contents

Message from the Secretary 3

Message from the Chief Financial Officer 6

Management’s Discussion and Analysis 11

 Performance Highlights 18

 Financial Highlights 23

 Scorecard on the President’s Management Agenda 39

 Inspector General’s FY 2008 Top Management Challenges 43

 GAO’s High Risk Issues 79

Performance Report 85

 Performance Framework and Readers Guide 86

 Performance Summary Tables 93

 Strategic and Organizational Goals 

Safety Strategic Goal 98

Reduced Congestion Strategic Goal 118

Global Connectivity Strategic Goal 130

Environmental Stewardship Strategic Goal 140

Security, Preparedness and Response Strategic Goal 150

Organizational Excellence Strategic Goal 158

DOT Program Evaluations 170

Financial Report 185

 Office of Inspector General’s Quality Control Review 187

 Independent Auditor’s Report 193

 Principal Statements 210

 Notes to Principal Statements 215

 Required Supplementary Information 261

 Required Supplementary Stewardship Information 269

Other Accompanying Information 277

 Performance Data Completeness and Reliability Details 278

 Summary of Financial Statement Audit and Management Assurances 310

 Improper Payments Information Act (IPIA) Reporting Details 313

 Inspector General’s FY 2008 Top Management Challenges 319

 Schdule of Net Cost by Strategic Goal 373

WWW.DOT.GOV

United States Department of Transportation 3

Message from the Secretary

I am pleased to submit the U.S. Department of Transportation’s 

Performance and Accountability Report for Fiscal Year 2008. When 

I was sworn in as Secretary, I pledged to find the best ways to address 

our most pressing transportation challenges by focusing on safety and 

improving system performance and reliability, all the while finding 

21st century solutions to 21st century problems. I am proud to report 

significant progress in many areas, which you will learn more about in 

this report.

INCREASE SAFETY

At the Department of Transportation (DOT) we know that safety is 

the most important issue we address. We have made tremendous 

progress over the decades through a variety of solutions such as 

road safety improvements, auto manufacturing safety standards, 

commercial driver regulations, and public awareness. About 30 

percent of DOT’s budget is devoted to targeted safety improvement 

through a variety of initiatives.

Safety on our Roads

Highway fatalities account for about 95 percent of transportation fatalities each year; therefore, we devote 

substantial attention to targeted highway safety initiatives, such as seatbelt usage, child safety seats, motorcycle 

safety and rural safety.

I am proud to report that 83 percent of vehicle occupants used seatbelts during daylight hours this year, up from 

82 percent in 2007. This was, in large part, due to high visibility enforcement campaigns, such as Click It or 

Ticket, and effective enforcement laws in 26 States. We estimate that approximately 270 lives are saved for every 

one percent increase in belt use.

I am also proud to report that child safety restraint use for children is at an all-time high — more than 98 percent 

for those less than 1 year old and 96 percent for 1 to 3 year-olds — due to the network of more than 30,000 

dedicated child passenger safety technicians that DOT has helped develop over the past 10 years. When properly 

used, child safety restraint systems reduce fatalities by 71 percent in infants and 54 percent in toddlers. I was 

disappointed to learn, however, that 7 of 10 child safety seats are installed improperly, so we launched a new 

campaign this year that educates parents on proper installation and provides a new 5-star rating system that tells 

consumers which child-safety seats are easiest to install.

Our challenges in motorcycle safety require similar rider-focused solutions. In 2006, 4,810 motorcyclists were 

killed — an increase of 5 percent over 2005. So this fiscal year, I announced a new Departmental Action Plan to 

Reduce Motorcycle Fatalities and proposed legislation that would allow States the flexibility to spend available 

funds on helmet use education. This is a cost-effective solution that can have a more immediate impact than any 

new program that would require additional funding.
4 FY 2008 Performance & Accountability Report

One other troubling safety area is that of rural roads, which carry less than half of America’s traffic yet account 

for over half of the Nation’s vehicular deaths. To address this imbalance, we launched a new Rural Safety 

Initiative to bring focus and a comprehensive approach to rural safety. This initiative will result in safer drivers, 

better and smarter roads, better trained emergency responders, and stronger partnerships to help improve safety. 

Safety in the Air

We continue to meet our targets in aviation safety; however, after a series of high-profile events earlier this year 

raised questions about the U.S. aviation safety program, I asked an outside team of aviation and safety experts 

to conduct an independent review. I subsequently directed the Federal Aviation Administration (FAA) to 

move forward on all 13 of the safety team’s recommendations in order to stay ahead of the risk factors. Already, 

the FAA has changed its procedures for reviewing reported findings, planned for a new automated safety data 

system, and developed more clear guidance to ensure that safety requirements are fully understood by both FAA 

field offices and the airlines.

REDUCE CONGESTION

We have seen increased mobility among Americans and now we are seeing the impacts of our very mobile 

society – increased congestion. Nearly 55 percent of DOT’s budget goes toward congestion reduction and 

other mobility initiatives. Our ability to move people and goods across the domestic transportation system has 

become insufficient for modern transportation patterns in both passenger and cargo transport. 

Congestion in Surface Transportation

Americans already lose 4.2 billion hours and 2.9 billion gallons of fuel sitting in traffic jams annually, yet 

highway vehicle-miles traveled (VMT) have been projected to grow substantially by 2030 making the likelihood 

of increased congestion probable. Therefore, I have placed considerable emphasis on congestion initiatives such 

as new sources of transportation financing and broad transportation reform giving state and local leaders greater 

flexibility to invest in their transit and highway partners.

Reliance on the Federal gas tax for financing transportation projects is not working and is actually worsening 

the funding problem as the price of gas rises and driving patterns change, thereby decreasing tax revenue and 

subsequently transportation funding. However, we have examples of state and local government shifting away 

from our reliance on the regressive flat fee gas tax in favor of a more equitable user fee system that charges 

drivers only when and where they drive.

I have proposed that we make use of efficient pricing mechanisms that can reduce the number of trips taken, 

alter trip routes and the time of day that trips are taken, reduce trip duration, decrease variation in travel speeds, 

and facilitate more pollution-efficient travel speeds. And I have proposed that we unleash the greatest new wave 

of investment in highways and transit this Nation has ever seen by tapping into the more than $400 billion in 

private-sector capital for transportation infrastructure.

I also issued a challenge to America for completely overhauling the way U.S. transportation decisions 

and investments are made. The proposal includes plans for fundamental changes to our Nation’s surface 

transportation planning and management approach including:
United States Department of Transportation 5

  •  A fund that rewards cities willing to combine a mix of effective transit investments, dynamic pricing of

highways, and new traffic technologies; 

  •  Drastic reduction in the 100+ Federal transportation programs down to eight comprehensive, intermodal

programs that focus transportation investments and cut red-tape; and 

  •  Significant reduction in the average 13-year planning and review process it now takes to design and build

new highway and transit projects.

Congestion in Air Transportation

As challenging as the congestion issue is on our highways, we see similar challenges in air transportation. 

Almost 30 percent of flights nationally are now cancelled or substantially delayed resulting in Americans wasting 

$9.4 billion a year on lost time. Air travel is projected to nearly double by 2030 making this problem even worse. 

Fundamental changes in our air transportation system are required.

I have proposed that caps be implemented in heavily congested airports to limit the number of flights during 

peak hours and distribute some flights to non-peak periods. Currently, many airlines schedule more arrivals 

and departures into each peak hour than what runways can efficiently service, resulting in relatively predictable 

delays. Our proposed caps should limit these scheduling practices. I have also proposed that the rights to 

operate designated flights be auctioned for a five-year lease allowing us to implement market mechanisms on 

a small scale, gauge interest and determine a slot’s true market value. The real winners will be consumers, who 

stand to benefit from more reliable air service that costs less in terms of both time and money by providing 

stronger incentives for more efficient use of resources.

But demand-based solutions represent only one facet of a comprehensive solution. We know that we are not 

meeting our targets for on-time performance in air travel. About 70 percent of delays are caused by weather. 

The trend indicates that the problem is only getting worse. By 2025, air traffic is projected to increase at least 

twofold placing unmanageable stress on the system. To address this challenge, over the next 20 years the Next 

Generation Air Traffic System (NextGen) is being deployed to improve our air traffic management procedures 

so that aircraft can choose more efficient routes and make quicker in-flight decisions to avoid weather and other 

traffic by replacing old World War II-era ground-based radar technology with satellite operations.

In conclusion, I am proud of the work we are doing at the Department of Transportation. Not only are we 

identifying the most significant challenges facing our Nation’s transportation system, but we are also digging 

deeper to understand the core causal factors behind those problems to make sure we address the right things 

moving forward. It will take disciplined and persistent effort to continue the progress we are making in safety 

and to follow through on the long-term challenges we face in congestion. You will find evidence of both recent 

progress and long-term challenges in many areas of transportation throughout this report.

Mary E. Peters

November 17, 2008
6 FY 2008 Performance & Accountability Report

MESSAGE FROM THE ASSISTANT SECRETARY

FOR BUDGET AND PROGRAMS and CHIEF FINANCIAL OFFICER

As I end my career with the Federal Government, I am very pleased to 

note that the Department of Transportation (DOT) continues to be a 

leader in budget, performance and financial management. In Fiscal Year 

(FY) 2008 we made further progress in implementing our mission and 

strategies and in making effective and efficient use of DOT resources to 

achieve the Nation’s transportation goals.

As the organizational leader for the Department’s financial management, 

we have worked to hire well-qualified, talented financial managers 

throughout the Department to ensure success in overseeing the 

Department’s finances. In March I convened the Department’s financial 

management community to once again discuss and prepare for the 

challenges for the upcoming year. In light of the ever-increasing, 

externally-driven reporting requirements that impact the financial 

management community, we have emphasized the importance of training and open communication throughout 

the Department.

Over the past year, the Office of the Assistant Secretary for Budget and Programs and Chief Financial Officer 

played a key role in the development of new strategies for overseeing the Federal Highway Trust Fund and 

successfully managed the recent cash shortfall. We have taken a proactive approach to the issue and established 

a multimodal working group to prepare for the possible reoccurrence of a shortfall. We are coordinating with 

the Office of Management and Budget (OMB) and the Department of the Treasury and fine tuning indicators to 

help us determine when to implement new cash management procedures.

We continue to reinforce the Federal Aviation Administration’s efforts to fund and implement the NextGen 

initiative to increase the capacity of the National Airspace System while maintaining the same level of safety and 

limiting environmental impacts. We have been supportive of the record-level transit-related dollars by ensuring 

that Federal dollars are appropriately leveraged along with State and local resources.

EXCELLENCE IN FINANCIAL MANAGEMENT

DOT’s emphasis on improved financial management has resulted in an unqualified audit opinion this year with 

no material weaknesses, our seventh clean audit in the last eight years. Each year, we develop, implement and 

track detailed corrective action plans to ensure we resolve all audit findings, as we continue to improve our 

financial management business process, internal controls and financial systems.

DOT’s effective financial management is highlighted by the fact that the Government Accountability Office 

(GAO) did not issue any major reports this year addressing DOT Financial Management and Systems. A major 

carryover issue from last year’s audit (FAA Construction In Progress) has been aggressively addressed and the 

issue was reduced from a material weakness to a significant deficiency.
United States Department of Transportation 7

DOT’S PAR RATED #1 IN ALL THREE CATEGORIES

DOT is honored that our FY 2007 Performance and Accountability Report (PAR) was rated #1 for the second 

year in a row by the prestigious Mercatus Center at George Mason University in all three major categories: 

Overall Excellence, Leadership and Transparency. We were especially pleased that Mercatus described our PAR 

as “easy to read” – no small accomplishment for this kind of a report.

PERFORMANCE IMPROVEMENT INITIATIVE

DOT continues to be recognized for our leadership in OMB’s Performance Improvement Initiative (formerly 

called Budget and Performance Integration). We’ve been rated green for the last 18 quarters for our 

accomplishments in both the progress and status categories. 

BUDGET FORMULATION AND EXECUTION LINE OF BUSINESS

The Budget Formulation and Execution Line of Business (BFELoB) is an Electronic Government initiative to 

“identify opportunities for common solutions and automated tools to enhance agency budget, performance 

and financial information; and promote integration and standardize information exchange between budget 

formulation, execution, financial management and performance measurement systems, and activities across 

Government.” As part of its BFELoB initiative, in August 2008, DOT signed a Memorandum of Understanding 

(MOU) with the Department of the Treasury to implement the Budget Formulation and Execution Manager 

(BFEM) at DOT. The initial implementation will cover three Operating Administrations: FAA, FHWA and 

FRA. BFEM, which was released in April 2007, is a web-based application that allows government agencies to 

formulate budget justifications for OMB and Congress, including the Budget In Brief. BFEM maintains historic 

data and will allow DOT to reduce its reliance on desktop applications to produce budget documents.

FINANCIAL MANAGEMENT BUSINESS TRANSFORMATION INITIATIVE (FMBT)

During FY 2007, my office, in partnership with the Enterprise Services Center (ESC) and the Departmental 

financial community, embarked on an initiative to standardize DOT business processes, develop and define 

requirements for an upcoming upgrade of our core financial management system, Delphi, to Oracle Federal 

Financials version 12i. We have also established a strategic plan to standardize the DOT financial management 

business model in accordance with OMB’s Lines of Business Initiatives. In early 2008, the DOT financial 

management community established a governance structure by which this initiative would be managed. We 

chartered five transformation workgroups and established a Business Transformation Team (BTT) responsible 

for managing and coordinating the daily progress of the transformation initiatives. The FMBT has adopted the 

seven-phased Oracle applications implementation method as our guiding approach to this initiative. To date, 

the FMBT has accomplished a significant portion of Phase 1: Definition and Planning and has begun to execute 

Phase 2: Operational Analysis, including defining the business requirements for the new system.

IMPROVING FINANCIAL AND ACCOUNTING PROCESSES AND OPERATIONS

During FY 2008, we finalized the transition of all of DOT’s accounting operations to our shared service provider, 

the Enterprise Services Center (ESC) in Oklahoma City. The full consolidation of accounting activities at the 

ESC improves communication, reduces redundant processes, gains efficiencies, and enhances internal controls 

through consistent application and monitoring of accounting standards and financial policies. Additionally, 

centralized accounting operations allows better management of resources during periods of increased 
8 FY 2008 Performance & Accountability Report

accounting activity and simplifies training for financial system updates and other accounting process changes. 

This change has also simplified our preparation for broader changes coming with our business transformation 

effort.

MEASURING IMPROVEMENTS IN FINANCIAL PROCESSES

Beginning in FY 2007, the DOT Office of Financial Management (OFM) rolled out a new department-wide 

initiative designed to help the Operating Administrations (OAs) recognize and reconcile longstanding data 

issues in their financial systems. OFM identified fourteen areas for attention and set goals for improvement. 

This initiative, called the FAB 14 has raised OA awareness and accountability to correct inaccurate and 

incomplete data by establishing performance metrics in these vulnerable areas. In FY 2008, DOT achieved 

improved performance on a number of these metrics such as increasing the use of electronic payments over 

paper checks, reducing budgetary to proprietary reconciling items, and eliminating the use of suspense 

accounts. One notable case of improvement has been with the Treasury Report on Receivables. Two Operating 

Administrations reduced their total debt eligible for referral to Treasury from over $1 million to zero in the third 

quarter of this fiscal year. The result is a major cleanup of pending actions that have been on hold for some time.

SYSTEMS MANAGEMENT FOR DELPHI FY 2009

DOT continues to upgrade and enhance Delphi. We successfully scheduled and accomplished six system 

updates, bundling technical and hardware improvements to enhance our system security, streamline business 

processes, and tighten our financial management internal controls.

Working together, all components of DOT’s financial community have initiated a Systems Management 

Improvement Effort. One large component of this effort was completed in FY 2008 on the enhancement and 

standardization of DOT’s Core Financial Management Program’s (Delphi) System Change Request (SCR) 

and Release Management processes. These process improvements focused on analyzing and ranking SCRs, 

streamlining the creation and iterative development process, and improving both historical and predictive 

tracking abilities for the requests.

INTERNAL CONTROL AND FEDERAL MANAGERS FINANCIAL INTEGRITY ACT (FMFIA)

Over the last year, DOT instituted a three-year evaluation cycle to ensure that all key internal controls are tested 

regularly, in accordance with OMB Circular A-123, Appendix A, Management’s Responsibility for Internal 

Control requirements. As part of the three-year cycle, DOT divided its key business processes into three focus 

area process groups to be assessed in different years. DOT also developed a risk and materiality evaluation 

to identify material and/or high-risk key controls that must be tested more frequently than every three years. 

For FY 2008, DOT assessed the Cash Management, Credit Card Management, Procure-to-Pay, and Travel 

Management focus area processes for all OAs, as well as material and high-risk key controls for our material 

OAs.

Based on our development and implementation of corrective action plans to resolve internal control findings, 

DOT’s Office of Inspector General has determined that our Internal Control program is in compliance 

with OMB requirements. In addition, DOT has enhanced its internal control program by broadening the 

traditional FMFIA compliance efforts to address internal controls for programs and operations. This year we 
United States Department of Transportation 9

have integrated the analysis and assessment of processes across A-123 and FMFIA to better support the annual 

assurances required of the agency. The result has been a reduction in potentially duplicative review activities and 

a strengthening of the analytical basis for assurances issued by DOT executives.

FEDERAL SHARED SERVICE PROVIDER

DOT continues to operate as one of four government-wide Centers of Excellence for financial management. 

As a Federal Shared Service Provider through the ESC, we offer financial systems and accounting services to 

other agencies and provide both the benefit of best industry practices and significant economies of scale. In 

competitive processes during 2008, the National Credit Union Administration and the Consumer Product Safety 

Commission selected DOT’s Delphi financial system for their own use. DOT’s other external customers include 

the U.S. Government Accountability Office, the National Endowment for the Arts, the Commodity Futures 

Trading Commission, and the Institute for Museum and Library Services. Three of our external customers 

have also contracted with DOT’s ESC to provide high-quality accounting services and we continue to market 

our outstanding financial system and accounting services to other Federal agencies in support of the Financial 

Management Line of Business of the President’s Management Agenda.

CONCLUSION

FY 2008 has been another productive year for DOT’s financial community. We have continued our efforts 

to enhance and integrate our budget, performance and financial management programs. Looking back, I see 

that DOT is far ahead of where we were only a few short years ago. Building on our accomplishments, we will 

continue to develop and implement CFO initiatives to better demonstrate the financial and program results the 

American people expect and deserve. We fully support the Department’s strategic goals to create a safer and 

more efficient transportation system for the Nation.

Phyllis F. Scheinberg

Assistant Secretary for Budget and Programs and Chief Financial Officer

11

Management’s Discussion and Analysis
12 FY 2008 Performance & Accountability Report

About This Report

The Department of Transportation’s (DOT or Department) Performance and Accountability Report (PAR) for 

Fiscal Year 2008 (Report) provides performance and financial information that enables Congress, the President, 

and the public to assess the performance of the Department relative to its mission and stewardship of the 

resources entrusted to it. This Report satisfies the reporting requirements of the following major legislation.

 Reports Consolidation Act of 2000

 Government Performance and Results Act of 1993

 Chief Financial Officers Act of 1990

 Government Management Reform Act of 1994

These reports are combined in the PAR, which consists of the Annual Performance Report—required by the 

Government Performance and Results Act of 1993—with annual financial statements—required under the CFO 

Act, as amended by the Government Management Reform Act of 1994—and other reports, such as assurances 

on internal controls, accountability reports by agency heads, and Inspector General assessments of an agency’s 

management challenges.

Additional copies of the Department of Transportation’s Fiscal Year 2008 Performance and Accountability 

Report are available by writing to:

U.S. Department of Transportation

Office of the Assistant Secretary for Budget and Programs/Chief Financial Officer

Room W95-330

1200 New Jersey Avenue, SE

Washington, D.C. 20590

You may also view this Report online at http://www.dot.gov
United States Department of Transportation 13

How This Report is Organized

Management’s Discussion and Analysis (MD&A)

The Management’s Discussion and Analysis (MD&A) section provides a summary of the entire Report. It 

includes an organizational overview; a summary of the most important performance results and challenges for 

FY 2008; a brief analysis of financial performance; a brief description of systems, controls, and legal compliance; 

and information on the Department’s progress in implementing the President’s Management Agenda. The 

MD&A also addresses the management challenges identified by the Department’s Inspector General and a 

summary of the Inspector General’s audit report.

The Performance Report

The Performance Report section contains the annual program performance information required by the 

Government Performance and Results Act of 1993 (GPRA) and includes all of the required elements of an annual 

program performance report as specified in OMB Circular A-11, Preparation, Submission and Execution of the 

Budget. The results are presented by Strategic Goal.

The Financial Report

The Financial Report section contains the Department’s financial statements, notes, required supplementary 

information, supplementary information pertaining to the Department’s stewardship of Federal assets, related 

Inspector General’s Audit Report, and other accompanying information.
14 FY 2008 Performance & Accountability Report

Department Of Transportation

MISSION AND VALUES

MISSION

The national objectives of general welfare, economic growth and stability, and the security of the United States 

require the development of transportation policies and programs that contribute to providing fast, efficient, and 

convenient transportation at the lowest cost consistent with those and other national objectives, including the 

efficient use and conservation of the resources of the United States.

VALUES

Professionalism

As accountable public servants, we exemplify the highest standards of excellence, integrity, and respect in the work 

environment.

Teamwork

We support each other, respect differences in people and ideas, and work together in ONE DOT fashion.

Customer Focus

We strive to understand and meet the needs of our customers through service, innovation, and creativity. We are 

dedicated to delivering results that matter to the American people.
United States Department of Transportation 15

Organization

History

Established in 1967, DOT sets Federal transportation policy and works with State, local, and private sector 

partners to promote a safe, secure, efficient, and interconnected National transportation system of roads, 

railways, pipelines, airways, and waterways. DOT’s overall objective of creating a safer, simpler, and smarter 

transportation program is the guiding principle as we move forward to achieve specific goals.

How We Are Organized

DOT employs almost 60,000 people across the country, in the Office of the Secretary of Transportation (OST) 

and through twelve Operating Administrations (OAs) and bureaus, each with its own management and 

organizational structure.

The Office of the Secretary of Transportation provides overall leadership and management direction, administers 

aviation economic programs, and provides administrative support. The Office of Inspector General (OIG) and 

the Surface Transportation Board (STB), while formally part of DOT, are independent by law.

SECRETARY/

DEPUTY SECRETARY

ASSISTANT

SECRETARY FOR

TRANSPORTATION

POLICY

ASSISTANT SECRETARY 

FOR AVIATION AND

INTERNATIONAL

AFFAIRS

UNDERSECRETARY

FOR POLICY

ASSISTANT

SECRETARY FOR

ADMINISTRATION

BOARD OF

CONTRACT

APPEALS

ASSISTANT SECRETARY

FOR BUDGET AND

PROGRAMS & 

CHIEF FINANCIAL

OFFICER

OFFICE OF

THE CHIEF

INFORMATION

OFFICER

OFFICE OF

CIVIL RIGHTS

OFFICE OF

DRUG & ALCOHOL

POLICY & COMPLIANCE

EXECUTIVE

SECRETARIAT

GENERAL

COUNSEL

ASSISTANT

SECRETARY FOR

GOVERNMENTAL

AFFAIRS

OFFICE OF

INTELLIGENCE

AND SECURITY

OFFICE OF

PUBLIC

AFFAIRS

OFFICE OF SMALL &

DISADVANTAGED

BUSINESS

UTILIZATION

FEDERAL

AVIATION

ADMINISTRATION

FEDERAL

HIGHWAY

ADMINISTRATION

FEDERAL MOTOR

CARRIER SAFETY

ADMINISTRATION

FEDERAL

RAILROAD

ADMINISTRATION

FEDERAL

TRANSIT ADMINISTRATION

MARITIME

ADMINISTRATION

NATIONAL

HIGHWAY TRAFFIC

SAFETY

ADMINISTRATION

OFFICE OF

INSPECTOR

GENERAL

PIPELINE AND

HAZARDOUS

MATERIALS SAFETY

ADMINISTRATION

RESEARCH AND

INNOVATIVE

TECHNOLOGY

ADMINISTRATION

SAINT LAWRENCE

SEAWAY

DEVELOPMENT

CORPORATION

SURFACE

TRANSPORTATION

BOARD
16 FY 2008 Performance & Accountability Report

Overview of Legislative Authorities

The DOT strategic plan summarizes the legislative authorities of each Operating Administration. To provide a 

context for the reader, the highlights of the responsibilities of each Operating Administration are listed below.

Office of the Secretary. The Office of the Secretary (OST) oversees the formulation of national transportation 

policy and promotes intermodal transportation. Other responsibilities range from negotiation and 

implementation of international transportation agreements, assuring the fitness of U.S. airlines, enforcing 

airline consumer protection regulations, issuance of regulations to prevent alcohol and illegal drug misuse in 

transportation systems and preparing transportation legislation.

Federal Aviation Administration. The Federal Aviation Administration’s (FAA) mission is to promote aviation 

safety and mobility by building, maintaining, and operating the Nation’s air traffic control system; overseeing 

commercial and general aviation safety through regulation and inspection; and providing assistance to improve 

the capacity and safety of our airports.

Federal Highway Administration. The mission of the Federal Highway Administration (FHWA) is to improve 

mobility on our Nation’s highways through national leadership, innovation, and program delivery.

Federal Motor Carrier Safety Administration. The Federal Motor Carrier Safety Administration’s (FMCSA) 

primary mission is to prevent commercial motor vehicle-related fatalities and injuries.

Federal Railroad Administration. The Federal Railroad Administration’s (FRA) mission is to ensure that our 

Nation has safe, secure, and efficient rail transportation that enhances the quality of life for all.

Federal Transit Administration. The Federal Transit Administration (FTA) provides leadership, technical 

assistance, and financial resources for safe, technologically advanced public transportation that enhances 

mobility and accessibility, improves America’s communities, preserves the natural environment, advances 

economic growth, and ensures that transit systems are prepared to function during and after criminal or terrorist 

attack.

Maritime Administration. The Maritime Administration’s (MARAD) mission is to improve and strengthen the 

U.S. Marine Transportation System to meet the economic, environmental and security needs of the Nation.

National Highway Traffic Safety Administration. The National Highway Traffic Safety Administration’s 

(NHTSA) mission is to save lives, prevent injuries and reduce economic costs due to road traffic crashes through 

education, research, safety standards, and enforcement activity.

Office of Inspector General. The Inspector General Act of 1978, as amended, established the Office of Inspector 

General (OIG) as an independent and objective organization within the DOT. The OIG’s mission is to promote 

economy, effectiveness, and efficiency and to prevent and detect fraud, waste, and abuse in DOT operations and 

programs by conducting and supervising independent and objective audits and investigations.

Pipeline and Hazardous Materials Safety Administration. The mission of the Pipeline and Hazardous 

Materials Safety Administration (PHMSA) is to protect people and the environment from the risks inherent in 

transportation of hazardous materials—by pipeline and other modes of transportation.
United States Department of Transportation 17

Research and Innovative Technology Administration. The Research and Innovative Technology 

Administration (RITA) is dedicated solely to the advancement of DOT priorities for innovation and research 

in transportation technologies and concepts. Innovations that will improve our mobility, promote economic 

growth, and ultimately deliver a better integrated transportation system.

Saint Lawrence Seaway Development Corporation. The U.S. Saint Lawrence Seaway Development 

Corporation (SLSDC), a wholly owned government corporation and an OA of DOT, is responsible for the 

operations and maintenance of the U.S. portion of the St. Lawrence Seaway between Montreal and Lake Erie.

Surface Transportation Board. The Surface Transportation Board (STB) is charged with promoting substantive 

and procedural regulatory reform in the economic regulation of surface transportation, and with providing 

an efficient and effective forum for the resolution of disputes and the facilitation of appropriate business 

transactions.
18 FY 2008 Performance & Accountability Report

Performance Highlights

Secretary Mary E. Peters is committed to ensuring that our transportation system remains safe, secure, and 

efficient and that it serves as the engine that drives our Nation’s economy. Because economic activity and 

global trade are increasing, our roads, railways, pipelines, public transit systems, airways, and waterways are 

experiencing increasing growth in demand.

This Administration is working to ensure that our transportation system has the capacity to accommodate 

the needs of a growing and prosperous America. Below, we present the highlights of our fiscal year (FY) 2008 

results in our five strategic areas: safety, reduced congestion, global connectivity, environmental stewardship and 

security, preparedness and response. We also present our internal organizational achievements that enhance 

DOT’s performance as a results-driven Federal agency.

SAFETY

Transportation makes possible the movement of people and goods, fueling our economy and enabling the 

American way of life. Development of transportation systems has become a major determinant of a nation’s 

economic success. At the same time, transportation exposes us to the risk of harm. While we have made 

progress in making all modes of transportation safer, the Department’s top priority and central focus remains 

improving safety. All modes of transportation have a share in achieving our strategic safety goal: Enhance public 

health and safety by working toward the elimination of transportation-related deaths and injuries.

In the last eleven years, the Department has set two very challenging safety goals for itself. In 1997, the White 

House Commission on Aviation Safety and Security issued a challenge to FAA and the aviation industry 

to reduce the air carrier fatal accident rate by 80 percent in 10 years. In response, FAA initiated a joint 

Government-industry analysis of causal factors most frequently involved in aviation accidents. By 2007, aviation 

fatalities had declined by 57 percent.

In 1998 we announced our intention to reduce highway fatalities to 1 per 100 million vehicle-miles traveled. In 

the ten years that followed we made significant progress, reducing the number of highway fatalities by 1.1 percent 

from 41,501 in 1998 to 41,059 in 2007. Taking into account the extent of highway travel (VMT), this seemingly 

small reduction in the number of highway fatalities corresponds to a 13.3 percent reduction in the fatality rate, 

from 1.58 fatalities per 100 million (100M) VMT in 1998 to 1.37 in 2007.

Over the years we have made significant progress toward the two targets, but we have yet to meet them. We 

reexamined our programs and goals and decided to make some significant changes in the FY 2006 – 2011 

Strategic Plan.

Rather than focus exclusively on the 1.0 goal in highway transportation, we have begun tracking four new 

measures, which reflect the spectrum of road users: passenger vehicles, motorcyclists, large trucks and buses, and 

non-occupants (pedestrians, cyclists, etc.). This approach will allow us to pinpoint which populations are most 

at risk and develop programs to address those risks. For FY 2008, we project DOT will meet the targets for three 

of the four measures: occupants of passenger vehicles, non-occupants, and occupants of large trucks and buses. 

Fatalities continue to rise, however, among motorcycle operators and passengers. We have suspected for several 

years that this was a point of vulnerability in highway safety and the data for the new measures are bearing 

this out. The Department is addressing motorcyclists and the road conditions that are hazardous for them 
United States Department of Transportation 19

specifically. We have begun this process with the Transportation Action Plan to Reduce Motorcycle Fatalities. 

(See the report at: http://www.nhtsa.gov/staticfiles/DOT/NHTSA/Communication%20&%20Consumer%20

Information/Articles/Associated%20Files/4640-report2.pdf.)

The Federal Aviation Administration has adopted a new goal: reducing the number of commercial air carrier 

fatalities per 100 million persons onboard by half by 2025. The new metric is more relevant because it measures 

the individual risk to the flying public. All fatalities, including passengers, crewmembers, ramp workers, and 

ground fatalities, are counted equally. FAA stayed below the target for this new metric in FY 2008. The Agency 

also had a successful year in general aviation; the end of April, 2008, marked a 3-year period that was the safest 

ever recorded in the history of General Aviation.

In September 2008, a commuter train in Los Angeles collided with a freight train, killing 25 passengers. 

Although this was the most serious passenger rail accident in several years, FRA still met its target for the 

number of rail-related accidents and incidents per million train miles. NTSB has begun an investigation to 

identify the cause of the accident; FRA will act on any recommendations that result.

Transit continued its long history of excellent safety, easily keeping the number of transit fatalities below .468 

per 100 million passenger-miles traveled. This success is particularly notable when you realize that an increasing 

number of people across the country are turning to mass transit for their commute to work. In fact, passengermiles traveled between January and June 2008 was 3.7 percent higher than the same period in 2007.

We are still finding it challenging to meet the target for the number of serious incidents for natural gas and 

hazardous liquid pipelines. This year’s target was 40 and, based on preliminary data, we project there will 

be 41 serious incidents. We know that approximately three-fourths of serious incidents occur in natural gas 

distribution pipelines, the small diameter lines that move material from a collection point to homes and 

businesses. To address this issue, the Pipeline and Hazardous Materials Safety Administration (PHMSA) plans 

to extend the integrity management rules, which have been so effective in reducing incidents in hazardous liquid 

and natural gas transmission lines, to natural gas distribution systems. Implementation will begin in FY 2009, 

but it will be several years before we begin seeing the effects of the new risk-management approach.

The number of serious hazardous materials transportation incidents continues to decline. PHMSA works closely 

with other DOT agencies involved in transporting hazardous materials (FAA, FMCSA, and FRA) to address 

major risks.

Reduced congestion

Historically, the mobility that transportation provides has helped define us as a people and as a Nation. Our 

ability to travel from place to place allows us to connect with other people, work, school, and marketplaces 

throughout the United States and around the world. Congestion in all modes of transportation, however, has 

increased substantially in the last decade. Whether it takes the form of commuters and trucks stalled in traffic, 

cargo on the docks at overwhelmed seaports, or airplanes circling crowded airports, congestion is costing 

America around $200 billion a year. To address this situation, the Department adopted a new strategic goal: 

Reduce congestion and other impediments to using the Nation’s transportation system.
20 FY 2008 Performance & Accountability Report

In 2006, the Secretary of Transportation announced the National Strategy to Reduce Congestion on America’s 

Transportation Network. The strategy, which focuses on roads and transit systems, contains a number of 

initiatives to encourage variable pricing, the use of new technologies, and private sector investment in 

transportation infrastructure. Our goal is to reduce the rate at which congestion is increasing across the country. 

At 27.3 percent of travel, congestion in urban areas was below the projected level of 32.3 percent.

Pavement and bridge conditions affect congestion; the better condition the infrastructure is in, the less need for 

repair and rehabilitation projects that slow down the flow of traffic. This year, preliminary results suggest that 

slightly less than the target of 57 percent of pavement met the standards for a good ride. The percent of bridge 

deck area rated as either structurally deficient or functionally obsolete, however, exceeded the target. More than 

29 percent of bridge deck areas needs to be replaced or repaired. The FHWA is assisting States in developing 

programs to repair, rehabilitate, or replace structurally deficient bridges in their inventories in order to reduce 

the number of structurally deficient bridges at an accelerated pace.

Transit ridership increased by 4.3 percent this year, exceeding the target of 1.5 percent. While transit agencies 

have increased ridership over four years with improved service and fare subsidy programs, it is fairly clear that 

this year’s growth can be attributed to higher gas prices.

The Department seeks to increase transit ridership in general, and also to individuals with disabilities who often 

rely on public transportation. The Federal Transit Agency has worked with state and local transit agencies for 

18 years to bring bus fleets and rail stations into compliance with the Americans with Disabilities Act. We have 

exceeded targets for both measurement areas once again, with 98 percent of bus fleets compliant and 95 percent 

of key rail stations compliant.

Aviation congestion remains a challenging issue for FAA and the Department. We missed the target for on-time 

arrivals for a second year; this year’s target was 87.29 percent and actual performance was 87.35 percent. To 

help increase arrival rates, FAA evaluates new tools and technologies, redesigns airspace where helpful, adjusts 

separation standards between aircraft flying at high altitudes, and collaborates with airlines to manage traffic flow 

at specific, high-volume airports

GLOBAL CONNECTIVITY

Transportation systems within and among nations are lifelines to economic growth, less restricted trade, and 

greater cultural exchange. The globalization of the American economy has put pressure on our ports, borders, 

and airports. When combined with increasing local traffic, greater volumes of international freight and 

passenger traffic will result in more congestion and delay and, as a result, higher shipping and travel costs. Our 

strategic goal: Facilitate an international transportation system that promotes economic growth and development 

rests on two strategies: open international transportation networks and improved intermodal transportation 

systems.

The Department has adopted two new measures connected with efficient cargo movement: the number of freight 

corridors where the average speed is 55 miles per hour and the number of U.S. border crossings with an increase 

in operational reliability. We also continue to track the movement of vessels through the St. Lawrence Seaway. 

In FY 2008, all twenty-five of the freight corridors under study kept their average travel speed at 55 miles an 

hour, and no corridor had a decline in average speed of more than 1 mile per hour. Any decline in the average 

speed means it takes motor carriers longer to reach their destinations, thus increasing the cost of transportation 
United States Department of Transportation 21

for the goods being carried. The target for more efficient border crossings was not met. The SLSDC narrowly 

missed its target of U.S. Seaway availability. We expected this gateway to the Great Lakes to be open for 99 

percent of the shipping season, but the actual performance was 98.8 percent.

The Department continues to work with other countries to negotiate bilateral agreements, removing the barriers 

to increased service and lower fares for airline passengers. As of 2008, the Department has negotiated 90 Open 

Skies agreements, covering 3.94 billion potential passengers.

ENVIRONMENTal Stewardship

While transportation ties us together as a Nation, it can also produce unwanted side effects such as air and water 

pollution, the loss of ecosystems and disruption of communities. Americans want solutions to transportation 

problems that are consistent with sound environmental planning. DOT is committed to avoiding or mitigating 

the adverse environmental effects that can accompany transportation, as stated in our strategic goal: Promote 

transportation solutions that enhance communities and protect the natural and built environment.

For the third year in a row, the number of areas in a transportation emissions conformity lapse was well below 

the target. In fact, for the second year in a row there were no conformity lapses at all nationwide.

In FY 2008, we replaced the performance measure “Number of exemplary ecosystem initiatives initiated” with 

“Number of exemplary human environmental initiatives undertaken”. The previous measure tracked actions 

that helped sustain or restore natural systems and their functions and values using an ecosystem or landscape 

context. We had exceeded the target by significant margins since 2004, which indicated transportation planners 

were increasingly aware of the environmental impact of their projects and taking steps to mitigate it. We 

decided to drop the measure in favor of a new, more challenging one which focuses on enhancing the human 

environment. This year the target was to identify 10 exemplary initiatives; FHWA received proposals for 11 

projects that met the criteria.

This year, for the first time, we are presenting performance measures that indicate our success in streamlining 

the environmental review process. Three Operating Administrations, Federal Highways, the Federal Aviation 

Administration, and the Federal Transit Administration, sponsor major infrastructure projects that must comply 

with the National Environmental Protection Act before the projects can be started. It can take years to complete 

an Environmental Impact Statement (EIS). The length of time required to complete the environmental review 

process, referred to as the NEPA process, is a source of frustration to State and local transportation agencies. We 

have set ourselves challenging targets and this year’s results prove how much of a challenge this effort will be. We 

know progress will be slow, but we are committed to streamlining the process because it will ultimately reduce 

the time it takes to complete major projects.

SECURITY, preparedness and response

Our transportation system must remain a vital link for maintaining the country’s economy, supporting civilian 

emergency response and mobilizing our armed forces for military contingencies. The strategic goal has been 

refocused to include the need for preparedness and response to natural disasters: Balance transportation security 

requirements with the safety, mobility, and economic needs of the nation and be prepared to respond to emergencies 

that affect the viability of the transportation sector.
22 FY 2008 Performance & Accountability Report

The Department of Defense (DOD) relies on the U.S. commercial transportation industry as well as governmentowned ships to deliver equipment and supplies throughout the world in order to maximize defense logistics 

capabilities and minimize cost. In addition to the availability of commercial U.S.-flag vessels, MARAD has 44 

government-owned Ready Reserve Force vessels available to satisfy DOD’s surge sealift requirements. MARAD, 

in conjunction with DOD, also negotiates an agreement with each DOD-designated commercial strategic port 

specifying which facilities will be needed to conduct a military deployment. These ports are expected to make 

their facilities available to the military within 48 hours of written notice. DOT met both the shipping capacity 

target of 94 percent availability within mobilization timelines, and achieved 100 percent readiness within 

established timelines for targeted commercial strategic ports.

ORGANIZATIONAL EXCELLENCE

Secretary Peters’ management strategy for achieving organizational improvement includes full implementation 

of the President’s Management Agenda (PMA). The PMA contains seven mutually reinforcing initiatives that 

the DOT team is integrating into its corporate culture in striving for continuous management improvement. 

The seven PMA initiatives are in the areas of strategic management of human capital; commercial services 

management; financial performance; electronic government; performance improvement; federal real property 

asset management; eliminating improper payments. For FY 2008, three of DOT’s initiatives had green 

ratings and four of the initiatives had yellow ratings. A green rating means the Agency has met all the OMB 

requirements, whereas a yellow rating indicates that the Agency has failed to meet one or two significant 

requirements. An Agency that receives a red rating has met none of the major PMA requirements for the 

initiative in question.
United States Department of Transportation 23

Financial Highlights

Preparing these statements is part of the Department’s goal to improve financial management and to provide 

accurate and reliable information that is useful for assessing financial performance. Departmental management 

is responsible for the integrity and objectivity of the financial information presented in the financial statements.

The financial statements and financial data presented in this Report have been prepared from the accounting 

records of the DOT in conformity with generally accepted accounting principles (GAAP). GAAP for Federal 

entities are the standards prescribed by the Federal Accounting Standards Advisory Board (FASAB).

Overview of Financial Position

Assets

The Consolidated Balance Sheet shows the Department had total assets of $61.3 billion at the end of FY 2008. 

This represents a 1 percent decrease over the previous year’s total assets of $61.8 billion. The largest increase 

of $950 million was in the increase in Direct Loans disbursements made under Transportation Infrastructure 

Finance Innovation Act (TIFIA) which provides credit assistance to major transportation projects.

The Department’s assets reflected in the Consolidated Balance Sheet are summarized in the following table.

Assets by Type (Dollars in Thousands) 2008 % 2007 %

Fund Balance with Treasury $ 22,074,754 36.0 $ 23,392,470 37.8

Investments 21,728,238 35.4 21,218,168 34.3

General Property, Plant & Equipment 14,512,568 23.6 14,683,890 23.7

Inventory and Related Property, Net 802,368 1.3 785,760 1.3

Direct Loans and Guarantees, Net 1,670,284 2.7 889,885 1.4

Accounts Receivable 303,490 .5 623,810 1.0

Cash and Other Assets 276,082 .5 237,855 0.4

Total Assets $ 61,367,784 100.0 $ 61,831,838 100.0

Liabilities

The Department had total liabilities of $14.8 billion at the end of FY 2008. This represents a 5 percent increase 

from the previous year’s total liabilities of $14.1 billion, which is reported on the Consolidated Balance Sheet 

and summarized in the following table. The largest increases were in the Debt which reflects the increase in the 

TIFIA loan program and; the Grant Accrual which reflects changes in grantee payment patterns.
24 FY 2008 Performance & Accountability Report

Liabilities by Type (Dollars in Thousands) 2008 % 2007 %

Grant Accrual $ 5,810,147 39.2 $ 5,526,288 39.3

Other Liabilities 4,628,380 31.2 4,727,489 33.6

Accounts Payable 1,528,335 10.3 1,591,693 11.3

Environmental and Disposal Liabilities 828,757 5.6 852,366 6.1

Debt 1,762,985 12.0 1,040,761 7.4

Loan Guarantees 258,050 1.7 336,626 2.3

Total Liabilities $ 14,816,654 100.0 $ 14,075,223 100.0

Net Position

The Department’s Net Position at the end of FY 2008 on the Consolidated Balance Sheet and the Consolidated 

Statement of Changes in Net Position is $46.6 billion, a 1 percent decrease from the previous fiscal year total net 

position of $47.8 billion. Net Position is the sum of the Unexpended Appropriations and Cumulative Results of 

Operations.

Results of Operations

The results of operations are reported in the Consolidated Statement of Net Cost and the Consolidated Statement 

of Changes in Net Position.

Net Costs

The Department’s total net cost of operations for FY 2008 was $66 billion.

Net Costs (Dollars in Thousands) 2008 %

2007

Restated %

Surface Transportation $ 50,153,011 75.7 $ 47,385,306 75.05

Air Transportation 15,532,121 23.4 14,814,454 23.46

Maritime Transportation 215,079 0.30 570,727 0.90

Costs Not Assigned to Programs 386,130 0.60 388,392 0.62

Less Earned Revenues Not Attributed to 

Programs 39,379 0.05 30,295 0.05

Cross-Cutting Programs 23,501 0.04 11,448 0.02

Net Cost of Operations $ 66,270,463 100.00 $ 63,140,032 100.0

Surface and air costs represent 99.1 percent of the Department’s net cost of operations. Surface transportation 

program costs represent the largest investment for the Department at 76 percent of the Department’s net 

cost of operations. Air transportation is the next largest investment for the Department at 23 percent of the 

Department’s net cost of operations. The increases in Net Cost are attributed to the Surface and Air Programs. 

More funding was expended to increase mobility and improve safety which are Departmental goals.
United States Department of Transportation 25

Resources

Budgetary Resources

The Combined Statement of Budgetary Resources provides information on how budgetary resources were 

made available to the Department for the year and their status at fiscal year-end. For the 2008 fiscal year, the 

Department had total budgetary resources of $133.7 billion, compared to the FY 2007 levels of $122.7 billion.

Budget Authority of $136.6 billion – which consists of $62.5 billion of appropriations received and $57 billion 

of borrowing and contract authority. The Department incurred obligations of $87.7 billion for the 2008 fiscal 

year, a 16 percent increase over the $75.8 billion of obligations incurred during 2007. Outlays reflect the actual 

cash disbursed against the Department’s obligations. The increases in Budgetary Authority are attributed to 

the Surface and Air Programs. More funding was expended to increase mobility and improve safety which are 

Departmental goals.

Heritage Assets and Stewardship Land Information

Heritage assets are property, plant and equipment that are unique for one or more of the following reasons: 

historical or natural significance; cultural, educational, or artistic importance; or significant architectural 

characteristics.

Stewardship Land is land and land rights owned by the Federal Government but not acquired for or in 

connection with items of general property, plant and equipment.

The Department’s Heritage assets consist of artifacts, museum and other collections, and buildings and 

structures. The artifacts and museum and other collections are those of the Maritime Administration. Buildings 

and structures include Union Station (rail station) in Washington, D.C., which is titled to the Federal Railroad 

Administration.

The Department holds transportation investments (Stewardship Land) through grant programs such as the 

Federal Aid Highways, mass transit capital investment assistance, and project grants for airport planning and 

development.

Financial information for Heritage assets and Stewardship Land is presented in the Financial Section of this 

Report under the Financial Statements and Required Supplementary Information.
26 FY 2008 Performance & Accountability Report

Limitations of the Financial Statements

The principal financial statements have been prepared to report the financial position and results of operations of 

the Department of Transportation, pursuant to the requirements of 31 U.S.C. 3515 (b).

These statements have been prepared from the books and records of the Department of Transportation 

in accordance with generally accepted accounting principles (GAAP) for Federal entities and the formats 

prescribed by OMB. The statements are in addition to the financial reports used to monitor and control 

budgetary resources, which are prepared from the same books and records.

The statements should be read with the realization that they are for a component of the U.S. Government.
United States Department of Transportation 27

Systems, Controls, and Legal Compliance

Federal Managers’ Financial Integrity Act (FMFIA)

 The FMFIA requires agencies to conduct an annual evaluation of its management controls 

and financial systems and report the results to the President and Congress. The Secretary 

of Transportation then prepares an annual Statement of Assurance based on these internal 

evaluations.

 As a subset of the FMFIA Statement of Assurance, DOT is required to report on the effectiveness 

of internal control over financial reporting, which includes safeguarding of assets and compliance 

with applicable laws and regulations, in accordance with the requirements of Appendix A of OMB 

Circular A-123. A separate discussion on Appendix A is located at the end of this section.

 The Secretary of Transportation’s has provided the President and Congress a qualified Statement 

of Assurance for FY 2008. The Department evaluated its management control systems and 

financial management systems for the fiscal year ending September 30, 2008. This evaluation 

provided reasonable assurance and formed the basis of the Secretary’s Statement of Assurance 

that the objectives of the FMFIA were achieved in FY 2008.

FMFIA Annual Assurance Process

 The FMFIA review is an agency self-assessment of the adequacy of financial controls in all areas 

of the Department’s operations – program, administrative, and financial management. 

Objectives of Control Mechanisms

1. Financial and other resources are safeguarded from unauthorized use or disposition.

2. Transactions are executed in accordance with authorizations.

3. Records and reports are reliable.

4. Applicable laws, regulations, and policies are observed.

5. Resources are efficiently and effectively managed.

6. Financial systems conform to government-wide standards.

 Managers within the Department, being in the best position to know and understand the nature 

of the problems they face, establish appropriate control mechanisms to ensure Departmental 

resources are sufficiently protected from fraud, waste, and abuse, and to meet the intent and 

requirements of the FMFIA. The head of each Operating Administration and Departmental office 

submits an annual statement of assurance representing the overall adequacy and effectiveness 

of management controls within the organization to the Department’s Office of Financial 

Management. FMFIA material weakness and material nonconformances are also reported, citing 

milestones and/or accomplishments. Specific guidance for completing the end of fiscal year 
28 FY 2008 Performance & Accountability Report

assurance statement and reporting on material deficiencies is issued annually by the Department’s 

Office of Financial Management.

