offered form of rural transit service over the 4-year 

period. Nationally, demand response accounts for about two-thirds of all 

rural transit service provided in 2009 through 2012, according to the rural 

NTD, as measured by rural transit-miles driven. For these trips, riders 

typically must schedule their trip in advance so the transit agency can 

match similar trips together in a vehicle for greater operational efficiency. 

While demand response service has remained the most prevalent service 

provided, ridership has been the highest on deviated-fixed and fixed route 

services from 2009 through 2012. For example, these services accounted 

for over half of all rural ridership in 2012, according to the rural NTD. 

Figure 3 below summarizes the types of services rural and tribal providers 

offered in 2012. Among the rural and tribal transit providers we 

interviewed, service offerings varied. While 10 providers said they offered 

only one type of service, 20 providers, particularly those serving larger 

regions, said they offered multiple forms of transit service. For example, 

an official from Marq-Tran, a rural transit provider in the upper peninsula 

of Michigan, said it operates fixed routes or deviated fixed routes in the 

town of Marquette and other communities—where concentrations of 

people need to go to and from similar places—and demand response 

Since 2009, Rural 

and Tribal Transit 

Providers’ Services 

Have Remained 

Generally the Same 

and Have 

Experienced 

Increased Ridership 

and Costs

Rural and Tribal Transit 

Providers Continue to 

Provide a Range of 

Transportation Services 

for Transit Dependent 

Groups
Page 17 GAO-14-589 Public Transportation 

service in more rural areas. This official also said that fixed route trips 

accounted for the bulk of the system’s ridership.

Figure 3: Summary of Rural Transit Service in 2012

a

Other includes vanpools, commuter buses, demand response taxis, and ferryboats

Rural transit ridership nationwide has increased slightly since 2009. 

Nationally, according to data from the rural NTD, ridership increased 

about 4 percent from 2009 through 2012. According to officials from 8 of 

our 15 selected state transportation agencies, 18 of our 30 selected rural

and tribal transit providers, as well as representatives from the American

Association of State Highway and Transportation Officials, ridership had 

increased to some degree in recent years. Another 6 state transportation 

agency officials and 5 rural and tribal transit provider officials said 

ridership generally had remained steady in their service areas. Of the 

officials we interviewed in areas experiencing an increase in ridership, 5 

state transportation agencies and 4 rural and tribal transit providers 

attributed at least part of the increase to the increasing proportion of 

elderly persons in rural areas. According to these officials, the elderly may 

be less able to drive personal vehicles or may have fewer nearby family 

members able to drive them than in the past.

Source: GAO analysis of Federal Transit Administration data. | GAO-14-589
Page 18 GAO-14-589 Public Transportation 

The rural NTD does not include information on rider demographics or trip 

purposes, but national industry associations, 9 of 15 state transportation 

agency officials, and 20 of 30 rural and tribal transit provider officials we 

interviewed stated that rural transit riders tend to be from transit 

dependent populations, which include the elderly, disabled, and low 

income people. These three groups can overlap because some elderly 

may also be disabled, low income, or both. According to providers we 

interviewed, transit dependent populations often use public transportation 

to travel to essential services and employment. Of the 30 transit provider 

officials we interviewed, 20 identified medical transportation as a primary 

trip purpose. For example, officials from the Heart of Texas Council of 

Governments, a rural transit provider in Texas, said that a lot of the trips 

taken are for medical appointments. Moreover, 11 transit provider officials 

identified employment as a primary trip purpose. For example, Roaring 

Fork Transit, a rural provider in Colorado, said that 68 percent of its riders 

were commuters. These trip purposes are generally consistent with other 

research on rural transit trip purposes.29

Rural trip lengths can vary greatly because providers operate across 

expansive, low population service areas as well as within small rural 

towns. Rural and tribal transit providers we interviewed said that trip 

lengths can vary from less than 2 miles to over 100 miles. For example, 

while one provider in California only offers services within a small 

municipality, another provider in South Dakota said that nonemergency 

medical passengers may travel up to 3 hours each way to reach their 

appointments.

Since 2009, operating costs for providing rural transit have increased. 

From 2009 through 2012, rural and tribal transit providers’ operating costs 

increased on average by 19 percent in 2012 constant dollars, according 

to rural NTD data.30

 29Upper Great Plains Transportation Institute, North Dakota State University, Rural Transit 

Fact Book 2013 (Fargo, ND: July 2013).

