GAO 01-996R Access to Jobs

August 17, 2001

The Honorable Paul S. Sarbanes

Chairman

The Honorable Phil Gramm

Ranking Minority Member

Committee on Banking, Housing,

 and Urban Affairs

United States Senate

The Honorable Don Young

Chairman

The Honorable James L. Oberstar

Ranking Democratic Member

Committee on Transportation

 and Infrastructure

House of Representatives

Subject: Welfare Reform: GAO’s Recent and Ongoing Work on DOT’s Access to

 Jobs Program

Without adequate transportation, welfare recipients face significant barriers in

moving from welfare to work. Three-fourths of welfare recipients live in central

cities or rural areas, while two-thirds of new jobs are located in the suburbs. For

many of these new jobs, access to public transportation facilities, such as buses or

subways, is limited or nonexistent. Transportation to these jobs is primarily by

car, yet many welfare recipients do not have cars. To address this mismatch and

as part of the welfare reform movement, the Transportation Equity Act for the

21st Century (TEA-21) authorized up to $750 million for fiscal years 1999 through

2003 to implement the Job Access and Reverse Commute (Job Access) program.

On June 8, 2001, we briefed staff of the Senate Committee on Banking, Housing,

and Urban Affairs and the House Committee on Transportation and Infrastructure

on (1) our prior work, (2) our preliminary observations on the Department of

Transportation’s (DOT) implementation of the program in fiscal year 2001, and

(3) our current plans for reporting on the program. We agreed to send you this

letter describing the information we provided during the briefing.

United States General Accounting Office

Washington, DC 20548
Page 2 GAO 01-996R Access to Jobs

The following summarizes the information we are providing.

ï We previously reported on the Job Access program three times from May 1998

through December 2000. In May 1998 we found that the proposed Job Access

program would support reform of the nation’s welfare system by bringing

additional resources to transport welfare recipients to work.1

 We made

recommendations—reflected in TEA-21—intended to (1) enhance DOT’s

evaluation of the program; and (2) promote coordination among DOT, other

federal agencies, prospective grantees, and other affected parties (such as

local social service agencies). In November 19992

 and December 2000,3 we

reported that DOT had implemented our recommendations and taken steps to

refine its grant selection process.

ï Our preliminary observations related to (1) DOT’s proposal to use a formula

for allocating grant funds to states, (2) the status of grant fund obligations, and

(3) DOT’s plans for reporting on the program to the Congress. First, DOT

believed that allocating fiscal year 2002 Job Access funding to states via

formulas would promote predictable funding of Job Access projects. The

formula proposal was DOT’s response to fiscal years 2000 and 2001 conference

reports accompanying DOT’s appropriations acts that directed Job Access

funding to specific projects. However, in commenting on a draft of this letter,

DOT said that because the Congress had rejected its formula proposal, DOT

was considering another option. Second, according to DOT’s comments on a

draft of this letter, as of August 7, 2001, DOT had obligated 94 percent of the

Job Access program's fiscal year 1999 appropriated funds, 67 percent of the

program's fiscal year 2000 appropriated funds, and 20 percent of the program's

fiscal year 2001 appropriated funds. Third, DOT missed its June 2000 statutory

reporting deadline but expects to send the report to the Congress in

September 2001.

ï Regarding our ongoing work, we plan to issue a report on the Job Access

program in December 2001, focusing on FTA’s implementation of the program.

In 2002, we expect to report on grantees' experiences in implementing their

Job Access projects.

Background

TEA-21 authorized the Job Access program, through which DOT provides grants

to local agencies, nonprofit organizations, transit authorities, and others to

improve the mobility of welfare recipients and low-income individuals seeking

employment. Within DOT, the Federal Transit Administration (FTA) is

 1

Welfare Reform: Transportation's Role in Moving from Welfare to Work (GAO/RCED-98-161,

May 29, 1998).