Criteria for Reporting Material Weaknesses and Nonconformances

 A material weakness under FMFIA must fall into one or more of the categories below plus merit 

the attention of the Executive Office of the President and/or the relevant Congressional oversight 

committees.

Criteria for Reporting a Material Weakness

1. Significant weakness of the safeguards (controls) against waste, loss, unauthorized use or misappropriation of funds, 

property, or other assets.

2. Violates statutory authority, or results in a conflict of interest.

3. Deprives the public of significant services, or seriously affects safety or the environment.

4. Impairs significantly the fulfillment of the agency’s mission.

5. Would result in significant adverse effects on the credibility of the agency.

 A material nonconformance under FMFIA must fall into one or more of the categories below 

plus merit the attention of the Executive Office of the President or the relevant Congressional 

oversight committees.

Criteria for Reporting a Material Nonconformance

1. Prevent the primary accounting system from centrally controlling financial transactions and resource balances.

2. Prevent compliance of the primary accounting system, subsidiary system, or program system under the Office of 

Management and Budget Circular A-127.

Summary of FY 2008 FMFIA Material Weaknesses

Status of Internal Controls (FMFIA Section 2)

The DOT is reporting one material weakness, due to the non-compliance with Federal Information Security 

Management Act (FISMA) of 2002, and OMB requirements for security information systems and providing 

privacy protection of personally identifiable information (PII).
United States Department of Transportation 29

Status of Financial Management Systems (FMFIA Section 4)

Appendix A, Internal Controls Over Financial Reporting

Appendix A of OMB Circular A-123 emphasizes management’s responsibility for establishing and maintaining 

effective internal control over financial reporting. Appendix A requires agencies to maintain documentation of 

the controls in place and of the assessment process and methodology management used to support its assertion 

as to the effectiveness of internal control over financial reporting. Agencies are also required to test the controls 

in place as part of the overall FMFIA assessment process. The assurance statement related to the assessment 

performed under Appendix A acts as a subset of the Overall Statement of Assurance reported pursuant to 

Section 2 of the FMFIA legislation. Management’s assurance statement as it relates to Appendix A is based on 

the controls in place as of June 30. The assurance statement is located in the following section of this report. 

DOT is reporting an unqualified assurance statement on internal controls over financial reporting. DOT began 

the first full year of the Department’s Internal Control Program where it performed in-depth testing of the 

controls over four focus area business processes for each Operating Administration (OA). Additional testing of 

high-risk key controls from the remaining ten non-focus area business processes was performed for OAs whose 

transactions are material to the Department-wide financial statements.
30 FY 2008 Performance & Accountability Report

Management Assurances – OMB Circular A-123
United States Department of Transportation 31
32 FY 2008 Performance & Accountability Report

Federal Financial Management Improvement Act

The Federal Financial Management Improvement Act of 1996 (FFMIA) requires that agencies’ financial 

management systems provide reliable financial data in accordance with generally accepted accounting 

principles and standards. Under FFMIA, financial management systems must substantially comply with three 

requirements — Federal financial management system requirements, applicable Federal accounting standards, 

and the U.S. Government Standard General Ledger (SGL). In addition, agencies must determine annually 

whether their systems meet these requirements. This determination is to be made no later than 120 days after 

the earlier of (a) the date of receipt of the agency-wide audited financial statement, or (b) the last day of the fiscal 

year following the year covered by such statement.

To assess conformance with FFMIA, the Department uses OMB Circular A-127 survey results, FFMIA 

implementation guidance issued by OMB, results of OIG and GAO audit reports, annual financial statement 

audits, the Department’s annual Federal Information Security Management Act (FISMA) Report, and other 

relevant information. The Department’s assessment also relies a great deal upon evaluations and assurances 

under the FMFIA, with particular importance attached to any reported material weaknesses and material 

nonconformances.

FFMIA of 1996 Noncompliance Issues

The Department is pleased to report the Section 4 noncompliance as related to the financial reporting of the CIP 

balance was resolved during FY 2008.

FFMIA of 1996 Financial Management Systems Strategy

DOT uses Oracle Federal Financials software as its agency-wide financial management and accounting system 

of record (called Delphi). DOT was the first—and remains the only—cabinet agency to migrate all of its 

Operating Administrations (OAs) to a Financial Systems Integration Office-certified, commercial-off-the-shelf 

based financial system running on a cost-effective single production instance of the software. Using the DOT 

developed Financial Statement Solution enhancement, the Department is able to produce regulatory Financial 

Statements overnight from the core accounting system. This improves accuracy, effectiveness, efficiency and 

enables DOT to meet OMB, Treasury and other Federal reporting requirements on schedule.

In FY 2008, DOT enhanced its standardized release schedule for installing Delphi patches, enhancements and 

upgrades. The Office of Financial Management (OFM) Financial Systems Team and the Enterprise Services 

Center (ESC) Delphi Team worked with customers to identify, develop, test and coordinate six separate 

release deliverables. For FY 2008 the hardware and software releases have been decoupled so that technical 

infrastructure and application changes are in different releases. This release schedule assured more complete 

testing of patches and enhancements, allowed thorough design and review of hardware upgrades and greatly 

improved communication and understanding of changes made to the system. The Department was especially 

focused on upgrades needed to keep pace with vendor support requirements. In order to successfully migrate 

the Delphi Oracle Database to a new operating system in Mid 2009, a new middle tier was implemented and the 

Discoverer and Web reporting servers were replaces with modern technology. Communication was facilitated 

with timely and effective “Go To” on-line web-based meetings between the OAs, ESC and OFM.
United States Department of Transportation 33

These upgrades offer assurance that the Delphi Financial Application Software Modules are maintained at a 

level that ensures supportability by Oracle. The upgrade also adds some increased functionality for the Delphi 

support staff, reduces risks associated with technical enhancements, resolves some outstanding customer 

requests, provides customers with additional secure processing tools and allows Delphi to move toward future 

enhancements. 

Throughout FY 2008 DOT has continued to refine the Delphi System Change Request (SCR) Process. The bulk 

of the work undertaken in FY 2008 to refine the process is being implemented in the first quarter of FY 2009. 

Major deliverables include, modifying the SCR Request document into a standardized Business Case Document 

that is used by all OAs, the Enterprise Service Center and the Office of Financial Management, Streamlining 

the SCR Process flow to ensure that all organizations have early visibility of all SCRs and modifying the Delphi 

SCR Tracking system (Kintana) to allow visibility of all SCRs scheduled for particular releases, and support the 

customers prioritization of business cases.
34 FY 2008 Performance & Accountability Report

Federal Information Security Management AcT

FISMA requires Federal agencies to identify and provide security protection commensurate with the risk and 

magnitude of harm resulting from the loss of, misuse of, unauthorized access to, disclosure of, disruption to, or 

modification of information collected or maintained by or on behalf of an agency. FISMA and its predecessor, 

the Government Information Security Reform Act (GISRA), required that Inspectors General to evaluate 

agencies’ information security programs and practices.

The Department has 13 Operating Administrations that, for Fiscal Year (FY) 2008, reported a total of 425 

information systems, of which 62 percent belong to the Federal Aviation Administration (FAA). Among 

the systems the Department maintains and operates is the air traffic control system, which the President has 

designated as part of the critical national infrastructure. Other systems owned by the Department include 

safety-sensitive surface transportation systems and financial systems that are used to manage and disburse over 

$50 billion in Federal funds each year. In FY 2008, the departmental IT budget totaled about $2.8 billion.

This year’s IG report indicates that the Department’s information security program and practices are not 

effective. Consequently, the Department is not in compliance with FISMA and OMB requirements for security 

information systems and providing privacy protection of personally identifiable information (PII). Last year we 

reported that the overall effectiveness of DOT’s information security program declined because management 

had to divert resources and attention to resolving Headquarters move-related issues. While we observed 

some operational improvements, we nonetheless continued to see a decline in the Department’s program and 

practices. Our prior year’s information security-related recommendations have not been fully implemented.

Developing a robust information security program, including implementation of our current and prior years’ 

recommendations, requires (1) the Chief Information Officer (CIO) Office to effectively oversee Operating 

Administrations’ implementation of departmental policies/guidance, and (2) stability in the Office of the Chief 

Information Security Officer (CISO). However, when compared with some of his counterparts in other Federal 

agencies and other appointed officials within the Department, the DOT CIO has limited influence on Operating 

Administrations. Unless there are management or budgeting consequences, Operating Administrations are 

likely to continue the practice of not effectively implementing departmental policies/guidance. As a result, the 

IG has made a recommendation to increase Operating Administrations’ accountability. 

During FY 2008, the Department’s performance was also hindered by significant turnover in the Office of 

the CISO. Consequently, the Department has not established adequate policies or procedures to implement 

and maintain an effective Department-wide information security program or to address key OMB privacy 

requirements.

The full FY 2007 FISMA report can be found at www.oig.dot.gov.
United States Department of Transportation 35

SAS-70 review on DOT’s Financial Management System

The SAS-70 report summarizes the results of a review of general, application, and operational controls over 

the DOT Enterprise Services Center (ESC). The ESC performs services including accounting; financial 

management; systems and implementation; media solutions; telecommunications; and data center services for 

DOT and other Federal organizations.

This is the fourth year that a SAS-70 audit has been conducted on DOT’s Delphi financial system. The ESC 

provides accounting and financial management systems and services for DOT and other Federal agencies. 

Delphi is hosted, operated and maintained by Federal Aviation Administration employees at the Mike Monroney 

Aeronautical Center in Oklahoma City, Oklahoma, under the overall direction of the Departmental Chief 

Financial Officer.

ESC is one of four Federal Shared Service Providers designated by the Office of Management and Budget to 

provide financial management systems and services to other government agencies. ESC supports other Federal 

entities, including the National Endowment for the Arts, the Commodity Futures Trading Commission, 

the Institute of Museum and Library Services, and the Government Accountability Office. The Office of 

Management and Budget requires Shared Service Providers to provide client agencies with an independent 

audit report in accordance with the American Institute of Certified Public Accountants’ (AICPA) Statement of 

Auditing Standards (SAS) 70.

This year’s SAS-70 audit of Delphi was conducted by Clifton Gunderson, LLP, of Calverton, Maryland. The 

DOT Office of Inspector General performed a Quality Control Review of the SAS-70 audit work to ensure that it 

complied with applicable standards.

The Clifton Gunderson SAS-70 audit report dated July 31, 2008 concluded that management’s description of 

controls for the Delphi Financial Management System presents fairly, in all material respects, the controls that 

had been placed in operation as of June 30, 2008. Clifton Gunderson recommended several enhancements 

to strengthen Delphi controls further; DOT has already implemented many of these recommendations and is 

implementing the remaining corrective actions. The operational environment enabled auditors to rely on Delphi 

system controls in conducting this year’s financial statement audits.

Follow Up Review

Since the issuance of its July 31, 2008 report, Clifton Gunderson completed a follow-up review covering the 

period from June 30, 2008 through the September 30, 2008 fiscal year end. The purpose of this follow-up review 

was to determine whether any significant changes had been made to Delphi’s operating environment. The 

follow-up review documented the corrective actions that have been implemented to strengthen Delphi controls 

in accordance with the SAS-70 recommendations. The full OIG report can be found on their web site at www.

oig.dot.gov.
36 FY 2008 Performance & Accountability Report

Improper Payments Information Act of 2002

In FY 2008, the Department fully implemented the Improper Payments Information Act of 2002 (IPIA), which 

requires that agencies: (1) review programs and identify those susceptible to significant improper payments; (2) 

report to Congress on the amount and causes of improper payments; and, (3) develop approaches for reducing 

such payments. 

In FY 2008, the Department successfully completed its review of the Federal Highway Administration (FHWA) 

Federal-aid Highway Program, Federal Aviation Administration (FAA) Airport Improvement Program, and the 

Federal Transit Administration (FTA) Formula Grants Program and Capital Investment Grants Program.

In FY 2008, the Department re-engaged AOC Solutions, Inc. to develop a nationwide sampling plan, collect 

the results from the application of test procedures, and provide a nationwide estimate of improper payments 

for Federal-aid Highway Program, Airport Improvement Program, Formula Grants Program, and Capital 

Investment Grants Program. With respect to the Formula Grants Program, as in FY 2007, in FY 2008 the 

sampling plan, test procedures, and test results only applied to the grantees covered by the FTA’s Formula Grant 

Triennial Review Program, which represents approximately one-third of the grantee population. 49 U.S.C. 5307 

prescribes a triennial review of all Formula Grant grantees. OMB Circular A-123, Attachment C, paragraph F 

provides for alternative approaches, including determining the amount of improper payments for components, 

such as those addressed in the foregoing statute.

The samples designed to execute the model are of sufficient size to yield an estimate with a 90 percent confidence 

interval within +/- 2.5 percent points around the estimate of the percentage of erroneous payments, as prescribed

by OMB. The results of these efforts are discussed below.

FHWAFederal-aidHighway Program

The Department developed and executed a sampling plan to test project payments and estimate the amount of improper 

payments nationwide. The FHWA executed the nationwide testing program using personnel from the FHWA 

division offices and covered Federal payments to grantees over the twelve-month period March 1, 2007 through 

February 29, 2008.

The IPIA sampling plan involved a multi-staged statistical approach that included the selection of 40 Federal 

payments totaling $109,732,056, 49 state payments totaling $30,910,426, and then 182 testable line items from 

supporting invoices totaling $20,733,729 for testing. As in FY 2007, the FY 2008 sample was designed to support 

a nationwide estimate of improper payments; it was not designed support an estimate for each state and territory 

grantee. States and territories that did not appear in the IPIA sample were subjected to a similar sampling process 

under the FHWA’s Financial Integrity Review and Evaluation (FIRE) program.

The test procedures applied to the line items were designed to test a range of administrative and contractual 

elements. Tests of administrative elements included determining whether payments were properly approved, billed 

at the correct Federal participation rate, and whether billings and payments were mathematically accurate. Tests 

of contractual elements included determining whether payments were in accordance with contract rates/prices for 

specified materials and whether material quality tests indicated that materials met contractual requirements.

Improper payments totaling $149,035 were found in the sample of 182 tested items. The projection of known 

improper payments to the population of program payments for the twelve-month period results in an improper 

payment estimate of $55.1 million +/- $4 million. The estimated improper payment rate is .17% +/- .01%. This

projection does not meet OMB’s definition of significant improper payments ($10 million and 2.5 percent of total 

program payments).
United States Department of Transportation 37

The improper payments reported resulted from factors such as underpayments related to retainage not covered by 

contract provisions and incorrect calculations.

The FHWA has implemented its FIRE Program to monitor State and territory payments and provide a 

mechanism for assisting these entities with effectively addressing operational issues that result or could result in 

improper payments.

FTAFormula Grants Program

FY 2008 was the second year of nationwide coverage of the FTA Formula Grants Program. FTA executed 

the nationwide testing program for grantees covered by the 2008 Triennial Review Program using contractor 

personnel. The review covered the twelve-month period March 1, 2007 through February 29, 2008.

The sampling plan involved a multi-staged statistical approach that included the selection of 8 Federal payments 

totaling $95,650,747; 24 transportation authorities’ payments totaling $29,989,649; and then 44 testable line 

items from supporting invoices totaling $10,657,250 for testing. The test procedures applied to the line items 

were designed to test a range of administrative elements and contractual elements. Tests of administrative 

elements included determining whether payments were properly approved, billed at the correct federal 

participation rate, and whether billings and payments were mathematically accurate. Tests of contractual 

elements included determining whether payments were in accordance with contract rates/prices for specified 

materials and whether material quality tests indicated that materials met contractual requirements.

Potential improper payments totaling $199,874 were found in the sample of 44 tested items. The projection of 

known improper payments to the population of program payments for the twelve-month period results in an 

improper payment estimate of $47.6 million +/- 5.3 million. The estimated potential improper payment rate is

5.63% +/- .63%. This projection meets OMB’s definition of significant improper payments ($10 million and 2.5

percent of total program payments). The FTA believes this finding is inconclusive for reasons discussed below.

The potential improper payments reported are attributable primarily to the absence of documentation in support 

of the fringe benefit rate used to recover fringe benefits allowable under the Formula Grants Program. While 

such costs are allowable charges, OMB Circular A-87, Attachment E, requires that fringe benefit charges to 

Federal programs be supported by formal documentation and retained in accordance with the records retention 

provisions of the Grants Management Common Rule. The FTA believes that because as a general rule these 

costs are allowable, the FTA should validate the grantee’s methodology prior to a final determination on payment 

propriety of this finding.

The FTA will advise grantees of the provisions of OMB Circular A-87 with particular attention to the 

requirement that fringe benefit and indirect cost rates used for cost reimbursement be documented and retained 

for audit and program review. Finally, the FTA will assess the feasibility of follow-up actions to assess the extent 

to which grantees covered by the 2009 review are addressing deficiencies that resulted in improper payment 

determinations.

FTACapital Investment Grants Program

FY 2008 was the first year in which the FTA executed a sampling plan to provide a nationwide estimate of 

improper payments for this program. In FY 2007 the FTA developed a model for use in estimating the amount of 

improper payments.
38 FY 2008 Performance & Accountability Report

The sampling plan involved a multi-staged statistical approach that included the selection of 10 Federal payments 

totaling $321,661,382; 31 transportation authorities’ payments totaling $35,783,951; and then 66 testable line items 

from those payments totaling $12,804,680 for testing. The test procedures applied to the line items were designed 

to test a range of administrative and contractual elements. Tests of administrative elements included determining 

whether payments were properly approved, billed at the correct federal participation rate, and whether billings and 

payments were mathematically accurate. Tests of contractual elements included determining whether payments 

were in accordance with contract rates/prices for specified materials and whether material quality tests indicated 

that materials met contractual requirements.

Improper payments totaling $43,672 were found in the sample of 66 tested items. The projection of known 

improper payments to the population of program payments for the twelve-month period results in an improper 

payment estimate of $87 million +/- $6 million. The estimated improper payment rate is 3.13% +/- .23%. This

projection meets OMB’s definition of significant improper payments ($10 million and 2.5 percent of total program 

payments).

The improper payments reported resulted from draw-downs in excess of federal participation share. The grantee 

refunded known improper payments.

The FTA will advise grantees of actions needed to ensure reimbursement requests are in accordance with grant cost 

sharing or matching requirements.

FAAAirport Improvement Program (AIP)

The FAA developed and executed a sampling plan to determine the amount and cause of improper payments in 

the Airport Improvement Program. The FAA review covered the twelve-month period March 1, 2007 through 

February 29, 2008. 

The sampling plan involved a multi-staged statistical approach that included the selection of 30 Federal payments 

to sponsors totaling $48,796,094; 30 sponsor payments to contractors totaling $37,107,109; and then 63 testable line 

items from contractor invoices totaling $15,390,373 for testing. The test procedures applied to the line items were 

designed to test a range of administrative elements and contractual elements. Tests of administrative elements 

included determining whether payments were properly approved, billed at the correct federal participation 

rate, and whether billings and payments were mathematically accurate. Tests of contractual elements included 

determining whether payments were in accordance with contract rates/prices for specified materials and whether 

material quality tests indicated that materials met contractual requirements.

Improper payments totaling $658.44 were found in the sample of 63 tested items. The projection of known 

improper payments to the population of program payments for the twelve-month period results in an improper 

payment estimate of $.973 million +/- $0.128 million. This projection does not meet OMB’s definition of significant

improper payments ($10 million and 2.5 percent of total program payments).

The known improper payments are attributable to unexplained differences between payments to sponsors and 

payments to contractors.

The FAA will advise field personnel and sponsors of the need to establish control procedures for ensuring 

agreement between payments and requests for Federal reimbursement.
United States Department of Transportation 39

SCORECARD ONTHE PRESIDENT’S MANAGEMENTAGENDA

The original President’s Management Agenda was comprised of five government-wide and nine-agency specific 

goals to improvement federal management and deliver result to the American public. In the original baseline 

scorecard, the Department of Transportation received a score of red for human capital, competitive sourcing, 

financial management, and e-government. We received a yellow for budget and performance integration, now 

called Performance Improvement. 

In the last six years the Department has made significant progress and ends FY 2008 with three green and 

four yellow scores across seven initiatives. For more information on activities in FY 2008, please see the 

Organizational Excellence chapter in the Performance Report. 

These scoring indicators relate to the Department’s “Status” score that reflects a collection of results in each 

initiative, usually in the form of “percentage complete” or other indicator of the current state. Scores for 

“Progress” are also provided that reflect accomplishment of recent actions and lead in to very near-term plans for 

continued improvement.

KEY

 A green score indicates full success in achieving the elements of the initiative

 A yellow score indicates substantial success in achieving the elements of the initiative

 A red score indicate that insufficient success has been achieved against the elements of the initiative

More information about the President’s Management Agenda can be found on the White House Office of 

Management and Budget website at http://www.whitehouse.gov/omb/budintegration/pma_index.html.

FY 2008 

Status PRESIDENT’S MANAGEMENT AGENDA INITIATIVES FY 2008 Progress

 HUMAN CAPITAL INITIATIVE 

Develop a Department-wide human capital workforce strategy to address future workforce 

gaps, eliminate skill gaps in critical occupations, develop performance-based incentives for the 

workforce, ensure citizen-centered, delayered, and mission-focused organizations; strengthen 

leadership skills, and ensure a robust leadership pipeline; improve the measurement and 

evaluation of human capital strategies; and integrate e-Government and Competitive Sourcing 

strategies. 

 COMMERCIAL SERVICES MANAGEMENT 

Improve the consistency for defining commercial and inherently governmental inventories 

across the Department. Identified competable activities, provided strategic direction for 

competitive sourcing and human capital initiatives, and developed and shared high-quality 

intellectual capital within the Department and other agencies.
40 FY 2008 Performance & Accountability Report

FY 2008 

Status PRESIDENT’S MANAGEMENT AGENDA INITIATIVES FY 2008 Progress

 IMPROVED FINANCIAL MANAGEMENT 

Develop financial management systems capable of producing more timely and accurate 

information, and maintain a record of unqualified opinions on our financial statements.

 ELECTRONIC GOVERNMENT 

To better justify and track costs and performance of information technology projects, as well as 

participate in government-wide initiatives that automate and simplify how the public deals with 

the government and reduce redundancies and increase efficiencies across government-wide.

 PERFORMANCE IMPROVEMENT 

To better integrate budget and performance functions by integrating respective staff work; 

developing plans and budget with outcome goals, output targets, and resources requested in the 

context of past results; charging full budgetary costs of programs; and documenting program 

effectiveness. 

 ELIMINATING IMPROPER PAYMENTS 

Develop financial management systems capable of producing more timely and accurate 

information, and eliminating improper payments to DOT vendors/customers.

 REAL PROPERTY 

Use sound real property management of real property resources for diverse transportation 

missions, maintaining the quality of real property assets managed, and disposing of assets that 

are no longer required. 
United States Department of Transportation 41

Other Management Information,

Initiatives, and Issues

DOT’S FINANCIAL MANAGEMENT

BUSINESS TRANSFORMATION INITIATIVE

The Financial Management Business Transformation (FMBT) is a multi year initiative that is sponsored by the 

Office of Financial Management (B-30). The FMBT is planned, executed and managed as a collaborative effort 

across the Department’s financial management community in order to achieve the goals set collectively by 

the financial management community in 2007. The FMBT was launched in response to multiple drivers both 

internal and external to the Department. Currently, many of the Operating Administrations (OAs) use multiple 

and redundant reports and reporting tools to communicate similar financial information, resulting in an 

inability to share the right information with the right people at the right time in the most cost effective manner. 

Additionally, many OAs use different, OA-specific guidelines to conduct similar accounting transactions. 

As a result, the Department is unable to take full advantage of the economies of scale available through the 

consolidated accounting operations at the Enterprise Service Center (ESC) and the significant improvements in 

functionality that will result with our next application (Oracle) upgrade. Furthermore, each OA has a different 

Accounting Code Structure which is not aligned with OMB’s new, required Common Government Accounting 

Code, and we are currently unable to roll up financial information Department-wide. Finally, the Department 

is still cleaning up data from the first conversion to Oracle, and a data clean-up and conversion strategy are 

required before moving to the next Oracle platform.

During FY 2007, B-30, in partnership with ESC and the Departmental financial community, embarked on 

an initiative to standardize DOT business processes, develop and define requirements for future financial 

management system upgrades and establish a strategic plan to standardize the DOT financial management 

business model in accordance with OMB’s Lines of Business Initiatives. The focus areas of the FMBT Program 

fall into five main categories, and each area has several goals:

1. Reporting and Information Sharing

a. Achieve a fully integrated reporting environment and design an Oracle/Delphi/OA common 

reporting inventory

b. Enable Department-wide roll-up of cost and performance data and improve data quality and 

integrity

c. Design future systems to most effectively support internal and external customers’ requirements 

d. Develop a shared reporting solution and tools to exchange data/information with common internal 

and external systems

e. Refine our interface strategy by defining rules that eliminate redundancies and maximize integration

f. Successfully respond to current and proposed OA, OMB, Treasury, and other internal/external 

reporting requirements 

2. Business Process Reengineering

a. Reengineer business systems and processes across the Department in order to take full advantage of 

future system functionality and achieve economies of scale with consolidated accounting services
42 FY 2008 Performance & Accountability Report

b. In partnership with the DOT Office of Procurement, implement a fully integrated procurement 

solution

c. Develop formal policies to support optimal communication with all stakeholders of financial 

management information across the Department

d. Develop a formal process to guide decisions and future investments

3. Data Management

a. Develop and implement a Department-wide Accounting Code Structure (ACS) that is aligned with 

OMB’s Common Government Accounting Code

b. Develop and execute data clean-up plan across all OAs 

c. Develop and execute data conversion plan across all OAs 

d. Develop and implement a Department-wide future data management strategy

4. Current System Set-Up

a. Prepare to convert and manage the transition from the current system set-up (Oracle 11.5.10) to 

Oracle Financial release 12iFSIO effectively

b. Refine the release management process 

c. Refine the system change request (SCR) process

d. Understand Delphi’s role in the Department’s Enterprise Architecture (EA)

e. Develop and implement an archiving and purging strategy for Delphi and any future system

f. Successfully respond to current and proposed security requirements

5. Future System Set-Up

a. Develop and manage an overarching implementation strategy for future systems that incorporates 

FMBT decisions and includes training and communications plans

b. Analyze hardware requirements for the transition period to future systems and recommending a 

hardware solution for the future state

c. Successfully respond to current and proposed security requirements for future systems and ensuring 

compliance

In 2007, the CFOs from each DOT OA agreed to come together as a single decision-making body to develop and 

implement a single set of requirements for the Department’s new financial system. Since this time, stakeholders 

across the Departmental financial, procurement and IT community have shown unanimous support for this 

initiative, by participating in visioning conferences and decision-making forums. The end result of FY 2007 was 

the signing of charter documents for the FMBT governance structure and workgroups and the establishment of 

the Business Transformation Team (BTT), the group responsible for the day-to-day management of the FMBT. 

In FY 2008, the BTT focused on establishing a governance structure by which this program will be managed; 

chartering five workgroups responsible for accomplishing each of the five goals listed above; and established 

a Business Transformation Team (BTT) responsible for managing and coordinating the daily progress of the 

transformation initiatives.
United States Department of Transportation 43

INSPECTOR GENERAL’S FY 2008

TOP MANAGEMENT CHALLENGES

The Department recognizes that Management Challenges are not issues that are easily solved. In many cases 

they require investments or upgrades to technology or substantial changes in long-standing procedures or 

program activities. To completely address a Management Challenge may take more than one fiscal year. Since, 

the OIG may refine the scope of the management challenge based on information that may become available 

during the year; it can be difficult to provide a context showing how far along the Department is in resolving a 

particular challenge. To provide perspective on the Department’s progress, we have provided a self assessment 

showing the achievements toward resolving the challenge as currently defined. The result is displayed via the 

Progress Meter icon. DOT hopes that this approach will provide perspective toward gauging the Department’s 

progress in resolving a management challenge.

DEPARTMENT OF TRANSPORTATION

OFFICE OF INSPECTOR GENERAL APPROACH

The Office of Inspector General (OIG) issues its annual report on DOT’s top management challenges to 

provide a forward-looking assessment for the coming fiscal year. The purpose of the report is to aid DOT’s 

agencies in focusing attention on and mapping work strategies for the most serious management and 

performance issues facing the Department. 

In selecting the challenges for each year’s list, the OIG continually focuses on the Department’s key strategic 

goals to improve transportation safety, capacity, and efficiency. In addition to the OIG’s vigilant oversight 

of DOT programs, budgetary issues, and progress milestones, it also draws from several dynamic factors to 

identify key challenges. These include new departmental initiatives, cooperative goals with other Federal 

departments, recent changes in the Nation’s transportation environment and industry, as well as global issues 

that could have implications for the United States’ traveling public. As such, the challenges included on the 

OIG’s list vary each year to reflect the most relevant issues and provide the most useful and effective oversight 

to DOT agencies. 

As required by OMB Circular A-136, the OIG’s report briefly assesses DOT’s progress in addressing the 

challenges identified. To track management challenges identified from year to year, the OIG provides an 

exhibit to the report that compares the current list of management challenges with the list published the 

previous fiscal year. In addition, the OIG may refine the scope of the management challenge from year to year 

based on program developments, external factors, or other information that becomes available.
44 FY 2008 Performance & Accountability Report

1. Management Challenge: Continuing to Enhance Oversight to Ensure 

the Safety of an Aging Surface Transportation Infrastructure 

and Maximize the Return on Investments in Highway and Transit 

Infrastructure Projects.

- Targeting oversight actions to ensure the safety of tunnels and bridges

Recent tragic highway incidents underscore the need for FHWA to 

ensure that its oversight actions target tunnels and bridges that represent 

high-priority safety risk so that problems are identified, evaluated, and 

remediated in a timely and thorough manner.

Tunnels

Currently there are no national standards regarding the design, 

construction, inspection, operations and maintenance of highway tunnels in the Nation. The Federal Highway 

Administration (FHWA) and the American Association of State Highway Transportation Officials (AASHTO) 

are working together to provide guidelines and manuals for inspection, maintenance and management of 

tunnels. As an example, FHWA completed a two-day workshop on tunnel engineering in July that provide an 

opportunity to gather experts in tunnel ventilation, computer modeling, tunnel operation and response, and to 

formulate criteria for creation of a pilot program on tunnel fires. Short-term and long-term research, deployment 

and education programs are needed to assure the safety, reliability and efficiency of our highway tunnels. As 

such, there are a number of initiatives being considered or under development. In FY 2009, FHWA will develop 

a pilot program for computer modeling of fires in a tunnel. FHWA will also release a Highway Tunnel Design 

and Construction Manual that focuses on Construction, Inspection, Operation and Maintenance.

Following the collapse of a section of a suspended ceiling in the Central Artery Tunnel in Boston, the FHWA 

moved quickly to conduct an investigation of the collapse and to ensure safety of existing and new tunnels. 

FHWA issued a Technical Advisory to provide guidance and recommendations regarding the use and in-service 

inspection of adhesive anchors in sustained tension applications on all Federal-aid highway projects. Over the 

longer term, FHWA plans to develop a National Tunnel Inspection Program. An Advanced Notice of Proposed 

Rule Making (ANPRM) was drafted and is awaiting final signature before being published in the Federal 

Register. The development of the program will likely take from three to five years to completed beginning with 

the rulemaking process. Following the publication of a Final Rule, a Tunnel Inspection training program will 

be developed. In addition, FHWA and the AASHTO-20 Tunnels Committee members are coordinating efforts 

to conduct a domestic scan on Tunnel Management Practices in the near future. FHWA continues to work with 

AASHTO to advance tunnel technologies through research and other cooperative technology transfer efforts: 

These continuous efforts and exchanges ensure that tunnel owners have the option to use best available practices. 

Bridges

FHWA continues to provide stewardship and oversight of the National Bridge Inspection Program and the 

Highway Bridge Program to assure compliance with applicable laws and regulations and the use of best practices 

in design, construction, inspection, and evaluation of highway structures. FHWA conducted National Bridge 

Inspection Standards (NBIS) compliance reviews in nearly every State, and provided States with reports of 

findings and recommendations.

moderate 

progress significant

progress

complete no

progress

slight

progress

PROGRESS METER
United States Department of Transportation 45

Through risk assessments and in-depth reviews, FHWA has taken steps to minimize deficiencies in bridge load 

rating and posting practices. The load rating and posting is important on all bridges, so the scope of our efforts 

is not limited to structurally deficient bridges. 

Out of 52 FHWA Division Offices, 47 completed their risk assessments on bridge load rating and posting by 

October 2007. The remaining 5 Divisions plan to complete their assessments during 2008. Twelve Divisions 

identified load rating and posting as high risks. These Divisions will respond by conducting in-depth reviews of 

load rating and posting practices during FY 2008 or FY 2009. Through the National Highway Institute FHWA 

initiated the development of a training course titled the Load and Resistance Factor Rating Method, based on 

an improved methodology for determining the load capacity of bridges. This course will be offered to State 

Departments of Transportation.

During 2008, FHWA initiated development of two additional standard NBI data reports to further assist in a 

data-driven approach to targeting our oversight activities. One of these reports identifies a list of bridges that 

may experience a change in operating rating due to a condition change that puts the bridge into a structurally 

deficient status. The other NBI data report, scheduled to be implemented by September 2008, will provide the 

Divisions a list of bridges that have been structurally deficient for the past ten years.

The revised FHWA Bridge Program Manual is still undergoing technical and legal review. It is a comprehensive 

document that requires an extensive multi-disciplinary review. A target date for completion will be established 

once the review is complete. Additional standard NBI data reports have been implemented to provide our bridge 

engineers with opportunities to make use of existing National Bridge Inventory data.

The FHWA Fiscal Management Information System (FMIS) was queried to determine if it is possible to develop 

detailed information regarding the obligation of Federal funds on structurally deficient bridges. However, the 

results could not be validated because of the way projects are established in FMIS. Both the FMIS and the NBI 

systems would have to be modified to accurately track obligation of Federal funds on structurally deficient 

bridges.

- Ensuring that major projects are completed in an efficient and cost efficient manner to maximize the 

return on Federal infrastructure investments

FHWA continues to play an important role in ensuring that Value 

Engineering (VE) is successfully integrated in the development and delivery 

of surface transportation programs and projects. In FY 2007, the State 

DOTs and the Office of Federal Lands Highway performed a total of 316 VE 

studies and achieved a significant cost savings of $1.972 billion on projects 

with an estimated construction cost of $24.81 billion. In addition, a total of 

$41.8 million was saved as the result of approved construction VE Change 

Proposals that were submitted by contractors.

To ensure the continued enhancement of program oversight and further promotion of VE in FY 2008 

and beyond, several initiatives are planned or currently underway. The FHWA’s 2007 call for VE data 

was successfully expanded to request information on States’ current best practices in their VE Programs. 

Collaboration with the AASHTO VE Technical Committee continues to enhance the reporting requirements, 

and the FHWA will integrate the results of this collaboration into the FHWA’s upcoming 2008 call for VE data.

moderate 

progress significant

progress

complete no

progress

slight

progress

PROGRESS METER
46 FY 2008 Performance & Accountability Report

By the end of 2008, the FHWA will begin the rulemaking process to update the VE regulations. The intent of 

this rulemaking is to provide consistent language and terminology between the existing regulations and 23 

United States Code Section 106, as amended by the Safe, Accountable, Flexible, Efficient Transportation Equity 

Act: A Legacy for Users (SAFETEA-LU) and to supplement and expand the level of guidance currently provided 

with the regulation. The rule should promote more effective administrative practices and consistent application 

of the VE techniques by the states, thereby providing benefits to the delivery of the surface transportation 

program and increasing the potential for reducing project costs.

The OIG noted that FTA’s use of independent contractors to assist in oversight is a sound approach that could 

be replicated in other operating administrations. The project management oversight of transit infrastructure 

projects is primarily performed by outside project, financial, safety and procurement oversight consultants hired 

by FTA. The oversight contractors regularly monitor each major capital project, closely watching quality, scope, 

cost and schedule using the latest risk assessment methods. The agency provides its own oversight activities in 

addition to reviewing the contractors’ work. Vigilant oversight will be particularly important since FTA must 

continue to oversee Federally funded transit infrastructure projects throughout the Nation, while at the same 

time overseeing several large and complex New York City projects (four FTA projects and one FHWA project 

at World Trade Center have a Federal commitment of $4.4 billion, the $4.7 billion New York/Second Avenue 

Subway and the $7.3 billion Long Island Rail Road East Side Access) collectively costing about $16 billion. More 

recently, the oversight program has demonstrated its effectiveness on the Dulles Corridor Metrorail project, 

motivating the sponsor to control costs and eliminating the need for a Federal loan and line of credit.

2. Management Challenge: Addressing Long- and Short-Term

Challenges for Operating, Maintaining, and Modernizing the National

Airspace System

- Hiring and training nearly 15,000 controllers over the next 10 years

One of FAA’s challenges over the next ten years is hiring and training enough 

air traffic controllers to address the surge in retirements. The Agency has 

developed a strategy for this and continues to modify and improve it as 

needed. FAA’s new hires come largely from three sources: experienced 

military controllers, Collegiate Training Initiative (CTI) partner schools, and 

the general public. This year FAA has taken action in all three areas to greatly 

increase the qualified applicant pool and reduce the time and cost associated with hiring and training.

FAA currently offers a recruitment bonus of up to $20,000 to previous military controllers. This allows the 

Agency to attract individuals with previous controller experience, which reduces time and costs associated with 

training. FAA also offers relocation incentives and reassignment bonuses for current controllers and retention 

incentives for retirement-eligible controllers.

In 2007, FAA revised the CTI evaluation process and added nine new schools, bringing the new total to 31. In 

addition, it opened the program again for new schools to apply between February 5 and March 7, 2008. This 

will expand the base of approved CTI schools even more. Final approval and announcement of the additional 

new schools will be in September 2008. The expansion of this program will allow FAA to attract a large pool of 

qualified candidates with aviation-related college degrees.

moderate 

progress significant

progress

complete no

progress

slight

progress

PROGRESS METER
United States Department of Transportation 47

During 2007, numerous public sector job announcements were issued throughout the country, resulting in about 

25,000 applications. Nationwide job announcements continue to be issued in 2008 at a rate of about one per 

month, ensuring a continual flow of applicants for vacant controller positions.

The FAA has improved the selection process with centralized selection and placement (CSP) panels that 

convene regularly throughout the year in Oklahoma City. Here the Air Traffic Organization and the Office 

of Human Resources review referred applications and make selections. Each CSP takes place in a week and 

instant coordination and communication occurs with each of the respective stakeholders. Many applications are 

reviewed, resulting in hundreds of selections being made at each panel. The CSP panel compresses the selection 

process from several months to one week.

CSP selectees are invited to a Pre-employment Processing Center (PEPC) for the remainder of their processing 

PEPCs are a streamlined and highly effective initiative that compresses the pre-employment application and 

screening process into a week-long session by bringing candidates together in a centralized location that allows 

FAA to: 1) conduct job interviews, 2) finalize selections, 3) collect security information to initiate the clearance 

process, 4) conduct medical exams, drug testing, and psychological evaluations, and 5) process human resources 

paperwork. Traditionally, the pre-employment processing took up to six months or more. The FAA has been 

able to cut time and costs in hiring by implementing the PEPCs. Ten PEPCs were held in FY 2008.

The FAA continues to make significant progress in the validation of accurate facility-level staffing standards. As 

part of the 2008 Controller Workforce Plan, FAA included updated staffing ranges at the facility level for all 314 

terminal and en route facilities. In 2007, FAA completed its efforts to revise the standards for tower cabs and en 

route centers. As a result of the updated tower and en route standards, FAA was able to use data from all tower 

and en route facilities as input to the staffing ranges. In addition, FAA has started updates to the TRACON 

staffing model and anticipates completion during the fall of 2008.

The FAA is increasingly using simulators to reduce time and costs associated with training new controllers. FAA 

awarded a contract for 24 Tower Simulation Systems (TSS) in December 2007. Installation of the TSS has begun 

in field facilities and the FAA Academy, with full installation to be completed in September 2009. The Agency 

has also installed additional En Route Training Simulation Systems at six Air Route Traffic Control Centers and 

the Academy to increase training capacity.

The Deployable Air Traffic Training System (DATTS) is the FAA’s newest simulation training initiative. DATTS 

is a portable commercial-off-the-shelf mobile air traffic control training system, designed for deployment of ‘just 

in time’ or ‘as needed’ training use. DATTS expands training and closes the trainee back-log. The DATTS will 

be installed and tested at various field facilities and the FAA Academy in the coming months.

The FAA continues to use operations per controller as a baseline metric to measure controller productivity. This 

metric is tracked at the system level to provide a comprehensive view of terminal and en route operations. Due 

to decreasing levels of air traffic in recent years and the net increases to the controller workforce, the operations 

per controller metric for FY 2009 is projected to be 16 percent lower than FY 2000. This recent downward trend 

clearly indicates that FAA is proactively meeting the challenge of the air traffic controller retirement wave.
48 FY 2008 Performance & Accountability Report

- Keeping existing modernization projects on track

FAA has created and implemented mitigation strategies to comprehensively 

address the need to keep modernization projects on track. Implementation 

of executive and management reviews and wide-ranging processes have 

resulted in positive, measurable, and dramatic changes in how FAA manages 

modernization projects.

A major earned value management (EVM) effort has been initiated 

across the agency. For all newly approved Information Technology (IT) investments that have current year 

development, maintenance and enhancement funding equal to or greater than $10 million, the FAA applies the 

EVM project management tool. These programs are also required to track and measure program performance 

in accordance with Earned Value Management Systems (ANS/EIA STD-78 EVMS) guidelines. By applying this 

project management tool, the FAA ensures optimum project planning and control by effectively integrating the 

project scope of work with cost, schedule, and performance elements. The FAA is more than fifty percent of the 

way to full EVM implementation.

The agency is also transforming the way it manages acquisitions with the implementation of an objective 

measurement system to evaluate program performance. In conjunction with EVM processes, the FAA has 

implemented a series of 21 program reporting metrics. A comprehensive Red/Yellow/Green assessment of 

program performance is available through a combination of Financial, Schedule, Technical, Resources, External 

Interest metrics as well as the program manager’s overall assessment.

FAA continues efforts to enhance its accountability and improve performance reporting. Among other 

initiatives, the Capital Investment Plan will now include baseline history for programs selected for acquisition 

performance measurement. In addition, standard operating procedures are being developed to address Program 

Planning, Baseline Management, and Program Performance Reporting. These processes and procedures will 

ensure continuity, discipline, and consistency in the way programs are planned, managed, and reviewed at all 

levels within FAA. In addition, Post-Implementation Reviews are routinely conducted and results reported to 

senior FAA management.

- Reducing cost, schedule, and technical risk with NextGen

The development and execution of NextGen is the most complex, high-risk undertaking FAA has ever attempted 

and will require multibillion dollar investments from the Federal Government and airspace users. NextGen 

implementation is led by the recently appointed Senior Vice President for NextGen and Operations Planning, 

in cooperation with the NextGen Management Board and NextGen Review Board. The Senior Vice President 

for NextGen and Operations Planning is supported by the NextGen Integration and Implementation Office. 

This office is structured to successfully implement NextGen by carefully 

monitoring the cost, schedule and technical risks.

During FY 2008, the NextGen Integration and Implementation Office 

took steps to acquire the necessary expertise to make NextGen a reality. 

The former Operational Evolution Partnership office and FAA’s chief 

systems engineers were brought together into the NextGen Integration 

and Implementation Office and FAA initiated recruitment actions for the 

NextGen solution set and integration managers and support staff. In addition, FAA entered into an agreement 

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United States Department of Transportation 49

with the National Academy of Public Administration (NAPA) to conduct a workforce needs analysis to identify 

the competencies needed for all segments of our NextGen workforce and to define strategies to obtain this 

expertise. A final report, Identifying the Workforce to Respond to a National Imperative – The Next Generation Air 

Transportation System, was delivered in September 2008. The report contains recommendations on acquisition 

workforce strategies, strategies to acquire and retain acquisition workforce competencies, and NextGen 

implementation challenges.

The FAA’s NextGen Implementation Plan, which details FAA’s efforts to transform the National Airspace 

System using 21st century technologies, was published in June 2008. Even with this plan, NextGen is not 

without complex engineering, integration, and human factors issues. FAA continues to develop the enterprise 

architecture roadmap to attain the operational capabilities and improvements envisioned with NextGen. The 

FAA is also directing efforts to develop the critical path and risk matrix for NextGen to help mitigate engineering 

and integration issues, and to identify best practices in system integration for complex enterprises.

It is widely accepted that Earned Value Management (EVM) is the best project control technique for early 

detection of project performance variances. The FAA’s Acquisition Management System (AMS) requires all 

organizations responsible for major capital investment programs that involve development, modernization, or 

enhancement to develop and implement an EVM system.

NextGen’s transformational programs, such as Automatic Dependent Surveillance – Broadcast and System Wide 

Information Management have already implemented EVM. We expect Data Communications and NAS Voice 

Switch to follow suit once final investment decisions are made and approved program baselines are established. 

Other enabling activities within the NextGen portfolio are still in the planning stages of FAA’s standard lifecycle 

work breakdown structure (i.e., concept development and feasibility studies, etc.), where EVM is less useful as a 

project control technique.

To compliment the AMS, FAA is also looking at best practices to apply research and systems analysis and a 

technology readiness level framework to 1) facilitate the development of new technology and applications to 

meet approved service needs and 2) transition mature technologies through research and systems analysis to 

solution implementation.

- Maintaining FAA’s aging air traffic control facilities

Today there are over 500 terminal and en route air traffic control systems 

and facilities located throughout the country. Both the number and 

locations of the Air Traffic Control systems and facilities currently in use 

were driven by available technology. In preparation for the transition to the 

NextGen Air Transportation System, an estimated 400 legacy systems and 

facilities will need to be replaced or modernized. 

In FY 2008, FAA spent more than $300 million for the repair, modernization, and replacement of its air traffic 

control facilities. These projects involve replacement of obsolete infrastructure, asbestos and mold abatement, 

repair of roof leaks, and plumbing improvements. Examples of these initiatives include:

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50 FY 2008 Performance & Accountability Report

• Mold remediation projects were completed at 29 facilities, including the Air Traffic Control

Tower at Chicago O’Hare. An additional 18 mold remediation projects are planned for FY 2009. 

In FY 2009, we will complete 15 status mold inspections as part of the ARTCC duct inspection 

process.

• Major asbestos abatement projects at nine ARTCCs. To date, one construction contract has been

awarded with the remaining projects in the engineering or procurement phases.

• Replacement of obsolete electrical and mechanical equipment as well as the installation of fire

detection/protection systems in operations support and administrative areas.

• Mitigation of operational risks associated with mission critical physical plant infrastructure

failure modes at all ARTCCs.

• Alignment of unmanned facility infrastructure survey data with a passenger-focused facility

impact database. The database is used to establish a risk reduction methodology to deliver 

projects that maximize the protection of NAS capacity in the minimum time.

A key attribute of NextGen is a geographic independent service delivery model. Air traffic services can be 

provided without the constraints associated with legacy surveillance and communications infrastructure. 

Moving forward, FAA will begin to provide networked services allowing for greater flexibility and service 

resilience. With these changes, opportunities will arise that allow us to transition to a more optimal allocation of 

services to facilities and to remove outdated infrastructure from the NAS.

In FY 2008, FAA continued ongoing analysis of requirements for NextGen facilities. As part of the analysis, FAA 

is evaluating several aspects related to future operations and facilities, including the transition of new operational 

requirements, physical security, and workforce impact. The analysis includes consideration of existing en 

route and terminal facilities and how operational changes and technology advancements will change airspace 

assignment and facility requirements.

The analysis is being conducted as part of the Concept and Requirements Definition (CRD) phase of the 

Acquisition Management System process to support an Initial Investment Analysis Readiness Decision, which is 

anticipated in February 2009.

- Properly accounting for capital investment projects

Following extensive corrective actions undertaken during FY 2007, FAA 

continued to standardize and improve its processes for monitoring and 

accounting for capital investment projects. These initiatives are described 

in the Capitalization Program Management Plan (PMP), approved January 

2008, which has been used to guide the Capitalization Program. FAA has 

made significant progress against the PMP. The activities identified in the 

PMP have been substantially completed, with ongoing clean up and routine 

processing tasks on target to be completed by September 30.

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United States Department of Transportation 51

The FAA identified and implemented process improvements to existing policy, procedures, business processes, 

and systems. The process improvement activities addressed the auditors’ Notification of Findings and 

Recommendations as well as the lessons learned from the intensive clean-up activities undertaken during 

FY 2007.