Additionally, the average cost per trip increased 15 

percent (from $10.08 to $11.56) and cost per mile, by 11 percent (from 

$2.31 to $2.57). Furthermore, 15 of 30 rural and tribal transit provider 

officials and a national industry association also noted the national trend 

of rising operating costs. Overall, 12 of 15 state transportation agency 

30All operating expenditure figures were adjusted for inflation using the Consumer Price 

Index by calendar year and reported in 2012 constant dollars.

Operating Costs Are 

Rising Even with a Newer, 

More Reliable Fleet
Page 19 GAO-14-589 Public Transportation 

officials and 26 of 30 rural and tribal transit provider officials we

interviewed identified fuel, wages, or maintenance costs among their 

biggest operating cost categories.

Fuel price increases in recent years likely contributed to increases in 

operating costs. Twelve of 30 rural and tribal transit provider officials 

identified increasing fuel costs as a reason for increasing overall costs. 

For example, the Southeast Missouri Transportation System, a regional 

rural provider in Missouri, said that the agency’s fuel costs had doubled in 

recent years due to rising fuel prices and providing more lengthy trips. 

The price of diesel increased by 80 percent and the price of gasoline 

more than doubled per gallon from 2009 through 2012, according to 

national fuel price indexes31

 31Gasoline and diesel prices were adjusted for inflation using the Consumer Price Index 

by calendar year and reported in 2012 constant dollars. Real fuel-price indexes came from 

the Energy Information Administration.

(see fig. 4). In contrast to this increase in fuel 

prices, 8 providers noted that wages have been fairly consistent or have 

gone down in recent years. For example, Amador Transit, a rural transit 

provider in California, said that wages had been frozen since 2009.
Page 20 GAO-14-589 Public Transportation 

Figure 4: Average Fuel Prices per Gallon, 2009 through 2012, in 2012 Constant Dollars

Operating costs have increased despite recent purchases of new 

vehicles. In general, newer fleets have lower maintenance costs and 

increased service reliability. According to data from the rural NTD, the 

national average vehicle age decreased by almost 7 percent from 2009 

through 2012, in part, because rural and tribal transit providers purchased 

over 2,000 vehicles in fiscal year 2010 alone, largely with Recovery Act 

funds. Specifically, Recovery Act funds accounted for about 60 percent of 

rural and tribal transit providers’ capital expenditures and funded $263 

million in capital expenditures in fiscal year 2010, the highest level of 

capital expenditures in our 4-year review period.32

 32Our previous work found that about 23 percent of Recovery Act funds for urban and 

rural transit were used to purchase vehicles. GAO, Recovery Act: Funding Used for 

Transportation Infrastructure Projects, but Some Requirements Proved Challenging, 

Additionally, 9 of 15 

state transportation agency officials said that Recovery Act funds helped 

GAO-11-600 (Washington, D.C.: June 29, 2011).

Source: GAO analysis of Energy Information Agency data. | GAO-14-529
Page 21 GAO-14-589 Public Transportation 

them purchase new vehicles. For example, one state transportation 

agency official said the agency was able to purchase 311 vehicles for 

rural providers with Recovery Act funds. We have previously found that 

federal agencies with vehicle fleets that own vehicles with maintenance 

costs that exceed the resale value may incur higher overall maintenance 

costs and require a larger fleet to accommodate ongoing repairs.33

Officials from roughly one-third of selected state transportation agencies 

(5 of 15) and rural and tribal transit providers (11 of 30) stated that unmet 

need existed within their service areas during times when transit was not 

operating, such as on evenings and weekends. Unmet need may also 

occur when transit providers have to deny a trip because, among other 

reasons, they have reached their capacity limit. Unmet need in selected 

areas may be the result of funding constraints, according to rural and 

tribal transit providers we interviewed. For example, officials from 

Chickasaw Nation Transportation Services, a tribal transit provider in 

Oklahoma, said that some shift workers in their service area could not 

use transit to commute to work because of a lack of evening service. 

Furthermore, 12 of 30 transit provider officials said that funding levels 

make it difficult to meet needs within their service areas. For example, 

officials from OATS, a large regional provider in Missouri, said that 

funding levels dictate how many demand response trips it can provide, 

and the agency has had to turn people away when there is no room in the 

schedule for an additional rider. Additionally, one state transportation 

agency official said that on average, demand response service is only 

available with the state about 2 days a week, in part, because rural transit 

agencies cannot afford to provide more.