2

Welfare Reform: Implementing DOT’s Access to Jobs Program in Its First Year (GAO/RCED-00-

14, Nov. 26, 1999).

3

Welfare Reform: DOT Is Making Progress in Implementing the Job Access Program (GAO-01-

133, Dec. 4, 2000).
Page 3 GAO 01-996R Access to Jobs

responsible for implementing the program. DOT’s two major goals for the

program are to (1) provide transportation services in urban, suburban, and rural

areas to assist welfare recipients and low-income individuals to gain access to

employment opportunities; and (2) increase collaboration among such parties as

transportation providers, human service agencies, employers, metropolitan

planning organizations, states, and communities in providing access to

employment.

To award Job Access grants in fiscal years 1999 and 2000, DOT issued

solicitations of applications in the Federal Register and, in response, received and

reviewed project proposals. It selected projects for the program on the basis of

four criteria:

(1) the degree of local coordination exhibited when a project was being designed,

(2) the demonstrated need of an area for Job Access services,

(3) a project’s effectiveness in providing those services, and

(4) the ability of an applicant to obtain resources to continue operating a project

after the Job Access grant ends.

After DOT had announced the selected proposals, the applicants were required to

provide assurances and documentation of compliance with FTA’s standard grant

requirements, such as those concerning drug and alcohol testing, federal

procurement standards, and state and regional transportation planning. TEA-21

requires that the Job Access grantees provide at least 50 percent matching funds

from other sources, including other federal funds available for transportation

services—for example, funds from the Temporary Assistance for Needy Families

program.

TEA-21 authorized up to $150 million each year for fiscal years 1999 through 2003

for the Job Access program. For fiscal year 1999—the program's first year—the

Department of Transportation and Related Agencies Appropriations Act provided

$75 million for the Job Access program, and DOT announced competitive awards

of about $71 million for 179 projects.

For fiscal year 2000, the Congress also provided $75 million for the program.

However, the conference report that accompanied DOT’s appropriations act

directed DOT’s distribution of $49.6 million of the $75 million to identified states,

localities, and other organizations. In addition, DOT solicited proposals and

competitively awarded about $29.6 million, including $25.4 million provided by the

Congress for fiscal year 2000 and about $4.2 million carried over from fiscal year

1999. For fiscal year 2001, the Congress provided $100 million, and the

conference report directed the distribution of about $75 million to identified

states, localities, and other organizations. Like applicants for competitive grants,

organizations and localities identified in the conference report had to provide
Page 4 GAO 01-996R Access to Jobs

project proposals that were consistent with the requirements of the program;

moreover, they had to submit additional documentation that complied with the

standard FTA grant requirements.

Prior Work on the Program

To date, we have issued three reports on the program: in May 1998, before the

program was established; in November 1999; and in December 2000.

ï In May 1998, we reported that the proposed Job Access program would

support reform of the nation’s welfare system by, among other things,

providing additional resources to transport welfare recipients to work.4 We

recommended that DOT (1) establish specific objectives, performance criteria,

and goals for measuring the program’s progress; (2) require grantees to

coordinate transportation strategies with local job placement and other social

service agencies; and (3) work with other federal agencies to coordinate

welfare-to-work activities. TEA-21 reflected these recommendations and

required appropriate action by DOT.

ï In November 1999, we reported on the implementation of the program in fiscal

year 1999—its first year. 5 We found that DOT had implemented our second

and third recommendations in carrying out TEA-21. DOT had also taken

preliminary steps to implement our recommendation that it establish specific

objectives, performance criteria, and goals for measuring the program’s

progress. However, we also found that DOT’s process for selecting Job Access

grant proposals was not consistent in fiscal year 1999, and the basis for some

selections was unclear.