During FY 2008, the FAA developed a financial manual that documents the capitalization policies and 

procedures and continues to conduct staff training to further communicate policy, process and procedure 

changes. FAA also implemented a quality assurance review checklist and process to ensure accurate financial 

treatment of capital projects and related assets. A National Program Capitalization Team was established to 

document and communicate decisions about capital programs to ensure timely and accurate capitalization of 

assets. In addition, 30 positions have been added throughout the organization to enhance capitalization efforts.

The FAA continues to develop and implement process improvements, including a regional quality assurance 

process and standardized FAA capitalization processes in headquarters and the three regional service areas. We 

have implemented standardized business processes and quality reviews that have resulted in FAA processing 

approximately 67 percent of assets within 65 days in FY 2008. Version 2 of the Capitalization Program 

Management Plan (PMP 2.0) has been developed, which will guide the agency through the next phase of 

capitalization process improvements and standardization in FY 2009.

3. Management Challenge: Developing a Plan to Address the Highway and Transit Funding 

Issues in the Next Reauthorization

 - Facing a near-term funding crisis in the Highway Trust Fund

Given the current constraints in the Federal budget, the Department has 

undertaken several initiatives to encourage more effective and efficient use 

of existing revenue sources and the development of additional sources of 

revenue. The importance of these efforts was reinforced in September as 

the Department instituted emergency measures to deal with an expected 

shortfall in the Highway Account of the Federal Highway Trust Fund (HTF). 

Although Congress passed legislation, which the President subsequently 

signed, providing the Highway Trust Fund with $8 billion from the General Fund to avoid the shortfall, these 

funds provide only temporary relief. The HTF will remain vulnerable to shortfalls as long as it continues to rely 

on fuel taxes as its primary source of revenue. 

The Department has encouraged Federal, state and local lawmakers to reduce the wasteful effects of political and 

special purpose spending, including earmarks and to apply benefit-cost analysis and other economic measures 

to transportation spending to ensure that priorities are being funded. The Department has encouraged the 

development and deployment of technological innovations that help States and local authorities use existing 

infrastructure more effectively. Significantly, the Department’s congestion pricing initiatives have facilitated 

the innovative use of advanced tolling technologies to more effectively manage congestion in metropolitan 

areas. Not only does better management of existing resources reduce investment needs, but pricing also creates 

dedicated and sustainable sources of revenue, which offer a promising alternative to declining fuel taxes. The 

groundbreaking Urban Partnership Agreements, for instance, emphasize utilization of tolling and pricing as a 

remedy to worsening urban congestion. 

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52 FY 2008 Performance & Accountability Report

The Department has also encouraged states and local authorities to leverage existing public resources to attract 

substantial co-investment from the private sector. The Department has employed several programs in these 

efforts, including the private activity bonds program, FHWA’s Transportation Infrastructure Finance and 

Innovation Act (TIFIA) and interstate tolling programs, and pilot programs such as the FTA’s Public-Private 

Partnerships Program and the FHWA’s Corridors of the Future program. Over the last few years, these programs 

have attracted billions of dollars in private co-investment for our Nation’s transportation infrastructure.

The public-private partnerships (PPPs) facilitated through these programs are not divestitures of public 

transportation assets, but rather contractual arrangements whereby the private sector agrees to perform 

multiple elements of a public project, including design, construction, financing and/or long-term operations 

and maintenance. The public sector retains ownership of the facilities and ongoing responsibilities with respect 

to security, safety and other important functions. In addition, the public sector typically retains monitoring 

and oversight responsibilities to ensure that private operators are complying with the detailed performance 

specifications that are specified in the PPP contracts. Breaches by a private operator generally lead to penalties, 

and ultimately to the termination of the PPP contract and forfeiture by the private partner of its rights with 

respect to the facility. Because of the financial incentives created for the private sector to satisfy customers, and 

because the private sector assumes significant amounts of project risk in PPPs, including risks associated with 

cost overruns and schedule delays, the Department believes that taxpayers may well have less exposure to risks in 

a PPP than they do when the public sector employs traditional approaches to project funding and delivery. The 

Department is developing explanations of how risks are managed and how risks can be mitigated through careful 

negotiation of PPP contractual provisions.

- Demand for more investment and rapid cost escalation will increase the pressure to expand highway 

funding

The amount needed to offset the effects of inflation in highway construction 

and maintenance costs has soared dramatically in recent years. The 

increases have substantially reduced the purchasing power of highway 

construction funds and have led some state planners to cancel or delay 

projects. The Inspector General urged DOT to pursue innovative uses of 

funding to counter this price escalation.

Reducing recurring and non-recurring congestion, improving day-to-day operations, enhancing freight 

management, better emergency management, deployment of new technologies – these are all ways that FHWA 

works to maximize the benefit of the Federal investment in highways. In addition, DOT works actively to 

leverage that investment by encouraging and facilitating a broad range of financing options available within 

current law. SAFETEA-LU provided innovative changes to stimulate needed private investment such as 

eligibility for private activity bonds, additional flexibility to use tolling to finance infrastructure improvements, 

and broader Transportation Infrastructure Finance and Innovation Act and State Infrastructure Banks loan 

policies.

DOT’s Urban Partnership program, an element of the Transportation Secretary’s National Strategy to Reduce 

Congestion (Congestion Initiative), provided an incentive for a number of large metropolitan areas to undertake 

meaningful pricing efforts as part of a comprehensive strategy to reduce congestion. A relatively small amount 

of Federal funding, along with a pledge of technical assistance, was enough to encourage adoption of broad 

congestion pricing programs. Up to this time, most congestion pricing was small scale and limited to a specific 

facility.

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United States Department of Transportation 53

FHWA supports efforts to move innovative methods into mainstream use, providing education, best practices 

and technical support. 

• A tolling and pricing opportunities website provides information about the tolling and pricing

programs available under Title 23 of the United States Code and invites Expressions of Interest 

from States and/or other public entities. The site also provides key contacts and links to resources 

related to tolling and pricing that can be used to support an initiative. Through this site, agencies 

can understand the tolling and pricing opportunities that now exist and can communicate with 

FHWA in order to assist them in effectively applying for tolling and pricing authority or funding. 

• A Public Private Partnership (PPP) website contains information to facilitate and encourage

more widespread use of PPPs. Expanding the private sector role allows the public agencies to 

tap private sector technical, management and financial resources in new ways to achieve certain 

public agency objectives such as greater cost and schedule certainty, supplementing in-house staff, 

innovative technology applications, specialized expertise or access to private capital.

• An Innovative Finance website highlights programs to meet the increasing gap between

transportation capital needs and available resources, without direct increases in Federal grant 

funding. During the past decade, at least $29.1 billion in innovative finance projects have been 

advanced, which were supported by $8.6 billion in Federal-aid funding. On average, for each 

Federal dollar invested in an innovative finance project, $3.40 of construction investment was 

enabled, which compares quite favorably to the ratio of $1.25 to $1.00 for every dollar invested in 

the traditional grant program. DOT continues to work actively with partners to make innovative 

tools such as TIFIA assistance, State Infrastructure Banks, and private activity bonds more widely 

accessible. 

In addition to its ongoing activities under current authorities, the DOT has also developed a comprehensive 

proposal (Reform Proposal) for reforming the Federal surface transportation program subsequent to the 

expiration of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEALU). The Reform Proposal incorporates provisions that would encourage states and metro areas to explore 

innovative transportation financing mechanisms. Specific provisions in this area include (1) allowing 

jurisdictions to toll Interstates and other major highways (while conditioning their use of toll revenues), 

(2) expanding the use of public private partnerships, (3) broadening the availability of TIFIA credit assistance, 

(4) removing the volume cap on private activity bonds and making them more flexible; and (5) allowing 

jurisdictions greater flexibility to create and use state infrastructure banks.

Beyond its current programs, DOT has also included provisions in its surface transportation Reform Proposal 

to encourage states and metro areas to explore innovative transportation financing mechanisms. Specific 

provisions in this area include (1) allowing jurisdictions to toll Interstates and other major highways (while 

conditioning their use of toll revenues), (2) expanding the use of public private partnerships, (3) broadening the 

availability of TIFIA credit assistance, (4) removing the volume cap on private activity bonds and making them 

more flexible, and (5) allowing jurisdictions greater flexibility to create and use state infrastructure banks.
54 FY 2008 Performance & Accountability Report

- Developing a comprehensive Highway funding framework quickly

In addition to its provisions regarding innovative finance, the DOT’s Reform 

Proposal provides a comprehensive vision of a clarified Federal role in 

surface transportation. The Reform Proposal reflects the Administration’s 

strongly-held beliefs on the long-term inability of the gas tax and the 

current Federal programmatic structure to adequately respond to America’s 

transportation, economic, energy, and environmental policy goals. It 

provides an investment strategy and regulatory framework for Federal 

surface transportation investments and outlines programmatic, financial, and regulatory reforms that a surface 

transportation authorization bill might include. These reforms would focus substantial Federal funding on 

projects of national interest; give state and local officials greater flexibility and private-sector financing options to 

tackle urban congestion; ensure that government invests tax dollars effectively, and continue to focus on safety. 

In addition to grant programs, the proposal would encourage pricing and the leveraging of Federal funding and 

provide for greater accountability with more effective decision making and performance measurement.

In deference to the prerogatives of both Congress and the next Administration, the Reform Proposal does not 

recommend funding levels, whether in the aggregate or for individual programs. However, it does suggest 

approximate ratios for distribution of overall funding (regardless of its cumulative level) between various 

programs.

4. Management Challenge: Reducing Congestion in America’s 

Transportation System

The Department is pursuing a national strategy to reduce congestion across 

all modes of transportation. Congestion limits economic growth, wastes 

billions of gallons or fuel, and costs billions of dollars in lost productivity 

each year. This will likely remain a prominent challenge for the Department 

for some time, particularly with regard to air travel. FAA and FHWA are the 

focal points in the Department for addressing these challenges.

- Reducing delays, improving airline customer service and meeting the anticipated 

demand for air travel in the near term

Reducing Delays

The FAA continues to work at reducing delays and meeting the anticipated demand for air travel. 

Implementation of the Next Generation Air Transportation System (NextGen) is the long term solution 

to increasing capacity of the National Airspace System. In the meantime, FAA and the Department of 

Transportation have implemented a number of initiatives to reduce delays in the near term.

• New York Aviation Rulemaking Committee (ARC). The ARC was formed in September 2007 to

explore operational improvements, market-based mechanisms, and other options for addressing 

airspace congestion and flight delays in the New York metro-area. It provided recommendations 

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United States Department of Transportation 55

to the Secretary of Transportation in December 2007. Please find the final report summarizing 

the ARC discussions at: http://www.faa.gov/library/reports/media/NY%20ARC%20Final%20

Report.pdf.

• John F. Kennedy (JFK) International Airport Schedule Reduction and Temporary Order. The

FAA convened a scheduling reduction meeting for JFK Airport in October 2007 to address 

the problem of severe congestion and delays. The FAA was successful in meeting with air 

carriers operating at the airport and securing flight schedule reductions and the re-timing of 

peak period flights. As a result of this meeting, FAA issued an order in January 2008 to codify 

these agreements and cap operations at the airport at 81 scheduled operations per hour. The 

cap on operations addresses the congestion and delay that peaked in summer 2007. The order 

became effective in March 2008 and will expire upon the effective date of the final congestion 

management rule in December.

• Newark Liberty International Airport Schedule Reduction and Temporary Order. The airlines

serving Newark agreed with FAA’s request to reduce their schedules during peak periods and 

shift to operations to off-peak periods. These and other measures adopted at Newark will 

prevent carriers from simply shifting the congestion from JFK to Newark. The FAA issued an 

order codifying these schedule agreements in May 2008. The order limits scheduled operations 

to 81 per hour. The order became effective in June 2008 and will be replaced by the congestion 

management rule when it becomes effective in December.

• The JFK and Newark Orders also provided for opportunities to increase airline competition at

these congested airports, though auctions at new and returned operating authorizations. The 

FAA expanded the slot auctions to cover a percentage of existing slots, at LaGuardia, JFK and 

Newark. Consumers will realize the benefits of more competition and a more national use of 

slots. 

• New York Area Operational Improvements. Thirty percent of commercial air traffic passes

through the New York airspace, where a substantial number of daily delays begin. FAA 

is redesigning airspace in the region, which affects airports in New York, New Jersey, and 

Pennsylvania, in order to improve traffic flow. The U.S. military worked with FAA to make some 

of its airspace available for civilian airliners during the peak holiday travel periods in FY 2008. 

The use of the military airspace was so successful in mitigating congestion over the Thanksgiving 

and Christmas holidays in 2007 and the July 4th weekend this summer that FAA is working with 

the Department of Defense (DOD) to ensure that military airspace will be available for civilian 

use during future holidays.

Improving Customer Service

The Department took several steps in FY 2008 to ensure the airlines provided adequate customer service to their 

passengers, especially when flights are delayed. For instance, the Department’s Aviation Enforcement Office 

investigated unrealistic scheduling by the large airlines, targeting chronically delayed flights. During 2007 and 

2008, the numbers of such flights were dramatically reduced. In 2008 the Aviation Enforcement Office began 

applying a somewhat more rigorous set of criteria during its review. Even with the more rigorous criteria, there 

were only 71 chronically delayed flights during the second quarter of 2008 versus 129 in the second quarter of 

2007.
56 FY 2008 Performance & Accountability Report

 The Department formed a Tarmac Delay Task Force to study past delays, review existing and other promising 

practices, and develop model contingency plans that airlines and airports can tailor to their unique operating 

environments to mitigate the impact of lengthy ground delays on consumers. The task force has held six 

meetings and the last meeting is scheduled for November 12, 2008. At the last meeting, Task Force members will 

vote on whether to recommend the model contingency planning document to the Secretary. 

DOT published an Advance Notice of Proposed Rule Making in the Federal Register earlier this year that will 

enhance airline passenger protections by: (1) requiring carrier contingency plans for lengthy tarmac delays; 

(2) requiring carriers to respond to consumer problems, including making information available for filing 

a complaint with the carrier; (3) deeming scheduling a chronically delayed flight to be unfair; (4) requiring 

publication of delay data; (5) requiring carriers to publish complaint data; (6) requiring on-time performance 

reporting for international flights; and (7) requiring carriers to self-audit their customer service plan. The next 

step would be issuance of a Notice of Proposed Rulemaking (NPRM) seeking comments on any proposals the 

Department decides to advance, which will likely occur this fall.

The Aviation Enforcement Office has conducted on-site enforcement investigations of five large airlines this 

fiscal year to evaluate their compliance with consumer protection requirements. DOT has pursued enforcement 

action against carriers for failure to provide consumers, upon request, the on-time arrival percentage of a flight 

as required by existing rules. Cease and desist orders assessing civil penalties have been issued against four 

different carriers (Hawaiian, JetBlue, Delta and U.S. Airways).

- Keeping planned infrastructure and airspace projects on schedule to relieve congestion and delays

New runways and runway extensions provide significant capacity increases. 

Since fiscal year 2000, fifteen new airfield projects have opened at the 35 

busiest airports. The progress of each Operational Evolution Partnership 

(OEP) runway and/or taxiway project is monitored by a team comprised of 

representatives from key FAA organizations and outside stakeholders. The 

team is responsible for ensuring that the runway and/or taxiway project 

is commissioned on schedule with all necessary equipment and airspace 

procedures in place to achieve the full operational capability of the airfield project. The team provides quarterly 

updates to the NextGen Management Board, which is chaired by the FAA Deputy Administrator. Any issues 

relating to the runway project are discussed, assigned to an executive to resolve, and tracked by the integration 

team to ensure resolution.

In June 2008, a new center taxiway was opened at Los Angeles International Airport and in September, Chicago 

O’Hare commissioned a 2,856-foot runway extension. Three additional runways will open at Chicago O’Hare, 

Washington Dulles and Seattle-Tacoma in November 2008. With these three projects, the agency and local 

communities will deliver to the NAS the potential to accommodate an additional 245,000 airport operations per 

year.

In addition, there are four other airfield projects at major airports (runways at Philadelphia and Charlotte, and 

taxiways at Dallas-Ft. Worth and Boston) under construction. These projects will be commissioned by 2010 and 

will provide the associated airports with the combined potential to accommodate an additional 80,000 annual 

operations, which will further reduce delays and improve efficiency.

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To meet additional near-term needs, the FAA and local stakeholders will continue to pursue new airfield 

infrastructure to provide significant capacity, efficiency, and safety improvements. Currently, there are 

environmental impact studies for proposed runway extensions at Fort Lauderdale International Airport 

and Portland International Airport, as well as an airfield reconfiguration at Philadelphia International 

Airport. Houston’s Bush Intercontinental Airport is expected to begin the environmental process this year to 

examine alternatives to increase runway capacity. Salt Lake City International Airport is expected to begin an 

environmental study within the next few years to examine the impact of a runway extension.

Meeting the future capacity needs of the nation’s airports will require innovative approaches, as well as 

continued emphasis on airport expansion and technological improvements. The FAA’s report, Capacity Needs 

of the National Airspace System: 2007-2025 identifies fifteen metropolitan areas that will experience significant 

population gains and economic growth resulting in additional capacity needs by 2025. Within these fifteen 

metropolitan areas the FAA must promote regional planning; monitor aviation infrastructure investment; and 

identify additional airports with potential to accommodate future demand. The FAA and local communities are 

currently focusing on eight of these metropolitan areas which contain fourteen major airports. These airports 

are expected to have the greatest capacity shortfalls. The FAA is working with these airports to develop potential 

solutions to address these future capacity shortfalls and expects to have initial results by the end of 2008.

The FAA continues to monitor the progress of airspace redesign projects as near-term commitments in the 

NextGen Implementation Plan. In the past year, FAA has made progress on critical projects that increase routes, 

as well as reduce airspace complexity and restrictions, departure delays, and taxi, flying times, and distance.

In December 2007, the first elements of the New York/New Jersey/Philadelphia Metropolitan Area Airspace 

Redesign were implemented. The new dispersal headings at Newark-Liberty and Philadelphia International 

airports have decreased departure delays by as much as twenty percent. For New York, the initial dispersal 

headings have provided up to 20 percent reduction in departure delays, when headings are in use, at Philadelphia 

and Newark.

In April 2008, five new south departure routes were opened as part of the Chicago Airspace Project. These new 

routes will work in conjunction with the airfield improvements at Chicago O’Hare to significantly decrease 

delays. In Chicago, the on-time departure improvements were observed after the new southbound routes were 

put in place in April 2008.

The NextGen Implementation Plan also describes new ways of designing and managing airspace that could 

be implemented within the next decade. The NextGen Management Board, NextGen Review Board, and 

NextGen Integration and Implementation Office are all focused on gaining shared commitment and moving to 

implementation.

- Leading Stakeholders

The Department acknowledges the need to leverage its available tools to 

influence stakeholder decisions on infrastructure improvement. Indeed, 

the critical need to move from a tax-based transportation model to a user 

pay model and the concomitant need to have a level playing field for private 

and public sector investors in transportation infrastructure represent 

significant policy change. The Nation can no longer afford to rely almost 

exclusively on Federal fuel taxes to fund our transportation infrastructure. 

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58 FY 2008 Performance & Accountability Report

Accordingly, the Department has repeatedly testified before Congress on all aspects of this issue, delivered 

speeches on the topic to key stakeholders across all modes and across the country, launched public web sites 

and The Secretary’s blog to keep stakeholders up-to-date on recent developments and has supported its public 

outreach effort with a series of seminars on the topic to educate and inform DOT employees.

- Developing innovative funding solutions for infrastructure needs

Any sustainable response to traffic congestion must accomplish two general 

objectives: making efficient use of existing transportation infrastructure 

and adding capacity where needed. DOT has strongly endorsed the use 

of innovative finance – including public-private partnerships (PPPs) – 

accomplish both ends. There are more than 20 major PPPs in various stages 

of procurement in the US, including several managed lanes projects which 

will incorporate pricing and reduce congestion; many of these projects 

would likely not be financially viable under more traditional public procurement approaches.

The Department has supported innovative finance and PPPs in a number of ways. DOT’s congestion pricing 

initiatives have facilitated the innovative use of advanced tolling technologies, which allow metropolitan 

areas to both more effectively manage congestion and to generate associated revenues. The Department has 

encouraged states and local authorities to leverage existing public resources to attract substantial co-investment 

from the private sector. The Department has employed several programs in these efforts, including the private 

activity bonds program, FHWA’s TIFIA and interstate tolling programs, and pilot programs such as the FTA’s 

Public-Private Partnerships Program and the FHWA’s Corridors of the Future program. Over the last few 

years, these programs have attracted billions of dollars in private co-investment for our Nation’s transportation 

infrastructure.

Beyond its current programs, DOT’s surface transportation Reform Proposal would encourage states and metro 

areas to explore innovative transportation financing mechanisms. Specific provisions in this area include (1) 

allowing jurisdictions to toll Interstates and other major highways (while conditioning their use of toll revenues), 

(2) expanding the use of public private partnerships, (3) broadening the availability of TIFIA credit assistance, 

(4) removing the volume cap on private activity bonds and making them more flexible, and (5) allowing 

jurisdictions greater flexibility to create and use state infrastructure banks.

It is important to note that the public-private partnerships facilitated through DOT’s existing programs and 

supported within the Department’s Reform Proposal are not divestitures of public transportation assets, but 

rather contractual arrangements whereby the private sector agrees to perform multiple elements of a public 

project, including design, construction, financing and/or long-term operations and maintenance. The public 

sector retains ownership of the facilities and ongoing responsibilities with respect to security, safety and other 

important functions. In addition, the public sector typically retains monitoring and oversight responsibilities 

to ensure that private operators are complying with the detailed performance specifications that are specified in 

the PPP contracts. Breaches by a private operator generally lead to penalties, and ultimately to the termination 

of the PPP contract and forfeiture by the private partner of its rights with respect to the facility. Because of the 

financial incentives created for the private sector to satisfy customers, and because the private sector assumes 

significant amounts of project risk in PPPs, including risks associated with cost overruns and schedule delays, 

the Department believes that taxpayers may well have less exposure to risks in a PPP than they do when the 

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United States Department of Transportation 59

public sector employs traditional approaches to project funding and delivery. The Department is working on 

literature explaining how risks are managed in PPP programs and how PPP risks can be mitigated through 

careful negotiation of contractual provisions.

5. Management Challenge: Improving Oversight and Strengthening 

Enforcement of Surface Safety Programs

Over the last several years, Congress has provided increased funding to enhance surface transportation safety 

programs, particularly under the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for 

Users (SAFETEA-LU). Over the last 21 years, the Department has helped reduce the rate of highway fatalities 

per 100 million total vehicle miles traveled by about 45 percent (from 2.51 in 1986 to 1.37 in 2007). Still, 41,059 

people were killed on our Nation’s highways in 2007. The Department has set an ambitious goal of reducing the 

highway fatality rate to 1.0 by 2011. However, finding ways to reach this goal is a significant challenge for the 

Department.

- Improving motor carrier safety with more complete information on vehicle crashes and stronger 

enforcement against repeat violators

The DOT IG challenged FMCSA to train the states on reporting nonfatal 

crashes and ensure that all states are assessed by the end of FY 2008. The 

FMCSA aggressively responded by performing site reviews using federal 

staff and contractor support to improve the number of state assessments 

from the 15 reported in the OIG audit to 42 state assessments completed 

as of June 2008. To improve the overall quality of crash statistics, FMCSA 

established new data upload criteria which required states to satisfy 

additional data quality requirements. A concerted effort of testing, piloting, and training resulted in 29 states 

meeting the more challenging criteria despite early projections that only 12 states would qualify. Crash data 

completeness improved to 98 percent, and crash reporting time decreased by 17 percent, increasing inspection 

and crash data accuracy. The FMCSA strengthened its repeat violator policy by requiring its inspectors to treat 

carriers responsible for any acute or critical violations found during subsequent compliance reviews as repeat 

offenders, regardless of their ability to pay fines.

- Closely monitoring Mexican motor carriers operating throughout the United States under the 

Department’s demonstration project

On September 6, 2007, the Department initiated a 1-year demonstration 

project to permit up to 100 Mexico-domiciled and 100 U.S. motor carriers 

to operate beyond the commercial zones along the United States–Mexico 

border. The demonstration project was subsequently extended for two 

additional years. The FMCSA addressed the needs with coordinated, 

site-specific plans for checking trucks and drivers participating in the 

demonstration project. This required coordinating inspections and driver 

checks with state partners and U.S. Customs and Border Protection, resulting in the development of 25 port-ofentry specific plans. Nearly 100 percent of the licenses of Mexican drivers crossing the border were validated 

to ensure that all Mexican drivers participating in the project are properly credentialed and licensed. Also, 

inspectors verified that each commercial motor vehicle crossing our southern border displays decals denoting 

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recent safety inspections. The FMCSA tracks the out of service (OOS) rates of carriers in the demonstration 

project, just as all U.S. carriers’ OOS rates are tracked. The vehicle and driver OOS rates are a metric used by 

FMCSA to monitor compliance with commercial vehicle safety regulations by motor carriers operating in the 

United States. These rates reveal that Mexican domiciled trucks and drivers participating in the demonstration 

project have established compliance rates equal to or better than U.S. trucks and drivers.

- Countering Fraud in the Commercial Driver’s License program

Over the past six years, the DOT IG and FMCSA carried out commercial 

drivers license (CDL) fraud-related investigations of corrupt third-party 

examiners in 26 states resulting in prosecutions in 20 states. On April 

9, 2008, a notice of proposed rule making was published in the Federal 

Register which proposed to tighten regulatory controls over CDL learner’s 

permits, strengthen requirements for proving that CDL applicants are in the 

United States legally, and improve detection and prevention of fraudulent 

testing and licensing.

The FMCSA performed in-depth reviews of 15 state CDL programs in 2008 to verify that testing and licensing 

procedures were effective, that policies and procedures complied with existing laws, and that State practices were 

not susceptible to fraud. Recommendations were made to the states to improve the CDL program’s integrity.

The FMCSA is working closely with our state partners in multiple initiatives with CDL Program Improvement 

grants to reduce fraud within the national CDL program. The FMCSA awarded grant funds to multiple States 

to increase overt and covert monitoring of third party and State examiners. The Agency also awarded grants 

to automate the CDL knowledge and skills testing process, thereby reducing the risk of both applicant and 

examiner fraud. The automated systems, which randomly generate test questions from a large sample, minimize 

the opportunity for applicants to predict the specific questions they will ask. Furthermore, this process posts the 

knowledge test results directly to the driver record, thereby reducing the chance for examiners to fraudulently 

change applicant test scores.

Additionally, FMCSA has awarded grant funding to the American Association of Motor Vehicle Administrators 

(AAMVA) to operate the Fraud Early Warning System, which communicates potential fraud occurrences 

among the states. This includes information about stolen license documents, CDLs issued based on fraudulent 

activity, and other sensitive information. Also in partnership with AAMVA, FMCSA has initiated a Fraudulent 

Document Recognition (FDR) training program that will provide states with hands-on instruction and 

expertise in identifying potentially fraudulent identity and eligibility documents. The FDR project is funded in 

coordination with the National Highway Traffic Safety Administration (NHTSA).

- Resolving hours of service rules for commercial drivers

In response to a decision of the U.S. Court of Appeals for the District of 

Columbia Circuit, FMCSA published on December 17, 2007, an Interim 

Final Rule (IFR) regarding hours of service (HOS) for truck drivers. The 

IFR retains the HOS provisions allowing 11 hours of driving time within a 

14-hour, non-extendable window from the start of the workday, following 10 

consecutive hours off duty. The IFR also allows motor carriers and drivers 

to restart calculations of the weekly on-duty time limits after the driver 

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has at least 34 consecutive hours off duty. The IFR was developed after new data showed that safety levels have 

been maintained since the 11-hour driving limit and 34-hour restart were first implemented in 2003. The IFR 

specifically addressed concerns expressed by the D.C. Circuit Court in its 2007 decision. On December 19, 2007, 

Public Citizen, Citizens for Reliable and Safe Highways, Parents Against Tired Truckers, Advocates for Highway 

and Auto Safety, and the International Brotherhood of Teamsters, requested that the D.C. Circuit Court enforce 

its mandate, invalidate the IFR, and order the Agency to rewrite the HOS rules to limit driving time to 10 hours 

and eliminate the 34-hour restart. On January 23, 2008, the D.C. Circuit denied Petitioners’ motion to enforce 

the court’s orders.

In the IFR, the Agency stated, “FMCSA is fully committed to issuing a final rule in 2008” (72 FR 71247). 

Approximately 880 comments were received in response to the IFR. In general, industry comments were 

supportive of the IFR. The two HOS provisions which were, in effect, upheld by the Court (the 14-hour and 

sleeper-berth provisions) are not supported by the industry, but those provisions were not addressed in the IFR. 

Public safety advocacy groups again expressed strong opposition to the reinstated provisions because, in general, 

they do not believe that the reinstated provisions allow drivers adequate rest time to avoid driving while fatigued.

The FMCSA has completed its analysis of the comments received in response to the IFR, and prepared a final 

rule, with the intent of publishing it in 2008. The Final Rule is currently under Departmental Review.

- Improving State accountability in programs for reducing alcohol-impaired driving

In 2007, alcohol-related fatalities remained at 41 percent (17,036) of all 

traffic fatalities (41,059). Practically speaking, no significant improvement 

in the safety target can be achieved unless alcohol-related fatalities drop 

dramatically, and the States are the linchpin in achieving this drop.

NHTSA is the lead Federal agency responsible for reducing alcoholimpaired driving. SAFETEA-LU authorized $555 million in funding for State 

alcohol-impaired driving incentive grants. In 2007, an estimated 12,998 people were killed in alcohol-impaired 

driving crashes.

Evaluations of our current efforts to counter alcohol-impaired driving found that NHTSA must ensure that 

States establish and report better performance measures to assess how well they are using Federal funding to 

counter impaired driving. State performance plans generally contain measures on activities, such as the number 

of sobriety checkpoints conducted, or on the overall performance goal of reducing the alcohol-impaired fatality 

rate. However, the plans usually do not address performance of key strategies, such as sustained enforcement of 

laws, effective prosecution, and full application of available sanctions. Better information is needed on the degree 

to which States are implementing these key strategies; without it, NHTSA will not be able to determine which 

programs need to be strengthened.

NHTSA and the Governor’s Highway Safety Association (GHSA) recently completed the development of a 

consensus list of State performance measures that will be used to help States and NHTSA measure progress in 

a variety of safety areas, including impaired driving. States will report their performance on these measures in 

their annual highway safety plans (HSPs) and annual reports. These reports will be used by NHTSA and States 

to determine if progress is being made. The consensus list includes both outcome and activity measures. These 

measures will be included in State FY 2010 HSPs. In addition, NHTSA and GHSA agreed to study the possibility 

of adding a measure involving a survey of attitude and awareness of impaired driving. Following are the State 

performance measures aimed at reducing impaired driving, and the proposed survey measure.

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State Performance Measures

Type Performance Measure

FY 2010 State Performance Measures

Outcome Number of fatalities involving a driver or motorcycle 

operator with a BAC of .08 and above.

Activity Number of impaired driving arrests made during 

grant-funded enforcement activities.

Proposed State Measure

Survey Self reported attitude, awareness, and behavior 

regarding impaired driving, laws, penalties, and 

enforcement.

These measures were released in September 2008 and NHTSA will be working with the States to incorporate 

them into the FY 2010 Highway Safety Plans.

- Further reducing railroad collisions and fatalities through more safety oversight

Over the past 10 years, significant progress has been made in reducing 

collisions and fatalities at highway-rail grade crossings. The number of 

such collisions fell by 31 percent from the end of 1996 to its end-of-2006 

total of just over 2,900. FRA’s grade crossing safety oversight activities 

have contributed to this progress. However, these grade crossing collisions 

continue to claim over 300 lives each year. FRA pursued a number of 

activities in FY 2008 to address this issue.

The Agency continues to perform accident/incident reporting audits for compliance with the reporting 

requirements of Title 49 Code of Regulations Part 225 (49 CFR Part 225) on each of the eight Class I railroads 

on a recurring basis every 3 years. Each of FRA’s eight regions will audit the Class II and commuter railroads 

within their geographical territories on a recurring basis every 5 years. (Note: the Surface Transportation Board 

categorizes the railroads according to their annual operating revenues. The Class Is have operating revenues in 

excess of $350 million; Class IIs range from $28 million to $350 million; and Class IIIs are below $28 million. 

Currently, there are eight Class Is and approximately 30 Class II railroads.)

FRA investigates a number of crossing collisions annually. In May 2005, FRA issued a Safety Advisory (Safety 

Advisory 2005-03) to facilitate improved cooperation in the investigation of collisions at highway-rail grade 

crossings. This Safety Advisory reiterated the responsibility of the railroads to: properly report any accident 

involving grade crossing signal failure; properly maintain records relating to credible reports of grade crossing 

warning system malfunctions; properly preserve the data from all locomotive-mounted recording devices 

following highway-rail grade crossing collisions; and fully cooperate with local law enforcement authorities 

during their investigations of such accidents. FRA’s position is that with our limited resources, we investigate 

collisions that meet our standard protocol, and will investigate others as circumstances warrant.

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Secretary Peters submitted to Congress in February 2007 the Bush Administration’s rail safety reauthorization 

bill, introduced by request as H.R. 1516 and S. 918. The bill was passed as H.R. 2095 in October 2008. The bill 

has significant safety requirements including implementation of Positive Train Control which will prevent 

collisions and over speed derailments. The bill reforms hours of service requirements for train and engine crews 

and signal maintainers that will reduce fatigue related accidents. The bill also mandates rulemakings that are 

likely to be significant for conductor certification and bridge inspections. Grade crossing safety will be improved 

through a provision that requires that the National Crossing Inventory be made current and thereby updated on 

a regular basis by States and railroads. Better data would help identify the Nation’s most hazardous crossings and 

assist in finding the best strategies for further reducing casualties at crossings.

In March 2005, FRA began working with Louisiana in developing a statewide highway-rail grade crossing safety 

action plan. Louisiana consistently ranks among the top five States nationally with the highest number of grade 

crossing collisions and fatalities. The State’s action plan focuses on reducing vehicle-train collisions at grade 

crossings where multiple incidents have occurred. In June 2008, in part as a result of efforts to create the action 

plan, the Louisiana Department of Transportation and Development announced an agreement with Kansas City 

Southern Railway Company to make safety improvements at 300 public grade crossings. Over five years, more 

than $16 million will be invested to upgrade warning devices, replace cross-buck signage, and close redundant 

crossings. FRA is now working with Texas and Illinois to develop similar State-specific action plans, which may 

be completed by the end of 2008. Arizona completed a rail safety and security plan in 2007 that incorporated 

crossing safety as well.

6. Management Challenge: Continuing to Make a Safe Aviation System Safer

- Taking proactive steps to improve runway safety in light of recent serious incidents

Reducing the risk of runway incursions is one of FAA’s top priorities. 

Reducing runway incursions lessens the probability of accidents that 

potentially involve fatalities, injuries, and significant property damage. 

The definition of a runway incursion was changed in October 2007 to “any 

occurrence at an airport involving the incorrect presence of an aircraft, 

vehicle or person on the protected area of a surface designated for the 

landing and takeoff of aircraft.” This definition has also been adopted by the 

International Civil Aviation Organization (ICAO). Before it was developed, countries around the world used 

at least 20 different definitions for a runway incursion. With its adoption, the worldwide aviation community 

now has a single runway incursion definition, which will help in the search to determine common factors that 

contribute to these incidents.

Surface Safety Technology Implementation

In FY 2008, FAA continued the Runway Status Lights (RWSL) program which reduces the likelihood of runway 

accidents. In June 2008, FAA announced that RWSL would be installed at 22 airports by 2011.

The Airport Surface Detection Equipment Model X (ASDE-X), a runway safety tool developed to aid in 

preventing surface collisions and reducing critical Category A and B runway incursions is currently installed 

at 17 airports. Additionally, FAA is considering the use of low-cost, commercially available radar surveillance 

systems that would reduce the risk of runway incursions at certain small and medium-sized airports. FAA issued 

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a request for proposals in September 2008 inviting industry offers of candidate low-cost ground surveillance 

products at six additional pilot airports. Lower traffic levels and less complex operations at these airports allow 

ground operations to be safely conducted through visual and voice communication between controllers and 

pilots.

A low-cost ground surveillance system (LCGS) would further reduce the risk of ground incidents or accidents, 

especially during periods of low visibility. The LCGS will provide the basic infrastructure upon which additional 

runway safety applications such as Runway Status Lights (RWSL) and Surface Movement Guidance and Control 

Systems (SMGCS) can be built.

A draft of the National Runway Safety Plan has been drafted and will be published by the end of 2008.

Safety Promotion, Outreach, and Awareness

While pilots have traditionally acquired information about what runway or taxiway they are on by looking 

out their windshield, FAA is making it easier for pilots to have an invaluable electronic tool in the cockpit. It 

provides a moving map display with “own ship position”—changing and improving runway safety the way 

Global Positioning System (GPS) has changed the way we safely navigate our cars. Proposals to participate in 

the test program have been sent to industry for a program evaluation and are expected to begin during the next 

twelve months and continuing for several years.

FAA and industry leaders in August 2007 identified short-term steps to improve runway safety. These Call to 

Action initiatives focused on improved procedures, increased training for airport and airline personnel, and 

enhanced airport markings, lighting and signage.

• FAA has completed runway safety reviews at 20 initial ‘call to action’ airports based on runway

incursion data and wrong runway departure data resulting in more than 100 short-term and 

numerous mid- and long-term initiatives. Most of the short-term initiatives identified have been 

completed.

• Seventy-five of the busiest airports enhanced their runway markings and the remaining smaller

certificated airports must complete the marking enhancements by December 2009 or 2010, 

depending on their size.

• FAA issued an Advisory Circular on March 31, 2008 strongly recommending that certificated

airports require annual driver training for all with access to the movement area. FAA has 

initiated rulemaking to require this annual driver training program at certificated airports.

• FAA conducted a review of air traffic procedures that could contribute to runway incursions. 

The first procedure change, explicit taxi clearances, was implemented in May, and the second 

change, waiting until all runways are crossed along the taxi route before issuing the takeoff 

clearance was implemented on August 11, 2008. The third change, requiring specific runway 

crossing clearances for each runway along the taxi route, may be implemented by December 

2008. These new procedures address several National Transportation Safety Board aviation safety 

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United States Department of Transportation 65

• In July, at Chicago O’Hare International Airport, a voluntary reporting system for air traffic

controllers was launched. The reporting system known as ATSAP (Air Traffic Safety Action 

Program) encourages a culture of non-retributive open communications about incidents and 

potential problems.

• The proposed Runway Safety Council, a joint FAA-industry group, will address root causes

including human factors and accountability issues. The first meeting occurred on October 29, 

2008.

- Ensuring consistency and accuracy in reporting and addressing controller operational errors

To address this challenge, FAA will continue to focus on the development 

and implementation of an automated software prototype that will depict 

Air Traffic Control separation conformance in the Terminal environment 

nationwide. The Traffic Analysis and Review Program, TARP, will apply 

separation logic to targets; identify where applicable separation standards 

are not being maintained; and highlight incidents for further investigation.

Originally TARP implementation was scheduled to be complete at all applicable terminal and en route facilities 

by December of 2011. However, in March FAA announced the acceleration of the TARP deployment schedule. 

The TARP audit tool implementation will now be complete at all applicable terminal facilities by December 

2009. The en route environment currently has the Operational Error Detection Program that identifies potential 

losses of separation. Therefore, the TARP implementation strategy was modified to first focus on the area with 

the greatest need, the terminal environment.

The FAA has developed an additional tool that complements TARP, the Continuous Data Recording Player Plus 

(CDRPP). CDRPP has TARP-like separation detection logic, playback functions and near real-time data access. 

CDRPP will be used to review and automatically investigate potential losses of separation between aircraft 

initiated by traditional methods. The FAA will formally deploy CDRPP to all applicable terminal facilities by 

October 2008.

The En Route and Oceanic Services Unit will continue to remain focused on reducing risk in the National 

Airspace System through effective performance management. For FY 2009 En Route and Oceanic facilities will 

develop and implement strategies which address the primary causal factors found in their operational errors, 

creating a safety culture within the facility, and ensuring the quality of on-the-job training and that weather 

information is properly disseminated.

In addition to these initiatives En Route and Oceanic Services will continue daily monitoring of performance, 

and will pursue procedural development to enhance the safety of NAS operations. En Route and Oceanic 

Services will also continue their communication and awareness strategies, including bi-weekly quality assurance 

and training telephone conference calls, a weekly quality assurance newsletter, and an annual quality assurance 

and training conference.

To ensure consistency and accuracy in reporting and addressing controller operational errors, in FY 2008 FAA 

began providing briefings to operational field air traffic personnel to emphasize the joint goals of the agency 

towards safety and efficiency. A significant element of the briefing addresses the need and responsibility for 

air traffic personnel to fully report all losses of separation for both operational errors and pilot deviations. The 

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briefing includes discussion of the need to accurately capture the casual factors during investigation of every loss 

of separation. These briefings were presented to most large terminal facilities and some of their associated en 

route facilities by the end of March 2008.

The FAA is also ensuring more complete and accurate reporting of losses of separation through random audits of 

recorded radar data. Each month, the Air Traffic Organization’s (ATO) Safety Office selects approximately fifteen 

terminal radar facilities and directs them to review two hours of radar data for dates and times specified by the 

Safety office. In addition, FAA requires approximately three of these facilities to forward their radar data for the 

selected periods to ATO Safety for a second, independent review of separation. En Route and Oceanic Services 

facilities continue to use the audit process in FAA Order 7210.56.

- Strengthening risk-based oversight systems for air carriers, external repair facilities, and aircraft 

manufacturers

The FAA continues to strengthen its risk-based oversight system and has 

expanded the Air Transportation Oversight System (ATOS) to 107 certificate 

management teams, FAA teams that oversee the nation’s Title 14 Code of 

Federal Regulations (14 CFR) part 121 air carriers.

This system-safety and risk-based process ensures that FAA executes the 

agency’s responsibilities to determine the continuing operational safety 

of Title 14 CFR part 121 air carriers. About a third of the inspector workforce is assigned to ATOS certificate 

management teams. The remainder of the safety oversight workforce will begin using risk-based oversight 

processes in 2012 when FAA deploys these systems to other certificate holders such as Title 14 CFR part 135 air 

carriers and part 145 repair stations.

FAA continues to train the inspector workforce in risk-based management. New risk–based training courses 

have been developed to teach inspectors how to use the redesigned ATOS process and tools. As of April 2008, 

all inspectors currently using ATOS (approximately 1,600) have taken the training. No inspector is allowed to 

perform ATOS work assignments until completing the training. 

In September 2005, FAA launched the enhanced repair station and air carrier oversight system. This risk-based 

oversight system standardizes the approach for surveillance of certificated repair stations and noncertificated 

facilities contracted to perform maintenance for air carriers. It also provides for the continuous assessment 

and prioritization of each repair station and noncertificated repair facility and provides a method of targeting 

areas of high risk. While FAA has completed an update of the order which contains all of the standards and 

requirements safety inspectors use daily, we are continuing a review of the order for needed harmonization with 

the latest practices and surveillance of repair stations and air carrier outsourced maintenance providers. This 

revision to the order is expected to be released as completed and finalized in June 2009.

FAA continues to effectively oversee manufacturers’ compliance with the aviation safety regulations. In the 

interest of safety and effective resource allocation, a risk management model is used to identify critical impact 

indicators that serve to categorize facilities according to their potential for producing nonconforming products 

and parts.

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In June 2008, FAA revised draft guidance to manufacturers to include a process that evaluates and selects 

suppliers based on their capability to perform all manufacturing activities, inspections, and tests necessary to 

meet the specified requirements. The FAA expects this guidance to be incorporated in Advisory Circular 21-20 

by September 2009. New risk indicators were also developed in June 2008 to be used by FAA manufacturing 

inspectors that emphasize the manufacturers’ use of flight-critical parts suppliers. Risk indicators, used by FAA 

manufacturing inspectors to reduce the level of subjectivity in evaluating manufacturers so that inspectors’ risk 

assessments are more consistent, were revised in January 2008.

New guidance will be published in March 2009 to require FAA manufacturing inspectors to review a 

manufacturer’s prior audits of suppliers as part of the inspectors’ analysis of risk and determination of resource 

targeting. Content for a revised manufacturing inspector training course was finalized in September 2008.

- Maintaining a sufficient number of inspectors

In March 2008, the Aviation Safety Organization (AVS) provided to 

Congress a 10-year Aviation Safety Workforce Plan. This plan ensures 

that an adequate safety staff is maintained to address oversight needs 

and addresses inspector attrition and anticipated changes in the aviation 

industry. The plan also addresses competencies and skills required within 

the AVS workforce to stay abreast of new technologies and to meet growing 

industry demands for service. As of August, AVS had hired a net increase of 

143 positions, 85 of which are Aviation Safety Inspectors (ASI), putting us on target to meet the planned end-ofyear staffing level.

The FAA has also established recruitment plans to fill our most critical occupations. The agency’s Office 

of Human Resources Management continues to cultivate relationships and partnerships with the industry, 

professional organizations, and the educational communities to ensure positive publicity for the agency in order 

to enhance recruiting opportunities. We have implemented the newly revised qualification standards for the 

ASI occupation. Business and Interpersonal Competencies have been added to the Automated Staffing and 

Application Process for ASIs. This addition will help to determine whether applicants possess the necessary 

competencies and personal qualities to successfully perform the ASI duties and to support the organization’s 

safety mission.

FAA concurred with the recommendations in the Aviation Safety Inspector Staffing Standards Study prepared 

by the National Research Council of the National Academies to create a new staffing model and to expand the 

model to include the entire safety critical workforce. For most of FY 2008, the staffing model that is inclusive of 

the entire AVS safety critical workforce is in the discovery phase. Based on current activities including scheduled 

requirements gathering, AVS will implement the Aircraft Certification inspector workforce component by 

December 2008 and the Flight Standards inspector workforce component by October 2009. Plans to add other 

workforce components to the staffing model will be determined once the requirements have been defined and 

established for other AVS technical workforce occupations.

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- Strengthening oversight of the Airman Medical Certification program

The Airman Medical Certification Program is a critical safety program 

through which the FAA ensures that pilots are medically qualified and fit 

to pilot aircraft in the National Airspace System. Each year FAA processes 

approximately 460,000 airman medical certificate applications. After 

completing FAA training, physicians in private practice are designated as 

Aviation Medical Examiners (AME). The FAA currently has approximately 

4,500 AMEs designated to examine and evaluate airmen to determine 

whether they meet Title 14 CFR Part 67 airman medical standards. To properly discharge the duties associated 

with their responsibilities, AMEs must have detailed knowledge and understanding of FAA rules, regulations, 

policies, and procedures related to pilot medical standards and the certification process.

Due to advancements in medicine, including improved diagnoses and treatments, and the aging pilot 

population, the medical cases FAA must review have become considerably more complex. As a result, the 

medical certification of pilots requires more analysis and time. FAA has hired additional personnel, including 

physicians, program analysts and program assistants, in the Regional Aerospace Medicine Divisions and at the 

Civil Aeromedical Institute in Oklahoma City, Oklahoma. 

FAA took several steps this year to improve its oversight of aviation medical examiners. The Agency:

• Hired a senior program analyst to coordinate development of policies, procedures, and training;

• Hired one additional analyst in each Regional Aerospace Medicine Division;

• Developed new AME oversight policies, procedures and training; and

• Developed a schedule for conducting at least 150 site visits per year.

To address concerns raised in a recent congressional hearing about FAA handling of falsified pilot medical 

certificates, the Office of Aerospace Medicine revised FAA Form 8500-8, Application for Airmen Medical 

Certificate, to obtain more information from applicants. Applicants will be asked whether they are receiving 

disability benefits from the Federal Government or any other sources. If an applicant responds affirmatively 

to this question, examiners will follow-up with the applicant to ascertain the nature of their disability and 

determine whether the medical issues related to their disability may disqualify them from being a pilot. FAA 

began distribution of the form in September 2008.

In April 2008, FAA completed a modification of AME training to emphasize the importance of thoroughness in 

medical examinations, obtaining good patient histories, and of correlating the findings from those examinations 

and histories. The issue of falsification will also be addressed at future AME seminars and other AME training.

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7. Strengthening the Protection of Information Technology Resources, 

Including the Critical Air Traffic Control System

- Enhancing air traffic control system security and continuity planning

The National Airspace System of the United States is one of the most 

complex aviation systems in the world—consisting of thousands of people, 

procedures, facilities, and equipment—that enable safe and expeditious air 

travel in the U.S. and over large portions of the world’s oceans. Successful 

operation of the NAS relies on a system that continuously tracks the 

position, routes of flight, and movement of aircraft. ATC control activities 

are geographically distributed among Air Route Traffic Control Centers 

(ARTCC) which are responsible for many thousands of square miles of airspace. The ARTCCs control aircraft 

from the time they depart terminal airspace (or in certain cases airports) to the time they arrive at another 

airport or terminal’s airspace. Centers may also “pick up” aircraft that are already airborne and integrate them 

into the system. The need for protection of this information processing system cannot be overstated.