Recovery Act funds used to replace aging fleets may have helped lower 

operating costs and increase service reliability for rural and tribal transit 

providers as a result.

Looking forward, an aging rural population and efforts to support “aging in 

place,” which occurs when elderly persons remain in their communities as 

they age, could increase demand for rural transit. National groups have 

reported that the average age of rural communities has increased 

because the elderly have remained in their homes, while the younger 

 33GAO, Federal Vehicle Fleets: Adopting Leading Practices Could Improve Management,

GAO-13-659 (Washington, D.C.: July 31, 2013).

Demographic Trends 

Could Contribute to Future 

Unmet Need
Page 22 GAO-14-589 Public Transportation 

population has left the area in search of employment.34 For example, a 

provider in North Carolina said that the community’s older adult 

population is growing because people are living longer, which has, in turn, 

increased their need for assistance. As stated above, the elderly are 

already an important rural transit rider group, and these ongoing 

demographic changes could increase demand for services. Officials from 

2 state transportation agencies and 4 rural transit providers stated that 

they expected this growing demand for rural transit services to continue to 

increase in the future. For example, a state transportation agency official 

in Maine said that the aging population in the state will be a huge 

challenge in the future, and the state has had to develop a new statewide 

transportation plan to address this need. In 2011, we found that the 

transportation needs of older Americans may go unmet, particularly in 

rural areas.35 Furthermore, in 2012 we raised state and local providers’

concerns about how to meet the growing demand for transit dependent 

populations in the future given limited available funding.36 Older 

Americans and other transit dependent populations in rural areas have 

essential transportation needs, such as a need to get to medical 

appointments and shopping, but without funding to cover increasing 

service costs, some transit providers indicated they may not be able to 

meet all their transportation needs. For example, Butte Silver Bow, a 

provider in Montana said that although there is growing need for rural 

transit for the elderly, the provider did not have enough resources to offer 

sufficient services.

 34Sarah Jennings, American Association of Retired Persons, Improving Transportation 

Options for in Rural States and Tribal Areas Under MAP-21, testimony before the Senate 

Committee of Banking, Housing, and Urban Affairs, 113th Cong., Sioux Falls, SD, March 

28, 2013. Helen Kerschner and Jane Hardin, The Beverly Foundation and the Community 

Transportation Association of America, Transportation Innovations for Seniors: A Report 

from Rural America (July 2006).

35GAO, Older Americans Act: More Should be Done to Measure the Extent of Unmet 

Need for Services, GAO-11-237 (Washington, D.C.: Feb. 28, 2011). 

36GAO, Transportation Disadvantaged Populations: Federal Coordination Efforts Could Be 

Further Strengthened, GAO-12-647 (Washington, D.C.: June 20, 2012). We are 

conducting ongoing work on transportation for aging populations.
Page 23 GAO-14-589 Public Transportation 

In providing transit services in rural and tribal areas, rural and tribal transit 

providers face an array of challenges. To identify and understand these 

challenges, we conducted over 50 interviews with officials from FTA, state 

transportation agencies, and rural and tribal transit providers. We 

summarized challenges that were consistently identified into two general 

categories—operations and funding. While these challenges were 

consistently identified in our interviews, the results of our interviews are 

not generalizable to all rural and tribal transit providers. Some officials 

offered their ideas about possible ways to address some of these 

challenges, including actions that providers or FTA could take.

Nearly all rural and tribal transit providers identified challenges related to 

their operating environment, coordination with other transportation 

services, or activities to comply with federal requirements.

• Operating environment: Rural operating environments can create a 

wide range of difficulties for rural and tribal transit providers. Table 2 

below summarizes the challenges we frequently heard related to 

operating in these environments as well as solutions transit providers 

have taken to address these challenges.

Table 2: Frequently Cited Transit Challenges due to Operating in Rural Areas 

Challenge Description Suggested solutions

Recruiting and retaining 

drivers and mechanics

Hiring or retaining qualified drivers and mechanics can 

be difficult according to 24 of the 30 providers we 

interviewed. For example, rural providers in Montana 

and Pennsylvania found it difficult to compete with the 

wages offered by oil and gas exploration industries to 

qualified drivers. 