ï Our December 2000 report examined DOT’s implementation of the program in

fiscal year 2000.6 We found that DOT had taken steps to improve its process

for selecting Job Access proposals. For example, to promote greater

consistency in the evaluation and selection of grantees, DOT developed a

standard format for reviewing Job Access proposals and provided more

detailed guidance to its reviewers. Almost 90 percent of the fiscal year 1999

Job Access grantees that responded to a GAO survey were satisfied with the

goals and intent of the program. However, 51 percent said it took too long to

satisfy various standard FTA grant requirements—about 9 months, on average.

As a result, about one-third of the respondents reported experiencing

problems in obtaining matching funds. Also, seven projects were withdrawn

(about 4 percent of Job Access projects) for varied reasons, including, in one

case, the loss of matching funds. Also, DOT implemented our

recommendation that it develop specific objectives, performance criteria, and

measurable goals for the Job Access program by developing an evaluation plan

 4

GAO/RCED-98-161.

5

GAO/RCED-00-14.

6

GAO-01-133.
Page 5 GAO 01-996R Access to Jobs

and by requesting specific data from the grantees. DOT developed a goal to

increase new employment sites by 4,050 in fiscal year 2000 and 8,050 in fiscal

year 2001.7

Preliminary Observations on the Job Access Program

Our preliminary observations on the Job Access program fall into three areas—

(1) DOT’s proposed funding process, (2) FTA’s obligation of grant funds, and

(3) DOT’s plan for evaluating the program.

First, regarding DOT’s funding process, according to DOT’s Internet Web site, “in

fiscal year 2000 the Congress earmarked approximately 66 percent of the funds

for specific projects; in fiscal year 2001, about 75 percent.” In DOT’s view, as a

result of these funding designations, “There were many highly worthy applicants

that were not designated for an earmark, and the limited...funds remaining for

national competition resulted in many of these worthy applicants not being

funded.”8

 In response, for fiscal year 2002, DOT proposed to allocate funds to the

states and the District of Columbia via a formula rather than to individually

selected projects. This proposal, according to FTA, would have promoted more

predictable funding that could have been continuous over a period of several

years for a Job Access project. DOT also notes that by making funding available

to the states earlier than under the existing selection process and by enhancing

the certainty of funding, the formula proposal would have allowed funds to be

obligated earlier. At the national level, the formula would have allocated 60

percent of the funds to areas with populations exceeding 200,000 and 40 percent

of the funds to smaller areas. The total funds allocated to states would have

considered the number of low-income residents.

In its comments on a draft of this letter, DOT states that the Congress did not

accept the formula proposal. DOT also states that it is considering an option of

soliciting proposals in the fiscal year prior to funding availability and sharing its

scoring of proposals with appropriations committees in order to accelerate the

timing of obligations. DOT adds that it has provided applicants with “pre-award

authority,” making it possible for applicants to initiate service prior to the final

obligation of Job Access funding.

Second, regarding DOT’s obligations of grant funds, as of August 7, 2001, FTA had

not obligated significant portions of the funds that had been appropriated for Job

Access grants since fiscal year 1999. Specifically:

 7

An employment site is considered accessible if it is located within 1⁄4 mile of services provided by

the grantee.

8

We do not address here FTA’s assertion that the funding designations, which were contained in

the conference reports accompanying the DOT appropriations acts for fiscal years 2000 and 2001,

precluded it from awarding grants to worthy applicants. In addition, we have not assessed the

effects of these funding designations on the implementation of the program.
Page 6 GAO 01-996R Access to Jobs

ï For at least 7 of the 174 projects9 selected for grants in fiscal year 1999, funds

had not been obligated. Five of these projects were in the Chicago, IL, area;

one in the Dallas, TX, area; and one in Schoharrie County, NY. The total value

of the grants for these projects was about $2.7 million, and the grants ranged

in dollars to be obligated from about $119,000 to $1 million.

ï The Congress provided about $75 million for projects in fiscal year 2000—

according to DOT, about 67 percent of this amount had been obligated.