The FAA has experience dealing with partial and full outages of the information system at ARTCC. Today, in 

the event of a loss of a single ARTCC, adjacent Centers can assume some of the workload of the failed ARTCC 

through procedures and existing automation system capability. To further enhance this “backup” capability, the 

FAA is working to implement a system security and business continuity solution to ensure recovery of as close 

to 100 percent of a lost ARTCC’s ability, should an outage of a single ARTCC occur. The approach is to establish 

a “spare” ARTCC at the FAA’s William J. Hughes Technical Center (WJHTC) to assume control functions in the 

event of an outage in any one of the Centers. While this approach may slightly reduce the overall performance of 

the overall NAS, this will enable the FAA to maintain operations and capacity during the outage.

The FAA’s WJHTC serves as the national scientific test facility for the FAA. The Center was assigned the task of 

conducting a detailed impact analysis to determine how technical services would be affected by the loss of an 

ARTCC and the resultant activation of a spare ARTCC. The WJHTC was at the forefront of the development of 

the recover strategy. Tests and demonstrations were conducted throughout 2007 and 2008. At the completion of 

each test and demonstration, resource concerns were identified and addressed and a business continuity solution 

developed.

The WJHTC has been outfitted with most of the equipment and connectivity necessary to deliver air traffic 

services for any of the contiguous U.S. Air Traffic Control Centers. This excess capacity will allow for the 

rerouting of voice communications and surveillance signals from an affected center to the spare center. Having 

additional capacity will greatly reduce the time and effort required to reconstruct the air/ground and surveillance 

communications infrastructure.

In addition to the development of the above business continuity strategy, several activities have taken place to 

identify and test for unauthorized software changes in fielded systems to assess the integrity of the existing NAS 

portfolio of systems and equipment. The FAA conducted a review of major systems, beginning with en route 

and oceanic/offshore operational facilities. The purpose was to determine the prevalence of undocumented 

system modifications to the national system baselines. Site visits have been conducted at 24 operational facilities 

collecting data on 16 major en route and oceanic/offshore systems. Analysis determined that there was a less 

than 10 percent deviation from the documented baselines. None of the modifications were of a malicious nature.

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- Testing and strengthening the information system security program at DOT Headquarters

In FY 2008 DOT has undertaken several initiatives to test and strengthen 

the Departmental information systems security program specifically 

meeting tougher Federal Government security standards, correcting 

identified security deficiencies, and securing its IT infrastructure, all at a 

time of heightened vulnerability.

During FY 2008 the DOT Information Assurance and Privacy Management 

Office (IAPMO) has advanced and matured the DOT Information Assurance and Privacy Program to increase 

the reliability, integrity, confidentiality, availability, and non-repudiation of DOT information and information 

systems.

The Department has ensured that their General Support Systems and Major Applications are properly 

categorized, certified and accredited in accordance with National Institute of Standards and Technology (NIST) 

standards. DOT Operating Administrations (OAs) properly categorize their systems for confidentiality, 

integrity and availability and have worked to provide proper implementation of NIST required minimum 

security control protections consistent with risk and budget. For reporting and tracking security deficiencies 

or weaknesses identified during certification reviews, the Department has transitioned to the Cyber Security 

Asset and Management (CSAM) tool that allows the Department and OAs to prioritize, monitor, manage and 

remediate the Plan of Action and Milestones (POA&M) for those identified security deficiencies or weaknesses. 

Additionally, the Department has drafted a POA&M policy and is developing a POA&M guide that can be used 

with CSAM for an effective remediation framework.

During fiscal year 2008 the Department has implemented Network Admission Control (NAC) processes and 

procedures to ensure that computers connected to Departmental networks are in compliance with DOT security 

policies (for remote users). In order for a user to connect to the network, their computer must be running an 

anti-virus application that is supported by the CISCO NAC and their antivirus definitions must be current.

Additional initiatives that the Department has undertaken during FY 2008 to strengthen the DOT information 

systems security program include: 

• Consolidating all security monitoring and reporting under the Cyber Security Management

Center.

• Aligning Departmental information systems security policies to Federal Information Processing

Standard 200 and the National Institute of Standards and Technology Special Publication 800-53.

• Aggressively pursuing the implementation of all mandated Office of Management and Budget

Information Systems Security Line of Business initiatives.

• Implementing several network hardening initiatives in 5 critical focus areas to improve access

control, policy enforcement, and monitoring of DOT information systems.

• Utilizing Secure Elements Class 5 to validate for security configuration compliance for the Federal

Desktop Core Configuration requirements.

• Utilizing SPAM and Anti-Virus filtering at all Secure Mail Transfer Protocol gateways.

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United States Department of Transportation 71

- Ensuring the timeliness of data recording and protection of personally identifiable information when 

interfacing with non-Federal systems

In FY 2008 DOT has undertaken initiatives to ensure the protection of 

Personally Identifiable Information (PII) when interfacing with non-Federal 

systems. These efforts have focused on the compliance requirements 

associated with OMB M 07-16, Safeguarding Against and Responding to 

the Breach of Personally Identifiable Information. DOT policy requires 

encryption of all PII in transit. 

Additionally, the Department is working closely with other agencies to share ideas and resources for managing 

and protecting PII, increasing user awareness of responsibilities for protecting the Department’s PII data assets, 

and incorporating Government best practices.

The Department acknowledges that protecting PII when interfacing with non-Federal systems remains a 

formidable challenge. Work is underway to validate system interconnections and matching agreements to 

ensure that the proper administrative, technical, and physical safeguards are implemented and provide adequate 

safeguards to protect the confidentiality, integrity, and availability of PII. The validation process will be 

completed by July 30, 2009.

- Continuing to enhance oversight of information technology investments

In early FY 2008 DOT finalized both the Earned Value Management (EVM) 

and IT Program Rebaselining policies. These comprehensive policies 

will allow DOT to benefit from additional management oversight across 

the IT investment portfolio since this guidance provides a framework 

for comprehensive planning, proper baseline maintenance, and earned 

value analysis which combined provide a formula for increased visibility 

into individual investment performance and enhances overall portfolio 

management.

In addition, DOT has strengthened its review of monthly performance data associated with the Department’s 

major IT investments. This enhanced analysis provides additional management oversight specific to key 

data—such as variance analysis (actual vs. planned), performance trend analysis, performance forecasting, and 

corrective action planning—which lead to earlier recognition of potential issues making them easier, and often 

less costly, to correct.

In addition, DOT piloted a Health of Investments (HOI) reporting and analysis tool to provide greater 

transparency and a common set of criteria for all major IT investments. HOI is designed to rank investments 

based on key portfolio and program management factors thereby assigning an overall health, or risk indicator.

DOT has focused in FY 2008 on improving IT governance both at the Department and Operating 

Administration (OA) level. Business cases for IT investments are reviewed by the applicable OA Investment 

Review Board (OA IRB). The Department IRB reconvened in April and is scheduled to meet on a quarterly 

basis. The CIO Council continues to meet on a monthly basis, while the Capital Planning and Investment 

Control (CPIC) subcommittee generally meets bi-monthly. The collective work of these governance boards 

helps to strengthen oversight of IT investments across DOT.

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72 FY 2008 Performance & Accountability Report

There is significant work underway to achieve full EVM implementation, based on the American National 

Standards Institute/Electronic Industries Association (ANSI/EIA) 748 compliance (across 32 program 

management criteria), for the Department by December 2009. A DOT EVM Plan of Action and Milestones is in 

place and is updated quarterly. DOT is also meeting individually with each OA to discuss EVM implementation 

progress within their OA. These discussions are then brought to the EVM Working Group, which meets 

monthly, to identify best practices and share lessons learned. In addition, the DOT CIO requires a quarterly 

EVM self-assessment from each OA CIO. Supplemental policies addressing operational analysis, EVM baseline 

planning, Baseline Change Control, and integrated baseline reviews are in various stages of development.

8. Management Challenge: Managing Acquisition and Contract 

Operations More Effectively to Obtain Quality Goods and Services at 

Reasonable Prices

- Increasing incurred-cost audits of procurement contracts to reduce unallowable charges

Acquisition Policy Letter (APL) 2008-06 was issued on April 24, 2008 by 

the Office of the Senior Procurement Executive (OSPE) for the purpose 

of establishing a Departmental plan for assuring incurred-cost audits 

are obtained and audit report recommendations are resolved in a timely 

manner. The policy letter requires Operating Administration (OA) Chief 

Contracting Officers to (1) take action to revise their current FY 2008 

contract audit plan to identify planned contract audits not implemented 

during FY 2007 or FY 2008 and included in FY 2009 audit plans and to resolve any pending audit finding with 

questioned costs by November 20, 2008. They are also required to update and resolve the list of DCAA-reported 

unresolved questioned costs that are more than 6 months old as of October 2006 and report any costs recovered 

to the OSPE. Additionally, quarterly status reports are to be submitted to address audit hours used, resolved and 

unresolved questioned costs, and whether justifications have been placed in the contract files where audits were 

not requested.

The OSPE continues to work with DCAA, the Operating Administrations, and the Office of Inspector General to 

find better methods for obtaining contract audit services.

FAA was given separate contract authority in 1996 and therefore the authority to implement its own 

procurement policies. The agency, however, pursues acquisition policies similar to OST’s on many issues, 

including this one. FAA continues to emphasize incurred cost audits through a centralized audit program. For 

FY 2008, the Agency provided $1.6 million to fund a central interagency agreement with the Defense Contract 

Audit Agency (DCAA) to order incurred cost type and other required audits for procurement contracts. An 

interagency agreement was executed in February 2008.

FAA has also established an FY 2008 performance goal to require audits of cost-reimbursable contracts of $100 

million or more in value. The Contracting Oversight Team, using the PRISM database, identified 86 costreimbursable type contracts each with a total estimated potential value of $100 million or more. For FY 2008, 

FAA issued audit requests for 43 contracts, deferred audits for 15 contracts per DCAA planning, and determined 

audits were not required for 28 contracts, accounting for 86 contracts. Overall, FAA has issued audit requests for 

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United States Department of Transportation 73

155 contracts including incurred and other type audits. The Contracting Oversight Team, under the Acquisition 

Policy and Contracting Office, manages the central DCAA audit process and issues audit requests, maintains the 

audit database, and acts as a liaison with DCAA Headquarters and Branch offices.

The FAA also utilizes the National Acquisition Evaluation Program (NAEP) which provides oversight and 

evaluation of FAA acquisitions management practices. In FY 2008, the NAEP conducted reviews for the 

Southern, Southwest, Northwest, and Eastern Regional Contracts Offices, and two Headquarters Contracts 

Groups. The NAEP reviews include an evaluation of the appropriate use of DCAA audits for procurement 

contracts.

- Developing strategies for the future acquisition workforce

The Acquisition Workforce Career Development Program policy issued in 

November 2006 provides the framework for implementing OFPP Policy 

Letter 05-01 and establishes procedures to be used by DOT Operating 

Administrations in implementing this program. The Acquisition 

Workforce Career Development Program is applicable to those positions 

and career fields defined as the acquisition workforce. The DOT 

acquisition workforce is defined to include all positions in the General 

Schedule Contracting Series (GS-1102); all warranted Contracting Officers regardless of General Schedule series 

with authority to obligate funds above the micro-purchase threshold; all positions in the GS-1105 Purchasing 

Series; Contracting Officer Technical Representatives (COTRs), or equivalent positions; Project and Program 

Managers, as identified by the Chief Acquisition Officer (CAO); and other positions designated by the CAO as 

performing significant acquisition-related functions.

FAA employees are exempt from this program under P.L. 104-50. However, FAA will provide its affected 

employees with substantially similar training and education requirements to maintain mobility.

During 2007, DOT contracting employees participated in the government-wide Contracting Workforce 

Competencies Survey sponsored by the Federal Acquisition Institute. The results of the survey will be used 

to ensure that appropriate development opportunities are provided to the contracting workforce. A followup survey to include Program and Project Managers and COTRs planned for August 2008 should add to the 

information used in making strategic human capital decisions regarding the acquisition workforce.

The Acquisition Career Management Information System (ACMIS) is the government-wide database containing 

information on the Federal acquisition workforce in civilian agencies and is used to identify training needs 

and to support strategic human capital plans and decisions. The actual size of DOT’s Acquisition Workforce 

is expected to become easier to gauge with the inclusion of key acquisition roles (Program and Project 

Managers and COTRs) into ACMIS. The challenge is that these positions do not comprise one or more specific 

government position classification series. These roles may be performed by professionals in many series and are 

frequently time-limited. That is, individuals may take on acquisition management responsibilities related to their 

normal duties for months or years for a specific initiative and terminate acquisition duties when the initiative is 

completed or the professional moves to a new position. For these and other reasons, DOT is currently refining 

the identification of such positions. By the end of calendar 2008, more authoritative data on these acquisition 

professionals should be available.

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74 FY 2008 Performance & Accountability Report

- Fostering high ethical standards throughout the Department and its contracting programs to maintain 

the public trust

This year, the Department instituted an annual training program for 

acquisition and grants management personnel that concentrates specifically 

on ethics and contracting matters. This training supplements required 

annual ethics training. During June and July 2008, initial training sessions 

were held in the Office of the Secretary (OST). Also, training sessions 

were provided for senior management in September 2008. In future years, 

annual training will include both live sessions as well as written and on-line 

training.

Personnel from the Operating Administrations who are tasked with training their own acquisition and financial 

assistance management staff attended ‘train-the trainer’ sessions sponsored by OST in June 2008. These 

individuals are conducting training sessions throughout their own organizations, including field organizations, 

with the goal of completing initial training by the end of calendar year 2008.

The FAA uses an integrated and comprehensive approach in the development and delivery of procurement ethics 

training. Training modules for 2008 included: Getting What you Pay for on Services Contracts; Organizational 

Conflicts of Interest; Procurement Integrity; and Personal Services. Current laws, regulations, and case studies of 

noncompliance are highlighted.

Live training sessions have been conducted at FAA Headquarters and the FAA Centers. DVDs of the 

presentations with voice over discussion will be produced for those unable to attend sessions in person. Close 

to 100 percent of Contracting Officers, Contract Specialists, Contracting Officers Technical Representatives 

(COTRs) and many other employees that deal with acquisitions have received training provided by FAA’s Office 

of General Counsel. In total, approximately 2,100 acquisition and program personnel were trained.

The purpose of this training is to provide continuing reinforcement of ethics and contracting standards that 

promote the integrity of acquisition and grants management processes throughout DOT. The target audience 

for this training includes contracting officers, contracting officer technical representatives, program and project 

managers, procurement and other acquisition specialists, personnel who participate in cooperative agreement 

and grant matters, legal support personnel, and personnel who supervise acquisition matters.

- Enhancing oversight on Federal-Aid Highway construction projects to prevent abuse in contractor 

quality control programs

FHWA conducts assessments to better identify existing gaps that have 

the potential to introduce risk into the acceptance and payment process 

for construction and materials. Assessments completed to date include 

22 detailed state highway program reviews, a national program review 

of quality assurance programs and a nationwide assessment to quantify 

the state of quality assurance systems which has been used to establish a 

benchmark to track our efforts to improve in this area. In addition, FHWA 

sponsors training through the National Highway Institute and the FHWA Resource Center. These courses are 

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United States Department of Transportation 75

delivered across the U.S. and focused on elements of effective quality assurance specifications. FHWA also 

developed advanced tools that will allow states to better evaluate and manage risks within their quality assurance 

programs.

9. Management Challenge: Reforming Intercity Passenger Rail

- Improving Amtrak’s cost-effectiveness to sustain its financial progress

At the urging of the FRA, Amtrak has taken many steps to address these 

areas over the past few years. As a result of a combination of programs 

focusing on diverse aspects of corporate operations and its intensive efforts 

at revenue management—the company is relatively more stable financially 

that it was five years ago. Nevertheless, Amtrak’s reliance on public subsidies 

has grown over time, with a Federal appropriation of $1.325 billion in 2008.

Three measures sum up the extent of Amtrak’s relative progress. First, between 2002 and 2007, Amtrak’s 

passenger-miles per operating employee increased by 22 percent, far outstripping the similar productivity 

measure for the Class I freight railroads (revenue ton-miles per employee up 10 percent in the same period). 

Second, and also between 2002 and 2007, the net cash used in operating activities per passenger mile decreased 

by 27 percent on a constant dollar basis. As Amtrak’s essential purpose is the provision of intercity passenger 

transportation, the corporate cash flow per passenger-mile is the purest accounting measure of the net year-byyear efficiency.

Increased FRA Oversight

FRA in recent years has markedly expanded the capabilities of its Office of Passenger and Freight Programs, 

which oversees Amtrak activities, related to the $1.3 billion in grant funds that the Department awards Amtrak 

annually. FRA reconstituted that office, recruited a new Director, established clearer lines of authority through 

two passenger divisions—the Intercity Passenger Rail Analysis Division and the Program Implementation 

Division—and augmented its staff in all disciplines. These improvements have enabled the office to conduct 

comprehensive, multi-disciplinary reviews of Amtrak Management’s proposals and requests. It has also 

improved FRA’s understanding of the details of Amtrak’s operational and corporate performance through a 

number of initiatives, such as: (1) specification and analysis of the most detailed on-time performance data ever 

provided by Amtrak to the FRA, (2) new concepts for the presentation and interpretation of traffic, revenue, 

expense, and corporate result data, and (3) a new, straightforward definition of ‘State of Good Repair’ that 

provides a benchmark for Federal/State/regional long-term planning of investments in Amtrak’s most important 

asset, the Northeast Corridor main line.

In addition, the FRA conducts quarterly reviews of Amtrak’s capital program, with civil and mechanical 

engineers scrutinizing infrastructure and equipment programs; as well as reviews of reprogramming 

and advance purchase proposals, in an effort to improve efficiency and cost-effectiveness. The FY 2008 

Appropriations Act provided funding to FRA for intensified oversight of the capital programs. To this end, FRA 

is currently developing a statement of work for detailed engineering review of salient topics in infrastructure 

investment.

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76 FY 2008 Performance & Accountability Report

In the crucial area of financial reporting and management practices, FRA, the Department’s Volpe National 

Transportation Systems Center (Volpe Center), and Amtrak are jointly developing a new methodology for 

calculating avoidable and fully-allocated costs by route. This methodology will underpin a substantially 

upgraded route costing model that Amtrak can implement in FY 2009. Building on a meticulously detailed 

review of Amtrak’s route-by-route cost accounting systems, the new model will significantly improve the 

transparency and accuracy of Amtrak’s financial reporting by route and business line. It will also provide 

valuable input to possible future strategic planning and network review processes that Amtrak or the 

Department may undertake, and will help to refine Amtrak’s ability to negotiate cost-reimbursement contracts 

with States for the provision of passenger services in keeping with the Administration’s Principles. 1

Improved Cost Effectiveness at Amtrak

Although it is difficult to enumerate wasteful expenditures, FRA’s enhanced oversight is having positive effects as 

seen by the ratio improvements described above and the following:

• After the FRA required and helped Amtrak to design monthly reports on the income/loss of its

food service, Amtrak has devoted increased attention to food-service losses and applied better 

discipline regarding related costs. For instance, Amtrak has reduced many of its dining car crews. 

After the Federal Railroad Administrator placed a sharp focus on the need for improved on-time 

performance—which affects Amtrak’s revenue base, operating costs, bottom line, and public 

image—the on-time performance of Amtrak’s long-distance trains rose by 14.4 percentage points 

in the first nine months of FY 2008 over the same period last year.

• Largely because of FRA’s insistence on cogent business and equipment plans for Amtrak’s various

lines of business, as a prerequisite to FRA’s approval of major equipment-related investments 

that Amtrak plans to propose for FY 2009, Amtrak’s Board has adopted a more active role with 

respect to strategic planning. Meanwhile, Amtrak’s management has initiated a strategic planning 

working group, headed by the company’s most experienced employee, to undertake the kind of 

planning that the FRA is advocating.

• Amtrak is in the process of developing a long-term fleet plan. As a result, the company has

suspended expensive conversions of certain food service cars in order to better determine the 

type of equipment necessary to cost-effectively serve the various types of trains Amtrak operates.

1 These principles, announced by former Transportation Secretary Norman Y. Mineta in 2002, are as follows:

a. Establish a long-term partnership between States and the Federal Government to support intercity passenger rail;

b. Require that Amtrak transition to a pure operating company;

c. Create a system driven by sound economics;

d. Introduce carefully managed competition to provide higher quality rail services at reasonable prices; and

e. Create an effective public partnership, after a reasonable transition, to manage the capital assets of the Northeast Corridor.
United States Department of Transportation 77

- Overcoming challenges to improving Amtrak’s on-time performance

The FRA has taken proactive steps to improve Amtrak’s on-time 

performance (OTP). These steps are exhaustively described in FRA’s three 

OTP reports to Congress which are available at http://www.fra.dot.gov/us/

content/1996. Some report highlights include:

• As the Secretary of Transportation’s representative on the

Amtrak Board, FRA Administrator Joseph H. Boardman 

has repeatedly emphasized to the Board that OTP is essential to the Corporation’s service quality, 

public image, traffic and revenue levels, operating economy, and financial performance.

• Administrator Boardman has added Amtrak OTP to the regular agenda of his annual safety

meetings with senior executives from each of the Class I Railroads. At those meetings, the 

Administrator emphasizes the criticality of the issue and FRA’s commitment to take a more active 

role in monitoring progress.

• On April 16, 2008, Secretary of Transportation Mary E. Peters and Administrator Boardman held

a meeting among the Class I railroads’ top executives, the Amtrak CEO, and Amtrak’s Board 

of Directors in Pueblo, Colorado. At this first-ever executive level meeting, Secretary Peters 

specifically requested that Amtrak and the Class Is identify one Amtrak route on each major host 

railroad to develop an action plan (Performance Improvement Plan or PIP) for removing delays 

and improving OTP. Amtrak and the freight railroads have designated specific routes for PIPs 

and begun the process of OTP improvement.

• As a part of the FY 2007 Grant Agreement with Amtrak, FRA required Amtrak to submit a

Southeast Corridor Performance Improvement Plan to identify strategies that would enable 

Amtrak to reach an OTP target of over 75 percent for the Auto Train, Silver Service, Palmetto, 

Carolinian, and Piedmont. Amtrak and CSX presented the Southeast Corridor Performance 

Improvement Plan on November 8, 2007. Results thus far are encouraging. In FY 2008, CSX 

freight train interference delays affecting the Southeast Corridor long distance trains have fallen 

to about three minutes per 100 train miles. Furthermore, the Auto Train’s endpoint OTP is up to 

80.5 percent from 15 percent prior to the PIP, and the OTP of other long distance trains on this 

corridor has increased to 53.8 percent from 33 percent the previous year.

• In reporting to Congress on OTP, FRA thoroughly assessed alternative measures of performance

and developed specific route-by-route goals for OTP that set a more stringent standard than that 

advanced by Amtrak itself.

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78 FY 2008 Performance & Accountability Report

- Reauthorizing Amtrak to facilitate reform

While Congress has not implemented the Administration’s full proposal 

for reforming intercity passenger rail service in the United States, one of 

the key principles has been incorporated in recent law. Specifically, the 

FY 2008 Appropriations Act included $30 million for a Federal / State Capital 

program to support the needs of intercity passenger rail service. The FY 2009 

President’s Budget included funding for this program.

This new grant program recognizes that most publicly supported transportation in the U.S. is undertaken 

through a partnership between the Federal Government and the States. This model, which has worked well for 

generations for highways and transit and airports, places the States, and in certain cases their subdivisions, at 

the forefront of planning and decision-making. States best understand their mobility needs and connectivity 

requirements through statewide and metropolitan area intermodal and multimodal transportation planning 

funded, in part, by the U.S. Department of Transportation. (Integration of the improvements under this 

program with statewide transportation planning was required by appropriations language.)

FRA expects that this model will also work for intercity passenger rail. Several States have chosen to invest in 

intercity passenger rail service provided by Amtrak as part of strategies to meet their passenger mobility needs. 

Between 1996 and 2006, ridership on intercity passenger rail routes that benefit from State support grew by 88 

percent. Over that same time period, ridership on Amtrak routes not supported by States increased by only 17 

percent. State involvement in planning and decision-making for intercity passenger rail service identifies where 

mobility requirements justify public investment. An excellent example can be found in Washington State, which 

has invested in intercity passenger rail from Portland, OR, through Seattle, to Vancouver, B.C. in order to relieve 

highway travel on the congested I-5 corridor. Similarly, the state of Illinois has made financial commitments that 

have effectively doubled the number of State-supported trains operated by Amtrak on three routes.

Past experience shows active State engagement in planning and decision-making helps ensure that infrastructure 

components, such as stations, provide connectivity to other forms of transportation, which support 

intermodalism within the State. For example, in North Carolina, the State has undertaken the redevelopment 

of its intercity passenger rail stations and transformed them into multi-modal transportation centers serving the 

mobility needs of the surrounding communities.

In discussions with interested States, FRA has found that the greatest single impediment to implementing 

intercity passenger rail development is the lack of a Federal/State partnership, similar to that which exists for 

highways and transit, for investing in the capital needs of intercity passenger rail. This partnership will play a 

critical role in the future evolution of this important mode of transportation.

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United States Department of Transportation 79

Government Accountability Office

High Risk Issues

Since 1990, the Government Accountability Office (GAO) has provided to Congress a report on government 

programs and operations that in some cases are high risk due to their greater vulnerability to fraud, waste, abuse 

and mismanagement. In recent years, GAO also has identified high-risk areas to focus on the need for broadbased transformations to address major economy, efficiency, or effectiveness challenges.

In January 2007, GAO presented a new high risk list to Congress, which included concerns about FAA’s 

modernization program. According to GAO, over the years this modernization program, which includes the 

acquisition of new systems and facilities, has experienced cost overruns, schedule delays and performance 

shortfalls. GAO has reported on the root causes of these problems, including (1) immature capabilities for 

acquiring systems, (2) lack of an institutionalized architecture, (3) inadequate cost estimating and accounting 

practices, (4) an incomplete investment management process, and (5) an organizational culture that impairs 

modernization efforts. 

FAA has been actively addressing these issues for several years and much has been done already. The following 

summarizes FAA’s activities in FY 2008.

______________________________________________

FAA’S ACTION PLAN FOR STRENGTHENING ITS MODERNIZATION PROGRAMS

Problem: FAA Modernization Programs were not meeting cost and schedule targets.

Goal: Improve the FAA’s ability to identify, build, and field air traffic control systems in a timely and costeffective manner through institutionalizing acquisition management best practices and meeting targets to deploy 

air traffic control systems.

FAA has designated six areas to focus on in addressing this issue: acquisition processes and capabilities, 

enterprise architecture, cost estimating/accounting, information technology investment processes, human 

capital, and deployment. 

1. Acquisition Processes and Capabilities

Lead Organization: Air Traffic Organization, Vice President for Acquisition and Business Services

Focus area goals: Implement improved acquisition processes in the areas of measurement and analysis, 

verification and validation, quality assurance, risk management, contractor management, program management, 

and requirements on selected pilot programs. Additionally, develop and implement an approach for 

institutionalizing processes across the Air Traffic Organization for all new programs.

Expected Outcomes:

• Selected in-process major programs and all new acquisition programs follow a standard

acquisition management process based on industry best practices.
80 FY 2008 Performance & Accountability Report

• Institutionalize compliance assessment capability.

FY 2008 Accomplishments:

• Nov 2007: Implemented risk management, contractor management, program management, and

requirements processes across eight major ATC programs.

• Dec 2007: Developed and integrated quality assurance and risk policy, process, procedures,

information into the FAA standard Acquisition Management System (AMS) found on its website.

• Mar 2008: Established a compliance assessment approach and began implementation of same. 

Developed and integrated contractor management, measurement and analysis policy, process, 

and procedures information into the FAA AMS. 

• Jul 2008: Document Intensive Reviews completed on five new programs.

• Sep 2008: Completed update of Verification and Validation (V&V) Protocol of Operations.

2. Enterprise Architecture

Lead Organization: Air Traffic Organization, Director, Systems Engineering and Safety

Focus area goals: Implement and enforce a complete enterprise architecture (EA), which will provide a view of 

how well investments are meeting the organization’s business needs, as well as guiding future investments.

Expected Outcomes:

• Achieve Stage 3 of the GAO EA Maturity Model.

FY 2008 Accomplishments:

• Dec 2007: Independent validation and verification (IV&V) completed on EA. outside the

National Air Space (NAS).

• Mar 2008: IV&V completed on NAS EA.

• Aug 2008: Selected and procured best in class EA tool.

• Sep 2008: Received final IV&V report for NAS EA from MITRE.

3. Cost Estimating / Accounting

Lead Organizations: Assistant Administrator for Financial Services/CFO and Air Traffic Organization, Director 

of Investment Planning and Analysis 

Focus area goal: Improve cost estimating and cost accounting practices and obtain a clean financial audit.
United States Department of Transportation 81

Expected Outcomes:

• Publish and implement a lifecycle cost model that will be used with all major investments based

on a database of historical cost estimates.

• Implement quarterly reporting on the status of programs staying within annual cost targets at

Flight Plan reviews.

• Obtain a clean audit of our financial statements for fiscal year (FY) 2007 and lift the qualification

of the FY-06 statements.

FY 2008 Accomplishments:

• Nov 2007: Audit report lifted the qualifications from 2006 but identified a material weakness for

2007.

• Feb 2008: Improved the timeliness of cost accounting system (CAS) reports delivered to users to

within 38 days of the end of the quarter.

• Mar 2008: Improved the processes for accrual of expenses. Air Traffic Organization is

performing accruals on a monthly basis.

4. IT Investment Processes

Lead Organization: Assistant Administrator for Information Services/CIO

Focus area goals: Implement and enforce stage 3 of the GAO’s Information Technology Investment Maturity 

(ITIM) model, a summary of best practices for investing in information technology. The model allows agencies 

and GAO to assess to what degree of maturity (from stage 1, the lowest) to stage 5 (the highest) agencies are 

following these best practices. To date, no agency has been assessed at stage 3 or higher.

Expected Outcomes: 

• Establish a process for the FAA’s investment review board, the Joint Resources Council (JRC), and

subordinate boards, to regularly review the performance of IT systems throughout their lifecycles 

and take corrective actions when expected performance is not being met.

FY 2008 Accomplishments:

• Nov 2007: JRC delegated responsibility for Information Technology Executive Board (ITEB)

portfolio.

• Jan 2008: Documented and approved ITEB investment management process.

• Jan 2008: ‘Go to Green’ Tiger Team formed to produce an action plan to achieve most of the stage

3 requirements of the GAO ITIM model this year.

• Feb 2008: Completed processes for instituting the ITEB.

• Mar 2008: ‘Go to Green’ Plan for Stages 2 and 3 developed and approved.

• May 2008: Conducted Operational Analyses and budget verification on top 29 investments in

ITEB portfolio (92 percent of portfolio dollar value).
82 FY 2008 Performance & Accountability Report

• May 2008: JRC approved ITEB portfolio.

• Jun 2008: JRC approved Investment Selection Criteria.

• Jun 2008: Implement process of Meet Business Needs. 

• Jun 2008: Capture Investment Information.

• Jul 2008: Portfolio management policy and initial portfolio criteria approved. 

• Sep 2008: Selected IT investments

5. Human Capital

Lead Organization: ATO, Director, Leadership & Professional Development

Focus area goals: Overcome human capital challenges including how to develop the technical and contract 

management expertise needed to define, implement, and integrate FAA’s numerous complex programs and 

systems.

Expected Outcomes:

• Contracting professionals have required training and skill sets and the FAA has sufficient bench

strength to meet future needs.

• Program/Project managers are certified according to standards set by the Project Management

Institute (PMI) and assigned in accordance with OMB and related agency documented policy and 

processes.

FY 2008 Accomplishments:

• Dec 2007: Developed an FAA Project and Program Manager Career Path and associated PM

career development and certification policy.

• Jan 2008: Developed an agency strategy for recruiting, selecting & assigning program managers

to capital investment projects.

• Jan 2008: Developed an audit process to evaluate organizational compliance to established

program manager policy and guidance.

• Feb 2008: Received Office of Personnel Management approval to use reemployed annuitants to fill

contracting vacancies.

• May 2008: Developed interim action plan to address National Academy of Public

Administration’s (NAPA) Phase 1 findings.

• Sep 2008: Received final NAPA report.

• Sep 2008: FAA personnel in the contracting series, contracting officer’s technical representative,

and program/project managers participated in the Federal Acquisition Management 2008 FAI 

Competency Assessment.
United States Department of Transportation 83

6. Deployment

Lead Organization: ATO, Director of Capital Expenditures Programs 

Focus area goal: Improve the ability of FAA to estimate, plan, and meet target cost and schedule for major 

programs.

Expected Outcomes: 

• Earned value management (EVM) implemented for all major acquisitions.

• Breach reporting (cost or schedule variance greater than 5 and 10 percent) implemented.

FY 2008 Accomplishments:

• Dec 2007: All major programs which were assessed in April 2005, and are still in development,

are in full compliance with EVM ANSI Standards.

• Dec 2007: Developed and implemented EVM Surveillance and Certification processes.

• Dec 2007: Conducted strategic reviews on 22 of the 30 major programs.

• Jul 2008: Developed and provided GAO with deployment schedules and associated milestones

for 15 agreed upon major programs.

• Sep 2008: Developed a Standard Operating Procedure (SOP) for Air Traffic Organization

Program Control and Baseline Management to address Program Planning, Baseline Management, 

Program Performance Reporting, and Variance Analysis. SOP in the process of being vetted 

throughout ATO.

85

performance report
86 FY 2008 Performance & Accountability Report

performance framework

Introduction

The Department of Transportation’s overarching mission is:

To develop and administer policies and programs that contribute to providing 

fast, safe, efficient, and convenient transportation at the lowest cost consistent 

with the national objectives of general welfare, economic growth and stability, the 

national security, and the efficient use and conservation of the resources of the 

United States.

Everything we do at DOT is aimed toward meeting this mission statement and making measurable 

improvements in our transportation system, the security of our nation, and the quality of American life. In the 

Performance and Accountability Report we hold ourselves accountable to the public for effectively bringing 

to bear the Department’s energy and resources in improving the nation’s transportation system. We use these 

results to improve our strategies and resource decisions.

DOT’s performance framework is as follows:

• The DOT Strategic Plan provides a comprehensive vision for improving the nation’s complex 

and vital transportation system. DOT’s 2006–2011 Strategic Plan outlines five strategic objectives 

in the areas of safety, reduced congestion, global connectivity, environmental stewardship, 

and security that articulate the longer term focus of the Department. In addition to the broad 

objectives; the plan targets specific outcomes we want to achieve, and identifies key challenges.

• The DOT Performance Budget operationalizes the Strategic Plan, and provides direct linkages 

between DOT’s budget request and the results the public can expect for programs within each 

of our Operating Administrations. The performance budget defines the performance goals and 

measures used to manage progress toward our strategic objectives. It describes in detail one fiscal 

year’s resources and programmatic effort within a strategic context. The performance budget also 

aligns each dollar requested to one of our strategic objectives.

• This DOT Performance and Accountability Report provides a public accounting of our FY 2008 

performance results.

• Performance accountability for DOT organizations, executives, and employees embed the 

philosophy of managing for performance into the Department’s culture and daily practices. 

Performance accountability within the Department is accomplished through the following 

mechanisms:

Organizational Accountability Contracts – Prepared at the beginning of each fiscal year, these agreements 

between the Secretary of Transportation and each modal Administrator document expected levels of 

organizational performance for the upcoming year.
United States Department of Transportation 87

DOT Organizational Assessments of Performance – A review of each Operating Administration’s performance is 

done at the end of the fiscal year to assess the organization’s success in the following areas: meeting Departmentwide performance targets; results of Office of Management and Budget Program Assessments using the 

Program Assessment Rating Tool; President’s Management Agenda initiative ratings; and efforts associated with 

addressing any management challenges or material weaknesses identified by DOT’s Office of Inspector General. 

The results of these assessments are then factored into the personal performance evaluations of our senior 

executives.

Employee Performance Plans – Prepared early in the fiscal year, these plans document expected levels of 

employee performance that clearly link to our strategic objectives through the performance framework.

The following graphic describes how DOT plans, measures, manages, and reports on performance:
88 FY 2008 Performance & Accountability Report

How DOT Works to Achieve Its Strategic and Performance Goals

The Department achieves its goals through its leadership role in U.S. transportation policy, operations, 

investment, and research. To influence results, DOT programs rely on a number of common interventions and 

actions. These include:

• Direct operations and investment in DOT capital assets that provide capability, such as air traffic

control and the Saint Lawrence Seaway operations;

• Infrastructure investments and other grants, such as investment in highway, rail, transit,

airport, and Amtrak capital infrastructure, and grants for safety, job access, or other important 

transportation programs;

• Innovative financial tools and credit programs, such as those provided for by the Transportation

Infrastructure Finance and Innovation Act, and the Railroad Rehabilitation and Improvement 

Financing Program;

• Rulemaking, in areas such as equipment, vehicle, or operator standards; for improving safety; and

for fostering competition in the transportation sector of the U.S. economy;

• State/local organizational capacity building, through training, best practices, peer-topeer exchanges and other activities that strengthen the capability of State Departments of 

Transportation, Metropolitan Planning Organizations, and local governments to play their 

essential front-line role in planning, investing in, and operating highway and transit systems;

• Enforcement to ensure compliance, including inspections, investigations, and penalty action;

• Research and technology development and application, such as fostering new materials and

technologies in transportation, and transportation related research;

• Education and outreach, such as consumer awareness, and campaigns to influence personal

behavior; and,

• Public Information, such as that provided by the Bureau of Transportation Statistics, and each

DOT Operating Administration, so that States, localities, regions, and private sector entities can 

better plan their activities.

Some of these interventions and actions reside entirely within the Federal Government, but most involve 

significant partnering with State and local authorities and with the transportation industry. These are the broad 

areas of action that DOT—and State and local governments—commonly use to bring about desired results.
United States Department of Transportation 89

READER’S GUIDE TO DOT’S PERFORMANCE REPORT

The performance section of this report is composed of chapters for each strategic goal identified in the DOT 

Strategic Plan. For each strategic goal, we present four increasingly detailed levels of information, which 

together help the reader understand the breadth of the Department’s activities. 

1. Strategic Goals Describes the Strategic Goals and Strategic Outcomes and how the 

Department is engaged in a national priority like transportation safety.

2. Performance Areas Focuses on particular aspects of the priority outcomes in more manageable 

pieces through key performance areas.

3. Performance Measures Shows the reader how we measure our progress toward the performance 

objective, the target we set for ourselves, and our success in reaching it.

4 Performance Narrative Provides the reader additional details about our accomplishments or the 

challenges we faced, along with a forecast of our ability to meet the next 

year’s target.
90 FY 2008 Performance & Accountability Report

Figure 2 shows the different levels of information and how they are presented.

Figure 2

gLoBaL connectIVIty strategIc goaL

FACILITATE AN INTERNATIONAL TRANSPORTATION SYSTEM THAT PROMOTES ECONOMIC 

GROWTH AND DEVELOPMENT

FY 2009 Performance Forecast — DOT expects to meet the 

FY 2009 target of 99.0 percent.

FY 2008 Results — For FY 2008, DOT’s Saint Lawrence Seaway 

Development Corporation (SLSDC) met the performance target 

with a system availability rate of 98.8 percent....

Strategic Goal:

Desired long term end state.

Annual resources dedicated

to the Strategic Goal.

L

e

V

e

L

1

L

e

V

e

L

2

L

e

V

e

L

3

fy 2008 enacted funding by gloBal connectiVity

strategic objectives (Dollars in Millions)

expanded opportunities 

$6

international leadership 

& standardization 

$58

enhanced 

competitiveness $400

More efficient Movement 

of cargo $960

total fy 2008 funding: $1,430 Million

 

Effi cient Movement of Cargo

Safer, more effi cient and cost effective movement of passengers and cargo throughout the 

international and domestic transportation systems, 

including U.S. ports of entry, modal and intermodal supply chains.

 Percent of days in the shipping season that 

the U.S. portion of the St. Lawrence Seaway 

system is available.

 Number of freight corridors with an annual 

decrease in the average buffer index rating.

 Travel time reliability at NHS border crossings.

More effi cient Movement of cargo

fy 2008 enacted funds: $960 Million

Performance Goal Area:

Connection between Departmental 

activities and the Strategic Goal.

Strategic Outcomes:

Near term objectives.

Performance Measure:

Progress toward the

Performance Goal Area.

Performance Measure:

Progress toward the

Performance Goal Area.

Performance Measure 

Percent of days in the shipping season that the U.S. portion of the St. Lawrence 

Seaway system is available

2005 2006 2007 2008

Target 99.0 99.0 99.0 99.0 

Actual 99.7 99.0 99.4 98.8

Associated FY 2008 Funding - $18.0 billion

Annual resources dedicated

to achieving the

Performance Measure.

Planned Performance.

Performance Results.

L

e

V

e

L

4

This section describes 

accomplishments and challenges.

Forecast for the following 

fiscal year.

Se

fi le 
United States Department of Transportation 91

Level 1: Strategic Goals and Outcomes

In September 2006, DOT published its new Strategic Plan for FY 2006-2011. This 

Performance and Accountability Report is the first year that we are fully reporting 

against the goals and outcomes set forth in that plan.

Relationships between strategic goals – Very frequently programs and initiatives that 

are aligned with a particular strategic goals and outcomes also contribute to related 

goals and outcomes. This is a desirable trait that reinforces our efficient use of resources 

across the Department to address multiple transportation challenges with multi-faceted 

programs that do more than one thing.

Level 2: Performance Areas

The report focuses on key performance areas in ways that are meaningful both to DOT 

programs and the public rather than following a limiting line-by-line reporting of all 

Dot activities. This way the reader gets a much better view of the Department’s areas of 

concentration.

Resource Allocation – We provide a subtotal of Departmental resources that are 

applied to the pursuit of each set of performance objectives in order to show the level 

of investment made based on budget plans. We are not yet able to provide data from 

our cost accounting system on actual funds expended by performance area, so the associated funds identified 

for each area reflect the Department’s planned spending. While the financial information provided is not an 

accounting report of funds expended, it does give the reader an overall picture of how the Department uses its 

appropriations. We look forward to implementing future improvements to our cost accounting system allowing 

us to provide even more detail in the years to come.

Level 3: Performance Measures

Summary performance information - One of the ways that DOT interprets its progress 

towards achieving its strategic goals is to compare single year results to historical trends. 

We have provided a tabular summary of long-term performance for each of the Strategic 

Goals in the pages that follow providing 7 years worth of performance information.

Data completeness - An exhaustive assessment of the completeness and reliability of our performance data and 

detailed information on the source, scope, and limitations for the performance data in this report are provided 

at:

http://www.bts.gov/programs/statistical_policy_and_research/source_and_accuracy_compendium/index.html. 

In that website, we also provide information to resolve the inadequacies that exist in our performance data.

Strategic Goal – a 

statement from the 

DOT Strategic Plan, 

outlining the desired 

long-term end-state.

Strategic Outcome – 

a statement from the 

DOT Strategic Plan, 

outlining nearer-term 

sub-sets of the goal.

Performance Area

– a performance 

objective, connecting 

effects created 

by departmental 

activities and 

programs, and the 

resulting influence on 

strategic outcomes.

Performance 

Measure – a 

measurable indicator 

of progress toward 

a performance goal, 

with annual targets.
92 FY 2008 Performance & Accountability Report

Preliminary vs. final results - Reporting just 2 months after the close of the fiscal year is been challenging where 

we rely on third party reporting. Often we have only preliminary or estimated results based on partial-year data 

and must wait for final data to properly verify and validate our results. In some cases where data is provided 

solely as an annual value and is not available in time for this report, we rely on historical trend information and 

program expertise to generate a projected result. We have been careful to point out where we have assessed our 

performance on a preliminary or projected basis. Preliminary estimates or projected results will be adjusted after 

final compilation or verification and validation. In all cases where results have changed from last year’s report, 

we indicate that by placing an “(r)” with the number, indicating a revision.

Level 4: Performance Narrative

The relationship between DOT’s activities and observed results - The relationship between resources and 

results can be complex, and a mix of current and prior-year resources and activity almost always influences 

any performance result. For example, direct service program results such as FAA air traffic control operations 

are influenced both by external forces and prior-year acquisition activities. Other results, such as highway 

congestion or transit ridership, are predominately influenced by prior-year funding.

DOT contributions to common governmental outcomes - DOT’s performance is aligned with its legislative 

mandates, but in some cases there are no “bright lines” separating DOT from other agencies. For instance, 

in DOT’s Security Strategic Goal, we make very important contributions in accordance with our mandates 

and appropriations, but we do so alongside the Departments of Defense, Homeland Security, State, Justice, 

Commerce, and Energy. Similarly, other agencies make significant contributions to the nation’s transportation 

system.
United States Department of Transportation 93

Summary Performance Tables

The following tables present the results over several years, when possible, of all the performance measures 

tracked in this report. The measures are grouped by strategic goal.