Some providers noted that providing drivers 

with health insurance, retirement benefits, and 

meaningful work assisting members of their 

community had helped retain drivers. Other 

providers indicated they are hiring less 

experienced drivers and helping them learn 

needed skills.

Selected Providers 

Face Operational and 

Funding Challenges 

and Tribal Transit 

Funding Changes 

Have Created Some 

Uncertainty

Providers Identified 

Operational and Funding 

Challenges and 

Suggested Solutions

Operations
Page 24 GAO-14-589 Public Transportation 

Challenge Description Suggested solutions

Weather and road 

conditions

Fifteen of 30 providers noted that rural operating 

environments can be difficult both for routes and 

maintenance. For example, rural roads may be in poor 

condition—causing bus damage such as premature tire 

and suspension wear or cracked windshields—

particularly in winter.

Several providers noted they have established 

operational protocols for harsh weather. Others 

indicated that improved maintenance facilities 

helped them to keep up with needed repairs.

Effectively planning service Day-to-day dispatch and route planning can be difficult 

(14 of 30). Rural and tribal providers can operate in 

areas that are hundreds of square miles and sparsely 

populated. Coordinating the most cost-effective pick-up 

and drop-off routes for multiple riders can be logistically 

difficult.

While some operators mentioned that personal 

relationships between staff and regular riders 

helped coordinate rides, others cited various 

technologies (e.g., ride match software and 

Global Positioning Systems (GPS))—which can 

be purchased with rural transit program funds—

as key to gaining operational efficiency.

Promoting transit Eleven of 30 providers indicated that people in rural 

areas may not think of transit as a viable transportation 

option or that the service is only for the elderly or 

persons with disabilities. 

Some transit officials indicated that efforts to 

promote transit and overcome stigmas, such as 

educating the public about transit’s benefits, 

could help overcome these perceptions.

Source: GAO analysis of interviews and other information. | GAO-14-529

• Coordination: Officials from the majority of state transportation 

agencies (12 of 15) and some providers (11 of 30) identified 

coordinating transit services as a challenge despite the potential to

enhance their services. In 2012, we found that state and local efforts 

to coordinate transportation services—such as coordinating councils, 

call centers, and regional planning—can be hindered due to 

challenges such as insufficient federal leadership, changes to state 

policies, and limited financial resources.37 In our interviews with rural 

and tribal transit providers, officials cited related challenges. For 

example, the Navajo Nation extends across parts of three states, but 

the Navajo Nation Transit Service sometimes must only use buses 

purchased with funds it receives through a state transportation agency 

within that state’s boundaries, which creates route problems. In 

another situation, three providers explained that their states’ switch to 

state-wide brokerages for non-emergency medical transportation 

services funded by Medicaid has made it harder to coordinate transit 

services because, for example, regional transit systems that had 

previously coordinated service directly with one another now must 

work through the third party brokerage.38

 37

Alternatively, one provider in 

Washington State explained that coordination was easier because the 

GAO-12-647. 

38We have a review of non-emergency medical transportation issues under way.
Page 25 GAO-14-589 Public Transportation 

state determined that fully funding regional cross-county connectors 

with state dollars was a good investment, and these funds helped the 

transit providers coordinate with each other. By linking their respective 

systems, ridership has exceeded forecasts and helped overcome 

service area boundary challenges. Other providers noted that 

establishing personal relationships and communication with the 

people at other transit providers nearby improved coordination.

• Compliance: While the majority of providers we interviewed said 

compliance with federal requirements related to operations was not 

especially challenging (17 of 30), a number of providers also said 

federal requirements or associated FTA oversight reviews could be 

streamlined to help reduce the resources that providers must devote 

to compliance activities (12 of 30). Additionally, some providers (11 of 

30) indicated that collective procurement contracts, in which multiple 

transit providers purchase vehicles on the same contract, have made 

compliance with federal procurement rules easier and, potentially, 

save money. Also, FTA is currently developing final rules related to its

transit asset management (e.g., requiring FTA grantees to develop a 

plan and report on the condition of capital assets such as buses) and 

public transportation safety programs, following a public comment 

period that ended in January 2014.39

Many rural transit providers identified some type of funding challenge. 

Broadly, 20 of 30 rural and tribal transit providers we interviewed 

indicated that funding was one of their most daunting challenges. Specific 

funding challenges included the following.