ï FTA had obligated about 20 percent of the $99.8 million appropriated for Job

Access program grants for fiscal year 2001. For fiscal year 2001 funding,

rather than solicit applications for competitive grant awards for the

approximately $25 million that was not directed to specific organizations in

the conference report, FTA decided to grant these funds to proposals

submitted in fiscal year 2000 that it considered “meritorious” but was

previously unable to fund.

DOT is waiting to solicit grant proposals for fiscal year 2002 until after a decision

is reached on its proposal to allocate funds via formula.

According to DOT officials and as explained in our December 2000 report, DOT’s

process for awarding grants is a two-track process, consisting of one track for

soliciting, evaluating, and selecting projects, and a second track in which

prospective grantees must satisfy standard FTA grant requirements. This process

results in grantees often receiving funds in the fiscal year after the Congress

provided them. However, Job Access funds remain available from one fiscal year

to the next for obligation.

Third, DOT has developed a plan for evaluating the program but has not yet sent a

progress report to the Congress. TEA-21’s reporting deadline was June 2000.

DOT plans to send a report to the Congress by September 2001.

Our Ongoing Work on the Program

The objectives for our ongoing review of the Job Access program will focus on

FTA’s implementation of the program. We plan to issue a report in December

2001 and publish a more extensive report in 2002 on the challenges experienced

by grantees in implementing their Job Access projects.

Agency Comments

We provided DOT with a draft of this letter for review and comment. The

department, through FTA’s Associate Administrator for Administration, provided

 9

The total number has grown to 194 because some organizations chose to have their own grants

rather than participate as subgrantees under consolidated grants, and other proposals were

consolidated.
Page 7 GAO 01-996R Access to Jobs

us with written comments, which are attached as enclosure II. We revised our

letter in response to those comments as appropriate.

DOT suggested that our letter should explain that the competitive selection and

obligation process is a two-step process that is initiated only after the Congress

appropriates funds under the program. According to DOT, information about

appropriations generally becomes available in the first quarter of the fiscal year, at

which time DOT begins to solicit proposals for the program. DOT normally

announces selections later in the fiscal year; however, even after being selected,

applicants are still required to address standard FTA requirements. This dual

track process, states DOT, would result in obligations being incurred most

frequently in the fiscal year after the funding is made available. We agree that the

two-track process results in obligations occurring in the fiscal year after funding

was made available and incorporated this information into this letter.

DOT provided information about its proposal to allocate Job Access funds on a

formula basis. DOT states that although the formularization proposal would have

made funding available earlier than under the existing two-track selection and

obligation process, the Congress did not approve the proposal. Instead, DOT is

considering soliciting proposals in the fiscal year prior to funding availability and

then sharing its ranking of proposals with congressional appropriations

committees in hopes of allowing obligations to be made in the same year as the

appropriation. We revised our letter to include this new information.

The Department also provided new information on the percent of funds it has

obligated for the Job Access program. For example, by June 1, 2001, DOT had

obligated 91 percent of the funds that were appropriated in fiscal year 1999; but by

August 7, 2001, DOT had obligated 94 percent of those funds. We revised our

letter to include this new data.

- - - - -

We are sending copies of this letter to the cognizant congressional committees;

the Secretary of Transportation; the Administrator, Federal Transit

Administration; and other interested parties. The letter will also be available on

GAO’s home page at http://www.gao.gov. If you have any questions about this

letter, please call me at (202) 512-2834 or E-mail me at heckerJ@gao.gov.

JayEtta Z. Hecker

Director, Physical

 Infrastructure Issues
Enclosure I

Page 8 GAO 01-996R Access to Jobs

Slides Presented at June 8, 2001 Briefing

Briefing to Committee Staff:

U.S. Senate Committee on Banking, Housing, and Urban

Affairs

House Committee on Transportation and

Infrastructure

June 8, 2001

Review of Access to Jobs Program
Enclosure I

Page 9 GAO 01-996R Access to Jobs

Contents

• Background

• Prior GAO Work

• Update on Program Implementation

• Proposal for Formula Funding

• Project Funding Status - FY 1999 - FY 2001

• Program Evaluation Efforts

• Ongoing Review of Access to Jobs Program
Enclosure I

Page 10 GAO 01-996R Access to Jobs

Background

• TEA-21 authorized the Job Access program.