Safety Performance Summary

Performance Measure 2002 2003 2004 2005 2006 2007

2008

Actual

2008 

Target

Met/

Not Met

Passenger vehicle occupant highway 

fatality rate per 100 million passenger 

vehicle-miles traveled (VMT). 1.21 1.17 1.15 (r) 1.11 (r) 1.05* 1.03# 1.06 

Large truck and bus fatality rate per 100 

million total VMT. 0.185 0.176 0.170* 0.168* 0.171 

Motorcyclist fatality rate per 100,000 

motorcycle registrations. 65.4 69.2 69.8 73.5 72.34 (r) 71.8* 71.3* 76 

Non-occupant fatality rate per 100 

million VMT 0.19 0.19 0.20 0.19 0.18 0.19* 0.19 

Number of commercial air carrier fatalities 

per 100 million persons onboard 0.4* 8.7 

Number of fatal general aviation accidents 348 366 340 354 299 314 299* 325 

Rail-related accidents and incidents per 

million train-miles 20.04 19.40 19.02 18.03 (r) 17.42 (r) 16.56 (r) 15.74* 18.45 

Transit fatalities per 100 million 

passenger-miles traveled 0.473 0.461 0.467 0.428 0.389 (r) 0.437 (r) 0.289 * .468 

Number of serious incidents for natural 

gas and hazardous liquid pipelines 36 61 48 41 (r) 35 (r) 47 (r) 41* 40 

Number of serious hazardous materials 

transportation incidents 480 (r) 472 492 528 (r) 495 (r) 473 (r) 451* 462 

(r) Revised; * Preliminary estimate # Projection from trends;  Met;  Not Met
94 FY 2008 Performance & Accountability Report

reduced congestion Performance Summary

Performance Measure 2002 2003 2004 2005 2006 2007

2008

Actual

2008

Target

Met/

Not Met

Percentage of travel on the National 

Highway System (NHS) meeting 

pavement performance standards for 

“good” rated ride 49 50 52 52 54 57 (r) 56 * 57 

Percentage of deck area on National 

Highway System (NHS) bridges

rated as deficient, adjusted for 

average daily traffic 29.9 29.8 32.0 (r) 29.9 29.2 29.7 (r) 29.5* 22.0 

Percentage of total annual urban-area 

travel occurring in congested conditions N/A 28.5 (r) 28.6 (r) 28.6 (r) 28.4 (r) 27.8* (r) 27.3 # 32.3 

Average percent change in transit 

boardings per transit market (150 

largest transit agencies) 0.2 0.7 0.7 1.9 2.1 2.5 (r) 4.3* 1.5 

Percent of bus fleets compliant with 

the ADA 90 93 96 96 98 98 (r) 98* 98 

Percent of key rail stations compliant 

with the ADA 77 82 82 91 92 94* (r) 95* 94 

Percent of all flights arriving within 

15 minutes of schedule at the 35 

Operational Evolution Plan airports 

due to NAS-related delays 82.2 82.3 79.07 88.10 88.36 86.96 (r) 87.29* 88.00 

(r) Revised; * Preliminary estimate # Projection from trends;  Met;  Not Met

ADA – Americans with Disabilities Act
United States Department of Transportation 95

Global Connectivity Performance Summary

Performance Measure 2002 2003 2004 2005 2006 2007

2008

Actual

2008

Target

Met/

Not Met

Percent of days in the shipping season 

that the U.S. portion of the St. Lawrence 

Seaway system is available 98.7 98.9 99.1 99.7 99.0 99.4 98.8 99.0 

Number of freight corridors with an annual 

decrease in the average buffer index rating N/A N/A N/A N/A 3 5 23* 25 

Number of U.S. border crossings with an 

increase in operational reliability N/A N/A N/A N/A N/A 5 4* 5 

Number of new or expanded Bilateral 

and Multilateral agreements competed 

(new measure in FY 2004) N/A N/A 3 2 4 3 4 2 

Number of potential air transportation 

consumers (in billions) in international 

markets traveling between the U.S. 

and countries with open skies and 

open trans-border aviation agreements 

(measure revised in FY 2005) N/A 1.48 1.72 2.97 3.01 3.83 3.94 3.85 

Cumulative number of technology/

information exchange agreements

that promote the U.S. highway 

transportation industry N/A N/A N/A N/A N/A 4 4 3 

Percent share of the total dollar value of 

DOT direct contracts that are awarded 

to women-owned businesses 3.8 4.2 3.8 6.6 8.4 (r) 10.4 (r) 7.0* 5.1 

Percent share of the total dollar value of 

DOT direct contracts that are awarded 

to small disadvantaged businesses 16.2 15.8 15.6 12.7 16.2 (r) 18 (r) 16* 14.6 

(r) Revised; * Preliminary estimate # Projection from trends;  Met;  Not Met
96 FY 2008 Performance & Accountability Report

Environmental Stewardship Performance Summary

Performance Measure 2002 2003 2004 2005 2006 2007

2008

Actual

2008 

Target

Met/

Not Met

12-month moving average of the 

number of areas in a transportation 

emissions conformity lapse 6.0 6.0 6.3 5.8 1.3 0.0 0.0* 6.0 

Number of hazardous liquid pipeline 

spills in high consequence areas 48 52 49 55 (r) 46 (r) 50 (r) 59* 50 

Percent DOT facilities characterized as 

No Further Remedial Action Planned 

under the Superfund Amendments and 

Reauthorization Act 91 94 93 92 92 93 94 93 

Number of Exemplary Human 

Environmental Initiatives undertaken N/A N/A N/A N/A N/A N/A 11 10 

Median time in months to complete 

environmental impact statements for 

DOT funded infrastructure projects N/A N/A N/A 56 57 67 63.5* 60 

(r) Revised; * Preliminary estimate # Projection from trends;  Met;  Not Met

Security Performance Summary

Performance Measure 2002 2003 2004 2005 2006 2007

2008

Actual

2008

Target

Met/

Not Met

Percentage of DoD-required shipping 

capacity complete with crews available 

within mobilization timelines 94 96 94 95 93 97 97 94 

Percentage of DoD-designated commercial 

ports available for military use within DoD 

established readiness timelines 92 86 93 87 100 100 100 93 

(r) Revised; * Preliminary estimate # Projection from trends;  Met;  Not Met
United States Department of Transportation 97

Organizational Excellence Performance Summary 

Performance Measure 2002 2003 2004 2005 2006 2007

2008

Actual

2008

Target

Met/

Not Met

Percent of major federally funded 

transportation infrastructure projects 

with less than 2 percent annual growth 

for project completion milestones N/A N/A 73 89 89 89 79 90 

Percent of finance plan cost 

estimates for major federally funded 

transportation infrastructure projects 

with less than 2 percent annual growth 

in project completion cost N/A N/A 75 81 84 83 82 90 

For major DOT aviation systems, 

percentage of cost goals established in the 

acquisition project baselines that are met 89.5 88 100 97 100 100 96.08 90 

For major DOT aviation systems, 

percentage of scheduled milestones 

established in acquisition project 

baselines that are met 74 77 91.5 92 97.4 97 93.88 90 

(r) Revised; * Preliminary estimate # Projection from trends;  Met;  Not Met
98 FY 2008 Performance & Accountability Report

SAFETY STRATEGIC GOAL

ENHANCE THE PUBLIC HEALTH AND SAFETY BY WORKING TOWARD THE ELIMINATION OF 

TRANSPORTATION-RELATED DEATHS AND INJURIES

Improving safety throughout the transportation network is the premier goal of the Department of 

Transportation. Passage of the Safe, Accountable, Flexible, Efficient Transportation Act: A Legacy for 

Users (SAFETEA-LU) provided a renewed foundation for innovation in vehicle and infrastructure safety, 

partnerships with the states, and data-driven solutions to persistent safety challenges. The National Rail Safety 

Action Plan targets the most frequent and highest-risk causes of train accidents and accelerates research into 

new technologies. The Federal Aviation Administration and the Pipeline and Hazardous Materials Safety 

Administration are implementing risk management systems, which help them identify potential problems and 

develop targeted responses.

The U.S. Department of Transportation leveraged $21,430 million to promote 

safety in our nation’s transportation system.

fy 2008 enacted funding by safety strategy objectives 

(Dollars in Millions) 

aviation safety $9,856

highway safety $11,199

rail safety $161 

hazardous Material 

safety $138

total fy 2008 funding: $21,430 Million

Pipeline Safety $65

Transit Safety $10 

other safety strategic objectives
United States Department of Transportation 99

Key Performance Areas

Strategic outcomes from the DOT Strategic Plan are indicated in blue and FY 2008 results for key DOT 

performance measures are marked to indicate Met Target () and Did Not Meet Target ().

Reduction in transportation-related deaths

Reduction in transportation-related injuries

Highway Safety

 Passenger vehicle occupant highway fatality rate 

per 100 million passenger vehicle-miles (VMT) 

traveled.

 Large truck and bus fatality rate per 100 million 

total VMT.

 Rate of motorcyclist fatalities per 100,000 

motorcycle registrations (CY).

 Rate of non-occupant fatalities per 100 million 

VMT (CY).

Rail Safety

 Rail-related accidents and incidents per 

million train-miles.

Transit Safety

 Transit fatalities per 100 million passengermiles traveled.

Aviation Safety

 Number of commercial air carrier fatalities per 

100 million persons onboard.

 Number of fatal general aviation accidents.

Pipeline Safety

 Number of serious incidents for natural gas 

and hazardous liquid pipelines.

Hazardous Materials Safety

 Number of serious hazardous materials 

transportation incidents.

2008 Performance Highlights

 Fatalities from large truck crashes dropped for the third consecutive year with a total decline of 

8.2 percent.

 In aviation, there was less than 1 fatality for every 100 million persons on board. Fatalities 

aboard commercial airliners have dropped 57 percent in the last 11 years.

 The National Rail Safety Action Plan has contributed to across-the-board improvement in 

rail safety during the past three years with nearly a 25 percent decrease in the number of train 

accidents since 2004.

 Pipeline corrosion and excavation damage incidents were down 36 percent
100 FY 2008 Performance & Accountability Report

Highway Safety

FY 2008 Enacted Funds: $11.2 Billion

Motor vehicle traffic crashes account for 99 percent of all transportation-related fatalities and injuries. In 2005, 

they were the leading cause of death for Americans age 3 through 6 and 8 through 34. Alcohol is the single 

biggest contributing factor in fatal crashes. Motor vehicle crashes place a considerable burden on the nation’s 

health care system and have significant economic effects. The cost to the economy of all motor vehicle crashes 

was approximately $230.6 billion, in 2000 dollars, or 2.3 percent of the U.S. Gross Domestic Product. The 

FHWA, NHTSA, and FMCSA contribute to the accomplishment of the Department’s highway safety goal by 

promoting safer roads, safer vehicles, and safer driver behavior.

The Department remains committed to reducing highway fatalities and fully supports the goal of reducing 

fatalities to a rate of 1.0 per 100 million vehicle miles traveled (VMT). The target date for achieving the 1.0 goal 

was revised from 2008 to 2011, to account for the dramatically changing nature of the challenges currently facing 

highway safety. In 2007, the latest year for which figures are available, the estimate of the highway fatality rate 

was 1.37 fatalities per 100 million VMT.

To most effectively align program and policy actions needed to meet key challenges, the Department established 

four fatality sub-measures—passenger vehicles, non-occupants, motorcyclists, and large-truck and bus-related 

fatalities—which represent the breadth of all highway users. This approach more closely examines the fatality 

rates of the different segments of highway users, devotes greater energy and resources, and develops new 

strategies combating sub-measure trends that impede progress to the overall 1.0 goal.

FY 2009 Performance Forecast. The FY 2009 target for passenger vehicles is 1.02 passenger vehicle occupant 

fatalities per 100 million passenger vehicle VMT. Initial travel data for 2008 suggests that the higher price of 

gasoline together with the combined effects of the economic downturn, the trend towards increased use of 

smaller cars, and towards more walking, bicycling, and motorcycle riding, as well as the use of mass transit, 

reflect the fact that fundamental changes in personal travel are occurring in our transportation system. These 

various changes will affect the outcome measures for 2008 and later years, and may make it more difficult to 

forecast whether targets can be met. 

______________________________________________
United States Department of Transportation 101

Passenger Vehicles

Passenger vehicle occupant fatalities constitute around 70 

percent of all highway fatalities. While the total number 

of passenger vehicle fatalities has declined over the last five 

years, the Department knows that more needs to be done. 

Passenger safety rests on three things: safe road conditions, 

safe cars, and safe behavior. The Federal Highway 

Administration (FHWA) works with States to address 

road conditions that lead to crashes, while the National 

Highway Traffic Safety Administration (NHTSA) works 

with vehicle manufacturers to develop safer cars and with 

the driving public to promote safer driver and passenger 

behavior.

FY 2008 Results. The 2008 target will likely be met. During FY 2008, 

NHTSA made significant progress in behavioral programs to affect the 

passenger occupant fatality rate. The Agency led two nationwide law 

enforcement crackdowns to reduce impaired driving, and coordinated 

the annual Click It or Ticket mobilization to increase seat belt use. It 

developed and introduced new materials to improve the use of the 

Lower Anchors and Tethers for Children (LATCH) system to simplify 

installation of child safety seats, a new Ease of Use rating system for child 

safety seats, and a new teen driver safety campaign including a focus 

on parental responsibility. We are already seeing results from the new 

requirement for Electronic Stability Control (ESC) systems in passenger 

vehicles. ESC is a technology that has the potential to save many lives by 

assisting the driver in maintaining control in critical driving situations. 

For vehicles equipped with the technology, we estimate that these systems 

have reduced fatal single vehicle crashes by 63 percent for light trucks and 

vans (LTVs) and 36 percent for passenger cars. Rollover involvements 

in fatal crashes were decreased by 70 percent in passenger cars and 88 

percent in LTVs. For more information, please view Statistical Analysis 

of the Effectiveness of Electronic Stability Control (ESC) Systems Report at: http://www.regulations.gov/

fdmspublic/component/main?main=DocumentDetail&o=09000064802b4607.

FY 2009 Performance Forecast. DOT expects to see a reduction in 

the number of passenger fatalities in FY 2009, but because of significant 

changes in Americans’ driving habits due to higher gas prices, the 

number of vehicle miles traveled may decline. This decline could affect 

the ratio of fatalities per 100 million passenger vehicle-miles traveled, 

increasing the fatality rate even if the number of fatalities was reduced.

Performance Measure 

Passenger vehicle occupant highway fatality rate

per 100 million passenger vehicle miles traveled (VMT)

2005 2006 2007 2008

Target 1.15 1.12 1.10 1.06

Actual 1.15 (r) 1.11 (r) 1.05* 1.03#

(r) Revised; *Estimate based on projected 2007 VMT; # Projection based on 

trends from historical data. Actual number will be different, depending on 

external factors such as the economy, price of fuel, actual miles driven, vehicle 

mix, etc.

Associated FY 2008 Funding - $7.34 billion

When properly used, child safety restraint systems 

reduce fatalities by 71 percent in infants and 54 

percent in toddlers. However, 7 of 10 child safety 

seats are installed improperly. DOT’s new campaign 

educates parents on proper installation and provides 

a new 5-star rating system that tells consumers which 

child-safety seats are easiest to install called LATCH – 

Lower Anchors and Tethers for Children.
102 FY 2008 Performance & Accountability Report

Promoting Passenger Safety

There are a number of FHWA and NHTSA programs that have contributed to the decline in passenger fatalities 

over the years. Some of the developments in FY 2008 not mentioned previously are summarized below:

• Rural Safety Initiative - Rural roads carry less than half

of America’s traffic yet they account for over half of the 

nation’s vehicular deaths. The Rural Safety Initiative 

focuses on the four key factors that contribute to rural 

road deaths: human behavior, roadway environment, 

vehicles, and medical care after a crash. For more 

information please visit: http://www.dot.gov/affairs/

ruralsafety/ruralsafetyinitiativeplan.htm.

• Cable median barriers – FHWA emphasized barrier

installation in the medians of divided highways, 

especially cable median barriers which reduce cross 

median fatal crashes by 80 to 95 percent where used.

• Ignition Interlocks – For several years, NHTSA has

advocated the use of ignition interlocks for repeat 

offenders. These devices can detect when an offender 

has been drinking and prevent a vehicle from starting, 

thus helping to reduce the chances that offenders might 

again take to the road while impaired. In the past year, 

six States (Arizona, Illinois, Louisiana, Nebraska, New 

Mexico and Washington) have passed laws that require 

the use of ignition interlocks for all DWI offenders.

• Click It or Ticket – The most successful seat belt

campaign ever, helped achieve the current overall 

seat belt usage – 83 percent for 2008. NHTSA data show, however, that nighttime belt use 

continues to be much lower, particularly among young drivers. The campaign this year 

focused on the issue with the theme ‘Day or Night - Buckle Up or Pay Up’. The campaign 

was accompanied by statewide teen and nighttime demonstration projects to encourage 

improved seat belt usage among these high risk populations.

______________________________________________

Rural roads carry less than half of America’s traffic yet 

account for over half of the Nation’s vehicular deaths. A 

Rural Safety Initiative will bring focus and a comprehensive approach to rural safety promoting safer drivers, 

better and smarter roads, better trained emergency 

responders, and stronger partnerships to help improve 

safety.
United States Department of Transportation 103

Large Trucks and Buses

Just as passenger safety relies on safe road conditions, safe 

vehicles, and safe driver behavior, so does safety for large 

trucks and buses. The FMCSA conducts education and 

outreach to truck drivers, bus drivers and motor carrier 

companies. In addition, FMCSA develops, implements 

and enforces in-use safety regulations, and along with 

NHTSA, analyzes the causes of commercial motor vehicle 

crashes. NHTSA is responsible for developing, setting, and 

enforcing vehicle safety standards related to new trucks 

and buses as well as determining safety related defects 

prompting the recall of a truck or bus.

FY 2008 Results — Preliminary data for 2007 (the most recent data available) show that FMCSA exceeded its 

target in reducing the fatality rate for commercial motor vehicles, with a rate of .170 fatalities per 100 million total 

vehicle miles traveled (VMT), and a decrease in total truck and bus fatalities to 5,099. Fatalities from large truck 

crashes have dropped for three consecutive years from 5,240 in 2005 to 4,808 in 2007; a decline of 8.2 percent. 

Bus related fatalities dropped 4.5 percent between FY 2006 and FY 2007. These improvements are due, in part, 

to increased numbers of roadside inspections and safety interventions performed by FMCSA and our state 

partners. 

In 2007, FMCSA, NHTSA and FHWA developed new performance targets to focus the Department’s efforts on 

the critical factors responsible for overall highway fatality rates. To this end, the FMCSA fatality rate measure 

was aligned with the other highway modes to measure against total VMT, rather than just measuring against the 

subset of truck vehicle miles traveled. The previous FMCSA performance measure for truck fatalities shows a 

reduction to a rate of 2.24 per 100 million truck VMT in 2006, based on the latest information available. Final 

information on this measurement for 2006 and preliminary information for 2007 will not be available until 

December 2008.

FY 2009 Performance Forecast — DOT expects to meet the target in FY 2009.

Promoting Safety for Large Trucks and Buses

Although it has reached the lowest incidence of truck and bus crashes in decades, FMCSA still has a lot of 

work to do to achieve the goal of no more than 0.16 large truck and bus related fatalities per 100 million total 

VMT by the end of 2011. To reach the next level of safety, the Agency is examining the foundation of all of its 

safety programs and revisiting many existing programs. The FMCSA launched a major initiative in FY 2005 to 

reexamine and reengineer core safety activities called the Comprehensive Safety Analysis 2010 (CSA 2010). In 

FY 2008, the Agency began initial testing and evaluation of the CSA 2010 projects in four States. A representative 

sample of interstate motor carriers from Colorado, Missouri, New Jersey, and Georgia were exposed to a new 

safety measurement system and progressive intervention concept. The demonstration will determine the 

effectiveness of the new progressive interventions. Preliminary data analysis suggests a 40 percent improvement 

in terms of FMCSA’s ability to reach more carriers and drivers. Therefore, we expect to see improved compliance 

and decreased motor carrier-related crashes and fatalities as a result of this new approach.

Performance Measure 

Large truck and bus fatality rate

per 100 million total vehicle-miles traveled (VMT)

2005 2006 2007 2008

Target N/A 0.179 0.175 0.171

Actual 0.185 0.176 0.170* 0.168#

* Estimate # Projection based on trends from historical data. Actual number 

will be different, depending on external factors such as the economy, price of 

fuel, actual miles driven, vehicle mix, etc.

Associated FY 2008 Funding - $1.67 billion
104 FY 2008 Performance & Accountability Report

The NHTSA published a Notice of Proposed Rulemaking (NPRM) to require lap/shoulder belts for small school 

buses and establish performance requirements for voluntarily installed seat belts on large school buses. NHTSA 

expects to publish a final rule improving the stopping distance requirements for large trucks. This rule will 

require trucks to be equipped with larger drum brakes or in some cases disc brakes, and is expected to reduce 

crashes, fatalities, and injuries due to improved braking performance. The FMCSA and NHTSA completed 

initial research to understand performance capabilities and potential safety benefits of stability control systems in 

tractor semi-trailers and single unit trucks. In addition, the FMCSA initiated a field test of an electronic vision 

enhancement system to reduce truck blind spots. NHTSA is fully engaged in testing motor coaches to address 

safety issues related to occupant protection, roof crush, fire suppression and emergency evacuation.

____________________________________________________

Motorcyclists

Motorcyclist fatalities have increased each year since 

reaching an historic low of 2,116 fatalities in 1997. In 

2007, motorcyclist fatalities increased for the tenth year 

in a row to 5,154 from 4,837 in 2006. This is a 6.6 percent 

increase in just one year and fatalities among motorcyclists 

(motorcycle operators and passengers) accounted for 

13 percent of the 41,059 total fatalities in motor vehicle 

crashes in 2007.

The measure of motorcyclist fatalities was re-baselined 

in 2008, when it became a DOT sub-metric, to reflect a 

change of focus from fatalities per 100 million VMT to 

fatalities per 100,000 registrations. The targets were set 

below actual projected fatality rates. Between 1997 and 2006, motorcycle registrations increased by 75 percent 

while fatalities far outpaced the increase in registrations. Given the increase in exposure resulting from the 

increased use of motorcycles for transportation, reaching the target motorcycle fatality rate of only 77 fatalities 

per 100,000 motorcycle registrations in 2009 is an ambitious goal.

FY 2008 Results. Projections using the latest available rate data (2002-2006) indicate that the target for 2008 

should be met. During FY 2008, NHTSA initiated development of national standards for novice motorcycle 

rider (operator) training, completed a program to educate motorcyclists on the dangers of riding impaired, 

updated motorcycle licensing guidance to State Motor Vehicle Administrators, and continued to incorporate 

motorcycle operators in High Visibility Enforcement (HVE) impaired-driving crackdowns. NHTSA also 

initiated a research project to train riders on visual search strategies on curves to decrease the likelihood of runoff-the-road crashes.

FY 2009 Performance Forecast. DOT expects to meet the target in FY 2009.

Promoting Motorcycle Safety

As the number of motorcycle fatalities continues to rise, the Department has targeted some of its safety programs 

specifically at motorcyclists. In October 2007, DOT released the Action Plan to Reduce Motorcycle Fatalities. 

The key initiatives are:

Performance Measure 

Motorcyclist fatality rate per 100,000 motorcycle registrations

2005 2006 2007 2008

Target N/A 75 76 76

Actual 73.5 72.4 (r) 71.8* 71.3#

(r) Revised; *Estimate based on projected 2007 motorcycle registrations; # 

Projection based on trends from historical data. Actual number will be different, 

depending on external factors such as the economy, price of fuel, actual miles 

driven, vehicle mix, etc.

Associated FY 2008 Funding - $1.00 billion
United States Department of Transportation 105

• Conducting the Motorcycle Crash Causes and Outcomes study

• Developing national standards for entry level motorcycle rider training

• Addressing the falsification of helmet certifications

• Distributing the brochure Roadway Safety for Motorcycles to road planners, designers, and

engineers

• Creating a program to educate police on motorcycle safety

• Marketing a Share the Road campaign kit to States, local communities, and motorcycle

organizations

Under a separate initiative, NHTSA continued to promote high visibility enforcement during National Impaired 

Driving Crackdown periods (Labor Day and the month of December) with the message ‘Drunk Driving. Over 

the Limit. Under Arrest’. The ads were updated for the 2008 Labor Day campaign to feature a motorcycle rider, 

since motorcycle fatalities continue to rise and a higher percentage of impaired driving fatalities involve riders 

(35 percent) as compared with drivers of other motor vehicles (32 percent).

____________________________________________________

Non-Occupants

The target for non-occupant fatalities was re-baselined in 2008 when this measure became a DOT sub-metric. 

The non-occupant fatality rate uses overall VMT data to calculate the rate since pedestrian, bicyclist, and other 

non-occupant miles traveled are not available—meaning the numerator is much smaller than the denominator 

and changes in the rate are minuscule.

FY 2008 Results. DOT expects to meet the FY 2008 

target. We missed the target in FY 2006 and FY 2007, 

although we did see a decrease in the number of 

fatalities for pedestrians and bicyclists. To address this 

performance gap, NHTSA initiated research to decrease 

the incidence of crashes involving impaired pedestrians, 

tested enforcement strategies to reduce vehicle crashes 

involving pedestrians, and completed a comprehensive 

pedestrian safety demonstration program. The Agency 

initiated an assessment of hit-and-run crashes to identify 

common variables and to develop and implement 

countermeasures specific to that crash type, in addition to a demonstration project supporting implementation 

of the Community Guide to Enhanced Pedestrian Safety. NHTSA held a public meeting to address the issue of 

blind pedestrians around quiet cars and subsequently began development of a research plan to address the issue. 

To address pedestrian-related crashes, FHWA consulted with State and local agencies targeting high crash 

locations in States and cities with the highest number of pedestrian fatalities. FHWA assisted in developing and 

implementing pedestrian safety action plans and delivered a training course, How to Develop a Pedestrian Safety 

Action Plan and Engineering for Pedestrian Safety, on 40 occasions in targeted areas with pedestrian safety 

Performance Measure 

Non-occupant fatality rate per 100 million VMT

2005 2006 2007 2008

Target 0.16 0.16 0.15 0.19

Actual 0.20 0.19 0.18 0.19#

# Projection based on trends from historical data. Actual number will be 

different, depending on external factors such as the economy, price of fuel, 

actual miles driven, vehicle mix, etc.

Associated FY 2008 Funding - $1.20 billion
106 FY 2008 Performance & Accountability Report

issues. FHWA developed two new guides (Pedestrian Safety Guide for Transit Agencies and A Resident’s Guide 

for Creating Safe and Walkable Communities) to reach non-traditional audiences including transit agency staff 

and residents working to improve pedestrian safety within their communities.

NHTSA also initiated development of a law enforcement training program on pedestrian safety and developed 

an education program to enhance older pedestrian safety at the community level. A curriculum was developed 

to teach pedestrian and bicycle safety to individuals who use English as a second language.

FY 2009 Performance Forecast. DOT expects to meet the target.

Aviation Safety

FY 2008 Enacted Funds: $9.86 Billion

This remains one of the safest periods in aviation history for both commercial and general aviation. Over the 

last five years, nearly three billion airline passengers reached their destination safely. As the stewards of aviation 

safety in the U.S., FAA and its industry partners have built a system that operates nearly 32,000 scheduled 

commercial flights daily and has reduced the risks of flying to all-time lows.

This map shows which states had an increase in traffic fatalities greater than 5 percent, increases less than 5 percent 

or decreases from 2006 to 2007. The results are generally positive with over half the states seeing a decrease in 

fatalities. These results provide DOT with the opportunity to target effective safety initiatives and campaigns. For 

more information see NHTSA’s August 2008 Traffic Safety Facts at http://www-nrd.nhtsa.dot.gov/Pubs/811017.pdf.
United States Department of Transportation 107

FY 2008 Results. In FY 2008, FAA adopted a new safety 

performance metric and target for commercial air carriers. 

The metric, fatalities per 100 million persons carried, is 

more relevant because it measures the individual risk 

to the flying public. All fatalities, including passengers, 

crewmembers, ramp workers, and ground fatalities, are 

counted equally.

We met our target with a result of 0.4 (preliminary 

estimate) fatalities per 100 million persons on board. Two 

accidents with 3 fatalities (ground and crew members) occurred in July.

While FY 2008 results were significantly better than our target of 8.7 fatalities per 100 million persons on board, 

the new measure remains a challenge. Aviation numbers involve years with few fatalities, interspersed with 

spikes in the wake of singular catastrophic accidents. As an example, our established out-year goal is 4.4 fatalities 

per 100 million people on board. At 4.4, a major accident in an aircraft as small as a Saab SF 34 (typically 30 to 

32 passenger seats) will assure failure in the out years. Consequently, FAA established interim goals, such as 

the goal of 8.7 fatalities per 100 million persons on board for FY 2008, as recognition of the volatility in aviation 

measures as we work our way to a sustained, low fatality rate.

FY 2009 Performance Forecast. The FAA expects to meet the FY 2009 commercial air carrier fatality rate. 

The goal is a 50 percent reduction in fatalities by 2025. To meet this goal, the FAA will continue to work in 

partnership with industry.

______________________________________________

Although most people are familiar with FAA’s role in commercial aviation, they may not be aware that it also 

oversees the safety of approximately 300,000 general aviation (GA) aircraft in the United States. These aircraft 

include amateur-built aircraft, rotorcraft, balloons, and highly sophisticated turbojets. General Aviation 

activities include student training, crop dusting, fire fighting, law enforcement, news coverage, sightseeing, 

industrial work, on-demand air taxi service, corporate transportation, business use, and personal use.

FY 2008 Results. FAA has met the target this year for 

reducing GA fatal accidents. Since the FAA began using 

GA fatal accidents as a performance target seven years 

ago, the target has been exceeded just once. In FY 2008, 

GA fatal accidents once again decreased from the previous 

year. FAA and industry’s collaborative safety initiatives 

continue to drive the GA fatal accident rate lower. We 

have consistently met our GA safety goals and successfully 

remained under our ceiling of 325 fatal accidents for 

FY 2008. The end of April 2008 marked a 3-year period 

that was the safest ever recorded in the history of general aviation.

During these three years, FAA continued its emphasis on enhancing general aviation safety and directed energies 

to creating an improved measure. The new safety metric tracks the general aviation fatal accident rate rather 

than the number of fatal accidents. The FAA has baselines for the new GA safety metric and goal which will be 

Performance Measure 

Number of fatal general aviation accidents

2005 2006 2007 2008

Target 343 337 331 325

Actual 354 299 314 299*

* Preliminary estimate

Associated FY 2008 Funding - $1.63 billion

Performance Measure 

Number of commercial air carrier fatalities

per 100 million persons onboard

2005 2006 2007 2008

Target N/A N/A N/A 8.7

Actual N/A N/A N/A 0.4*

* Preliminary estimate

Associated FY 2008 Funding - $8.21 billion
108 FY 2008 Performance & Accountability Report

implemented in FY 2009. The previous measure was not rate-based and did not reflect fleet activity levels and 

its relationship to the number of fatal accidents. The new performance measure is a true rate-based metric and 

tracks changes in the fatal accident rate for a fixed volume of flight hours (per 100,000 flight hours). Our goal is 

to reduce GA fatal accidents over the next ten years to no more than one accident per 100,000 flight hours.

FY 2009 Performance Forecast. FAA expects to meet the performance target in FY 2009.

Promoting Aviation Safety

Creating safe flying conditions is a complex interplay of many activities but FAA has learned that by addressing 

the precursors to accidents, operational errors, and runway incursions, safety is enhanced. Therefore, the agency 

spends considerable time and resources to reduce operational errors and runway incursions.

In addition, in recent years, FAA has focused on reducing aviation risks in Alaska, particularly those associated 

with general aviation. Aviation plays a vital role in Alaska, but the state’s topography, high volume of off-airport 

operations, and extreme weather present unique safety challenges to pilots.

RUNWAY ACCIDENTS

Reducing the risk of runway incursions is one of FAA’s top priorities. The 

definition of a “runway Incursion” was changed in October 2007 to “any 

occurrence at an airport involving the incorrect presence of an aircraft, vehicle or 

person on the protected area of a surface designated for the landing and takeoff 

of aircraft.” Reducing runway incursions lessens the probability of accidents that 

potentially involve fatalities, injuries, and significant property damage.

FAA pursues a number of initiatives to address runway incursions, but close calls 

at some of the nation’s busiest airports in 2007 showed that FAA and the aviation 

industry must take quick action to reduce the risk of runway incursions and 

wrong runway departures. In 2007, more than 40 aviation leaders from airlines, 

airports, air traffic control and pilot unions, aerospace manufacturers, and the 

FAA agreed to quickly implement a five point short-term plan to improve safety 

at U.S. airports. 

The FAA Administrator asked the meeting participants to consider solutions 

in four areas: cockpit procedures, airport signage and markings, air traffic 

procedures, and technology. The table below summarizes the plan and gives the 

status of each recommendation to date.

After a series of high-profile 

events earlier this year raised 

questions about the U.S. aviation safety program, an outside 

team of aviation and safety 

experts conducted an independent review. The review 

produced thirteen recommendations intended to keep 

the FAA ahead of multiple risk 

factors. 
United States Department of Transportation 109

Call to Action for Runway Safety

Recommendation Status

1. Within 60 days, teams of FAA, airport operators, 

and airlines will begin safety reviews at the airports 

where wrong runway departures and runway 

incursions are the greatest concern.

FAA completed runway safety reviews at 20 initial 

“call to action” airports based on runway incursion 

data and wrong runway departure data. The result 

was more than 100 short-term and numerous midand long-term initiatives. Most of the short-term 

initiatives identified are complete.

2. Within 60 days, disseminate information and 

training across the entire aviation industry.

All certificated airports and active air carriers were 

asked to provide annual recurrent training for all 

individuals with access to runways and taxiways. 

To date all 112 air carrier are in compliance and 91 

percent of the airports have agreed to develop such 

training.

3. Within 60 days, accelerate the deployment of 

improved airport signage and markings at the top 

75 airports, well ahead of the June 2008 mandated 

deadline.

FAA completed the implementation of upgraded 

or enhanced runway markings at the 75 medium 

and large airports with more than 1.5 million 

annual boardings before the June 30, 2008 target. 

On March 31, 2008, FAA extended the markings 

requirement to all certificated airports. The 

markings must be implemented by December 2009 

or December 2010 depending upon the airport size. 

To date, 151of the 489 small certificated airports (31 

percent) have completed the installations.

4. Within 60 days, review cockpit procedures and 

air traffic control (ATC) clearance procedures. 

This may include changing cockpit procedures to 

minimize pilot activities and distractions while an 

aircraft is moving on the ground and to make ATC 

instructions more precise.

All 112 active air carriers have reviewed their 

cockpit procedures. The FAA completed an analysis 

of air traffic control procedures and found that 

more explicit taxi instructions are needed. In May 

2008, FAA implemented procedures for issuing 

more detailed taxi instructions.

5. Implement a voluntary self-reporting system for 

all Air Traffic Organization personnel, such as air 

traffic controllers and technicians.

In March 2008, FAA and the National Air Traffic 

Controllers Association signed an 18 month 

agreement to create and use an Air Traffic Safety 

Action Program at several designated sites. The 

program is designed to foster a voluntary, nonpunitive environment for the open reporting of 

flight safety concerns by air traffic controllers.

According to the preliminary FY 2008 data, FAA met the target of no more than 0.509 runway incursions per 

million operations. For more information on the Call to Action and other runway safety initiatives, please visit: 

http://www.faa.gov/airports_airtraffic/airports/runway_safety/.
110 FY 2008 Performance & Accountability Report

OPERATIONAL ERRORS

One of the fundamental principles of aviation safety is separation—the need to maintain a safe distance from 

other aircraft, terrain, obstructions, and restricted airspace. Air traffic controllers employ rules and procedures 

that define separation standards for this environment. An operational error (OE) occurs when controllers fail to 

apply or follow these procedures that enforce separation and allow aircraft to end up too close to each other or 

to an obstruction. Reducing the risk of operational errors is one of the FAA’s top priorities as traffic continues to 

increase. We did not meet our FY 2008 target of limiting Category A and B (most serious) operational errors to 

a rate of no more than 2.15 per million activities, reaching an operational rate of 2.31 (preliminary estimate).

In FY 2008, FAA revised the way operational errors are measured. The new separation conformance measure 

of proximity provides a consistent comparison of events. However, the conformity measure needs further 

refinement for enhanced utility. Several types of events currently fall outside the conformity index, such as 

errors involving military flights of two aircraft and errors involving dependent Instrument Landing System (ILS) 

approaches. In FY 2009, we will be expanding conformity to include a greater number of events that result in 

operational errors.

In 2009, the FAA will continue to develop an index to describe the central tendency and variance of losses of 

separation. The index will allow FAA to measure performance over a period of time, similar to a stock index. 

This new measure will provide indicators that reflect both the risk of collision and the degree to which separation 

standards were maintained.

The FAA continues to focus on the development and implementation of an automated software prototype that 

will depict Air Traffic Control separation conformance in the Terminal environment nationwide. The Traffic 

Analysis and Review Program will achieve the following:

• apply separation logic to targets,

• identify where applicable separation standards are not being maintained, and

• highlight incidents needing further investigation. 

ALASKA ACCIDENTS

Alaska’s skyways are equivalent to the highway and road infrastructure found throughout the continental U.S., 

making the use of general aviation aircraft essential to everyday life. This includes but is not limited to enabling 

children to attend school, traveling to medical appointments, and supplying communities with groceries, fuel, 

and mail.

Therefore, there is urgency to modernize flight service in Alaska and FAA’s Flight Plan focuses specifically on 

reducing GA accidents in Alaska. The agency’s goal is to reduce Alaska accidents from the 2000-2002 average of 

130 accidents per year to no more than 99 accidents per year by FY 2009. Based on preliminary FY 2008 data, 

there were 108 GA accidents in Alaska, missing the FY 2008 target of 104.

In FY 2008, the FAA continued to work jointly with the Alaska aviation community through a number of 

organizations and safety programs such as: the Medallion Foundation, Alaska Air Carriers Association, Alaska 

Airman’s Association, FAASTeam (FAA Safety Team), and Circle of Safety. 
United States Department of Transportation 111

In addition to these training and education efforts, we’re using new technology in Alaska, such as the satellitebased Capstone navigation and terrain awareness avionics. We’re also installing 221 additional weather cameras 

throughout the state. These cameras provide a real-time depiction of what’s happening throughout the state. 

The Alaskan pilot now has go/no go information that was previously unavailable.

E-mails and post cards were sent in March 2008, to every pilot with a current medical certificate in Alaska. The 

communication emphasized the Alaska accident data and encouraged flight instruction. This message continues 

to be delivered via tri-fold pamphlets at local events.

The FAA and Medallion executed a ‘See your CFI before you fly’ media blitz which began broadcasting on the 

radio in April 2008 and on television in May 2008. This effort targets the historical rise of accidents each year 

in spring after months of not flying. It encourages pilots to work with their certified flying instructors (CFIs) in 

a Medallion training device at no cost and/or in an aircraft. The Medallion training devices have sophisticated 

visuals that use satellite imaging developed under a NASA grant. Pilots who use these devices can simulate 

deteriorating weather and other scenarios that allow them to practice their decision-making skills.

Rail Safety

FY 2008 Enacted Funds: $161 Million

In the past 10 years, the Federal Railroad Administration 

(FRA) has successfully reduced the total number of railrelated accidents nationwide and the rate of accidents per 

million train-miles. From FY 1998 through FY 2007, total 

accidents have declined by 21 percent, while the rate of 

accidents per million train-miles has dropped by almost 

thirty-three percent. Significantly, this has occurred while 

rail traffic rose almost 18 percent. Although this is good 

news, FRA was concerned with the slight increase in the 

number of train accidents and the relatively flat accident 

rate over much of this same period. 

To address the train-accident challenge, the Department launched the National Rail Safety Action Plan in 2005. 

The plan targeted the most frequent, highest-risk causes of train accidents; focused FRA oversight and inspection 

resources more precisely; and accelerated research efforts that had the potential to lessen the largest risks.

FY 2008 Results. For the first nine months of FY 2008, FRA is significantly below its target for the year and 

is confident it will remain below the yearly goal, despite the September 2008, collision between a commuter 

train and a freight train in Los Angeles, which killed 25 passengers. Much of its success is attributable to 

the aggressive implementation of the National Rail Safety Action Plan; the railroads’ support of FRA’s safety 

initiatives; independent actions taken by railroads, labor unions, and rail employees to operate more safely; and 

the assistance of researchers and other industry stakeholders in developing and deploying new, safer technology. 

Additionally, FRA has built substantial partnerships with State and local agencies, through the State Rail 

Participation Program, to address accidents and casualties at highway-rail grade crossings and from trespassing. 

These activities benefit the public in several ways: fewer accidents mean fewer deaths and injuries, fewer healthcare expenses, and a reduced loss of personal property.

Performance Measure 

Rail-related accidents and incidents

per million train-miles

2005 2006 2007 2008

Target 17.14 16.80 16.70 18.45

Actual 18.03 (r) 17.42 (r) 16.56 (r) 15.74*

(r) Revised; * Preliminary estimate

Associated FY 2008 Funding - $161 million
112 FY 2008 Performance & Accountability Report

FY 2009 Performance Forecast. FRA should meet its FY 2009 target.

Promoting Rail Safety

FRA has succeeded over the past several fiscal years in meeting or exceeding its grade-crossing goals, measured 

by the number of incidents that occur where roads cross railroads. To reach this level of safety, FRA has required 

railroads to take a number of precautions, such as

• using train horns at highway-rail crossings;

• testing warning devices regularly;

• using alerting lights on locomotives;

• applying retro-reflective material on all rolling stock; and

• trimming vegetation that could block signs.

FRA will use these types of preventive measures to help the state of Louisiana implement as part of a statewide 

highway-rail crossing safety action plan. Louisiana has consistently ranked among the top five states nationally 

with the highest number of grade crossing collisions and fatalities. The state’s action plan focuses on reducing 

vehicle-train collisions at grade crossings where multiple incidents have occurred. As part of this effort, the 

Louisiana Department of Transportation and Development announced an agreement with the Kansas City 

Southern Railway to make safety improvements at 300 public grade crossings. Over five years, more than $16 

million will be invested to upgrade warning devices, replace cross-buck signage, and close redundant crossings. 

FRA is currently working with Texas and Illinois to develop similar state-specific action plans.

In May 2008, FRA announced completion of the National Rail Safety Action Plan (NRSAP), noting that the plan 

contributed to an across-the-board improvement in rail safety during the past three years, including nearly a 25 

percent decrease in the number of train accidents since 2004. Please view the report at: http://www.fra.dot.gov/

downloads/PubAffairs/final_report_May_2008.pdf. As a part of the NRSAP, FRA developed a Federal rule to 

address top human factor causes of accidents. The final rule was issued in February 2008. The final rule covers 

both railroad operational testing programs and railroad operating practices related to the handling of equipment, 

switches, and fixed derails. The rule establishes greater accountability for implementation of sound operating 

rules necessary for safety. Through the first four months of FY 2008, the industry has seen a 17 percent drop in 

human-factors caused accidents that relate to the railroad operating rules (now regulations) that had, in the past, 

accounted for many accidents and injuries to railroad employees and the public. FRA is also working to ensure 

that emergency responders have timely access to key train hazmat information. The American Association of 

Railroads (AAR) amended its Operating Practices for Transportation of Hazardous Materials circular to provide 

that local responders be given a ranked listing of the top 25 hazardous materials transported by rail, upon their 

written request. CSX Transportation and Chemtrec entered into a pilot agreement, and FRA is working with 

AAR to encourage participation from other railroads.
United States Department of Transportation 113

Transit Safety

FY 2008 Enacted Funds: $10 Million

Public transportation provides a flexible, safer alternative 

to traveling by automobile. Currently, transit is one of 

the safest modes of travel per passenger-mile traveled. 

According to the National Safety Council, passengers on 

the Nation’s bus, rail, or commuter rail systems are 40 times 

less likely to be involved in a fatal accident, and 10 times 

less likely to be involved in an accident resulting in injury. 

The challenge is to further reduce the rate of fatalities and 

injuries even as the total number of people using transit 

increases.

FY 2008 Results. DOT expects to meet the target for calendar year (CY) 2008. Using six months of data from 

FTA’s National Transit Database and four months of Commuter Rail data from the FRA Rail Accident Incident 

Reporting System, 2008 safety figures come in well under the target rates for fatalities and injuries. Strong 

growth in transit ridership and the continued expansion of transit service significantly increased the number of 

transit passenger miles traveled in 2008 over 2007. The increase in passenger miles traveled between January 

and June of 2008 was 3.7 percent higher than the same period for 2007. Approximately 26,963 million passenger 

miles were traveled during this period in 2008.

FY 2009 Performance Forecast. DOT will meet the CY 2009 target.

Pipeline Safety

FY 2008 Enacted Funds: $65 Million

While pipelines are by many measures the safest mode 

for transporting hazardous liquid and natural gas, the 

nature of their cargo is inherently dangerous. To address 

this hazard, the Pipeline and Hazardous Materials Safety 

Administration (PHMSA) has designed and implemented 

a strong, risk-based, systems approach to protect the 

safety, security, and reliability of our Nation’s pipeline 

infrastructure. This risk-based systems approach also 

helps provide secure and reliable transportation of our 

Nation’s energy resources.

To reduce the risk to the public, PHMSA identifies and evaluates risks, develops and enforces standards, provides 

grants to assist states in support of their pipeline safety programs, educates operators and the public, sponsors 

research on promising technologies, and responds to accidents/incidents. States play a very important role in 

helping provide oversight of the safety of the nation’s pipeline infrastructure, overseeing most of the intrastate 

Performance Measure 

Transit fatalities

per 100 million passenger-miles traveled

2005 2006 2007 2008

Target .482 .477 .473 .468

Actual .428 .389 (r) .437 (r) .289*

(r) Revised; * Preliminary estimate

Associated FY 2008 Funding - $5 million

Performance Measure 

Number of serious incidents for natural gas and hazardous liquid pipelines

2005 2006 2007 2008

Target N/A 43 42 40

Actual 41(r) 35(r) 47(r) 41*

(r) Revised; * Preliminary estimate

Associated FY 2008 Funding - $65 million
114 FY 2008 Performance & Accountability Report

pipeline system infrastructure, including most of the nation’s natural gas distribution pipeline mileage. States 

face increasing resource and technical challenges as we expand the State role in assisting with new Integrity 

Management (IM) and other evolving requirements. The Pipeline, Inspection, Protection, Enforcement and 

Safety Act of 2006 (PIPES Act) recognized the challenge and calls for increased funding to help states meet 

new mandatory initiatives. PHMSA recognizes the importance of a strong continued focus on excavation 

or construction-related damage—the leading cause of serious pipeline incidents involving death or injury, 

especially in natural gas distribution systems where people work and live in closest proximity to pipelines.

FY 2008 Results. This year we move to the new metric of “number of serious natural gas and hazardous liquid 

incidents”. Serious incidents are those where a fatality or injury was involved. Based on preliminary data, 

PHMSA projects 41 serious pipeline incidents in 2008, which would miss the performance target for our goal by 

2.5 percent. 

Pipeline failures tend to be low-probability high-consequence risks, where the ratio of fatalities to injuries is 

fairly high (1:4), and where there are often multiple injuries or fatalities (average 1.5 people hurt for every serious 

incident). Over the past three years, we have seen an average of 41 serious incidents each year, with an average 

of 17 deaths and 45 injuries requiring hospitalization. In 2008, we have already seen 3 deaths and 39 injuries 

reported—almost all in natural gas distribution systems.

About 20-25 percent of serious incidents occur on hazardous liquid or natural gas transmission pipelines, the 

large diameter pipelines that carry products from an origination point, across the country to a collection point 

serving a population center. In these two areas, PHMSA has already promulgated integrity management rules 

and requirements; proposed rules to extend integrity management requirements to distribution systems were 

published this year. Around seventy-five percent of all human consequences from pipeline failures occur in 

natural gas distribution systems, the small diameter lines that move material from a collection point to homes 

and businesses. PHMSA expects to improve performance of distribution pipeline systems by extending the 

integrity management rules from hazardous liquid and natural gas transmission pipelines—where integrity 

management has been in place for several years—to natural gas distribution systems. The integrity management 

program requires operators to identify the risks in their systems, evaluate those risks, and identify and fix flaws 

in their systems. 

FY 2009 Performance Forecast. Even with the anticipated improvement from a risk-based approach, PHMSA 

expects significant challenges in meeting its target of 38 serious incidents for 2009. Integrity management 

systems require some time to develop and implement, and final rules remain to be published. At the same time, 

the number of serious incidents we have seen over 2007-2008 indicate that there is still substantial variability in 

performance from year-to-year, and the long-term trend indicates that we are reaching diminishing effects as the 

number of serious incidents has dropped by half since 20 years ago.

Promoting Pipeline Safety

With enactment of the PIPES Act of 2006, PHMSA has sharpened its focus on further mitigating the risk to 

people and is advancing the agency’s risk–based, integrity management approach. Some of the big gains over 

the past year have been in reducing the number of pipeline incidents caused by corrosion and excavation. 

These numbers have declined significantly for both causes in all three pipeline sectors (gas transmission, 

gas distribution, and hazardous liquid pipelines) over the last 12 months—largely due to PHMSA’s efforts in 

advancing integrity management and damage prevention.
United States Department of Transportation 115

Excavation damage has been the leading cause of pipeline 

incidents involving death or injury. In 2008, PHMSA 

implemented the new 811 campaign for call-before-youdig notifications, increased grants to states to support and 

encourage one-call activities, and increased outreach and 

education to the public and other utility workers about 

preventing excavation damage.

Corrosion damage has been targeted particularly by PHMSA’s 

integrity management requirements and inspections. During 

2008, the agency continued to work with hazardous liquid 

pipeline operators to advance their programs, and with gas 

transmission pipeline operators to build their programs 

(integrity management was implemented first on liquid 

pipeline systems).

By the end of July 2008, corrosion and excavation damage incidents were down 36 percent from the same time 

the previous year.

Hazardous Materials Safety

FY 2008 Enacted Funds: $138 Million

Energy products and hazardous materials underpin 

the American economy and our way of life. They 

also introduce some inherent risk to the public, the 

environment, and property. PHMSA is focused on 

protecting people and the environment from the risks 

inherent in transportation of hazardous materials. The 

agency leads the national program to identify and 

evaluate safety risks, develop and enforce standards for 

transporting hazardous materials, educate shippers and 

carriers, investigate hazardous materials incidents, conduct 

research, and provide grants to improve emergency 

response to incidents. 

PHMSA shares authority to enforce the hazardous materials regulations with other DOT operating 

administrations—the Federal Aviation Administration, the Federal Motor Carrier Safety Administration and 

the Federal Railroad Administration—as well as the US Coast Guard. To accomplish its safety goals, PHMSA 

works with these agencies to help them administer their hazmat safety programs effectively. PHMSA also 

leverages its limited resources with others in the hazmat community, including industry, first responders, other 

modal hazmat enforcement programs, and state and local emergency preparedness agencies. The agency builds 

on existing local and state programs by providing funding for emergency preparedness planning and training 

in order to identify threats specific to a locality and to train first responders to handle incidents resulting from 

those threats. 

Performance Measure 

Number of serious hazardous materials 

transportation incidents

2005 2006 2007 2008

Target 503 460 466 462

Actual 528 (r) 495 (r) 473(r) 451* 

(r) Revised; * Preliminary estimate

Associated FY 2008 Funding - $138 million

Ultimately, it is the responsibility of the pipeline operator to ensure 

the safety of its pipelines. However, citizens can learn more about 

what to look for and how to respond when a potentially hazardous 

pipeline situation presents itself. Visit http://www.call811.com/ for 

information.
116 FY 2008 Performance & Accountability Report

PHMSA focuses its safety program on those materials that present the most significant risks to public 

safety. Efforts are geared toward preventing high consequence events from occurring, and mitigating those 

consequences when they do occur. In addition to enhancing safety, effective response also reduces congestion by 

enabling highways, railroads and airports to resume normal operation in a minimum amount of time.

FY 2008 Results. The Department expects to achieve its serious incident target this year. A review of reported 

serious incident trends over five years found that 87 percent involved bulk releases of hazardous materials (more 

than 119 gallons); 10 percent required evacuations; 7 percent closed a major transportation artery—a contributor 

to non-recurring congestion; 4 percent resulted in major injuries; 3 percent caused an aircraft to change its flight 

path; and 2 percent resulted in fatalities (note: percentages exceed 100 percent since a serious incident may have 

multiple consequences). This information, along with an assessment of the major risks from the transportation 

of hazardous materials, helped focus our investments. This general pattern continued in 2008.

FY 2009 Performance Forecast. Based on previous years’ performance, DOT expects to achieve its target of 458 for 

serious hazardous materials incidents in 2009.