Many (18 of 30) rural and tribal 

transit providers either were unfamiliar with these pending changes or 

indicated that it was too soon to know the likely impact of these new 

rules on their operations. Officials for nine state transportation 

agencies or providers, however, expressed concern about whether 

FTA’s final rules will be scalable for smaller transit systems that may 

not have the financial or technical resources to meet elaborate 

requirements.

• Availability of capital funding: Eleven of 30 rural and tribal transit 

providers identified capital funding as a challenge. These providers 

 39GAO, Transit Asset Management: Additional Research on Capital Investment Effects 

Could Help Transit Agencies Optimize Funding, GAO-13-571 (Washington, D.C.: July 11, 

2013). Pub. L. No. 112-141 §§ 20019 and 20021, 126 Stat., 707, 709, codified at 49 

U.S.C. §§ 5326, 5329; 78 Fed. Reg. 61252 (Oct. 3, 2013).

Funding
Page 26 GAO-14-589 Public Transportation 

expressed concerns over their ability to afford future vehicle 

replacements. As noted above, the Recovery Act helped rural and 

tribal transit providers to make substantial vehicle replacements in the 

last few years and helped reduce the average age of vehicles in the 

national rural and tribal transit vehicle fleet. However, as these 

vehicles age—the useful life of rural transit vehicles typically ranges 

between 5 and 10 years—there could be a concentration of vehicles 

needing replacement at about the same time, in roughly 2018 or so. 

Some providers (9 of 30) said that the capital funding program 

changes in MAP-21 could lead to less overall funding for rural transit, 

particularly noting the changes in FTA’s other programs that fund bus 

capital projects.40 However, recent expenditures on capital projects 

from different funding programs suggest that a similar amount may be 

available in the current programs. The new Bus and Bus Facilities 

program provided about $65 million in both fiscal years 2013 and 

2014 to states for rural transit capital needs. In fiscal year 2012, about 

$58 million from FTA’s now discontinued capital program was 

expended by rural and tribal transit providers.41

• Obtaining state or local funding: Eighteen of 30 rural and tribal 

transit providers emphasized that securing enough state or local 

funding for transit can be challenging. As previously discussed, rural 

and tribal transit may compete with other needs within a community, 

such as public safety, for funding. Constrained state and local budgets 

can make securing these funds difficult. Among the providers we 

interviewed, approximately half of rural and tribal providers (16 of 30) 

said that they face challenges in raising enough state or local funding 

to meet FTA local match requirements. Some (7 of 15) of the states 

we included in our review provide limited or no state funds for rural 

transit, which increases the pressure on rural providers to secure local 

funds. Several providers indicated that the match requirement helped 

encourage local investments in transit, but noted that it was still 

difficult to secure local funds. One provider in North Carolina told us 

that securing sufficient local funds to cover increasing or volatile costs 

can be difficult since federal and state grants have not increased 

 4049 U.S.C. §§ 5309 and 5339. 

41In 2012, according to rural NTD data, rural and tribal transit agencies expended about 

$283 million on capital projects total. State and local funds accounted for about $55 

million, and FTA’s rural transit program accounted for about $50 million for capital 

(compared to $381 million for operating costs). Recovery Act funds accounted for about 

$84 million. 
Page 27 GAO-14-589 Public Transportation 

commensurately with operating costs. By contrast, some communities 

and providers have assured local funding through dedicated 

sources—such as dedicated property or fuel taxes—for transit.

• Uncertain federal funding: Short-term federal transportation 

authorizations and short-term appropriations acts create uncertainty 

that can be a challenge for long-term planning and managing cashflow for states and rural and tribal transit providers. For example, 

several rural and tribal transit providers noted that they were hesitant 

to expand services or their fleet because of uncertainty in the level of 

future federal funding, which, as noted above, is critically important to 

many providers. Similarly, officials from the Georgia state 

transportation agency noted that partial year appropriations are more 

difficult to manage than full-year appropriations because they must 

distribute partial year funding to providers multiple times throughout 

the year. In our 2013 High Risk update on financing the surface 

transportation program, we concluded that Congress and the 

administration need to agree on a long-term plan for funding surface 

transportation.42 FTA officials also acknowledged that the 2-year 

authorization of MAP-21 poses a challenge for rural and tribal transit 

providers.