• DOT’s Federal Transit Administration (FTA) makes

grants to local agencies, nonprofits, transit authorities,

and others to improve the mobility of welfare

recipients to the workplace.

• In FY 1999, the Congress provided $75 million for the

program, and DOT competitively granted $71 million.

• In FY 2000, the Congress provided $75 million, but

directed the distribution of about $49.6 million. DOT

awarded about $29.6 million, including about $4

million carried over from fiscal year 1999.

• In FY 2001, the Congress provided $100 million, but

directed the distribution of about $75 million.
Enclosure I

Page 11 GAO 01-996R Access to Jobs

Prior GAO Work

• In May 1998, we reported that the proposed Job

Access program would bring additional resources to

transport welfare recipients to work, and we made 3

recommendations for the implementation of the

program. Specifically, DOT should

1) establish objectives, criteria, and goals to evaluate

the progress of the program,

2) require grantees to coordinate transportation

strategies with various job placement and other social

welfare agencies,

3) work with other federal agencies to coordinate

welfare-to-work activities.
Enclosure I

Page 12 GAO 01-996R Access to Jobs

Prior GAO Work

• In November 1999, we reported:

FTA had implemented the 2nd and 3rd

recommendations of our May 1998 report.

However, FTA’s grant selection process was

inconsistent.

Also, FTA had not begun to evaluate the program.

• In December 2000, we reported:

FTA had improved its grant selection processes and

developed an evaluation plan.

Most FY 1999 grantees were pleased with DOT’s efforts

to help them meet standard FTA grant requirements,

but half said it took too long to satisfy them.
Enclosure I

Page 13 GAO 01-996R Access to Jobs

Program Implementation

PROPOSAL FOR FORMULA FUNDING

DOT has proposed a formula to allocate Job Access grant

funds in FY 2002.

• The proposal considers population levels and numbers

of low-income people.
Enclosure I

Page 14 GAO 01-996R Access to Jobs

Program Implementation

PROJECT FUNDING STATUS - FY 1999-2001

At least 7 FY 1999 projects still unfunded: 5 in the

Chicago area, 1 in Texas, and 1 in New York.

• Significant FY 2000 and FY 2001 funds not obligated:

• $75 million provided for FY 2000, but only half

obligated as of June 1, 2001.

• Only 1% of FY 2001 funds obligated as of June 1,

2001.

• DOT has not solicited FY 2002 grants pending the

decision on its formula distribution proposal.

• FY 2001 funds awarded to prior-year applicants: DOT

granted $24.5 million to previously unfunded or

partially funded applications.
Enclosure I

Page 15 GAO 01-996R Access to Jobs

Program Implementation

PROGRAM EVALUATION EFFORTS

• DOT did not send report in June 2000 to the Congress.

• Most report relevant data are now more than a year

old, and some data were found to be inaccurate.

• DOT plans to update the data and send a report to the

Congress in September 2001.

• 13,000 new employment sites are to be reached

(DOT’s objective was to reach 4,000).
Enclosure I

Page 16 GAO 01-996R Access to Jobs

Ongoing Work

• Met with Senate and House Committees to discuss

our work in April and May 2001.

• For a December 2001 report, we will examine how

DOT is implementing the Job Access program and

how grantees are implementing their projects.

• For a 2002 report, we will send out an extensive

questionnaire on project implementation.
Enclosure II

Page 17 GAO 01-996R Access to Jobs

Comments From the Department of Transportation
Enclosure II

Page 18 GAO 01-996R Access to Jobs

(544005)