Promoting Hazmat Safety

The major risks from the transportation of hazardous materials are the potential for fire aboard an aircraft, 

release of toxic-by-inhalation materials in bulk, and motor carrier crashes and rollovers involving flammable 

liquids in bulk. The first two of these are considered low-probability high-consequence risks, while the third is 

the more common occurrence of the three; although it is still a small percentage of all motor carrier crashes.

Fire aboard aircraft: In response to a series of incidents involving batteries carried by airline passengers and 

shipped as cargo aboard aircraft, PHMSA has pursued a comprehensive strategy to address the transportation 

risks presented by lithium batteries. We are working with representatives of the National Transportation Safety 

Board, the Consumer Product Safety Commission, manufacturers of lithium batteries and battery-powered 

products, airlines, airline employee organizations, testing laboratories, and the emergency response and law 

enforcement communities to share and disseminate information about battery related risks and developments 

and to promote improvements in industry standards and best practices. In 2008 PHMSA hosted a public 

meeting of the battery safety stakeholder group and developed a renewed safety plan with support from the 

group. On July 31, 2008 a notice of proposed rulemaking was published proposing further safety requirements 

applicable to the transportation of batteries of all kinds. PHMSA and FAA are working collectively to address a 

number of enforcement and outreach initiatives aimed at enhancing safety. All of these efforts reduce the risk of 

fire aboard aircraft from the expanding use of battery technology.

Toxic-by-Inhalation (TIH) materials: To enhance the security of rail shipments of TIH materials, PHMSA 

and the Federal Railroad Administration (FRA) continue to work closely with the Transportation Security 

Administration (TSA) through cooperative efforts with rail shippers and carriers. DOT participates on TSAled teams conducting rail corridor studies, which address vulnerabilities and mitigation strategies at specific 

locations. On April 16, 2008, PHMSA published an interim final rule (IFR) adopting new standards governing 

the routing and handling of highly hazardous rail shipments, including explosives, radioactive materials, 

and TIH materials. In addition, working with FRA, PHMSA published an NPRM to improve the accident 

survivability of railroad tank cars designed to transport TIH materials.
United States Department of Transportation 117

Motor carrier crashes involving flammable liquids in bulk: During FY 2008, PHMSA and the Federal Motor 

Carrier Safety Administration (FMCSA) co-sponsored a series of national summits to address the issue of tank 

truck rollovers—a leading cause of fatalities and serious incidents involving hazardous materials. The summits 

engaged a wide range of participants from industry and the research community, and developed many promising 

approaches to reducing the risk of rollovers. Following the summits PHMSA, FMCSA and the National 

Highway Transportation Safety Administration (NHTSA) partnered with the National Tank Truck Carriers 

(NTTC) Association to develop a multi-faceted safety action plan that includes development of driver training 

aids, outreach efforts and efforts to promote the use of technologies that reduce the likelihood of collisions and 

rollovers (e.g. electronic stability control systems, lane departure warning systems, etc.)

Emergency response: PHMSA published the latest version of the Emergency Response Guidebook (ERG) 

during FY 2008—available for the first time in electronic form for personal computers and pocket-PCs. The 

ERG provides first responders with a guide for initial actions to be taken in those critical first minutes after 

an incident to protect the public and to mitigate potential consequences. PHMSA also enhanced emergency 

responders’ ability to mitigate incidents involving E85 and other ethanol fuel blends (which degrade the 

effectiveness of most firefighting foam) by adopting new identification for ethanol-blends for better hazard 

communication.
118 FY 2008 Performance & Accountability Report

reduced congestion STRATEGIC GOAL

REDUCE CONGESTION AND OTHER IMPEDIMENTS TO USING THE NATION’S TRANSPORTATION 

SYSTEM

Most Americans would not know that congestion is costing America an estimated $200 billion a year collectively. 

What individual citizens do know, however, is that their time is being wasted sitting on our nation’s roadways or 

in our airports – time that should be spent with family, friends and in our communities. The National Strategy 

to Reduce Congestion has elevated congestion relief to a top priority and a number of significant changes are 

being explored and proposed that could fundamentally change the way we plan and pay for transportation 

improvements. On a parallel track, the multi-agency NextGen program plans to transform aviation over the 

next 20 years, making it even safer and expanding capacity by a factor of 3. Finally, DOT’s comprehensive 

surface transportation reform proposal (Reform Proposal) recommends changes to Federal surface 

transportation program and policies, many of which would enable states and localities to more effectively pursue 

congestion reduction strategies.

The U.S. Department of Transportation leveraged $38,184 million to reduce 

congestion and other impediments to mobility in the U.S transportation system.

fy 2008 enacted funding by reDuceD congestion

 strategic objectives

(Dollars in Millions) 

highway congestion 

$13,472

transit ridership $8,551

aviation Delay, 4,025

transportation 

accessibility $563

improved infrastructure 

$11,573

total fy 2008 funding: $38,184 Million
United States Department of Transportation 119

Key Performance Areas

Strategic outcomes from the DOT Strategic Plan are indicated in blue and FY 2008 results for key DOT 

performance measures are marked to indicate Met Target () and Did Not Meet Target ().

Highway Congestion

Reduction in urban congestion.

 Percentage of total annual urban-area travel occurring in congested conditions.

Transit Ridership

Reduction in urban congestion.

 Average percent change in transit boardings per transit market (150 largest transit agencies).

Improved Infrastructure

Longer lasting, high performance transportation 

infrastructure.

 Percentage of travel on the National Highway 

System (NHS) meeting pavement performance 

standards for “good” rated ride.

 Percentage of deck area on National Highway 

System (NHS) bridges rated as deficient.

Aviation Delay

Meet new and growing demands for air transportation 

services through 2025 and beyond.

 Percent of all flights arriving within 15 minutes 

of schedule at the 35 Operational Evolution Plan 

airports due to NAS-related delays.

Transportation Accessibility

Increased access for all Americans.

 Percent of bus fleets compliant with the ADA.

 Percent of key rail stations compliant with the ADA.

2008 Performance Highlights

 The percent of travel under congested conditions was estimated to be well below the FY 2008 

target of 32.3 percent. The results suggest that increased adoption of strategies related to traffic 

incident management and work zone management plus the price of fuel have influenced travel 

patterns and reduced travel.

 Over half of the top 40 metropolitan areas have full service incident management service patrols.
120 FY 2008 Performance & Accountability Report

Improved Infrastructure

FY 2008 Enacted Funds: $11.57 Billion

Improving the condition and performance of pavement and bridges is critical to the structural integrity and cost 

effectiveness of the transportation system. The condition of the National Highway System (NHS) also affects 

traffic congestion, wear-and-tear on vehicles, comfort of travelers, and fuel consumption.

FY 2008 Results. The target for 2008 was developed 

based on predictions using the Highway Economics 

Requirements System (HERS) model which reflect current 

engineering practices, transportation funding, and 

increasing construction material costs. The preliminary 

estimate of pavement condition for FY 2008 is 56 percent. 

The decline in nationwide pavement condition results 

corresponds to a significant year-to-year decline in 

pavement conditions reported in California. The data for 

California are still under review and may change at a later 

date.

FY 2009 Performance Forecast. The 2008 target for the pavement condition measure was revised in 2007, 

reflecting a more predictive approach based on more sound engineering and economic models. Recent trends in 

funding and material cost increases will pose difficulty in meeting the 2009 and future targets.

____________________________________________________

FY 2008 Results. The FY 2008 target was not met. 

Factors influencing the results include limited funding 

levels coupled with escalating materials costs on bridge 

projects. The percentage of deck area on NHS bridges 

that are rated as deficient decreased from 32.6 percent in 

1998 to 29.5 percent in 2008. A gradual downward trend 

is expected to continue. The impact on the deck area 

figures of additional funding made available in 2008 may 

not be apparent for several years. Bridge deficiencies are 

reduced primarily through a reduction in the number of 

structurally deficient bridges. 

FHWA conducted annual National Bridge Inspection System compliance reviews and met afterwards with the 

States as necessary to ensure that any compliance issues were resolved. More than 96 percent of the States are 

in compliance. FHWA will continue to work with the States with a goal of reaching 100 percent compliance 

through the sharing of commendable practices, peer reviews of a few individual programs, and continued bridge 

inspection training through the National Highway Institute.

Performance Measure 

Percentage of travel on the National Highway System (NHS) meeting pavement 

performance standards for “good” rated ride

2005 2006 2007 2008

Target 53 (r) 54 (r) 56 57

Actual 52 54 57 (r) 56*

(r) Revised; * Preliminary estimate

Associated FY 2008 Funding - $5.78 billion

Performance Measure 

Percent of deck area on National Highway System (NHS) bridges

rated as deficient.

2005 2006 2007 2008

Target 25.3 24.2 23.1 22.0

Actual 29.9 29.2 29.7 (r) 29.5*

* Preliminary estimate. (r)Revised 

Associated FY 2008 Funding - $5.78 billion
United States Department of Transportation 121

FHWA is working with the States to ensure that the additional funding made available for years 2008 through 

2010 is being used to supplement and not supplant planned bridge activities. At the end of FY 2008, nearly half 

of the $1 billion was made available to 13 States and $300 million was obligated to bridge activities.

FY 2009 Performance Forecast. FHWA will reexamine and reset the 10-year targets in FY 2009 to better reflect 

future forecasted conditions.

Repair and Reconstruction of the Minneapolis T-35W Bridge

On August 1, 2007, the center span of the I-35W interstate bridge in 

Minneapolis broke into sections and collapsed into the Mississippi River. 

Thirteen people died as a result of the collapse and over one hundred were 

injured. FHWA provided significant technical support to the National 

Transportation Safety Board (NTSB) investigation of the I-35W bridge 

collapse. Following the immediate reevaluation of all steel deck truss bridges, 

FHWA issued a Technical Advisory calling for States to check the capacity of 

gusset plates on all steel trusses. FHWA issued technical guidance regarding 

methods to check gusset plate capacity and is now working with AASHTO to 

improve upon the guidance.

FHWA was immediately involved in discussions with the Minnesota DOT on 

the design layout of the new bridge. Work began immediately on ensuring 

that the National Environmental Policy Act (NEPA) process was followed 

for the removal of the existing bridge, the traffic restoration work and the 

reconstruction of the bridge. The project was accelerated using a DesignBuild Best-Value procurement method. The State of Minnesota chose the 

contractor based on the most advantageous cost and time combination 

presented. The FHWA validated the cost estimate for the bridge and the 

entire reconstruction contract using a risk-based review. Construction was 

completed ahead of schedule and the I-35W bridge reopened in September 

2008. 

HIGHWAY CONGESTION

Traffic congestion on our Nation’s highways now affects more trips, involves more hours of the day, and includes 

more of the transportation system than ever before. Congestion varies significantly day to day because demand 

and capacity are constantly changing at any given location. Overall, 67 percent of the peak-period travel 

nationwide is congested, compared to 32 percent in 1982. Travelers in 85 urban areas spent 4.2 billion hours 

stuck in traffic in 2005, more than a five-fold increase when compared to 1982.
122 FY 2008 Performance & Accountability Report

FY 2008 Results. The percent of travel under congested 

conditions was estimated to be 27.3 percent, which is 

well below the FY 2008 target of 32.3 percent. Although 

increased adoption of strategies related to traffic incident 

management and work zone management may have helped 

to slow the growth of congestion, it is difficult to know to 

what extent. External factors including the price of fuel 

have significantly influenced travel patterns and reduced 

vehicle miles traveled (VMT) sharply. 

FY 2009 Performance Forecast. The actual results for congested travel nationwide from 2005 to 2007 were 

revised downward in 2008 based on an improved freeway speed estimate by the Texas Transportation Institute. 

As a result, the annual targets for FY 2009 and subsequent years will be reexamined in 2009. FHWA expects to 

meet the new 2009 target.

Reducing Congestion

Initiatives designed to demonstrate the value and efficacy of congestion pricing in reducing traffic congestion 

are key to advancing the Transportation Secretary’s Congestion Initiative. To this end, the Department initiated 

the Urban Partnership (UP) and Congestion Reduction Demonstration (CRD) programs and is now working 

with six metropolitan areas to demonstrate various pricing strategies. These UP/CRD partners have agreed to 

pursue integrated approaches that, while prominently featuring pricing, also include supporting technology 

and transit strategies. Five metropolitan areas were selected for 

the first Urban Partnerships: Miami, Minneapolis, New York 

City, San Francisco, and Seattle. After considerable debate, the 

New York state legislature failed to provide the necessary tolling 

authority for a highly innovative cordon pricing scheme in New 

York City. Consequently, the funds set aside for New York City 

were redistributed to Chicago and Los Angeles for CRD programs. 

The FHWA has a comprehensive agenda underway to capture 

lessons learned from all of the UP/CRD programs. Peer exchanges 

ensure the eventual widespread deployment of congestion pricing 

applications. Additionally, an intensive evaluation program has 

been established to quantify both the benefits and costs of these 

pricing strategies.

FHWA realized significant success in the Operations and 

Technology program areas that are part of the Congestion Initiative. 

Almost all states are now in compliance with the Work Zone Safety and Mobility Rule, with strategies for 

reducing crashes and congestion in work zones, and well over half of the top 40 metropolitan areas have full 

service incident management service patrols. Virtually all states with major bottlenecks are exploring lowcost, quick-fix operational improvements, and 48 percent of the U.S. population now has access to 511 travel 

information services.

FHWA is also addressing non-reoccurring congestion related to incidents and inclement weather, which 

contribute 40 percent to the overall congestion problem. The Traffic Incident Management program encourages 

the prompt clearance of traffic incidents, i.e., crashes, stalled vehicles, spilled loads, and debris on the roadway, 

Performance Measure 

Percent of total annual urban-area travel occurring in congested conditions.

2005 2006 2007 2008

Target 33.0 33.7 32.5 32.3

Actual 28.6(r) 28.4 (r) 27.8*(r) 27.3#

(r) Revised; # Projection; * Preliminary Estimate

Associated FY 2008 Funding - $5.78 billion
United States Department of Transportation 123

through a cooperative effort of public safety, transportation and private sector partners. In October 2007, 

the National Traffic Incident Management Coalition (NTIMC) adopted a National Unified Goal to achieve 

“Responder Safety; Safe, Quick Clearance; and Prompt, Reliable, Interoperable Communications”. The National 

Unified Goal will be achieved through actions led by the 23 NTIMC coalition partner members over the next 

few years. The Road Weather Management program focuses on providing highway users and operators accurate 

real-time information to achieve better decisions for personal trip planning and more efficient maintenance 

activities such as snow removal.

Several projects were launched including the Clarus Initiative. Clarus (which is Latin for clear) is an initiative 

to develop and demonstrate an integrated surface transportation weather observing, forecasting and data 

management system. The objective of Clarus is to provide information to transportation managers and users 

nationwide to limit the fatalities, injuries, and delays that often result from adverse weather.

In addition to its activities under current authorities, DOT has also developed a comprehensive proposal for 

reforming the Federal surface transportation program subsequent to the expiration of SAFETEA-LU. This 

Reform Proposal includes a variety of provisions that would enable states and localities to more effectively 

pursue congestion reduction strategies—particularly in regards to implementing variable pricing on congested 

roadways.

Visit www.oti.dot.gov/diagrammap.htm and click on any of the five operational and technological improvements in the graphic for more 

information. Courtesy of US Government Accountability Office, 2007

The graphic below depicts work zone management with cones and construction signs; traveler information with a dynamic message sign and 511 

travel information service logo sign; incident management with a tow-truck and ambulance on the highway shoulder; and bottleneck reduction 

with three lanes of congested highway traffic.
124 FY 2008 Performance & Accountability Report

Transit Ridership

FY 2008 Enacted Funds: $8.55 Billion

With the uncertainty of gasoline prices for the foreseeable future, public transit is an attractive alternative to 

the automobile. Transit agencies are handling increasing numbers of passengers; ridership growth increased by 

only 0.7 percent in 2003 and 2004, grew by 1.9 percent in 2005, 2.1 percent in 2006, and 2.5 percent in 2007, but 

expanded by 4.3 percent in 2008 . Transit is one of the safest ways of traveling, relieves road congestion, and 

reduces air pollution. Federal investments in transit, combined with State and private sector funds, make public 

transportation possible for tens of millions of Americans every day saving time, providing mobility, and reducing 

congestion. 

According to a recent Texas Transportation Institute analysis, Americans wasted 4.2 billion hours and 2.9 billion 

gallons of fuel sitting in traffic jams. Traffic congestion now costs motorists in our Nation’s top urban areas about 

$78 billion a year in wasted time and fuel. Mass transit, 

however, saved $10.2 billion in wasted fuel and time.

FY 2008 Results. For 2008, the strong increase in 

ridership continued at a rate more than double the 

performance target. Although the ridership increases 

of the past four years may have been affected by service 

improvements and fare subsidy programs, the substantial 

correlation with the increase in gasoline prices suggests a 

causal relationship (see graph).

FY 2009 Performance Forecast. DOT anticipates it will meet the 2009 ridership target.

Promoting Transit Ridership

To support this goal, FTA continued to invest billions of dollars in the Nation’s transit infrastructure to ensure 

transit is as safe, efficient, and cost-effective as possible, thus attracting new riders. FTA also implemented 

several new initiatives to promote ridership and 

recognize transit agencies that develop innovative and 

successful programs to increase ridership. 

As part of the Department’s Urban Partnership (UP) 

and Congestion Reduction Demonstration (CRD) 

programs, FTA is working with six metropolitan areas 

to implement integrated, multi-modal strategies to 

reduce urban traffic congestion. Each of these metro 

area strategies involves a combination of road and/

or parking pricing, enhancements to transit service, 

and the deployment of innovative transportation 

Performance Measure 

Average percent change in transit boardings

per transit market (150 largest transit agencies)

2005 2006 2007 2008

Target 1.0 1.0 1.5 1.5

Actual 1.9 2.1 2.5(r)* 4.3*

(r) Revised; * Preliminary estimate

Associated FY 2008 Funding - $8.55 billion

transit ridership vs. gas price prices

8.2

8.4

8.6

8.8

9.0

9.2

9.4

9.6

9.8

10.0

10.2

Jan '05 Jul '05 Jan '06 Jul '06 Jan '07 Jul '07 Jan '08 Jul '08

Billions of Trips (Rolling 12-Month)

$1.75

$2.00

$2.25

$2.50

$2.75

$3.00

$3.25

$3.50

$3.75

$4.00

$4.25

Average Price Regular Gas

Gas Prices

Rolling 12-Month Total Ridership

Nov '05

Feb '07

Feb '08

Katrina

NYC Transit Strike
United States Department of Transportation 125

technologies. In each case, the Department has both provided grant funding to implement the transit projects 

and established an intensive evaluation program to quantify the benefits and costs of the integrated pricingtransit-technology approach.

In FY 2007 and 2008, the United We Ride human service transportation initiative made strides to improve 

transportation delivery systems for older adults, persons with disabilities, families with low incomes, 

disadvantaged youth, and other populations most dependent upon public and human service transportation 

systems to meet their mobility needs.

FTA’s United We Ride and the USDOT’s Intelligent Transportation Systems (ITS) Joint Program Office 

launched a national demonstration program called the Mobility Services for All Americans (MSAA) Initiative 

to coordinate the 62 Federal programs that provide some level of human service transportation by using ITS 

technology to create a single point of customer access no matter what the trip, who provides it, or who funds 

it. Eight demonstration sites were selected to develop operational plans for implementing simplified customer 

access systems.

The goal of MSAA is to improve transportation services and simplify access to employment, health care, 

education, and other community activities by means of ITS through extending transportation service 

partnerships with consumers and human service providers at the Federal, State, and local levels.

FTA reviewed 27 proposed operational concepts for simplified customer access and reservations systems and 

selected 8 to develop further. After 18 months developing the concepts, seven of the 8 sites presented systems to 

demonstrate scalable and replicable Travel Management Coordination Centers (TMCCs). The system designs 

were received by the USDOT in July 2008. In Phase 2, $3.25 million will be awarded for 3 or 4 demonstration 

sites that will be selected to deploy their TMCC designs. Many of the sites indicated that they will implement 

their TMCC design regardless of whether they are selected. All of the designs are quite innovative. Technical 

assistance will be provided to the remaining demonstration sites.

Traffic flows on roadways during peak periods improve significantly when 

transit alternatives are also available to increase capacity.
126 FY 2008 Performance & Accountability Report

Transportation Accessibility

FY 2008 Enacted Funds: $563 Million

According to a recent report by the Institute of Medicine, there are some 40 million disabled Americans and 

this number is expected to increase as the population ages. The U.S. Census Bureau predicts that the number 

of Americans over 85 will increase from 5.4 million to 19 million between 2008 and 2050. The Americans 

with Disabilities Act (ADA) mandates that public transportation be accessible to these individuals; it is vital to 

maintaining independence and mobility for people with disabilities and linking them to employment, health care 

and their community.

FY 2008 Results. DOT met the 2008 target. Ninety eight 

percent of the bus fleet is compliant with the ADA. The 

bus fleet continues to become more accessible as older 

vehicles are replaced with new vehicles that are liftequipped or have low floors to accommodate wheel chairs. 

The overall rate of increase in bus accessibility has slowed 

somewhat since many of the buses replaced were already 

lift-equipped.

FY 2009 Performance Forecast. In 2009, 98 percent 

of the fleet should remain ADA compliant. While all new buses are lift equipped or have low floors, it will be 

difficult to reach 100 percent compliance because many transit operators retain buses for more than twenty years.

____________________________________

FY 2008 Results. The preliminary estimate for FY 2008 

indicates that the FY 2008 target will be met.

There are 681 key rail stations nationwide, designated 

as such by commuter, light or rapid rail operators, in 

cooperation with the local disability community. This 

revised number (down from 687 last reported in the 2007 

PAR) reflects stations that have been closed or relocated. 

Relocated facilities are treated as new construction by 

DOT and are required to be fully accessible.

FY 2009 Performance Forecast. DOT expects to reach the FY 2009 target.

The administration of FTA’s Job Access and Reverse Commute (JARC) program was changed in FY 2007 from 

a separate nationally-administered competitive program into a State-administered formula program as enacted 

in SAFETEA-LU. FTA is collecting data and establishing a baseline for a new measure “Jobs made accessible by 

JARC services”. The enacted funding for FY 2008 for this program was $156 million.

Performance Measure 

Percent of key rail stations compliant with the ADA

2005 2006 2007 2008

Target 84 91 93 94

Actual 91 92 94(r)* 95*

(r) Revised; * Preliminary estimate

Associated FY 2008 Funding - $150 Million

Performance Measure 

Percent of bus fleets compliant with the ADA

2005 2006 2007 2008

Target 95 97 97 98

Actual 96 98 98 98*

* Preliminary estimate

Associated FY 2008 Funding - $111 million
United States Department of Transportation 127

Aviation Delay

FY 2008 Enacted Funds: $4.0 Billion

Reducing delays is one of the biggest challenges facing the FAA. Commercial airline passenger delays in the U.S. 

amount to approximately $10 billion in delay costs each year. The problem is exacerbated by increased traffic and 

congestion concentrated at several major airports, particularly in the New York metropolitan area. Although a 

reduction in traffic of about 10 percent is expected this fall as airlines cut schedules due to high fuel prices, the 

large hub airports might not see significant delay reduction, because airlines tend to maintain schedules there. 

Along with increased congestion, adverse weather conditions are a major contributing factor to airport delays. 

Approximately 70 percent of flight delays are caused by weather. In the first 6 months of FY 2008, the percentage 

of operations conducted in severe weather increased almost 25 percent compared to the same time period in 

FY 2007.

FY 2008 Results. FAA did not achieve its FY 2008 NAS 

(National Air Space) On-Time Arrival performance target. 

Adverse weather conditions played a significant part in 

airport delays. Over 20 percent of operations at Boston, 

Newark, Philadelphia and Chicago were conducted 

during moderate to severe weather conditions. Traffic 

management initiatives, such as ground delay programs 

and airspace flow programs, were used to combat the effect 

of thunderstorms and maximize system efficiency as much 

as possible.

To help increase on-time arrival rates in the future, FAA continues to evaluate new tools and technologies to 

improve arrival times. These include greater collaboration with stakeholders (commercial airlines, business 

aviation, general aviation, military, and Congress), evaluation of separation standards, implementation of 

improved weather information tools, and airspace redesign where beneficial. Airspace redesign is one of the 

key components in optimizing U.S. airspace and allowing for increased capacity. Efficient airspace operations 

will require redesigning routes and changing the size and shape of airspace. This increased flexibility will help 

address volume, congestion, and weather in en route airspace.

The complexity of the future operating environment—with evolving fleet mixes, new aircraft, technology, and 

environmental constraints—must be approached in partnership with the aviation industry. The preparation 

for these changes is already well underway. The Federal Government’s vision for meeting this challenge is 

called the Next Generation Air Transportation System (NextGen). The concept of NextGen is a wide ranging 

transformation of the entire national air transportation system to meet future demands and avoid gridlock in the 

sky and at our airports.

FY 2009 Performance Forecast. Given the current issues in the NAS that impact on-time performance 

including adverse weather, runway construction, congestion at major airports, and aviation industry economic 

and scheduling pressures, the FAA anticipates that it will be particularly challenging to meet the current FY 2009 

on-time target of 88.22 percent. In recent years, we have seen increasing impact of these factors on the ability to 

meet the target, as evidenced by the last 2 years of performance.

Performance Measure 

Percent of all flights arriving within 15 minutes of schedule at the 35 Operational 

Evolution Plan airports due to NAS-related delays

2005 2006 2007 2008

Target 87.40 87.40 87.67 88.00

Actual 88.10 88.36 86.96(r) 87.29*

(r) Revised; * Preliminary estimate

Associated FY 2008 Funding - $4.0 billion
128 FY 2008 Performance & Accountability Report

Reducing Aviation Delays

The FAA continues to work at reducing delays and meeting the anticipated demand for air travel. 

Implementation of NextGen is the long term solution to increasing capacity of the National Airspace System. In 

the meantime, FAA and the Department of Transportation have implemented a number of initiatives to reduce 

delays in the near term. The top accomplishments for FY 2008 included:

• New York Aviation Rulemaking Committee (ARC). The ARC was formed in September 

2007 to explore operational improvements, market-based mechanisms, and other options for 

addressing airspace congestion and flight delays in the New York metropolitan area. The ARC 

provided its recommendations to the Secretary of Transportation on December 17, 2007.

Incorporating information received from the ARC into FAA and DOT efforts to address aviation 

congestion in the New York area resulted in the following actions:

o Daily planning teleconferences to provide common situational awareness for customers—

such as airlines, airport operators, and the military—on planned daily operations at JFK;

o Simultaneous runway approaches which will allow 4-6 more aircraft to land during 

instrument meteorological conditions; 

o Briefings and trainings to show controllers that reducing excessive spacing between 

aircraft on final approach can help reduce delay and does not pose a safety risk;

o Creation of another westbound departure route to mitigate westbound delays

• O’Hare International Airport Congestion Management Rule. In June 2008, FAA announced 

the 2004 caps on the number of aircraft that can land each hour at O’Hare International Airport 

will be allowed to expire in October 2008. This is a direct result of efforts to add capacity at 

O’Hare and coincides with the opening of a new runway at the airport in November 2008.

• Release of Special Use Airspace. The U.S. military worked with FAA to make some of its 

airspace available for civilian airliners over the Thanksgiving and Christmas holidays in 2007 and 

the Memorial Day and Fourth of July weekends this summer. The military opened up airspace off 

the East Coast, which helped relieve the most congested regions—from Maine to Florida. The use 

of the military airspace was so successful that FAA is working with the Department of Defense 

(DOD) to ensure military airspace will be available for civilian use during future holidays.

• Traffic Flow Management and Route Initiatives. Two initiatives put in place in 2007 delivered 

substantial benefit and were again used in 2008 to reduce delays, especially during the summer 

months, when aviation is most affected by weather. We expanded Airspace Flow Programs 

(AFPs) that manage traffic adjustments to changing weather patterns. AFPs, which act like 

ground delay programs for a piece of airspace, saved airlines about $68 million last summer. The 

Adaptive Compression tool identifies unused arrival slots at airports affected by AFPs or ground 

delays and immediately moves other flights into those slots. This saved airlines $27 million and 

more than 1 million delay minutes in its first year of operation. The Western Atlantic Route 
United States Department of Transportation 129

System was redesigned to introduce 50 nautical mile separation between properly equipped 

aircraft—down from 90—allowing pilots flying in the western Atlantic a greater choice of routes 

and available altitudes.

• Area Navigation (RNAV) Routes, Standard Instrument Departures (SIDs) and Standard 

Terminal Arrivals (STARs) - Area navigation (RNAV) consists of routes and procedures that 

allow aircraft to fly point-to-point operations that are not restricted by the location of radar. 

This permits aircraft to fly optimum routes with little controller intervention. Two tools that 

accommodate aviation growth and improve efficiency are RNAV standard instrument departures 

(SIDs) and Standard Terminal Arrivals (STARs). RNAV SIDs and STARs provide instrument 

flight procedures for departing and arriving aircraft transitioning to and from the terminal to 

the en route structure, using advanced navigation technology. Using RNAV reduces pilot and 

controller workload and enhances the efficient and safe use of navigable airspace within the 

terminal airspace environment. In the en route structure, we are developing high and low altitude 

RNAV routes. In FY 2008, we published more than 75 RNAV SIDs and STARs and implemented 

more than 45 RNAV routes at specific airports. We continue to realize capacity benefits as well. 

For example, since the implementation of two RNAV STARs at Phoenix Sky Harbor International 

Airport in October 2006, there has been a 38 percent reduction in the time aircraft remain in level 

flight at key step-down altitudes in terminal airspace, resulting in user benefit savings estimated at 

$2.4 million annually, and reductions in carbon dioxide emissions estimated at 2500 metric tons 

annually. 

• New Runways – Construction of airfield infrastructure (runways and taxiways) is a very effective 

method of increasing airport capacity, reducing delays, and improving efficiency. Los Angeles 

International Airport undertook a reconfiguration of their south runway and taxiway complex to 

enhance airfield geometry and reduce the potential for runway incursions. In April 2007 Runway 

7R/25L was relocated 55 feet south of its previous location and re-opened. In addition, on June 

26, 2008 a new center taxiway opened completing the south side reconfiguration. Chicago 

O’Hare also has a phased airfield reconfiguration underway. Phase 1 consists of three runway 

projects. The first project was completed on September 25, 2008 when the extension of Runway 

10L/28R was opened. There are 6 other Operational Evolution Plan OEP airports that have 

airfield projects under construction (3 new runways, 1 runway extension, and 2 taxiways), as well 

as 10 other projects in the planning or environmental stages.

Almost 30 percent of flights nationally are cancelled or substantially delayed resulting in Americans wasting $9.4 

billion a year in lost time. About 70 percent of those delays are caused by weather. While DOT certainly does not 

control the weather, focusing on a variety of traffic management solutions, such as limited flight schedules and 

modern, data-rich communications, can increase our ability to manage those weather delays and mitigate their 

impact on air travelers.
130 FY 2008 Performance & Accountability Report

global connectivity STRATEGIC GOAL

FACILITATE AN INTERNATIONAL TRANSPORTATION SYSTEM THAT PROMOTES ECONOMIC 

GROWTH AND DEVELOPMENT

The transportation sector accounts for more than 10 percent of the U.S. Gross Domestic Product, behind 

only housing, food and health care. The transportation sector moves goods and people, employs millions of 

workers, generates revenue, and consumes materials and services produced by other sectors of the economy. 

The Department of Transportation promotes economic growth and development domestically but also works to 

ensure that the U.S. interests are competitive in the international market.

The U.S. Department of Transportation leveraged $1,430 million to promote 

competition and economic development within the U.S. and internationally.

fy 2008 enacted funding by gloBal connectiVity

strategic objectives 

(Dollars in Millions)

expanded opportunities 

$6

international leadership 

& standardization 

$58

enhanced 

competitiveness $400

More efficient Movement 

of cargo $960

total fy 2008 funding: $1,430 Million

 
United States Department of Transportation 131

Key Performance Areas

Strategic outcomes from the DOT Strategic Plan are indicated in blue and FY 2008 results for key DOT 

performance measures are marked to indicate Met Target () and Did Not Meet Target ().

Efficient Movement of Cargo

Safer, more efficient and cost effective movement of 

passengers and cargo throughout the international 

and domestic transportation systems, including 

U.S. ports of entry, modal and intermodal supply 

chains.

 Percent of days in the shipping season that the 

U.S. portion of the St. Lawrence Seaway system 

is available.

 Number of freight corridors with an annual 

decrease in the average buffer index rating.

 Travel time reliability at NHS border crossings.

Enhanced Competitiveness

Reduce barrier to trade in transportation goods 

and services. Enhanced competitiveness of U.S. 

transport providers and manufacturers in the global 

marketplace.

 Number of potential air transportation 

consumers in international markets.

 Cumulative number of technology/information 

agreements that promote the U.S. highway 

transportation industry.

International Leadership and Standardization

Sustained international leadership in promoting U.S. transportation policies.

Harmonized and standardized regulatory and facilitation requirements in the international arena.

 Number of new or expanded bilateral and multilateral aviation agreements completed.

Expanded Opportunities

Expanded opportunities for all businesses, especially small, women-owned and disadvantaged businesses.

 Percent share of the total dollar value of DOT direct contracts that are awarded to woman-owned 

businesses.

 Percent share of the total dollar value of DOT direct contracts that are awarded to small disadvantaged 

businesses.

2008 Performance Highlights

 DOT initiated Corridor Development Agreements addressing Federal and state commitments 

on financing, planning, and design, environmental process, construction, operations, and 

maintenance.

 More than $560 million was funded for state use on Coordinated Infrastructure projects in border 

regions to make improvements and construct highways and related safety and enforcement 

facilities related to international trade. 

 DOT has successfully negotiated important new agreements with Australia, Croatia and Kenya 

that extended Open-Skies benefits to an additional 63 million potential aviation consumers.
132 FY 2008 Performance & Accountability Report

More Efficient Movement Of Cargo

FY 2008 Enacted Funds: $960 Million

Maritime Trade System

The binational St. Lawrence Seaway is the international shipping gateway to the Great Lakes, connecting the 

heartland of North America with the world. Commercial transportation on the Great Lakes St. Lawrence 

Seaway System serves as competition to other maritime trade routes as well as other transportation modes, 

which benefits the nation in lower consumer prices of finished goods and raw materials, and helps to reduce 

roadway and railway congestion—each Seaway-size vessel carries roughly 25,000 metric tons, the equivalent of 

870 tractor trailers.

Commercial trade on the Great Lakes Seaway System impacts 150,000 U.S. jobs, $12 million per day in wages, 

$9 million per day in business revenues by firms engaged in trade, and provides approximately $2.7 billion 

in annual transportation cost savings compared to competing rail and highway routes. Almost 50 percent of 

Seaway traffic travels to and from overseas ports, especially in Europe, the Middle East, and Africa.

FY 2008 Results. For FY 2008, DOT’s Saint Lawrence 

Seaway Development Corporation (SLSDC) narrowly 

missed its annual performance target related to St. 

Lawrence Seaway availability. During the fiscal year, 

the SLSDC recorded an availability rate of 98.8 percent, 

0.2 percent below its annual goal. An analysis of system 

non-availability during FY 2008 indicates that the most 

common causes were weather and vessel-related incidents. 

• Weather-related delays totaled 45 hours, 13 minutes of the total 84 hours, 35 minutes of delays or

54 percent. These weather delays are caused by poor visibility, high winds, fog, and other winter 

weather conditions that are significant enough to deem waterborne transportation unsafe.

• Vessel incidents in FY 2008 accounted for 20 hours, 38 minutes of delays, or 24 percent. Vessel

incidents involve ship operations, and are usually caused by human error on the part of a vessel’s 

crew. Incidents also include vessel breakdowns, which are caused by mechanical problems with 

a vessel. These vessel incidents must be cleared before transportation can resume causing a 

decrease in the navigation hours available on the Seaway.

Of the remaining factors that cause system non-availability, the SLSDC has the most control over the proper 

functioning of its lock equipment. During FY 2008, there were 11 hours, 37 minutes of delays, related to lock 

equipment malfunctioning incidents. Lock equipment delays represented approximately two-tenths of one 

percent of the total navigation time during FY 2008.

FY 2009 Performance Forecast. DOT expects to meet the FY 2009 target of 99.0 percent. Although the 

Seaway has enjoyed a 99 percent reliability rate over its history, similar results in the future are uncertain with an 

aging infrastructure that has not been adequately renewed. The Seaway is comprised of perpetual assets, which 

requires periodic capital reinvestment in order to continue to operate safely, reliably, and efficiently. Yet, the U.S. 

Performance Measure 

Percent of days in the shipping season that the U.S. portion of the St. Lawrence 

Seaway system is available

2005 2006 2007 2008

Target 99.0 99.0 99.0 99.0 

Actual 99.7 99.0 99.4 98.8

Associated FY 2008 Funding - $18.0 billion
United States Department of Transportation 133

Seaway infrastructure is approaching the end of its original “design” life, 

and without sufficient investment in these perpetual assets, it will become 

increasingly difficult to maintain the future availability and reliability of 

the U.S. section of the St. Lawrence Seaway. A recent economic analysis 

concluded that the economic impact of a shutdown of either of the two U.S. 

locks would range from $1.3-$2.3 million per day, depending on the length 

of the delay.

To address this concern and enable DOT to meet the performance target, 

the SLSDC will begin in 2009 to address the long-term infrastructure 

renewal needs of the U.S. section of the waterway through its Asset Renewal 

Program (ARP). The Seaway ARP identifies 50 necessary capital and 

maintenance investments to be completed over a 10-year period for the two 

U.S. Seaway locks, connecting channels, operational systems, and other 

infrastructure assets.

Highway Freight Corridors

A doubling of international trade over the last decade placed a strain on 

many of the Nation’s intermodal ports and gateways and contributed to an 

increase in traffic congestion. A further increase in freight activity on the 

Nation’s highways is anticipated in this decade due to continued growth 

in international trade. Traffic congestion hinders freight movement and 

undermines business productivity and international trade.

The buffer index, a measure of travel time reliability, represents the extra time freight carriers should add to their 

average travel time in order to ensure on-time arrival, at least 95 percent of the time, for an end-to-end trip along 

the corridor. The extra time is added to account for any unexpected delay. The buffer index, which is expressed 

as a percentage, decreases as trip reliability improves.

FY 2008 Results. The 2008 target, which was based on 

having 100 percent, of the corridors, performing above the 

national average was not met. When compared to 2007, 23 of 

the 25 corridors showed a decline or no change in reliability 

rating. Based on preliminary data, the national buffer 

reliability index for all 25 corridors measured was 25 percent. 

During this same reporting period, the average travel speed 

for the 25 corridors was 55 miles per hour, and no corridor 

had a decline in average annual speed greater than 1 mile per 

hour.

Performance Measure 

Number of freight corridors with an annual decrease in the average buffer index 

rating

2005 2006 2007 2008

Target N/A N/A 5 25

Actual N/A 3 5 23*

N/A Not applicable. *Preliminary Estimate

Associated FY 2008 Funding - $469 million

This environmentally friendly form of surface 

transportation handles a combined total of over 

1.1 billion short tons of cargo, which is about 23 

percent of the ton-miles of all domestic surface 

transportation traffic. Domestic waterborne 

transportation contributes $7.7 billion to the 

gross domestic product annually in the form of 

freight revenue.
134 FY 2008 Performance & Accountability Report

FY 2009 Performance Forecast. Continued integration of freight professional capacity into the organizational 

structure of States and Metropolitan Planning Organizations (MPO) suggests a growing focus on efficient freight 

movement as key to overall transportation system performance. Under this scenario, the FY 2009 target will 

likely be met.

The Freight Analysis Framework (FAF) provides current and 

forecast data on the volume of freight and truck movements on 

the U.S. transportation network. The information created by 

FAF is used to identify significant freight corridors in need of 

attention, now or in the future, to maintain or improve the level 

of service provided by these roadways. The Freight Analysis 

Framework, an analytic tool used extensively in both the public 

and private sector, was recalibrated using data from the 2002 

Commodity Flow Survey and integrated with key international 

gateway data. In addition, FHWA updated FAF mapping of the 

highway network with 2002 freight flows, generated forecasts of 

freight movement to 2035, completed provisional estimates for 

2007, and performed analyses in support of responses to network 

disruptions such as the closure of I-5 in Washington due to 

storms.

Promoting Corridors of the Future

The Corridors of the Future Program (CFP) is making a significant contribution to the Nation’s transportation 

system through the establishment of comprehensive, multi-jurisdictional approaches that will be vital for the 

competitiveness of the United States. Since the transportation system that supports the economy rarely stays 

within political boundaries and a large percentage of the value and tonnage of freight moves across State, 

regional or national boundaries, the CFP multi-jurisdictional approach allows transportation agencies to address 

congestion from a national/regional perspective.

In FY 2008, the DOT initiated the development of Corridor Development Agreements (CDA) that address the 

commitments of all Federal and State parties to the Corridor with respect to the financing, planning, and design, 

environmental process, construction, operations, maintenance, and other components of the Corridor. A CDA 

also identifies the specific objectives and priorities of the Corridor along with performance measures that would 

be used to evaluate success in achieving these objectives. The DOT and States finalized all seven agreements 

before the end of 2008. USDOT has allocated discretionary funding to a few projects along the Corridors 

for projects that will advance the Corridors and objectives under the CDA. In FY 2009, the coalitions will 

implement the initial CFP objectives and the DOT will continue to provide assistance in advancing the Corridor 

concept and priorities identified by the CFP coalitions.
United States Department of Transportation 135

The six participating routes will receive the following funding to implement their development plans: $21.8 million for I-95 from 

Florida to the Canadian border; $5 million for I-70 in Illinois, Indiana, Missouri, and Ohio; $15 million for I-15 in Arizona, California, 

Nevada, and Utah; $15 million for I-5 in California, Oregon, and Washington; $8.6 million for I-10 from California to Florida; and 

$800,000 for I-69 from Texas to Michigan.

Corridors of the Future

The U.S. Department of Transportation announced six interstate routes, which carry 22.7 percent of the nation’s daily interstate 

travel, as the first to participate in a new federal initiative to develop multi-state corridors to help reduce congestion. The initiative 

is aimed at developing innovative national and regional approaches to reduce congestion and improve the efficiency of freight 

delivery using public and private resources. The concepts include building new roads and adding lanes to existing roads, building 

truck-only lanes and bypasses, and integrating real-time traffic technology such as lane management that can match available 

capacity on roads to changing traffic demands.

Border Crossing

Trade using surface transportation between the United States and its North American Free Trade Agreement 

(NAFTA) partners Canada and Mexico was $74.1 billion, or 6.6 percent higher in June 2008 than in June 2007. 

Border delays and border crossing time reliability are an important concern for public agencies, travelers and 

those involved with or affected by international travel and trade.

FHWA currently collects travel time data for five U.S.-Canada land border crossings across Washington, North 

Dakota, Michigan and New York. More than 50 percent of all U.S. inbound truck traffic crossed at these five 

land crossings in 2007. Inbound and outbound crossing times were measured for commercial trucks moving 

within two miles of the border crossing area.

FY 2008 Results. Based in part on the increased level 

of trade between the U.S., Mexico, and Canada and the 

complexity of working across border organizations on 

projects and initiatives, DOT did not meet the FY 2008 

target based on the preliminary estimate.

FY 2009 Performance Forecast. The U.S. Customs and 

Border Protection, U.S. DOT, Canada Border Security 

Agency, and Transport Canada will engage in activities 

to jointly address border delay and congestion. Specific 

activities will include; wait time measurements, establishment of delay measurement and standards; sharing 

Performance Measure 

Number of U.S. border crossings with an increase in operational reliability

2005 2006 2007 2008

Target N/A N/A N/A 5

Actual N/A N/A 5 4*

* Preliminary estimate

Associated FY 2008 Funding - $18.0 billion
136 FY 2008 Performance & Accountability Report

of research and study results, and enhancing information sharing, communications and coordination. From 

these efforts, transportation agencies will have better information to disseminate to the traveling public, have 

improved information to support development traffic management strategies, and have better information to 

plan for future transportation needs. 

In addition, the United States-Canada Transportation Border Working Group and U.S.-Mexico Joint Working 

Committee will continue to coordinate infrastructure improvements at or near the border, facilitate discussion 

of the role of ITS and other technology in improving the efficiency of goods and people movement across the 

United States-Canada border and work with border stakeholders to encourage consideration of technology 

and operations solutions for common border problems including traffic congestion. Under this scenario, the 

FY 2009 target will likely be met.

Reducing Border Crossing Delay

Through FY 2008, more than $560 million in projects was funded through the Coordinated Infrastructure 

program. States use these funds in a border region to make improvements to existing transportation and 

supporting infrastructure, and construct highways and related safety and safety enforcement facilities related 

to international trade. They also undertake operational improvements including those related to electronic 

data interchange and use of telecommunications, modify regulatory procedures, and coordinate transportation 

planning, programming, and border operations with Canada and Mexico.

The DOT implemented a Transportation Border Congestion Relief (TBCR) program as part of the 

Transportation Secretary’s Congestion Initiative. The TBCR program is specifically designed to facilitate and 

accelerate transportation-related capacity and operational improvements at international land border crossings. 

In September, the DOT announced several new border congestion-relief projects including the Otay Mesa 

East Port of Entry in San Diego, CA, and the Cascade Gateway Expanded Cross-Border Advanced Traveler 

Information System in Blaine, WA.

Harmonized and Standardized

Regulatory and Facilitation Requirements

FY 2008 Enacted Funds: $58 Million

New and Expanded Agreements

Bilateral Aviation Safety Agreements (BASA) promote aviation safety and environmental quality, enhance 

cooperation, and increase efficiency in the civil aviation system. The agreements are based on recognized 

comparability of U.S. and foreign systems for approval and surveillance of the aviation industry. By building 

a network of competent civil aviation authorities and concluding agreements with additional countries and/or 

regional authorities, FAA increases safety and competitiveness globally. Improved global understanding of U.S. 

safety regulations, processes, and procedures leads to better international regulatory oversight and evens the 

market by holding more international players to comparable standards.
United States Department of Transportation 137

FY 2008 Results. In FY 2008, FAA exceeded its 

performance target, concluding four new or expanded 

BASAs that will facilitate an increase in the ability 

to exchange aviation products and services thereby 

expanding opportunities for the global aviation industry.

• We completed negotiations with South

Korea for one Executive Agreement and 

one BASA Implementation Procedures 

for Airworthiness (IPA). Both documents were signed at the 2008 Singapore Air Show. The 

BASA IPA allows the FAA to request technical assistance from the Korean Civil Aviation Safety 

Authority related to South Korean suppliers to U.S. manufacturers.

• A revision to update the U.S./Canada BASA IPA was signed in June 2008. The changes include

new provisions for Canadian acceptance of rebuilt U.S. engines and FAA-approved alterations 

data. 

• An agreement between the United States and the European Community was signed in June 2008. 

The agreement provides for streamlined repair station certifications between the U.S. and Europe. 

When ratified, the agreement will also allow more European companies to apply for FAA design 

approvals.

FY 2009 Performance Forecast. We are currently updating the FAA Flight Plan and do not expect to conclude 

any new or expand existing BASA Executive Agreements or Implementation Procedures in FY 2009, and 

we have not set a target for this performance measure in the next fiscal year. We are continuing to lay the 

groundwork for future BASAs with countries experiencing aviation industry growth such as India.

Enhance Competitiveness

FY 2008 Enacted Funds: $400 Million

International Air Transportation Market

Since the 1940s, international air transportation has been subject to restrictive bilateral agreements that limit 

price and service options and artificially suppress aviation growth. DOT’s policy is to negotiate bilateral and 

multilateral agreements to open international air travel to market forces, thereby removing limitations on the 

freedom of U.S. and foreign airlines to increase service, lower fares, and promote economic growth. These Open 

Skies agreements have made it possible for the airline industry to provide the opportunity for better quality, 

lower priced, more competitive air service in thousands of international city-pairs to an increasing portion of the 

world’s population.

Performance Measure 

Number of new or expanded Bilateral and Multilateral agreements competed

2005 2006 2007 2008

Target 2 2 3 2

Actual 2 4 3 4

Associated FY 2008 Funding - $58 million
138 FY 2008 Performance & Accountability Report

FY 2008 Results. DOT exceeded its performance target 

for FY 2008. DOT has successfully negotiated over 

90 Open Skies agreements, including important new 

agreements in FY 2008 with Australia, Croatia and Kenya 

that extended Open Skies benefits to an additional sixtythree million potential aviation consumers.

FY 2009 Performance Forecast. DOT expects to meet 

the target of 3.99 billion potential aviation consumers for 

FY 2009. To accomplish this task we will continue ongoing 

efforts to conclude Open Skies agreements with important aviation trading partners such as Armenia, Israel, 

Laos and Vietnam.