The Tribal Transit Program was changed to a largely formula-based 

allocation of funds, and FTA expected this change to increase the stability 

and reliability of funding for tribal transit providers and thereby to provide 

better support for public transportation in tribal areas, the goal of the 

program. From fiscal years 2006 through 2012, funds were distributed on 

a competitive, discretionary basis to tribal transit providers that applied for 

funds. During this period, FTA awarded about 70 grants per year to nearly 

200 total tribal transit systems. In any given year, a provider that applied, 

and had previously received funds, might or might not have been 

awarded funds or the amount awarded might not have been for the 

amount requested. According to national stakeholders, FTA officials, and 

some tribal transit officials we interviewed, the prior award process 

sometimes caused unpredictable funding levels for recipients. As 

previously discussed, since the MAP-21 reforms were enacted, program 

funding increased to $30 million total, with $25 million to be distributed 

through a new formula ($5 million remained for a new discretionary 

 42GAO, High-Risk Series: An Update, GAO-13-283 (Washington, D.C.: February 2013).

The Consequences of 

Different Funding Levels 

under MAP-21 for Tribal 

Transit Program Grantees 

Are Unclear, but May 

Include Some Disruptions 

in Transit Services
Page 28 GAO-14-589 Public Transportation 

program). As established by MAP-21, the formula allocates 75 percent of 

funds based on vehicle revenue miles.43

The change to a largely formula-based program in the Tribal Transit 

Program has dramatically altered funding levels for tribal transit providers. 

Under the new formula some tribal transit providers received much more 

funding and some received much less than they received in previous 

years, with increases or decreases of more than 50 percent common. We 

analyzed FTA discretionary grant awards from fiscal year 2009 through 

2012 and formula grant awards in fiscal year 2013 and 2014. We found 

that 83 tribes received at least one grant in each of these two time 

frames. Of those 83, 30 tribes’ formula-funding awards were at least 50 

percent greater than their prior average discretionary awards. Two tribes 

received increases of over 1,000 percent.

FTA officials explained that the 

formula should provide a more predictable source of federal funding 

because vehicle revenue miles are a straightforward means to provide 

funding in direct proportion to services. Likewise, 4 of 8 tribal transit 

officials we spoke with indicated the change to a formula could result in 

more stable and predictable funding that better sustains and supports 

tribal transit systems.

44

 4349 U.S.C. § 5311(c)(3)(C). As noted above, 50 percent of Tribal Transit funds are 

distributed in proportion to vehicle revenue miles and 25 percent are distributed equally 

among systems with 200,000 or more vehicle revenue miles.

By contrast, 32 received grant 

award reductions of 50 percent or more in average annual funding 

compared with what they had received previously in discretionary awards. 

According to FTA officials, tribal transit systems that received increased 

grant awards generally tended to be larger tribal transit systems, while 

those that received decreased grant awards generally were smaller tribal 

transit systems. This outcome, in part, reflects the formula’s emphasis on 

vehicle revenue miles, which varies significantly given the different size 

and scope of services provided by tribal transit systems. For example, 

Lummi Transit, a relatively small system in Washington State, provided 

about 100,000 vehicle revenue miles of service and was awarded a 

discretionary grant of $315,000 in fiscal year 2012. It was awarded about 

$70,000 by formula for fiscal year 2014. Under the formula some tribal 

systems received very small awards, with two fiscal year 2014 awards of 

44All annual funding amounts were adjusted for inflation using the CPI per calendar year 

and are reported in 2012 constant dollars.
Page 29 GAO-14-589 Public Transportation 

less than $1,000.45

 45The administration’s proposed 2014 surface transportation reauthorization would set a 

minimum grant award level of $20,000.

For example, the Poarch Band of Creek Indians 

received $186 in fiscal year 2014 funding. Conversely, the Chickasaw 

Nation Transportation Service, a relatively large system in Oklahoma, 

provided about 1.1 million vehicle revenue miles of service and was 

award $300,000 in 2012. In fiscal year 2014, it was awarded 

approximately $1.2 million by formula. Smaller systems may provide 

relatively limited services aimed at essential transportation needs 

whereas larger systems may offer more developed and extensive 

services. Figure 5 below shows the percentage change in funding levels 

tribes received between the two programs by comparing average 

discretionary awards received from fiscal years 2009 through 2012 with 

average formula awards from fiscal years 2013 through 2014. About half 

the tribal transit providers we interviewed indicated they were surprised 

by the change in funding their system received under the new formula 

and were making adjustments and plans for the increased or decreased 

funds.
Page 30 GAO-14-589 Public Transportation 

Figure 5: Average Increases and Decreases in Tribal Transit Funding Following 

Change from Discretionary to Formula Funding (Fiscal Years 2009-2012 versus 

Fiscal Years 2013-2014)

Note: This figure includes only the 83 tribes with established tribal transit systems that received 

funding both under the discretionary and the formula funding programs. Tribes receiving planning 

grants were not included in this analysis.

With just fiscal year 2013 and 2014 funding cycles completed using the 

formula, it is unclear how these changes will affect tribal transit in the long 

term and whether the change to a formula will provide a more stable and 

reliable level of support to tribal systems of different sizes or result in 

service disruptions for some tribal transit systems that experienced 

funding declines. Among tribes we spoke with that saw increased funds, 

some are planning new projects, such as service expansions and bus 

procurements, but were reluctant to make plans because they were 

unsure funding at the new level would continue. Smaller systems may 

need to reduce or cancel services, according to two tribal transit officials 

that experienced reduced funding, resulting in decreased mobility for 

transit dependent people in tribal communities and less access to 

potentially critical services. An official from a tribal transit system in 

Alaska indicated that he anticipated the formula would result in severe 

funding reductions for transit for many Alaska Native Villages, which tend 

Source: GAO analysis of Federal Trade Administration data. | GAO-14-529
Page 31 GAO-14-589 Public Transportation 

to be small and have low vehicle revenue miles. Consequently, he stated 

that the transit system may not remain viable unless new sources of 

funds can be identified. FTA officials also indicated that they anticipated 

when implementing the formula for the first time that it would result in very 

different funding levels for some tribal transit providers. Accordingly, FTA 

conducted outreach and meetings with providers to educate them about 

these likely changes.

Selected tribal transit providers and FTA have considered strategies to 

mitigate declines in Tribal Transit Program funding and are still in the 

process of adjusting to new funding levels. For example, officials for two 

tribal systems that we interviewed suggested that FTA use the $5 million 

discretionary program to fund systems that experienced funding 

decreases in the new formula program. FTA officials stated that they 

considered this strategy, but instead are reserving discretionary awards 

primarily for starting new systems because the formula directs funds to 

existing systems. Additionally, tribal transit providers may also seek to be 

sub-grantees of rural transit program grants through state transportation 

agencies. For example, the tribal transit provider in Alaska that we 

interviewed that experienced a funding decrease under the formula 

subsequently applied for rural transit program funding through the state. 

FTA officials stated that tribes are encouraged by FTA regional staff and 

tribal liaisons to participate in the rural transit program as sub-grantees of 

the states. However, according to FTA and some tribal transit officials, 

accessing these funds may be challenging for tribes with strained 

relationships with state governments.

We provided a draft of this report to the Secretary of Transportation for 

review and comment. The Department of Transportation did not have any 

comments on the report.

We are sending copies of this report to the Administrator of FTA, the 

Secretary of the Department of Transportation, and interested 

Congressional Committees. In addition, the report is available at no 

charge on the GAO website at http://www.gao.gov. 

If you or any of your staff members have any questions about this report, 

please contact me at (202) 512-2834 or wised@gao.gov. Contact points 

Agency Comments
Page 32 GAO-14-589 Public Transportation 

for our Offices of Congressional Relations and Public Affairs may be 

found on the last page of this report. GAO staff who made major 

contributions to this report are listed in appendix II.

David J. Wise

Director, Physical Infrastructure Issues
Appendix I: Objectives, Scope, and 

Methodology

Page 33 GAO-14-589 Public Transportation 

This report addresses the following three objectives:

1. How does Federal Transit Administration (FTA) fund, oversee, 

and otherwise support rural and tribal transit services in the rural 

transit program?

2. What is known about how services, ridership, and costs for rural 

and tribal transit have changed since 2009?

3. What challenges do rural and tribal transit providers face in 

providing transit service and what actions could address these 

challenges?

To determine how FTA funds, oversees, and otherwise supports rural and 

tribal transit services through the rural transit program, we reviewed FTA 

circulars, training, guidance materials, and legal decisions to determine its 

policy for implementing its rural transit program. Moreover, we reviewed 

State Management Plans, which state transportation agencies must 

submit to FTA; FTA’s State Management Review workbook and related 

materials; and state transportation agency level oversight guidance. 