Industry Agreements

Increasingly, the DOT and FHWA provide direct support for U.S. foreign policy priorities and initiatives, 

especially expanded opportunities and access for U.S. transportation industry. Currently, the Agency is 

providing technical assistance to countries such as Iraq, Kuwait, China, Brazil, and Argentina, thereby expanding 

opportunities for the U.S. private sector. Through the International Scanning Program in cooperation with 

the American Association of State Highway Transportation Officials and international partnerships, new 

technologies and best practices that were developed elsewhere are more quickly adopted in the U.S., thus 

enhancing the competitiveness of U.S. transport providers and manufacturers. 

FY 2008 Results. The FY 2008 target was met. FHWA 

concluded agreements with Israel, Iraq, and Kuwait and 

facilitated an agreement between the Russian Republic of 

Karelia and the State of Tennessee.

International scans of ten countries, including Australia, 

Belgium, Canada, France, Japan, Korea, Portugal, Spain, 

Sweden, and United Kingdom were completed on high 

interest topics including public-private partnerships, older 

driver safety, and research administration. 

FHWA coordinated ongoing distance learning activities for approximately 70 representatives from counterpart 

agencies including 30 in the Western Hemisphere and 40 in Africa. Public private partnerships (PPP) and Safety 

are the ongoing program focus. This international technical exchange fulfills Section 506 of the International 

Outreach Program.

FY 2009 Performance Forecast. The cumulative target for the entire plan has been met and no additional 

agreements will be targeted.

FHWA coordination and activities continued with European partners, participants in the Border Technology 

Exchange Program, and counterpart agencies in Korea, China, Japan, and Russia. FHWA anticipates future 

results during FY 2009 as these programs are ongoing.

Performance Measure 

Cumulative number of technology/information exchange agreements

that promote the U.S. highway transportation industry

2005 2006 2007 2008

Target N/A N/A 3 3

Actual N/A N/A 4 4

Associated FY 2008 Funding - $384 million

Performance Measure 

Number of potential air transportation consumers 

(in billions) in international markets traveling between the U.S. and countries 

with open skies and open transborder aviation agreements

2005 2006 2007 2008

Target 1.53 2.99 3.05 3.85

Actual 2.97 3.01 3.83 3.94

Associated FY 2008 Funding - $2.0 million
United States Department of Transportation 139

Expanded Opportunities

FY 2008 Enacted Funds: $6.1 Million

Expanded opportunities for small businesses, especially women-owned and disadvantaged businesses, serve the 

economic interests of the United States, both nationally and globally. These small businesses routinely develop, 

manufacture and distribute quality products to the private sector, but continue to face significant hurdles 

participating in procurement opportunities with the Federal Government. To give these entrepreneurs a fair 

opportunity to compete, Congress and the Administration have established procurement goals for the Federal 

Government. In turn, each DOT Operating Administration (OA) develops targets consistent with legislative 

mandates and anticipated contracting and subcontracting opportunities.

FY 2008 Results. Based on preliminary estimates, DOT 

will meet both of the small business related targets. All of 

the OAs continue to seek new opportunities to engage the 

small disadvantaged business community. DOT is one of 

the few Federal agencies surpassing the government-wide 

five percent Women-Owned Business statutory goal. The 

Office of Small and Disadvantaged Business Utilization 

(OSDBU) continues to work closely with all OAs to ensure 

that small businesses are afforded maximum practicable 

opportunities to participate in DOT direct procurement 

actions. OSDBU provided assistance to the OAs with their 

acquisition strategies, professional development and access 

to qualified small businesses. OSDBU also increased 

technical assistance and participation in outreach events.

FY 2009 Performance Forecast. DOT expects to meet 

both small business targets by continuing its current efforts 

and leadership in the field.

Performance Measure 

Percent share of the total dollar value of DOT direct contracts that are awarded to 

women-owned businesses

2005 2006 2007 2008

Target 5.1 5.1 5.1 5.1

Actual 6.6 8.4(r) 10.4(r) 7.0*

(r) Revised; * Preliminary estimate

Associated FY 2008 Funding - $2.6 million

Performance Measure 

Percent share of the total dollar value of DOT direct contracts that are awarded to 

small disadvantaged businesses

2005 2006 2007 2008

Target 14.5 14.5 14.5 14.5

Actual 12.7 16.2(r) 18(r) 16*

(r) Revised; * Preliminary estimate

Associated FY 2008 Funding - $2.6 million
140 FY 2008 Performance & Accountability Report

Environmental stewardship STRATEGIC GOAL

PROMOTE TRANSPORTATION SOLUTIONS THAT ENHANCE COMMUNITIES AND PROTECT THE 

NATURAL AND BUILT ENVIRONMENT

The transportation system has a significant impact on the environment. At the current rate of growth, 

transportation’s share of the human-produced greenhouse gas emissions in the U.S. is projected to increase from 

28 percent to 36 percent. DOT’s Climate Change Center and Environmental Forecasting is a collective effort of 

DOT agencies to examine environmental factors in a coordinated manner while each agency continues pursuit 

of the issues under its purview.

The U.S. Department of Transportation leveraged $7,188 million to protect 

communities and their natural and built assets.

fy 2008 enacted funding by enViroMental steWarDship 

strategic objectives 

(Dollars in Millions)

other 

environmental 

activities $4,206

reduction in 

pollution $2,845

streamlined 

environmental 

review $136

total fy 2008 funding: $7,188 Million
United States Department of Transportation 141

Key Performance Areas

Strategic outcomes from the DOT Strategic Plan are indicated in blue and FY 2008 results for key DOT 

performance measures are marked to indicate Met Target () and Did Not Meet Target ().

Reduction in Polution

Reduction in pollution and other adverse 

environmental effects from transportation and 

transportation facilities.

 Number of areas in a conformity lapse.

 Number of hazardous liquid pipeline spills in 

high consequence areas.

 Percent DOT facilities characterized as NFRAP 

under the Superfund Amendments and 

Reauthorization Act.

Streamlined Environmental Review

Streamlined environmental review of transportation 

infrastructure projects.

 Median time in months to complete 

environmental impact statements for DOT funded 

infrastructure projects.

Other Environmental Activities

 Number of Exemplary Human Environmental 

Initiatives undertaken.

2008 Performance Highlights

 For the second consecutive year there were no areas in air quality conformity lapse. The FHWA 

and the Enivironmental Protection Agency (EPA) cooperatively prepared state Departments 

of Transportation, air quality agencies, and Metropolitan Planning Organizations (MPO) to 

successfully meet requirements.

 DOT PHMSA issued a Final Rule expanding regulatory oversight to large diameter low-stress 

lines—the type of pipeline that failed on the North Slope of Alaska in 2006 with significant 

consequences.

 DOT has attained a 94 percent ‘No Further Remedial Action Planned’ status designation against 

70 sites FAA sites. Only 4 sites have not yet attained NFRAP status and all of those now have 

either short-term or long-term plans in place for remedial action.

 Over 40 percent of 26 FHWA projects were recognized as Exemplary Human Environment 

Initiatives transportation projects and activities that were particularly effective and innovative in 

how they enhanced the human environment and improve public benefit.

 The Maritime Administration awarded 21 disposal contracts that will result in the dismantling/

recycling of those ships within the next 2 years.
142 FY 2008 Performance & Accountability Report

Reduction In Pollution

FY 2008 Enacted Funds: $2.845 Billion

Mobile Source Emissions

The National Ambient Air Quality Standards (NAAQS) target six major pollutants as among the most serious 

airborne threats to human health. Transportation is a major contributor to some of the pollutants—particularly 

ozone, carbon monoxide and particulate matter. Over the past 20 years, contributions of emissions from on road 

mobile sources to all emissions rapidly declined. The downward trend in on road mobile source emissions is 

expected to continue as a result of the introduction of cleaner engines and fuels.

Areas that exceed, or have previously exceeded, certain air quality standards - designated as air quality nonattainment or maintenance areas, respectively - are required to meet transportation conformity requirements 

in the Clean Air Act. Failure to meet the conformity requirements places an area in a conformity lapse, which 

means only limited types of Federally-funded highway and transit projects can proceed.

FY 2008 Results. DOT exceeded the target. For 

the second consecutive year there were no areas in a 

conformity lapse. The EPA, with DOT concurrence, 

finalized a rulemaking to implement SAFETEA-LU 

changes. The FHWA and the EPA conducted workshops, 

training sessions, and other outreach activities to 

raise awareness and prepare State Departments of 

Transportation, air quality agencies, and Metropolitan 

Planning Organizations (MPO) to meet conformity requirements. State and local agencies coordinated the 

process well in advance of conformity determinations. Because of the advanced preparations, most of the locales 

that had been non-attainment and maintenance areas met the Clean Air Act goals, thus enabling projects to 

proceed.

A number of changes to the conformity provisions were implemented to streamline and provide more flexibility 

to the conformity process as a result of SAFETEA-LU. The introduction of a conformity lapse grace period 

allows an additional 12 months to address conformity issues before they enter into a lapse. Recent changes to 

the transportation conformity process in SAFETEA-LU provided flexibility to States and MPOs in meeting 

the Clean Air Act requirements. FHWA provided guidance and technical assistance to State Departments of 

Transportation and MPOs to ensure that the recent flexibility to the conformity process was implemented.

FY 2009 Performance Forecast. FHWA expects to meet the 2009 target. With the implementation of more 

stringent standards for ozone and fine particulate matter, FHWA will continue to address the impact of the 

regulatory changes and to maintain the number of conformity lapses at the current low level.

Performance Measure 

Number of areas in a conformity lapse

2005 2006 2007 2008

Target 6.0 6.0 6.0 6.0

Actual 5.8 1.3 0.0 0.0

Associated FY 2008 Funding - $2.1 billion
United States Department of Transportation 143

Partnering with State and Local Governments

FHWA worked with state and local partnering agencies to 

identify, fund, and implement more cost-effective emissions 

reduction strategies, often focusing on heavy-duty diesel 

emissions.

Guidance was provided to state and local partners to implement 

the new provisions under the Congestion Mitigation and Air 

Quality program.

And FHWA encouraged partners and stakeholders to better 

understand the science behind climate change especially in the 

transportation planning process, during project development, 

and in air quality analysis.

FHWA co-authored a study entitled, Impact of Climate Change 

and Variability on Transportation Systems and Infrastructure: 

Gulf Coast Study, Phase One [http://climate.dot.gov/publications/

impact_of_climate_change] and conducted numerous outreach 

efforts to provide information and engender discussion of climate 

change impacts on transportation.

Pipeline Spills of Hazardous Liquids

PHMSA’s first priority is the continued safe operation and reliability of all pipelines. PHMSA has taken a 

proactive approach to protecting the environment by designing and implementing a strong risk-based systems 

approach to ensure the safety, security, and reliability of the Nation’s pipeline infrastructure.

PHMSA establishes safe land use standards for existing pipelines and new pipeline construction in proximity 

to populated areas using an enterprise approach working with local governments, real estate and development 

interests, insurers, pipeline operators, other Federal and state agencies, the Pipeline and Informed Planning 

Alliance (PIPA), and others. PIPA helps communities understand where pipelines are located, who owns and 

operates them, and what other information is available for community planning. As pipelines expand into 

communities it is vital to locate them where they pose the least potential hazard to people and the environment 

while also protecting pipelines from potential excavation damage, helping to ensure their crucial energy supply 

is protected as much as possible from disruptions from potential excavation damage, a leading cause of pipeline 

failures.
144 FY 2008 Performance & Accountability Report

FY 2008 Results. Based on the preliminary data, PHMSA 

does not expect to meet the 2008 performance target. The 

increase from 2007-2008 might be attributed to multiple 

spills reported by pipeline operators who reported no spills 

in 2007. The causes for the increase, however, require 

further analysis.

• This year, PHMSA issued a Final Rule

expanding regulatory oversight to large 

diameter low-stress pipe lines—the type 

of pipeline that failed on the North Slope of Alaska in 2006 with significant consequences. The 

agency will pursue regulation of smaller diameter low-stress lines in FY 2009. This action is 

consistent with past Congressional requirements and new requirements in the PIPES Act of 2006. 

• Also in FY 2008, PHMSA issued an Advisory Bulletin seeking notification of construction

of pipelines that would transport new alternative fuels such as ethanol and other biofuels. 

Notification provides a key entry point for the agency to examine technical issues associated with 

transporting new alternative fuels, and to provide safety oversight of the construction.

Alaskan Pipelines

PHMSA recognizes the strategic importance of Alaska’s oil and gas production 

and transportation systems to the Nation’s energy supply and in FY 2008 

we elevated the status of our field office in Alaska to a Regional office to 

provide emphasis on our oversight there and continue to address technical 

challenges with declining oil field production and the need for planning to 

meet new demands. Alaska’s 4,600 miles of pipelines deliver about 10 percent 

of America’s energy products to the lower 48 states. Protecting the reliable 

and secure transportation of energy from Alaska is essential to the continued 

economic growth of our nation and meeting the President’s goal of energy 

independence.

FY 2009 Performance Forecast. We expect it might be a significant challenge to meet the FY 2009 target of 49 spills 

in high consequence areas, given the results in 2008 and the small numbers we are dealing with; however, we believe 

with overall reductions in corrosion and excavation damages we are on track for FY 2009. And although the agency 

did not meet the FY 2008 target, progress continues to be made to significantly reduce the environmental impact of 

non-volatile hazardous liquid spills over the long term.

The agency began collecting detailed Integrity Management related repair information beginning in 2005 

and with three years of collected information PHMSA is encouraged with the progress. With over 47,000 

defects found and fixed over that period together with a 32 percent decrease in corrosion, the leading cause 

of hazardous liquid accidents, we believe this is a good indicator that the Integrity Management approach is 

working. At the end of 2007, the total number of pipeline segment miles that could affect High Consequence 

Areas (HCAs), including environmentally sensitive areas, was approximately 72,000 miles, of which about 32,000 

miles were inspected in 2005-2007. Operators have repaired over 47,000 defects that without early detection and 

mitigation could have led to failures that harmed the public and the environment. Corrosion is the leading cause 

Performance Measure 

Number of hazardous liquid pipeline spills in high consequence areas

2005 2006 2007 2008

Target N/A 52 51 50

Actual 55(r) 46(r) 50(r) 59*

(r) Revised; * Preliminary estimate

Associated FY 2008 Funding - $24 million
United States Department of Transportation 145

of failures in HCAs and the agency has seen about a 32 percent decrease in those failures from the twelve month 

period ending July 2008 compared to the same time period in the previous year. Given this positive trend, 

PHMSA anticipates meeting the goal over the long term.

DOT Facility Cleanup 

DOT has a special responsibility to ensure that its own facilities are compliant with environmental laws and 

regulations. Our activities fall into three broad categories: restoration, compliance, and pollution prevention. 

Restoration activities involve identifying, investigating, and cleaning up contaminated sites. Compliance 

activities include the operation of facilities, equipment, and vessels in accordance with environmental 

requirements. Pollution prevention activities mean preventing future clean-up activities by avoiding the 

generation of pollutants in our operations or facilities.

The DOT has 73 of the 2,282 Federal facilities on the EPA’s Hazardous Waste Compliance Docket. The FAA 

and the FRA own or operate the DOT facilities included on the Hazardous Waste Compliance Docket. FAA is 

responsible for 70 of the 73 DOT sites listed.

FY 2008 Results. DOT met the FY 2008 target. There are 

73 DOT sites on the EPA Hazardous Waste Compliance 

Docket and all but 4 of them have attained No Further 

Remedial Action Planned (NFRAP) status. DOT has 

attained a 94 percent NFRAP status designation against the 

70 sites listed on the Docket which are FAA’s responsibility. 

The latest site to reach that status is FAA’s Omaha EX Air 

Force Station Z-71. EPA Region 7 provided a letter to FAA 

designating NFRAP status at the Omaha EX Air Force 

Station Z-71. FAA currently has only 4 sites listed on the Docket that have not yet attained NFRAP status. 

1. Ronald Reagan National Airport 

2. Kirksville Air Route Surveillance Radar (ARSR), AFS F-64

3. Mike Monroney Aeronautical Center

4. William J. Hughes Technical Center

FY 2009 Performance Forecast. DOT anticipates meeting the FY 2009 target. FAA provides funding and 

oversight for these four sites and has developed short-term actions (1-5 years) to achieve NFRAP status for the 

National Airport site, while longer-term actions (5-20 years) will be necessary to achieve NFRAP status for the 

other 3 sites.

Performance Measure 

Percent DOT facilities characterized as NFRAP

under the Superfund Amendments and Reauthorization Act

2005 2006 2007 2008

Target 93 93 93 93

Actual 92 92 93 94

Associated FY 2008 Funding - $40 million
146 FY 2008 Performance & Accountability Report

Other Environmental Activities

FY 2008 Enacted Funds: $4.206 Billion

Human Environment

The FHWA promotes environmental stewardship practices by recognizing Exemplary Human Environment 

Initiatives (EHEI) in transportation projects and activities that were particularly effective and innovative in how 

they enhanced the human environment and improve public benefit. The EHEI measure is based on the number 

of projects or activities chosen for national recognition in six categories:

• Encouraging non-motorized transportation activities such as greater use of bicycling, walking

(including access for persons with disabilities), and other non-motorized modes of travel.

• Enhancing the environment for human activities through infrastructure changes (e.g., historical

preservation activities) that benefit human transportation and increase livability and quality of 

life.

• Process and procedural changes (e.g., collaborative decision making) that allow for more efficient

service delivery.

• Educational and training programs that inform people about issues or changes that should be

made to improve the human environment.

• Product development including Geographic Information System or travel modeling related

activities that result in the creation or improvement of a tangible product or technology that 

improves everyday processes, and

• Other projects and activities including, but not limited to, border planning or economic

development that do not fit in the other five categories.

FY 2008 Results. The FY 2008 target was met. FHWA’s 

solicitation for EHEI projects or activities resulted in 26 

EHEI submittals with 11 projects announced as EHEI 

recipients at the end of July 2008. In FY 2008, the FHWA 

adopted the EHEI measure as a replacement for the 

measure of Exemplary Ecosystem Initiatives (EEI). The 

FHWA replaced the EEI measure after performance 

targets were exceeded, indicating that the desired effect of 

promoting consideration of ecosystems into development 

of transportation projects and in creating a broad array of 

model projects on which project sponsors could draw was achieved.

FY 2009 Performance Forecast. FHWA expects to meet the 2009 target. FHWA also focuses efforts to 

incorporate Context Sensitive Solutions (CSS) and Context Sensitive Designs (CSD) into all aspects of 

transportation planning and project development. CSS and CSD are collaborative, interdisciplinary approaches 

that involve all stakeholders in the development of transportation facilities that fit their physical settings and 

Performance Measure 

Number of Exemplary Human Environmental Initiatives undertaken

2005 2006 2007 2008

Target N/A N/A N/A 10

Actual N/A N/A N/A 11

N/A Not applicable

Associated FY 2008 Funding - $4.2 billion
United States Department of Transportation 147

preserve scenic, aesthetic, historic and environmental resources. CSS and CSD concepts are being promoted 

to advance solutions that enhance and protect ecosystems, communities, active living, beautification, and 

acquisition or relocation while maintaining safety and mobility.

Leveraging Expert Resources

FHWA issued grants for pilot projects that advance Eco-Logical 

concepts that leverage expertise outside the Department, 

integrates plans across agency boundaries, and endorses 

ecosystem-based mitigation. Eco-Logical: an Ecosystem Approach 

to Developing Infrastructure Projects [http://www.environment.

fhwa.dot.gov/ecological/eco_index.asp]

FHWA awarded funding to the American Association of State 

Highway and Transportation Officials (AASHTO) Center for 

Environmental Excellence, which hosts a comprehensive Web 

site, captures best practices through concise practitioner guides, 

conducts targeted problem solving workshops, and manages a 

program of technical assistance on a variety of environmental 

topics.

Ship Disposal

The Maritime Administration is the U.S. government’s disposal agent for merchant-type vessels 1,500 gross 

tons or more owned by the Federal Government. The Agency has custody of a fleet of approximately 100 nonretention ships that are available for disposal but not yet under contract. These obsolete ships are located at the 

James River Reserve Fleet site in Virginia, the Suisun Bay Reserve Fleet site in California and the Beaumont 

Reserve Fleet site in Texas. Steady progress in the disposal of the obsolete ships must be maintained to minimize 

the risk to the surrounding environment due to the presence of hazardous materials on board the ships.

FY 2008 Results. Despite the regulatory and litigation challenges faced in 2007 and 2008, the Maritime 

Administration awarded 21 disposal contracts that will result in the dismantling/recycling of those ships within 

the next 2 years. The 21 awards exceed the FY 2008 target by 11 ships. Of the 21 awards, 16 were through the sale 

of the obsolete ships, 4 were via fee-for-service contracts and one was through a donation to the Government 

of Greece for use as a museum. With the exception of the one to Greece, all of the removals are the result of 

dismantling/recycling contracts with domestic ship disposal companies. Proceeds from the sale of obsolete 

vessels provide revenue to the Government and value to the taxpayer. This has been achieved through a 

combination of high market steel prices and a sound sales strategy that maximizes domestic recycling industry 

capacity and competition. 

The Maritime Administration removed a total of 25 obsolete ships from the James River and Beaumont 

facilities in FY 2008, 9 more than the target of 16. The total number of vessels disposed in FY 2008 was 19 ships, 

exceeding the target by 3 ships. The completed ships were removed from the fleet sites during the current and 

preceding fiscal years. It takes from several months to more than two years to dismantle a ship once it has 
148 FY 2008 Performance & Accountability Report

arrived at a recycling facility. The rate of dismantling is dependent on a number of factors, including specific 

vessel characteristics, weather, contractor resource availability and the contractor’s ability to quickly and properly 

arrange for disposal of hazardous materials.

Streamlined Environmental Review

FY 2008 Enacted Funds: $136 Million

DOT establishes and pursues rigorous timeframes for all projects requiring an Environmental Impact Statement 

(EIS). By tracking timeframes, DOT has developed a better understanding of the key impediments to the 

process, enabling us to address the concerns of Congress, the States, and others. The DOT has established 60 

months as the FY 2008 target for the median timeframe for completing an EIS. DOT facilitates the achievement 

of the objective by promoting environmental stewardship practices and integrated planning efforts, and 

encouraging linkages between planning and NEPA requirements.

The EIS process not only ensures that infrastructure projects comply with NEPA guidelines, but it also allows 

citizens and local organizations an opportunity to voice their concerns and propose alternatives. DOT embraces 

the public’s thoughts on alternative ways to accomplish what it is proposing and to offer comments on its analysis 

of the environmental effects of the proposed action.

FY 2008 Results. The FY 2008 target was not met. The 

preliminary estimate of 63 months, based on 26 FHWA 

projects and 4 FRA projects with a completed EIS, was 

slightly above the target and 3.5 months shorter than last 

year’s results. (FAA is developing environmental impact 

statements for four airports, which because the process 

was not complete were not included in this year’s data 

collection.)

FY 2009 Performance Forecast. The FY 2009 target will 

likely not be met. Because the number of FHWA projects contributes significantly to the overall DOT result, the 

effort to remove dormant projects from the list of FHWA projects under review should have a positive effect in 

the coming months. More importantly, FHWA, FTA, and FAA are all pursuing activities that should begin to 

affect median review time in the next two or three years.

• FAA employs an interagency coordinated and expedited environmental review procedure on

designated infrastructure projects as provided for in Title III of Vision 100—Century of Aviation 

Reauthorization Act (also known as the Aviation Streamlining Approval Process Act of 2003). 

The procedures call for agreement on the protocols among affected agencies and deadlines for 

necessary actions by each individual agency including deadlines for the review of environmental 

analyses and the issuance of environmental opinions, licenses, permits, and approvals. Where 

this process has been used, not only has FAA seen a marked improvement in the time to complete 

the environmental review process, but here has been improvement in minimizing and resolving 

disputes between agencies.

Performance Measure 

Median time in months to complete environmental impact statements for DOT 

funded infrastructure projects

2005 2006 2007 2008

Target N/A N/A N/A 60

Actual 56 57 67 63.5*

* Preliminary estimate

Associated FY 2008 Funding - $68 million
United States Department of Transportation 149

• FHWA undertook a variety of actions, such as rescission of Notices of Intent for projects that

have been dormant for long periods of time, and peer exchanges to identify project management 

practices that were employed with the environmental review process to achieve timely project 

delivery. FHWA actively promoted practices that minimized project delays through several online resources. These activities will continue to have an effect on FHWA processes in FY 2009.

• FTA has taken several steps, including redesigning its ‘Managing the Environmental Process’

course, offered through the National Transit Institute, to emphasize sound, cost-effective 

document-preparation practices. FTA has also updated relevant guidance, including sample 

documents, on various aspects of impact statement preparation. To encourage its grantees 

and their consultants to pursue the National Environmental Policy Act process efficiently 

and effectively, FTA has instituted an Outstanding Achievement Award for Excellence in 

Environmental Document Preparation. Finally, FTA has published a document entitled Keys 

to Efficient Development of Useful Environmental Documents for the purpose of dramatically 

improving the quality of environmental documentation.

The Decision-Making Process in the

I-405 Corridor Program

The importance of citizen involvement in transportation 

planning is most obvious when it comes to a proposed project’s 

impact on the built or natural environment. While congestion 

and anticipated disruption and of course the ultimate benefits 

of the project are deeply explored, the public often becomes 

most engaged on issues that affect the environment. In the 

long-term, multi-modal I-405 Corridor project in Washington 

State, for example, broad environmental goals were established 

in response to strong environmental ethic of the community. 

As the process unfolded, the “preferred alternative” included 

projects to restore fish habitat in a number of major streams 

previously hurt by development, as well as inclusion of habitat 

protection actions as part of any new construction projects.
150 FY 2008 Performance & Accountability Report

SECURITY, PREPAREDNESSAND REPONSE STRATEGICGOAL

BALANCE TRANSPORTATION SECURITY REQUIREMENTS WITH THE SAFETY, MOBILITY, AND 

ECONOMIC NEEDS OF THE NATION AND BE PREPARED TO RESPOND TO EMERGENCIES THAT AFFECT 

THE VIABILITY OF THE TRANSPORTATION SECTOR

Threats may emanate from nature or from acts of terrorism, but either way, the transportation system is at once a 

target for damage and a critical infrastructure element for response and recovery. Working with the Department 

of Homeland Security and the Department of Defense as appropriate, the U.S. Department of Transportation, as 

well as state and local transportation departments, are significant players in security, preparedness and response..

The U.S. Department of Transportation leveraged $900 million to ensure 

preparedness for response to emergencies that impact the transportation 

system.

fy 2008 enacted funding by security, prepareDness & 

response strategic objectives 

(Dollars in Millions) 

security & readiness 

$642

Defense Mobilization 

$250

intelligence, 

preparedness & 

response $8

total fy 2008 funding: $900 Million
United States Department of Transportation 151

Key Performance Areas

Strategic outcomes from the DOT Strategic Plan are indicated in blue and FY 2008 results for key DOT 

performance measures are marked to indicate Met Target () and Did Not Meet Target ().

Intelligence, Preparedness and Response

Expert transportation sector intelligence.

Preparedness for response to emergencies 

affecting the transportation sector.

Effective response to emergencies affecting the 

transportation sector.

Security and Readiness

The DOT Operating Administrations work closely with 

the Departments of Homeland Security and Defense 

and other stakeholders to ensure the security of specific 

modes of transportation nationwide.

Defense Mobilization

 Percentage of DOD-required shipping capacity 

complete with crews available within mobilization 

timelines.

 Percentage of DOD-required commercial ports 

available for military use within DOD established 

readiness timelines.

2008 Performance Highlights

 During FY 2008, seven more modern and efficient vessels were enrolled in the Maritime Security 

Program, which ensures that the United States will have commercial vessels along with their 

intermodal assets to support DOD operations, thereby improving readiness capabilities.

 DOT exceeded its target for the percentage of DOD-required shipping capacity complete with 

crews available within mobilization timelines through the continued implementation of its 

performance based service contract for the maintenance and operation of vessels.

 DOT exceeded the target for the percentage of DOD-required commercial ports available for 

military use within DOD established readiness timelines as a result of close coordination with the 

military and the Strategic Ports.
152 FY 2008 Performance & Accountability Report

Defense Mobilization

FY 2008 Enacted Funds: $250 Million

The Department of Defense (DOD) relies on the U.S. commercial transportation industry as well as governmentowned ships to deliver equipment and supplies throughout the world in order to maximize defense logistics 

capabilities and minimize cost. 

• The DOT-owned Ready Reserve Force (RRF) is a very important component of the Department’s

ability to provide sealift capacity in times of emergency to DOD. These ships serve as an 

important asset supporting the Department’s emergency preparedness and disaster response 

activities. The RRF is composed of 44 ships with special capabilities that can carry or offload 

heavy and oversized military cargoes which regular U.S.-flag commercial cargo ships cannot 

carry. RRF ships meet approximately half of the U.S. Transportation Command’s surge (or initial) 

sealift requirement during a mobilization.

• DOT, through the Maritime Administration, is also responsible for establishing DOD’s

prioritized use of facilities at 15 U.S. commercial strategic ports during DOD mobilizations or 

other requirements of the nation’s defense to ensure the safe, secure, and smooth flow of military 

cargo through the commercial U.S. transportation system while minimizing commercial cargo 

disruptions.

• DOT’s Maritime Security Program (MSP) ensures that the United States will have U.S.-flag

commercial vessels along with their intermodal assets to support DOD operations.

• The Maritime Administration also supports the education and training of new merchant marine

officers by operating the U.S. Merchant Marine Academy (USMMA) and by providing partial 

support to the six State Maritime Schools (SMS) providing training to develop an unlimited 

number of licensed mariners to support DOD during national emergencies.

The availability of shipping capacity is determined by a number of different factors: availability of commercial 

vessels, availability of government-owned sealift vessels, availability of qualified mariners to crew these vessels, 

and the availability of war risk insurance coverage for vessels entering a war zone. All of these factors must be 

managed properly in order to support DOD’s mobilization requirements.

FY 2008 Results. DOT met the FY 2008 performance 

target. The Maritime Administration achieved these 

results through the successful pursuit of a number 

of activities. Most significantly, to assure sufficient 

availability of U.S. ships, the Maritime Administration 

maintained full enrollment in the Maritime Security 

Program, stable enrollment in the Voluntary Intermodal 

Sealift Agreement (VISA) program and Ready Reserve 

Force readiness levels. During FY 2008, seven more 

modern and efficient vessels were enrolled in the MSP to improve both MSP and VISA readiness capabilities. At 

the end of FY 2008, there were 125 vessels enrolled in the VISA program.

Performance Measure 

Percentage of DoD-required shipping capacity complete with crews available 

within mobilization timelines

2005 2006 2007 2008

Target 94 94 94 94

Actual 95 93 97 97 

Associated FY 2008 Funding - $248 million
United States Department of Transportation 153

Performance-Based Contracting to Improve Performance

The Ready Reserve Force achieved above target readiness through the 

continued implementation of its performance based service contract. This 

contract maximizes the utilization of the professional services of commercial 

shipping companies to maintain and operate vessels. The contract is resultsoriented and places great emphasis on ensuring vessels are safely maintained 

and operated in accordance with regulatory requirements and RRF 

requirements. 

Improved coordination with Military Sealift Command enabled better 

scheduling of resources and mitigated competition between Government 

organizations for shipyard services to accomplish major overhauls. This 

enabled the RRF to maximize work performed during out of readiness 

periods and mitigate unscheduled repair periods. When vessels are required 

for operations, the Maritime Administration diligently works with our DOD 

partners to identify the vessel that best fits and is capable to meet mission 

requirements. The result has been the ability for the RRF to activate vessels on 

time and sustain exceptional operational reliability.

The Maritime Administration successfully operated the War Risk Insurance program for Operations Desert 

Shield/Desert Storm, Operation Restore Hope in Somalia, Operation Restore Democracy in Haiti and most 

recently for Operations Enduring Freedom and Iraqi Freedom and the continuing War on Terror. 

In the interest of ensuring that sufficient numbers of highly qualified new mariners enter the U.S. workforce, 

Maritime Administration supported training activities resulted in the graduation of 211 licensed ship officers 

from the United States Merchant Marine Academy and 504 licensed officers from the six State Maritime Schools 

in June 2008.

Taken together, the above activities as well as those undertaken to assure the availability of strategic ports 

(discussed below), ensure the smooth and secure movement of deploying DOD personnel and material from 

origin to destination and support the Department’s ability to rapidly support response and recovery efforts for 

domestic and international emergencies.

FY 2009 Performance Forecast. The number of RRF vessels is expected to increase from 44 to 51 ships in 

FY 2009. However, the Maritime Administration expects this to have minimal impact on the performance 

forecast, and the FY 2009 target will be met.

FY 2008 Results. DOT exceeded the 2008 performance 

target as a result of close coordination with the military 

and the Strategic Ports. The Maritime Administration 

participated in joint military mobilization and security 

exercises as well as strengthened the cooperative 

partnerships that ensure effective emergency planning and 

coordination with a variety of organizations. The Maritime 

Performance Measure 

Percentage of DoD-required commercial ports available for military use within 

DoD estabilished readiness timelines

2005 2006 2007 2008

Target 93 93 93 93

Actual 87 100 100 100

Associated FY 2008 Funding - $1.3 million
154 FY 2008 Performance & Accountability Report

Administration is working closely with the Military Surface Deployment and Distribution Command on a study 

on the Strategic Ports to develop and implement a plan that will optimize the use of commercial and military 

Strategic Ports.

The Agency continues to develop the Agile Port Concept as a possible partial solution to increase port capacity. 

A fully built-out agile port system consists of a marine terminal, inland intermodal facility, dedicated freight rail 

corridor and an information management system that links all three components to rail, ocean carrier and port 

stakeholders. The system increases throughput capacity of the waterfront marine terminals by moving the cargo 

storage and sorting components to an inland location where land development costs are less expensive and traffic 

congestion impacts are reduced. The information system that links the facilities and users enables direct transshipments where containers are removed from vessels and directly sorted and transferred to rail for immediate 

movement to final locations without the need for inland sorting. The military has also used components of the 

agile port system to deploy. Changing military deployment processes to conform to agile port processes reduces 

the military cargo footprint in the Strategic Ports and reduces the military costs to deploy. A smaller footprint 

also minimizes commercial cargo disruption in the Strategic Ports. This is an important consideration as 

commercial ports become increasingly congested.

FY 2009 Performance Forecast. The Maritime Administration expects to meet the FY 2009 target. DOT will 

continue to administer an Intelligent Transportation System Deployment Integration program that demonstrated 

container and chassis satellite tracking technology using the Cargo Watch System. This program is to assist in 

commercializing their system, which addresses cargo security, fleet management and congestion mitigation. 

This technology has evolved from cellular to satellite technology and into the cold food supply chain market. 

The current technology focus is on developing two-way communications and on board computer interface for 

over the road reefer trailers.

Security and Readiness

FY 2008 Enacted Funds: $642 Million

Security in the Air In FY 2008, FAA continued to enhance our ability to respond to crises rapidly and 

effectively, including security-related threats and natural disasters, by building and improving emergency 

plans and preparedness tools that will enable us to sustain essential services and provide for employee wellbeing during crisis events. Operational coordination, communication, and command and control capabilities 

needed to prepare for, respond to, and recover from crises were strengthened and the use and functionality 

of operational and corporate crises response structures, such as specialized hurricane coordination cells and 

continuity of operations programs, were improved. 

Security on our Highways FHWA continued to balance the need to protect critical transportation 

infrastructure with the safety, mobility and economic needs of the nation. During FY 2008, FHWA enabled 

state departments of transportation to implement critical security enhancement activities such as response 

to disasters, freight and border security operations, and critical infrastructure vulnerability assessments and 

counter measure deployment. A major ongoing program is maintaining national defense mobility using the 

Strategic Highway Network (STRAHNET). The STRAHNET is a 62,791-mile system of roads deemed necessary 

for emergency mobilization and peacetime movement of heavy armor, fuel, ammunition, repair parts, food, and 

other commodities to support U.S. military operations.
United States Department of Transportation 155

The Strategic Highway Network (STRAHNET) system of public highways provides access, continuity, and emergency 

transportation of personnel and equipment in times of peace and war. The 61,000-mile system, designated by the Federal 

Highway Administration in partnership with the Department of Defense, comprises about 45,400 miles of Interstate 

and defense highways and 15,600 miles of other public highways. STRAHNET is complemented by about 1,700 miles of 

connectors—additional highway routes linking more than 200 military installations and ports to the network.

FMCSA implemented a security program for motor carriers that transport hazardous materials that checks 

driver identification, conducts on-site security assessments, encourages carrier security sensitivity, and 

communicates information about hazardous materials security threats, alerts and vulnerabilities. As the agency 

with primary responsibility for regulating the trucking industry, FMCSA has incorporated security sensitive 

visits and security contact reviews into our normal operations. 

Security in Public Transit Transit is a critical, high risk and high consequence national asset. Every day, 

transit provides mobility to 14 million passengers on transit systems that range from very small bus-only systems 

in rural communities to the largest urban economic and financial centers in the nation. FTA has provided 

employee training, emergency preparedness, and public awareness through oversight, technical assistance, 

and research programs. We also provided guidance and information to state and local agencies on transit 

preparedness in the case of an emergency. FTA also formalized a relationship with the DHS Transportation 

Security Administration through the execution of the DOT/DHS Memorandum of Understanding’s Public 

Transit Annex enabling FTA to leverage its expertise and resources to maximize effective transit security 

coordination. 
156 FY 2008 Performance & Accountability Report

Intelligence, Preparedness and Response

FY 2008 Enacted Funds: $8.3 Million

In FY 2008, DOT continued to make strides in meeting the requirements of the Intelligence Reform and 

Prevention of Terrorism Act (IRPTA), Public Law 108-458 (IRPTA), which established a new paradigm for 

sharing information. DOT created an Information Sharing Council which established an Information Sharing 

Environment (ISE) for the sharing of terrorism information among all appropriate Federal, State, local, tribal 

entities, and the private sector through the use of policy guidelines and technologies.

Along with our work in intelligence, DOT continued to ensure readiness to undertake its role as defined in 

the National Response Framework, issued in 2008. In this capacity, DOT is the lead agency for coordinating 

transportation response and support following a disaster and has taken a more active role working with State 

and local transportation officials in planning for disasters. This includes development of a system of emergency 

actions that define alternatives, processes, and issues to be considered during various stages of national security 

emergencies and identification of actions that could be taken in the early stages of a national security emergency 

or a pending emergency to mitigate the impact or reduce significantly the lead times associated with full 

emergency action implementation.

In collaboration with the Department of Homeland Security (DHS), DOT has been actively involved in actions 

required by Public Law 110-53: Implementation of the Recommendations of the 9/11 Commission (9/11 Act). 

Seventy-two sections of the 9/11 Act either directly or indirectly involved DOT. Actions required in thirty-six of 

the seventy-two sections have been completed. The remaining sections of the Act are being addressed by DHS 

and DOT as appropriate. Several do not have specific due dates or deliverable requirements, but we anticipate 

that a majority of the remaining requirements will be completed in FY 2009. DOT’s work on this Act has helped 

ensure that DHS and DOT modal agencies are coordinated in their efforts to protect the US public and private 

transportation infrastructure. Further, the Act has expanded technical and funding assistance to state, local, and 

tribal authorities to ensure the success of their security efforts. 

FY 2008 Results. Development of the new security performance measures did not proceed as planned. 

Therefore, we are unable to present baselines for the new measures. However, a model for looking across DOT’s 

operating administrations was explored and a set of measures proposed. 

FY 2009 Performance Forecast. In FY 2009, DOT will examine three sets of measures: those newly proposed, 

those that were previously being tracked at the DOT level, and those security-related measures that are currently 

only being tracked in a specific agency. A framework of measures will be assembled and preliminary data 

collected to determine baselines for measurement at the same time DOT revises its Strategic Plan.

Promoting Transportation Sector Security Issues in the Homeland Security Context

The Homeland Security Council established a National Exercise Program (NEP) addressing the full spectrum of 

emergencies and crises likely to require Executive Branch coordination. The NEP Implementation Plan defines 

processes and responsibilities for achieving and executing that program. Exercises in the plan are broken into 

priorities. Tier 2 exercises are the second highest priority for participation. Tier 2 exercises are focused on 

integration of Federal activities in a geographic region (overseas or domestic). Tier 3 exercises are other Federal 

exercises for which no support is mandated.
United States Department of Transportation 157

During Fiscal Year 2008, the Department of Transportation participated in approximately 30 exercises, including 

Tier 1, Tier 2 and regional exercises engaging senior, operational and regional staff. One exercise revolved 

around a series of radiological incidents, for example. Another example was the exercise that combined a 

terrorism scenario with a hurricane scenario.

During these exercises, staff at the Department of Transportation exercise their responsibilities under the 

national response framework; examine emerging policy issues through the conduct of exercises; incorporate 

current threat and vulnerability assessments into the exercise objectives and planning effort; develop a corrective 

action process to ensure that lessons from exercises are either sustained or improved as appropriate; and achieve 

national effort by involving appropriate Federal, State, local, private sector, and appropriate partner nation 

entities. 

The objectives of the program are to: 1) train U.S, Government senior officials, 2) examine and evaluate emerging 

national level policy issues, 3) practice efforts to prevent, prepare for, respond to and recover from terrorist 

attacks, major disasters, and other emergencies in an integrated fashion from the Federal level down to state, 

local, and private sector level, and 4) identify and correct national level issues, by not repeating the same 

lessons learned. These exercises contribute to the readiness of executives, managers and staff as well as point to 

weaknesses in the system or in protocols that are then improved.

The events of September 11, 2001, marked a distinct change in 

how transportation agencies plan for emergency events. Prior 

to then, transportation agencies focused on their role during 

weather-related incidents such as snowstorms, floods, and 

hurricanes.

Since then, however, transportation agencies have shifted 

their attention to the wide range of potential man-made accidents and malevolent events, including terrorist strikes that 

could occur without notice and that would require immediate, coordinated response efforts concurrent to accident, law 

enforcement, or national security investigations. One type of 

incident trigger—a biohazard emergency—presents transportation challenges that are potentially even greater than those 

posed by a large-scale evacuation. A biohazard release could 

simultaneously require both restricting and facilitating mobility of those affected. 

The Application of Technology to Transportation Operations 

in Biohazard Situations project provides a more comprehensive and actionable understanding of the role of transportation 

during a biohazard event so that communities can better plan 

for, respond to, and recover from such a situation. Go to http://

www.its.dot.gov/eto/docs/transops_biohazard/executive.htm

for more information.
158 FY 2008 Performance & Accountability Report

organizational excellence strategic goal

ADVANCE THE DEPARTMENT’S ABILITY TO MANAGE FOR RESULTS AND ACHIEVE THE GOALS OF 

THE PRESIDENT’S MANAGEMENT AGENDA

We cannot achieve our strategic goals without leadership and continuous improvement in all the supporting 

functions of the Department. We actively pursue the goals of the President’s Management Agenda as well as 

other externally- and internally-driven initiatives that improve the operations of the entire Department through 

each and every DOT agency.

The U.S. Department of Transportation leverages $1.20 billion to provide leadership in human resources, 

commercial services, financial management, performance improvement, and eGov.

Key Performance Areas

Strategic outcomes from the DOT Strategic Plan are indicated in blue and FY 2008 results for key DOT 

performance measures are marked to indicate Met Target () and Did Not Meet Target ().

President’s Management Agenda

Achieve PMA goals.

See the PMA Scorecard in the Management Discussion and Analysis section of this document for a summary 

of results in all six initiatives.

Commercial Services Management

 For major DOT aviation systems, percentage of 

cost goals established in the acquisition project 

baselines that are met.

 For major DOT aviation systems, percentage of 

scheduled milestones established in acquisition 

project baselines that are met.

Financial Performance

 Percentage of major federally funded 

transportation infrastructure projects with 

less than 2 percent annual growth for project 

completion milestones.

 Percentage of finance plan cost estimates for major 

federally funded transportation infrastructure 

projects with less than 2 percent annual growth in 

project completion cost.

2008 Performance Highlights

 All five transit infrastructure projects were within budget and one is anticipated to finish $141 

million (6 percent) under budget. Three transit projects are on schedule including the Denver 

project finished 19 months (20 percent) ahead of schedule. However the two New York projects 

are both 12 months behind schedule.

 Since the PMA initiative was established the Department’s initiatives have resulted in more than 

$170 million in real property savings.
United States Department of Transportation 159

President’s Management Agenda

FY 2008 Enacted Funds: $1.05 Billion

1. HUMAN CAPITAL

The human capital management agenda focuses on long-term management of the Federal workforce and 

fostering a citizen-centered, results-based government that is organized to be agile, lean, and focused on core 

competencies.

FY 2008 Accomplishments DOT has institutionalized systematic approaches to achieving strategic alignment 

and measurable results of agency activities supporting leadership, knowledge management, performance, 

diversity, talent management and compliance. 

• Electronic Training DOT upgraded the electronic Learning Management System (eLMS), an 

online training and development system, to make it a more accessible and functional tool that 

supports planning, scheduling, delivery, tracking, and reporting of training and development 

activities to increase employee competencies in support of program performance.

• Appraisal Requirements DOT and OPM verified that 70 percent of employees are covered 

by appraisal programs that meet Performance Appraisal Assessment Tool requirements. The 

appraisal plans link to Departmental mission, goals and outcomes; hold employees accountable 

for results appropriate to their level of responsibility; differentiate between various levels of 

performance; and provide consequences based on performance.

Increased Telework Participation

Telework serves as a means to decrease air pollution, lessen energy 

consumption, and reduce traffic congestion in support of the Department’s 

Reduced Congestion strategic goal. Additionally, telework improves our 

employees’ worklife quality and serves as a workforce flexibility used as a 

strategic recruitment and retention tool.

DOT set a 50 percent telework-eligible participation goal, and this year all 

senior executive performance plans include a telework objective.

Telework also serves as a sound business practice for emergency 

preparedness and continuity of operations to increase workforce readiness 

as our employees may be called upon to respond to natural/human disasters 

and events. DOT leveraged the conditions of a major local event near DOT 

headquarters to conduct the largest telework Continuity of Operations 

(COOP) exercise in the history of the Federal Government. Sixty-three 

percent of DOT headquarters employees teleworked on a single day to test 

our COOP policies and operations and make improvements to the program.
160 FY 2008 Performance & Accountability Report

2. COMMERCIAL SERVICES MANAGEMENT

DOT ensures that we are providing cost-effective services by determining which of those services are better 

performed by the commercial sector. During 2008, this President’s Management Agenda initiative was expanded 

to incorporate related business process reengineering efforts that rely on disciplined management practices 

including those that are intended to lead to creation of a high performing organization.

FY 2008 Accomplishments DOT conducted all required FAIR Act Inventories, with a focus on accuracy and 

completeness, assessing each eligible Federal position to be inherently governmental or commercial in nature.

• Competitions Since 2002, DOT has completed 23 competitions covering 30 percent of the 

9,772 FTE coded as commercial during the FY 2005 FAIR Act Inventory. Estimated savings from 

all organizational change efforts are $2.3 billion.

• Independent Validations DOT completed independent validations of competitions 

beginning in 2005 and results prove that DOT has achieved savings and cost avoidances of $8 

million, as reported in the 2007 Annual Report to Congress.

• Regained Scorecard Status For the fourth quarter scorecard period, the Department regained 

its green status and progress rating. Achievement of green status and progress resulted from 

completion of 11 and initiation of two independent validations of savings efforts for competitive 

sourcing projects, and the announcement of management reengineering efforts for certain 

activities within the FAA and FHWA.

Area of Emphasis:

Transportation Infrastructure Projects

Infrastructure projects are not static; at any point conditions may change in ways that impact the cost of the 

project or the delivery date. Monitoring cost, schedule, and performance of infrastructure projects is critical in 

order to identify problems and initiate action to mitigate risk. Three DOT operating administrations oversee 

major infrastructure projects included in the following infrastructure project performance measures: FAA, 

FHWA and FTA.

FY 2008 Results. DOT did not meet either schedule or cost targets in FY 2008.

Performance Measure 

Percentage of major federally funded transportation infrastructure projects with 

less than 2 percent annual growth for project completion milestones

2005 2006 2007 2008

Target N/A 90 90 90

Actual 89 89 89 79

Associated FY 2008 Funding - $46.3 million
United States Department of Transportation 161

Air FAA has major runway projects (those costing more than $1 billion) at Seattle-Tacoma (SEA) and 

Chicago O’Hare (ORD). The projects at both SEA and ORD are on schedule for completion in the first quarter 

of FY 2009 because they have met the preceding FY 2008 performance targets in project completion cost and 

milestones. The commissioning of airfield infrastructure (runways and taxiways) provides these airports with 

the ability to handle more arrivals and departures efficiently and reduce ground delays. Both projects are on 

schedule for completion and commissioning with no increases in cost in FY 2008.

Highways Of the 26 FHWA major infrastructure projects with estimated costs of more than $500 million, 

21 met the completion milestones and 20 met cost milestones. Most projects that missed the completion dates 

were by less than one month. Of the six that missed cost schedules, three were still under budget. For the three 

projects exceeding their budgets, adequate contingencies were in place to account for the increases.