Finally, we interviewed FTA officials from Headquarters and FTA regional 

offices in Georgia (IV), Texas (VI), California (IX), and Washington (X) to 

discuss FTA’s rural transit program funding and oversight processes as 

well as the federal role in rural transit. Regional offices were selected that 

provide oversight of and guidance for state transportation agencies that 

we visited (see below for details on these site visits).

To determine what is known about how rural transit services, ridership, 

and costs have changed since 2009, we analyzed data from the rural 

National Transit Database (rural NTD) for fiscal years 2009-2012. We 

selected this time frame because 2009 is the first year the data were 

sufficiently reliable for our purposes. To conduct this analysis, we first 

assessed the appropriateness and sufficiency of the data by determining 

the completeness of rural NTD reporting for each year and the 

reasonableness of certain measures over the 4 year period as well as by 

interviewing FTA officials on their data validation process and state 

transportation agency officials on their data collection processes. After 

determining that the data were sufficiently reliable at the national level for 

our purposes, we analyzed specific measures including: fleet size and 

age, type and amount of transit services provided, passenger trips taken, 

and operating and capital expenditures by funding source. Our review 

included both annual analyses for each year as well as assessing 

changes over the 4-year period. We did not analyze NTD data at the 

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 34 GAO-14-589 Public Transportation 

provider level or for tribal grantees specifically due to concerns over data 

reliability within smaller subsets of transit provider groups.

To identify the challenges that rural transit providers face and any actions 

that could address these challenges, we reviewed relevant academic 

literature pertaining to rural and tribal transit in the U.S. and interviewed 

two national stakeholder groups—the Community Transportation 

Association of America (CTAA) and the American Association of State 

Highway and Transportation Officials (AASHTO)—that, respectively, work 

closely with rural and transit providers and state transportation agencies. 

Literature and interviewees identified some solutions to challenges faced, 

and we summarized these challenges. To assess challenges related to 

Tribal Transit Program funding, after determining these data were 

sufficiently reliable for our purposes, we analyzed FTA award data from 

2009 through 2014 to calculate changes in funding levels experienced by 

tribal transit providers.

To address all three of our objectives, we conducted interviews with 15

state transportation agencies as well as 30 rural transit providers, 8 of 

which were tribal systems. Some of these interviews included site visits 

and some were teleconferences. We nonstatistically selected state 

transportation agencies to provide a range of the number of rural or tribal 

transit providers in the state, total state grant amounts, and FTA regions. 

Using these criteria, we selected state transportation agencies in Arizona, 

California, Georgia, Oklahoma, Texas, and Washington for site visits and 

state transportation agencies in Colorado, Maine, Michigan, Missouri, 

Montana, New York, North Carolina, Pennsylvania, and South Dakota for 

teleconferences. Once the states were chosen, we selected rural or tribal 

transit providers within each state to interview using the following criteria 

based on data found in the 2011 NTD: total operational expenditures, 

fleet size, and the type of service provided.1

 1

The 2011 rural NTD was the most current information available at the time of interviewee 

selection. The 2012 rural NTD data were not yet available.

In addition, for the site visits, 

we considered logistical feasibility given the long driving distances 

between rural locations. Using these criteria, we selected 15 rural and 

tribal providers for site visits and an additional 13 rural and tribal providers 

for teleconferences. Finally, we interviewed officials with two tribal transit 

providers not in selected states (Idaho and Alaska) based on changes in 

funding these tribes received following the MAP-21 reforms. Because we 
Appendix I: Objectives, Scope, and 

Methodology

Page 35 GAO-14-589 Public Transportation 

used a non-generalizable sample of transit providers, findings from these 

interviews cannot be used to make inferences about other rural or tribal 

transit providers. However, we determined that the selection of these 

transit providers was appropriate for our design and objectives and that 

the selection would generate valid and reliable evidence to support our 

work.

We conducted this performance audit from June 2013 to June 2014 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.
Appendix II: GAO Contact and Staff 

Acknowledgments

Page 36 GAO-14-589 Public Transportation 

David J. Wise, (202) 512-2834, or wised@gao.gov

In addition to the contact named above, the following individuals made 

important contributions to this report: Heather MacLeod (Assistant 

Director), Russ Burnett, Tom James, Bert Japikse, Delwen Jones, Sarah 

Jones, Terence Lam, Jeff Malcolm, Grant Mallie, Josh Ormond, Steve 

Rabinowitz, and John Stambaugh.

Appendix II: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(542222)
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