Transit FTA has five major projects (projects that exceed $1 billion): New York East Side Access; New York 

Second Avenue, Dallas Northwest/Southeast; Phoenix Light Rail and Seattle Central Link Light Rail. All five projects 

were within 2 percent of budget and the Seattle project is anticipated to finish $141 million (6 percent) under budget. 

Three of the projects are on schedule including the Denver project which finished 19 months (20 percent) ahead of 

schedule. However, the two New York projects are both 12 months behind schedule.

FY 2009 Performance Forecast.

Air FAA expects to meet the FY 2009 performance targets for both project completion cost and milestones. 

Only one sub-project of the Chicago O’Hare Modernization Program (OMP), the relocated runway, will remain 

unfinished as all other components of the OMP Phase 1 will be completed either late in FY 2008 or early in 

FY 2009. The Seattle runway will be completed in early FY 2009. Neither the Chicago nor Seattle projects are 

expected to grow in costs in excess of the target.

Highways SAFETEA-LU lowered the monetary threshold for classification as a FHWA Major Project from 

$1 billion to $500 million. Lowering the monetary threshold increases the number of active Major Projects that 

FHWA must monitor to 40 by the end of 2009. With more experience in managing costs and schedules for 

Major Projects, it is expected that the FY 2009 targets for the annual performance measure will be met. FHWA 

will continue to work with States to attempt to bring in all existing and newly classified Major Projects on time 

and within budget. But, unforeseen factors such as local labor shortages or a significant increase in the cost of 

materials could impact schedules and budgets.

Performance Measure 

Percentage of finance plan cost estimates for major federally funded 

transportation infrastructure projects with less than 2 percent annual growth in 

project completion cost

2005 2006 2007 2008

Target N/A 90 90 90

Actual 81 84 83 82

Associated FY 2008 Funding - $46.3 million
162 FY 2008 Performance & Accountability Report

Transit It is anticipated that FTA will meet the FY 2009 targets. FTA uses risk management as a 

continuous process for planning, assessment, mitigation and monitoring. The risk assessment for project 

cost and schedule was used as a guide to establish a project execution strategy that utilizes a contingency 

management plan and risk mitigation plan to monitor the projects. However, global economic changes in the 

cost of materials are causing project sponsors to redesign and repackage contracts to increase competitions after 

higher bids are received. Also, contractor competition on very large projects in the New York market has not 

been good because of all the new building in that area. Yet even with uncertain economic conditions, budgets 

are still being maintained because schedules are being extended in order to allow sufficient time to repackage 

contracts in response to the changing bidding climate.

3. FINANCIAL PERFORMANCE

DOT’s financial stewardship is guided by its performance on key financial metrics which highlight ongoing efforts to manage and upgrade fundamental financial factors such as assurances of financial controls, 

performance under the Federal Managers Financial Integrity Act (FMFIA), financial system upgrades and 

reduction of improper payments. 

FY 2008 Accomplishments The Government Accountability Office and the DOT Office of Inspector 

General have aggressively recommended that DOT financial management focus on needed improvements. 

DOT has responded with several efforts that have improved financial performance throughout the Operating 

Administrations and the Department as a whole.

• Elevated Scorecard Status DOT achieved ‘Yellow’, elevating its PMA Scorecard during the 

second quarter of FY 2008. The rise in status was primarily due to DOT successfully regaining 

a clean audit opinion as the result of a comprehensive cleaning up of FAA’s Construction in 

Progress data.

• Procurement System Consolidation In June 2008, DOT formally established a 

Department-wide strategy to consolidate 10 stand-alone procurement systems into a single 

system that would also be integrated with Delphi, the Department’s financial management system. 

This consolidation and integration reduces system operation costs and software maintenance 

costs, while automating commitment accounting, eliminating duplicate manual data entry, 

and significantly improving information provided to financial managers for decision-making. 

Implementation will begin in FY 2009.

• Internal Controls System After 2 years of design, DOT has implemented an internal controls 

system in accordance with the requirements presented in OMB Circular A-123. Testing began in 

2008.

• Centralized Financial Services DOT finalized the transition of all its accounting operations 

to the Enterprise Services Center (ESC) in Oklahoma City with the exception of the FAA which 

continues to do its own statements. With all accounting operations staff centrally located, 

financial policies are being applied more consistently, training on system updates is more efficient, 

and accounting operations are better managed during peak periods.
United States Department of Transportation 163

• Financial Performance Metrics DOT rolled out a new department-wide initiative designed 

to help the Operating Administrations recognize and reconcile longstanding data issues in their 

financial systems. DOT identified fourteen areas of concern and defined corrective actions 

using an in-house, web-based tool that reports data on a monthly basis. In FY 2008, DOT 

improved performance on a number of metrics such as increasing the use of electronic payments 

over paper checks, reduced budgetary to proprietary reconciling items, eliminated the use of 

suspense accounts and has reduced abnormal balances in general ledger accounts. Two operating 

administrations reduced their total debt eligible for referral to Treasury from over $1 million to 

zero in the third quarter of this fiscal year. The result was a major clean up of pending actions in 

receivables that had previously been on hold. 

• Financial Integrity The requirements governing financial management integrity—OMB 

Circular A-123, Appendix A, Internal Control over Financial Reporting and the traditional 

Federal Managers Financial Integrity Act (FMFIA). In FY 2008, DOT integrated the analysis and 

assessment of processes across A-123 and FMFIA to better support the annual assurances required 

of the agency. The result has been a reduction in potentially duplicative review activities and a 

strengthening of the analytical basis for assurances issued by DOT executives.

Area of Emphasis: Managing Major Acquisition Projects

Lifecycle acquisition management is built around a logical sequence of phases and decision points to determine 

and prioritize needs, make sound investment decisions, implement solutions efficiently, and manage services and 

assets over their lifecycle. The overarching goal is continuous improvement in the delivery of safe, secure, and 

efficient services over time to ensure that taxpayer dollars spent through DOT’s acquisition programs achieve 

performance outcomes required by tracking cost and schedule milestones.

Performance Measure 

For major DOT aviation systems, percentage of cost goals established in the 

acquisition project baselines that are met

2005 2006 2007 2008

Target 80 85 87.5 90

Actual 97 100 100 96.08

Associated FY 2008 Funding - $30 million

Performance Measure 

For major DOT aviation systems, percentage of scheduled milestones established 

in acquisition project baselines that are met

2005 2006 2007 2008

Target 80 80 85 90

Actual 92 97.4 97 93.88

Associated FY 2008 Funding - $30 million
164 FY 2008 Performance & Accountability Report

2008 Results. DOT met 2008 targets. FAA tracked 98 milestones against 51 acquisition programs for this 

performance measure and met all variances for cost and schedule. Any program with a total budget-atcompletion variance of less than 10 percent from the beginning of FY 2008 to the end of FY 2008 is considered to 

have met the established fiscal year cost performance goal.

FY 2009 Performance Forecast. DOT anticipates meeting the performance targets in FY 2009. Beginning in 

FY 2009, the FAA will implement standard written criteria for selection of programs and milestones included 

in the agency’s FY 2009 Cost and Schedule acquisition goal. The milestones selected will include major efforts 

or events contributing to the completion of total program acquisition baseline, or events that are of significant 

priority to the agency for advancing major programs.

Comprehensive Financial Reform through Business Transformation

During FY 2008, DOT initiated an effort to standardize department-wide business processes 

in accordance with OMB’s Lines of Business Initiatives and develop and define requirements 

for future financial management system upgrades. The business transformation initiative falls 

into five main categories.

(1) Reporting and information sharing involves designing a common reporting 

inventory, the ability to roll-up cost and performance data and improve data quality and 

integrity, and a shared reporting solution and tools. (2) Business process engineering is 

intended to achieve economies of scale with consolidated accounting services, implement 

an integrated procurement solution, and develop a formal process to guide decisions 

and future investments. (3) Data management involves creation of a Department-wide 

Accounting Code Structure (ACS) that is aligned with the emerging Common Governmental 

Accounting Code, and a common data management strategy. (4) Current system set up

involves preparations to convert to newer versions of the operating system, improvements 

to key financial system processes, and development of a strategy to archive and purge as 

appropriate elements of the current system. (5) Future systems set up involves creation of 

a comprehensive strategy that includes training and communications plans, anticipated 

hardware requirements, and increasing security requirements.

To date, the Department has established a governance structure to oversee this program 

using the CFOs from each DOT agency as a single decision-making body. A Business 

Transformation Team has been established to manage and coordinate the daily progress 

of the transformation initiatives and five workgroups have initiated work on the targeted 

objectives. In FY 2009, work will continue in all five areas.

4. ELECTRONIC GOVERNMENT

DOT is committed to ensuring that investment in information technology (IT) significantly improves its 

ability to serve the public and that IT systems are part of a comprehensive and secure information architecture. 

Effective implementation of e-Government initiatives makes DOT more accessible and more responsive to 

citizens and stakeholders while also making information dissemination more cost-effective.
United States Department of Transportation 165

FY 2008 Accomplishments

• Enterprise Architecture An Enterprise Architecture strategy was approved. This Transition 

Strategy is designed to move from the ‘as-is’ state to the ‘to be’ state over the next 3-5 years using a 

system of planning and investment control.

• Project Management Operating Administrations of DOT maintained compliance with 

American National Standards Institute (ANSI) standards and averaged project completions 

within 10 percent of budget and schedule. Concentration is on Earned Value Management for 

OMB-designated major investments.

• Employee IDs Made significant progress toward a Homeland Security requirement 

HSPD-12, the government-wide standard for secure and reliable forms of identification for 

Federal employees and contractors. Card issuance is already in progress.

Government Forms

Business Gateway provides small business and citizens with access to government information, including 

forms, compliance assistance resources, and tools in a single point of access. [www.business.gov] Business 

Gateway partner agencies deliver an outstanding level of quality and service to the small business 

community. There were 3,422,076 hours saved in FY 2008 as of July 2008.

The Business.gov Toolkit allows individuals and organizations to quickly access tools from their web 

site or Google home page. The ‘Add This’ feature allows users to easily bookmark and share Business.

gov pages via social bookmarking sites. Enhanced Search allows better advertisement and integration of 

all search options. Embedded Video allows users to watch key videos without leaving Business.gov. And 

Interactive Maps allows users to search for small business resources near them.

Business Gateway was the recipient of six awards for delivering mission critical services, demonstrating 

best practices and improving organization performance. One of these awards was the prestigious Search 

Engine Strategies (SES) Award in the category of “Best Use of Local Search”.

The program’s accomplishments were further recognized in a Government Computer News article 

highlighting 10 great .gov websites. 

Business Gateway was the only government finalist in any of the categories and was selected over two 

other industry leaders. 

5. PERFORMANCE IMPROVEMENT

Regular, systematic measurement and accountability for program performance compared to pre-determined 

targets is the means to improve DOT management. Connecting budgeting to performance management ensures 

that resources are properly aligned with mission and goal activities but also that the results of those activities are 

tied back into the annual budget planning process primarily through outcome-based measurement.
166 FY 2008 Performance & Accountability Report

FY 2008 Accomplishments

• Managed Performance The Program Assessment Rating Tool (PART) measures for rating 

DOT programs were met or exceeded at a rate of 52 percent. Eighty-three percent of those targets 

actually exceeded the planned rate of performance.

• Program Improvements Ninety-eight percent of planned improvement actions are on track. 

Sixty-five percent of those on-track program improvements have already been achieved and the 

majority of the remaining items are scheduled for completion in FY 2009.

• Performance and Accountability Report Earned the top rating among all Federal agencies 

for DOT’s FY 2007 Performance and Accountability Report from George Mason University’s 

Mercatus Center.

Performance Improvement Team

DOT established and implemented a comprehensive performance improvement mechanism 

-- the Transportation Performance Improvement Council (T-PIT) – which is charged with 

actively identifying and making targeted improvements that advance performance management 

in the Department.

Creation of this integrated performance improvement mechanism is significant in that it 

synthesizes, for the first time, three critical success factors: (1) collaboration across all DOT 

agencies; (2) active participation from both high level and working level managers; and (3) a 

systems approach to improvement through participation from support functions and programs.

The DOT performance community will benefit from a more advanced approach to resolving 

performance management issues and DOT programs will benefit from the informal, applied 

education that takes place as a part of the council’s performance management prioritization and 

improvement processes.

6. FEDERAL REAL PROPERTY ASSET MANAGEMENT

It is the policy of the United States to promote the efficient and economical use of America’s real property 

assets and to ensure management accountability for implementing Federal real property management reforms. 

DOT recognizes the importance of real property resources through increased management attention, the 

establishment of clear goals and objectives, improved policies and levels of accountability, and other appropriate 

action.

FY 2008 Accomplishments The entire Department, working as a team, has continued to make progress in 

the elimination of surplus real property, maintaining assets in the proper condition, and management of real 

property at the right cost. 

• Elevated Scorecard Status During the second quarter (Q2) of FY 2008, the Department’s 

real property initiative was rated ‘Green’ in PMA Status, as well as ‘Green’ in PMA Progress. The 

double ‘Green’ ratings were maintained in Q3 and Q4 FY 2008.
United States Department of Transportation 167

• Disposals In the Federal Real Property Council’s June 2008 report, the Department had the 

highest number of property disposals for a non-DoD agency. During FY 2008, the Department 

was able to remove more than 2,270 real property assets from its inventory of buildings, 

structures, and land.

• Innovation The Department received FY 2008 National-level Honorable Mention recognition 

by GSA for exceptional real property innovation in Federal Government-wide property 

management initiatives.

Asset Management Review

Management of the Department’s inventory has been greatly simplified through the 

development of a real-time, on-line dashboard application that provides real property 

managers with accurate data for daily decision-making.

Savings Since the PMA initiative was established the Department’s initiatives have resulted 

in disposals of more than $170 million worth of real property assets. Savings resulting from the 

disposition of property have been applied toward future disposition efforts, as well as updates, 

upgrades, repairs, and renovations of current assets. 

Disposition DOT removed more than 2,270 real property assets from its inventory of 

buildings, structures, and land. While a large number of the retired properties were zerocost leases associated with the FAA’s on-airport space, the value of other assets disposed of in 

FY 2008 exceeded $85 million. Funds realized from the disposition successes are being applied 

to facility modernization efforts.
168 FY 2008 Performance & Accountability Report

performance data completeness

and reliability

Performance measurement is dependent on the availability of useful data that will indicate level of performance 

and helps progress toward achieving organizational goals. Because all data are imperfect in some fashion, pursuing 

perfect data may consume public resources without creating appreciable value. For this reason, there must be 

an approach that provides sufficient accuracy and timeliness but at a reasonable cost. This section of the report 

provides information on how DOT uses performance data, assesses limitations of the data, and plans to improve 

DOT’s data.

IN GENERAL

In an attempt to bring consistency and quality to its performance reporting, DOT has implemented some general 

rules regarding the data it uses and how it is evaluated.

Annual Data — Whenever available, the data in this document are reported on a Federal Government fiscal year 

basis. However, there are instances where fiscal year data are not available so calendar year data are used instead. 

This often occurs when data are collected and reported to DOT by external sources and a calendar year reporting 

requirement is specified in the implementing regulation.

Completeness of Data for Annual Results — If available, the results for the most recent year in the report are 

listed as Actual in the shaded box for each performance measure. However, given the November 15 deadline for 

submission of the Performance and Accountability Report, not all data have been compiled and finalized for the 

entire year. When an actual value is not available for the current year, either an estimate or a projection is provided 

instead. In general, estimates are based on partial-year data that are extrapolated to cover a full 12-month period. 

Historical trend information, supplemented by program expertise, is then applied to estimate the remaining 

months of performance for which actual data is unavailable. The result is identified as a preliminary estimate in the 

report. If partial-year data are not available, then past trend information is analyzed and supplemented by program 

knowledge to develop a projected value for the annual performance measure. The result is identified as a projection 

in the report. As data are finalized, the projections and preliminary estimates are replaced by actual results, with 

resulting changes denoted by an (r). Results are also amended as errors and omissions are identified in the data 

verification process, as updated information is provided by the reporting sources, or because of legal or other action 

that changes a previously-reported value.

Reliability of Measurement Data — DOT performance data are generally reliable (useful to program managers 

and policy makers). But because performance results in a given year are influenced by multiple factors, some 

of which are beyond DOT’s control, and some of which are due to random chance, there may be considerable 

variation from year to year. A better “picture” of performance may be gained by looking at results over time to 

determine if there is a trend.

Virtually all data have errors. We have compiled Source and Accuracy Statements for each of the DOT data 

programs used in this report, which can be found at http://www.bts.gov/programs/statistical_policy_and_research/

source_and_accuracy_compendium/index.html. The Source and Accuracy Statements give more detail on the 

methods used to collect the data, sources of variation and bias in the data, and methods used to verify and validate 

the data.
United States Department of Transportation 169

Assessing and, where possible, eliminating sources of error in DOT data collection programs has always been 

an important task for data program managers. As part of their ongoing work, managers of Departmental data 

programs use quality control techniques to identify where errors can be introduced into the data collection system. 

Program managers also use computerized edit checks and range checks to minimize errors that may be introduced 

into the data of their respective programs. In addition, quality measurement techniques are employed to measure 

the effects of unanticipated errors. These include verification of data collection and coding, as well as coverage, 

response and non-response error studies to measure the extent of human error affecting the data. As sources of 

error are identified, data collection is improved. Quality control is an ongoing and continuous effort to improve 

data accuracy and availability.

The data used in measuring performance come from a wide variety of sources. Much of it originates from sources 

outside of the Department and, therefore, outside of the direct control of the Department. The data often come 

from administrative records or from sample surveys. While DOT may not have a strong voice in improving the 

quality of outside data, the Department takes all available information about the limitations and known biases in 

outside data into account when using the data.

To help the OAs address these issues, the Bureau of Transportation Statistics (BTS) is developing a statistical policy 

framework where the OAs will work together to identify and implement the current statistical best practices in all 

aspects of their data collection programs. This project is consistent with the data capacity discussions found in the 

DOT Strategic Plan.

See Other Accompanying Information in the Financial Report for detailed explanations of completeness and 

reliability for each performance measure.

DATA LIMITATIONS

DOT Data Source Limitations — Timeliness is the most significant limitation for DOT performance 

measurement data. Some DOT data are not collected annually. For example, the National Household Travel 

Survey and the Commodity Flow Survey each collect data every five years. Data that are collected each year 

(or more frequently) require time to analyze, confirm and report results. For example, Highway Performance 

Monitoring System vehicle-miles traveled (VMT) data require several months of post-collection processing, 

making final results unavailable for this performance report.

Other performance measurement data limitations are identified in the previously mentioned Source and Accuracy 

Statements for DOT data programs. These statements contain descriptions of data collection program design, 

estimates of sampling errors (if applicable), and discussions of non-sampling errors. Non-sampling errors include 

under-coverage, item and unit non-response, interviewer and respondent response errors, processing errors, and 

errors made in data analysis.

Estimating and Projection Techniques Used — As discussed under completeness, many of the FY 2007 

measures must be projected from either partial-year data or historical trends. The projections based on partial-year 

data from FY 2007 are more likely to reflect changes effected by current DOT policies and programs. The measures 

projected from FY 2006 and prior historical data reflect continuing trends from ongoing programs, but do not 

reflect the effects of changes implemented in FY 2007.

External Data Source Limitations — Data that originate from external or third-party sources are not directly 

controlled by DOT. These data often come from administrative records or from sample surveys. Timeliness is 

also a significant limitation. For example, many DOT internal data programs rely on data provided by State DOTs. 

DOT partners closely with the States, but does not have direct control over these programs.
170 FY 2008 Performance & Accountability Report

dot program evaluations

Performance measures show if intended outcomes are occurring and assess any trends. Program evaluation uses 

analytic techniques to assess the extent to which programs contribute to those outcomes and trends. As required 

by the Government Performance and Results Act of 1993, the Department’s FY 2006 - 2011 Strategic Plan includes 

a schedule of program evaluations by fiscal year.

Types of Program Evaluations

Program evaluation is an assessment, through objective measurement and systematic analysis, of the manner 

and extent to which programs achieve intended outcomes. Evaluations are of the following types:

 Impact Evaluations use empirical data to compare measurable program outcomes with what 

would have happened in the absence of the program. These represent the highest standard of 

program evaluations and are often the most difficult and expensive to construct and interpret.

 Outcome Evaluations assess the extent to which programs achieve outcome-oriented objectives. 

These use quantitative methods to assess program effectiveness, but fall short of the rigorous 

causal analysis of impact evaluations.

 Process Evaluations assess the extent to which a program operates as intended. While a true 

process evaluation will use objective measurement and analysis, it falls short of assessing the 

causal links between intervention and outcome.

 Cost-Benefit and Cost-Effectiveness Analyses compare a program’s outputs or outcomes with 

the costs to produce them. These analyses conform to program evaluation when applied 

systematically to existing programs and when measurable outputs and outcomes are monetized.

Program Evaluation Management

The programs selected for scheduled evaluations are vetted through the Department’s strategic planning 

process. Each modal administration nominates programs that are then reviewed by a strategic planning 

executive committee to ensure: 1) adequate breadth of program evaluations across modal administrations; and 

2) alignment to the strategic objectives. The OIG and the GAO pursue program evaluations independent of this 

schedule.
United States Department of Transportation 171

DOT Agency Program Type of Evaluation Source of 

Evaluation

Status

SAFETY

FAA Operational Error Outcome Internal In Progress/Results 

available in FY 2009

FMCSA Motor Carrier Safety 

Assistance Program

Process/CostEffectivenessIndependent Deferred to state by 

state reviews

FRA Railroad Safety 

Enforcement (deferred 

from 2007)

Outcome Independent Complete/ No 

Recommendations

NHTSA National Highway Safety 

Mobilizations

Outcome Independent Complete/ No 

Recommendations

FMCSA Compliance Review 

Effectiveness

Outcome Independent Complete

FMCSA Roadside Inspection 

and Traffic Enforcement 

Effectiveness

Outcome Independent Complete

REDUCED CONGESTION

FHWA/ FTA Infrastructure Investment 

Needs

Cost-Effectiveness Internal Complete/ Under 

Review

FAA Aircraft Delay Reduction Process Independent Complete/ No 

Recommendations

FTA Job Access and Reverse 

Commute Formula 

Grants

Outcome Independent Complete

SECURITY, PREPAREDNESS AND RESPONSE

MARAD Maritime Security 

(deferred from 2007)

Impact Independent In Progress/ To be 

completed in FY 

2009

ORGANIZATIONAL EXCELLENCE

MARAD Maritime Education Impact Independent Deferred to FY 2009

PHMSA Outreach and Training Process Internal In Progress

FMCSA Quality Assurance 

Review – Grants Financial 

Management

Process Independent Complete/ Under 

Review

FRA Rail Transportation 

Research, Dev and 

Demonstration 

Process Independent Actions Initiated

FMCSA State Division 

Effectiveness

Process/CostEffectivenessIndependent Complete/ Under 

Review

PHMSA Information Technology 

(deferred from 2007)

Process Independent Complete
172 FY 2008 Performance & Accountability Report

FY 2008 Program Evaluations supporting safety

Operational Error Program

FAA An OIG audit of the FAA’s Investigating and Reporting of Operational Errors was initiated in November 

2007. The objectives of the audit are to: (1) determine whether FAA has adequate policies and procedures 

in place to ensure the accuracy and consistency of operational error reporting and (2) review the roles and 

responsibilities of the Air Traffic Organization and FAA’s Aviation Safety line of business in reporting and 

investigating operational errors. 

The OIG is in the process of concluding the study and will have a final report in early FY 2009.

Motor Carrier Safety Assistance

FMCSA The FMCSA planned to perform an independent program evaluation of the Motor Carrier Safety 

Assistance Program (MCSAP) in FY 2008. However, FMCSA recently instituted new approaches to standardize 

the commercial motor vehicle safety planning process and requested time to allow these innovative processes 

sufficient opportunity to take effect. The Agency began a nationwide assessment of each MCSAP program 

grantee which involves conducting approximately 12 grantee reviews per year. With 20 reviews completed to 

date, FMCSA expects to have all of the reviews completed by 2011. The FMCSA intends to leverage the results 

from the grantee reviews and make a future determination based on need to perform a MCSAP program 

evaluation to assess the program’s overall effectiveness related to outcomes once the individual reviews are 

completed. 

Railroad Safety Enforcement

FRA In 2005, FRA initiated implementation of a new element of the FRA safety program, called Railroad 

System Oversight (RSO), to replace a prior safety program. The FRA conducted a program evaluation of the 

RSO since its implementation in 2005 to evaluate: the effectiveness of the RSO function; the extent to which the 

RSO supervisor and managers comply with the implementation directive; perceptions and satisfaction level of 

FRA HQ and regional managers, railroad managers, and labor organizations as to RSO effectiveness as a safety 

tool; and the extent to which RSO has been effective in communicating with FRA HQ and field personnel, and 

with railroad and labor organization representatives.

A contractor conducted interviews over two months with 58 stakeholders involved in the RSO process, including 

key FRA, railroad, and labor personnel. Additionally, the contractor analyzed safety data and statistical 

information and participated in scheduled RSO conference calls.

Findings Railroad managers and labor representatives expressed highly positive comments about the RSO 

and its staff. Some were emphatic about the need for FRA to maintain or expand the collaborative and liaison 

relationship. With one exception, both groups felt that RSO has value and a positive impact on safety. FRA 

regional administrators and staff directors, however, felt that RSO could be more effective and that it has the 

potential to be of greater value to the FRA safety program.
United States Department of Transportation 173

Of major concern noted in the interviews was the need to strengthen the communication network among RSO 

managers, FRA regional personnel, and staff directors. Additional findings and recommendations concerned 

improving overall effectiveness; tracking accomplishments and activities; greater analysis and specificity of 

accident/incident data; and the availability to staff directors and regional administrators of safety and compliance 

issues identified to headquarters by RSO managers.

Recommendations A few of FRA’s RSO program recommendations that have been adopted include: 

• The need for RSO staff to meet face-to-face at least annually with each regional administrator in

which the assigned railroad has substantial operations and/or safety concerns.

• Assure that the top accident causes and railroad safety issue lists prepared by railroad system

oversight managers for conference calls with the Deputy Associate Administrator are sent to FRA 

headquarters’ (HQ) staff directors and regional administrators in each region where the railroad 

operates.

• Develop an effective method to coordinate with HQ staff directors and regional administrators, at

least annually, to participate in strategic planning for safety improvement on individual railroads. 

National Highway Safety Mobilizations

NHTSA NHTSA conducted a program evaluation to evaluate Click It or Ticket (CIOT) Mobilization 

including the use of paid advertisements focusing on seat belt enforcement, measure motorists’ awareness of 

seat belt campaigns, and ultimately measure the change in seat belt use rate. NHTSA also evaluated the high 

visibility enforcement campaign to reduce impaired driving including the Labor Day and December Drunk 

Driving: Over the Limit; Under Arrest national crackdowns. The evaluation included review of program data, 

including dollars spent placing paid advertisements and enforcement activity, state reported observational 

surveys of safety belt use, knowledge/attitude surveys at driver licensing offices and a national telephone survey 

conducted in pre/post intervals to track progress.

Findings An analysis of the 2005 CIOT program and an evaluation of the national impaired driving high 

visibility enforcement campaign to reduce impaired driving 2003-2005 were published in the fall of 2007. Both 

reports are available under Click It or Ticket Seat Belt Mobilization Evaluation Reports at: http://www.nhtsa.dot.

gov/portal/site/nhtsa/menuitem.3d62007aac5298598fcb6010dba046a0. The results of the 2006 programs were 

published in the fall of 2008 and are available at: http://www.nhtsa.dot.gov/portal/site/nhtsa/menuitem.3d62007

aac5298598fcb6010dba046a0/.

The CIOT evaluations have demonstrated the positive impact of the campaign on overall belt use, and that 

focusing on groups less likely to use safety belts (pickup truck drivers, rural drivers) can increase their belt use. 

Impaired driving results are more mixed. Some states have made significant progress in reducing impaired 

driving fatalities, while progress has been slight in other states. The Impaired Driving evaluations show that 

successful states have comprehensive enforcement and media plans, and vigorous 24/7 enforcement.

The analysis of the 2007 mobilizations is in progress and reports will be published in the fall of 2009.

Recommendations Following the GAO recommendation we have tracked CIOT expenditures and the 2006 

mobilization reports break out media costs for Hispanic target audiences.
174 FY 2008 Performance & Accountability Report

Compliance Review Effectiveness

FMCSA The FMCSA uses the Compliance Review Effectiveness Model to measure the impact of 

compliance reviews (CR) on motor carrier safety and to provide states with macro and micro analysis of CR data 

for grant planning and resource deployment. Based on the individual and cumulative before and after changes 

in the safety performance of carriers that received CRs, the model estimates the number of crashes, injuries, and 

fatalities prevented as a result of performing these activities. Outputs from the CR Effectiveness Model are from 

calendar year (CY) 2002, CY 2003, CY 2004 and FY 2005 (methodology changed from CY to FY in 2005).

Findings Findings for FY 2005 include the total number of compliance reviews conducted (11,431), the 

estimated percentage reduction in average crash rate due to compliance reviews (16.3 percent), estimated crashes 

avoided (fatal, injury, and tow-away – 2,306), estimated injuries avoided (1,561), and estimated lives saved (92).

Recommendations FMCSA, in cooperation with RITA’s Volpe National Transportation Systems Center, 

has developed an analytic model to measure the effectiveness of roadside inspections and traffic enforcements 

in terms of crashes avoided, injuries avoided, and lives saved. The model assigns a crash risk probability to 

each violation of the Federal Motor Carrier Safety Regulations, then determines how many times each type 

of violation was detected and corrected at the roadside as a result of the roadside inspection program. Based 

on this information, the model estimates the number of crashes, injuries, and fatalities that have been avoided 

each year as a result of the program. Although this evaluation does not produce official recommendations, this 

information does inform managers on the impact of performing roadside inspections and traffic enforcement 

activities, enabling informed decision-making on program adjustments and enhancements.

Roadside Inspection and Traffic Enforcement Effectiveness

FMCSA The FMCSA uses an analytic model called the Intervention Model to measure the effectiveness 

of roadside inspections and traffic enforcement activities in terms of crashes avoided, injuries avoided, and 

lives saved. The model assigns a crash risk probability to each violation of the Federal Motor Carrier Safety 

Regulations. It then determines how many times each type of violation was detected and corrected at the 

roadside as a result of the roadside inspection program. Based on this information, the model estimates the 

number of crashes, injuries, and fatalities that have been avoided each year as a result of the program. Outputs 

from the Intervention Model are from CY 2004, CY 2005 and FY 2006 (methodology changed from CY to FY in 

2006).

Findings Findings for FY 2006 include program exposure or total number of roadside inspections and 

traffic enforcement activities. This data shows that in FY 2006, FMCSA and our state partners performed the 

highest number of interventions (3,273,062). It also provides FY 2006 program effectiveness for estimated 

number of crashes avoided (19,754), estimated injuries avoided (13,241) and estimated lives saved (748).

Recommendations FMCSA, in cooperation with RITA’s Volpe National Transportation Systems Center, 

has developed an analytic model to measure the effectiveness of roadside inspections and traffic enforcements 

in terms of crashes avoided, injuries avoided, and lives saved. The model assigns a crash risk probability to 

each of violation of the Federal Motor Carrier Safety Regulations then determines how many times each type 

of violation was detected and corrected at the roadside as a result of the roadside inspection program. Based 

on this information, the model estimates the number of crashes, injuries, and fatalities that have been avoided 
United States Department of Transportation 175

each year as a result of the program. Although this evaluation does not produce official recommendations, this 

information does inform managers on the impact of performing roadside inspections and traffic enforcement 

activities enabling informed decision-making on program adjustments and enhancements.

FY 2008 PROGRAM EVALUATIONS SUPPORTING REDUCED CONGESTION

Infrastructure Investment Needs (Conditions and Performance Report)

FHWA and FTA The Conditions and Performance (C&P) Report provides Congress and other decision 

makers an appraisal of highway, bridge and transit physical conditions, operational performance, financing 

mechanisms, and future investment requirements. The C&P Report consolidates conditions, performance, and 

finance data provided by States, local governments, and transit operators to provide a national summary. 

The C&P Report is issued roughly every two years. The 2006 C&P is the most recent, though work on the 

2008 C&P is well under way. The content of the report purposely remains similar in each edition to facilitate 

comparison of data and tracking of trends. The 2006 report was based on the 2004 National Transit Database 

data at the time it was written, and did not capture the effect of changes in funding levels from SAFETEA-LU.

Findings In the 2006 C&P Report, FHWA reported that combined investment by all levels of government 

in highway and transit infrastructure has increased sharply since TEA-21 was enacted. Highway capital spending 

rose 45.2 percent from $48.4 billion in 1997 to $70.3 billion in 2004. While the overall physical condition of 

the Nation’s highway and bridge infrastructure has improved as a result, highway congestion has worsened over 

the past decade. In order to keep average highway user costs from rising above their 2004 levels for a period 

between 2005 and 2024, investment by all levels of government would need to increase to $78.8 billion annually 

in constant 2004 dollars, a 12.2 percent increase above actual. In order to eliminate the existing backlog of 

highway and bridge deficiencies, as well as address new deficiencies between 2005 and 2024 when it is costbeneficial to do so, spending would need to increase to $131.7 billion annually. 

Recommendations The C&P report presents a series of 20-year capital investment scenarios projecting the 

potential impacts of alternative levels of public and private investment on system performance, but does not 

endorse any of these scenarios, or make any specific recommendations regarding future funding levels.

The Transit Economic Requirements Model (TERM), which is the 

computer model used to predict future transit funding needs for 

the C&P report, has been used for several special studies over the 

last year. The National Surface Transportation Policy and Revenue 

Commission Report, released in December of 2007, and the Rail 

Modernization Report to Congress (projected release in January 

of 2009) are the most important of these. Without the continuing 

data collection and updating of the TERM model, which takes 

place for the C&P report, these analysis’ would not be possible.

Aircraft Delay Reduction
176 FY 2008 Performance & Accountability Report

FAA More than one in four flights either arrived late or was canceled in 2007—making it one of the worst 

years for delays in the last decade. Flight delays are typically the worst at the New York metropolitan airports. 

The purpose of this study was to assess the effect of FAA’s Aircraft Delay Reduction Program on flight delays 

and cancellations which have plagued the U.S. aviation system. The U.S. Government Accountability Office 

(GAO) conducted a study of (1) the trends in the extent and principal sources of flight delays and cancellations 

over the last 10 years; (2) the status of Federal Government actions to reduce flight delays and cancellations 

by the summer of 2008; and (3) the extent to which these actions may reduce delays and cancellations for the 

summer 2008 travel season. The GAO-08-934T report is available at: http://www.gao.gov/new.items/d08934t.

pdf. Although GAO’s scope covers the national airspace system as a whole, their work highlighted the New York 

region.

The study based its conclusions on an analysis of DOT data on airline on-time performance, a review of relevant 

documents and reports, and interviews with officials from DOT, FAA, airport operators, and airlines, as well 

as aviation industry experts and associations on the status and potential impact of the Federal Government’s 

actions to reduce delays. 

Findings The annual number of domestic airline flight delays and cancellations has increased about 62 

percent while the annual number of scheduled flights has increased by 38 percent since 1998. In the New York 

area, the trend is even more pronounced. Cancellations in recent years have become more problematic as the 

airlines are now operating with fewer empty seats per flight.

1. Data provide an incomplete picture of the sources of flight delay. Current on-time performance 

data do not capture the full extent of delays or cancellations due to reporting practices by some 

airlines. Data also fail to capture the extent to which passengers’ average travel times have 

increased due to the fact that DOT tracks flights not passengers, which leaves out passenger 

delays due to missed connections from other delays or overbooked flights.

2. Actions are being implemented to reduce delays. The GAO study commended DOT and 

FAA for taking steps to reduce mounting flight delays and cancellations for the 2008 summer 

travel season. DOT and the FAA worked with the aviation industry to develop and implement 

several actions—capacity enhancing initiatives, demand management policies, and air traffic 

procedures—to reduce congestion and delays for the summer 2008 travel season. 
United States Department of Transportation 177

3. Actions may help reduce delays, but the extent of delay reduction in the summer of 2008 will 

likely be limited. The growing air traffic congestion and delay problem is the result of many 

factors, including airline practices, inadequate investment in airport and air traffic control 

infrastructure, and how aviation infrastructure is priced. Addressing this problem involves 

choices that affect the interests of passengers, airlines, airports, and local economies.

Recommendations No recommendations were made as part of this GAO evaluation – the findings and 

conclusions served as testimony to the U.S. Senate’s Committee on Commerce, Science and Transportation, 

Subcommittee on Aviation Operations, Safety, and Security. However, DOT and FAA continue to work both on 

short-term mitigation and long-term planning.

• Short-term Solutions Solutions that mitigate the short-term impact are capacity-enhancing

initiatives and demand management policies. One capacity-enhancing initiative is the New 

York/ New Jersey/Philadelphia Airspace Redesign which is projected to reduce flight delays by 

20 percent after full implementation in 2012. Demand management policies are being pursued 

for the three major New York airports that will limit the number of scheduled and unscheduled 

flights prompting a reduction in delays by up to 41 percent depending on the airport. The 

proposed rules for LaGuardia, John F. Kennedy International and Newark Liberty International 

will become effective in December 2008 and expire in 2018.

• Long-term Solutions FAA’s long-term objective is to reduce congestion by increasing capacity

to accommodate demand. To address capacity in the medium to long term, DOT is working 

full-time to develop and implement the Next Generation Air Transportation System (NextGen) 

technology so the air traffic system will be able to accommodate more traffic, more efficiently.

Job Access and Reverse Commute (JARC) Formula Grant

FTA The JARC program provides grants to States and localities for improving the mobility of low-income 

persons seeking and maintaining employment. This evaluation summary is a combination of the findings of 

three evaluations of the JARC program that were funded by the Federal Transit Administration (FTA) and 

conducted between 2002 and 2007:

• Connecting People to Employment: An Evaluation of JARC Services (2006). View report at:

http://www.fta.dot.gov/documents/DSFY06_Analysis_Final_20070928(1).doc

• The Economic Benefits of Employment Transportation (2008). View report at: http://www.utc.

uic.edu/research/reports/Thakuriah_Final_Report2008.pdf

• Planning Partnerships for Low-Income Transportation. View report at: http://www.fta.dot.gov/

documents/JARC_Partnership_Studies_Summary-10.doc

Findings

Program Results (1) The JARC program is meeting its mission of providing low-income persons with 

transportation to entry-level job opportunities. Two-thirds of the JARC users surveyed indicated they would 

not be able to access their destination without the service they were currently using. (2) The cost-per-ride 

of JARC services is comparable to other public transit services and the annual program cost of the JARC 

program compares favorably to other Federal grant programs designed to improve employment opportunities 
178 FY 2008 Performance & Accountability Report

for low-income persons. (3) Every $1 spent on JARC services produces a return of between $1.61 and $1.99 in 

net economic gains that accrue to the user. Every $1 spent on JARC services produces a return of $1.10 to the 

taxpaying and traveling public, as measured by (a) the value of taxes paid by JARC users; (b) welfare payments 

that no longer need to be made to the users; and (c) the value of congestion reduced and traffic accidents avoided 

that can be attributed to the JARC program.

Partnership Requirements (1) In many cases JARC energized existing planning activities and made services 

possible. (2) JARC partnerships have jump-started a variety of other partnerships and coordination activity. 

(3) Planning requirement has led to improved analysis of the regions’ job access needs.

Implementation and Sustainability (1) Delays in funding and inability to find local match challenged the 

ability to provide service. (2) Transportation coordinators have been effective in linking former welfare 

clients to services. (3) Much greater outreach is needed with private companies. (4) Planning partnerships 

were instrumental in achieving the job access goals for their area. The planning process resulted in financial 

partnerships where local agencies were able to coordinate funding and provide transportation services, leading 

to increased efficiency.

Recommendations

• Recommendations for Policy Activities (1) Structural inequities in the transportation

system should be addressed by much larger set of policy and programmatic functions, such as 

land use planning and economic incentives to employers, not just by transportation. (2) Special 

emphasis on employment transportation should continue including programs targeting persons 

with disabilities and incentives for matching funds. (3) Focus on the individual user and lifecycle 

transportation. (4) Leverage employers for funding and operations, such as encouraging the use 

of transit benefits.

FTA is already working to address the land use barriers by supporting the National Center on Transit Oriented 

Development’s work to promote affordable housing near transit stations.

• Recommendations for Planning Activities (1) Combine Federal transportation-assistance

programs for disadvantaged populations. (2) Provide greater guidance to states and local areas to 

merge statewide and regional planning requirements with the planning requirements for human 

services transportation. (3) Create training programs to educate partners about potential pitfalls. 

(4) Keep the program flexible to tailor to local needs.

FTA and Department of Labor already sponsor cooperative agreements with the Community Transportation 

Association of America to promote private sector involvement in the JARC program including the National 

Joblinks employment transportation initiative. This is a national peer-to-peer network that links local agencies 

with experienced practitioners familiar with the human services and workforce development environments and 

knowledgeable about special client transportation needs. 

• Recommendations for Service Implementation (1) Improve the prospects of sustainability –

establish a broader program. (2) Relax some of the requirements imposed on service providers. 

(3) Make resources available to publicize services. (4) Develop mechanisms to provide incentives 

for private sector involvement in services.
United States Department of Transportation 179

FY 2008 PROGRAM EVALUATIONS SUPPORTING

SECURITY, PREPAREDNESS AND RESPONSE

Maritime Security

MARAD The Maritime Administration planned to have an independent auditor conduct an impact 

assessment of the Maritime Security Program (MSP) in FY 2007. However, FY 2007 funding was not available 

for this project, so it was deferred until FY 2008. The Maritime Administration has awarded a program 

evaluation contract and the evaluation will be completed in FY 2009. 

FY 2008 PROGRAM EVALUATIONS SUPPORTING 

ORGANIZATIONAL EXCELLENCE

Maritime Education

MARAD Due to the higher than expected costs for a Maritime Security Program (MSP) program 

evaluation, funding was not available to conduct a program evaluation of the Maritime Education Programs in 

FY 2008. The Maritime Administration is deferring this evaluation, subject to availability of funds. 

Outreach and Training

PHMSA PHMSA is in the process of conducting a process evaluation of its outreach/training 

programs—a structured assessment of the underlying logic, planning, and implementation of those efforts 

that leverage our resources by working with others. The general objectives are to (1) identify possible areas 

for improvement and/or lessons learned that might be applied in other areas, and (2) begin laying the 

groundwork for a planned program evaluation of the pipeline safety grants program in FY 2009. The general 

approach for the evaluation is to assemble documents, interview program managers, formulate/reconstruct 

logic models, evaluate/test the models to identify logical disconnects, determine how the programs actually 

work in practice, and evaluate differences between assumptions in the plan and actual implementation.

The first phase, initiated in 2008 and carrying into 2009, is an evaluability assessment—aimed at helping to 

determine what aspects of outreach/training would be most useful and feasible to evaluate in more detail. The 

second phase, commencing in 2009, is a more in-depth evaluation of selected program activities or initiatives 

based on the evaluability assessment. 

Findings Preliminary results from Phase I will be available by the end of calendar year 2008. 

Recommendations Recommendations from Phase II will be available by the end of FY 2009.

Quality Assurance Review – Grants Management

The FMCSA assessed its seven grant programs for adequacy, consistency, objectivity, efficiency and effectiveness. 

The evaluation team documented and analyzed policies and procedures; compared associated grant 

administration processes with applicable government laws and regulations; and reviewed other related work (i.e. 

A-123 process flowcharts and GAO reports). The purpose of this process evaluation was to assess the extent to 

which our grant management programs and practices are consistent, standardized, and applied in a uniform and 

timely manner. 
180 FY 2008 Performance & Accountability Report

Findings The overarching finding was a lack of uniform program and financial management policies and 

procedures, and a lack of training in specialized grant management and monitoring.

Recommendations The Agency is still reviewing the recommendations, but in most cases program managers 

have initiated improvements consistent with several of the following key recommendations:

• Implement initiatives to improve the grants management oversight functionality/mission

• Comply with rules regarding the use of standardized forms

• Institute new grantee training initiatives (financial management)

• Organize a national conference to facilitate the exchange of best practices

• Develop a user-friendly central repository of policy, procedures and best practices

• Finalize a comprehensive grant management manual

Of these recommendations, FMCSA has accomplished the first four and has established an initiative to achieve 

the last two.

Rail Transportation Research, Development and Demonstration

The Federal Railroad Administration (FRA) completed a review of the Research, Development and 

Demonstration (RD&D) Program associated with freight and passenger rail programs. It was conducted by a 

committee of the Transportation Research Board through semi-annual meetings that included presentations 

from FRA program managers, discussions and debate by industry and subject matter experts, and various 

other data gathering methods. The review covered stakeholder involvement, project evaluation process, 

research priorities, future committee activities, and the role of academic research in railroad engineering and 

transportation.

Findings A review of research priorities identified during a 2006 Workshop on research to Enhance Rail 

Network Performance focused on three issues – safety, capacity, and efficiency. The committee found that 

several areas are being addressed such as lower cost options for positive train control, use of performance-based 

standards, cost-benefit analysis and risk analysis for train movement risk assessment, a 5-year plan for lowcost grade-crossing improvements, and a successful close-calls database and reporting pilot to improve safety 

analysis. 

The committee expressed support for the vision and direction of FRA’s research, development, and 

demonstration efforts. Additionally, of note, FRA continues to make good progress in developing a more 

consistent and priority driven program selection process.

Recommendations

• Identify Customers and Stakeholders FRA has already made significant progress regarding the

development and implementation of a formal project evaluation process that includes all the key 

factors identified by the committee. FRA is also restructuring its locomotive safety research and 

is reaching out to various stakeholders for input into future activities. 
United States Department of Transportation 181

• Accelerated and Enhanced Process Work has been done by FRA to develop a revised project

evaluation process that would include a mechanism for ranking research projects within FRA. 

That work should continue at an accelerated pace in order to establish a more robust system for 

selecting and evaluating research projects. This agency-level improvement will evolve in tandem 

with the Departmental effort of the Research Planning and Investment Coordination program 

operated by the Research and Innovative Technology Administration.

State Division Effectiveness

FMCSA The FMCSA conducted a study to evaluate the effectiveness of its State Divisions in meeting 

FMCSA safety goals and to identify weaknesses and gaps in planning efforts to meet them. The study also 

explored steps to eliminate these weaknesses and gaps, and to strengthen the effectiveness of the State Division 

activities. Additionally, this study identified potential planning and management improvements at all levels that 

could positively impact the safety goal and that would provide states with macro and micro analysis for grant 

planning and resource deployment. 

The FMCSA used a comprehensive approach to collect and analyze safety and performance data as well as 

empirical information from managers, staff, and partners. The methodology included five elements: (1) data 

analysis, (2) division safety plan analysis, (3) field staff focus groups, (4) state division visits, and (5) FMCSA 

headquarters review team discussions.

Findings

1. The study found that overall, the State Division offices employ robust management practices that 

include a range of management strategies and tools to motivate, manage, and develop strong, 

collaborative working relationships with their state partners.

2. The State Division offices continually work to strengthen the effectiveness of their enforcement 

processes, such as arranging to receive real time reports from state police on commercial motor 

vehicle fatal crashes and targeting at-fault carriers for review.

3. The study found some shortcomings in the State Division Safety Plan (DSP), in that it lacks input 

and output feedback loops, which disconnects it from other key planning processes and limits its 

utility to the State Divisions, Service Centers, and Headquarters.

Recommendations The study provides recommendations to strengthen the DSP. The recommendations 

suggest a process that integrates the State Division and Headquarters planning and program development into 

FMCSA’s strategic priorities, budget, performance plans, and performance targets. The FMCSA is currently 

evaluating these recommendations for incorporation into the Agency’s business processes.
182 FY 2008 Performance & Accountability Report

Information Technology

PHMSA PHMSA conducted a comprehensive Information Technology Program Review on the current 

IM capabilities in order to identify business and technology performance gaps that inhibit the ability of PHMSA’s 

lines of business to execute mission objectives.

Findings 

1. Organizational roles and responsibilities have not been defined for the management of enterpriselevel and shared data. 

2. Data and information are often not accessible through desktop tools. There are often integrity 

and quality challenges associated with operational data.

3. Key PHMSA business processes and services are underserved by the PHMSA IT groups.

4. IT services are provided by three independent teams reporting to separate leaders within 

PHMSA.

5. Enterprise-wide IT planning and IT investment management needs to be strengthened.

6. A gap exists between the data required to report on some external performance measures and the 

data collected within operational systems.

7. Internal organizational performance measures that describe how well PHMSA is meeting its 

mission need to be strengthened.

Recommendations

• Organization Develop roles and responsibilities, rules of engagement, and follow common

standards and repeatable procedures.

• Governance Develop common standards, processes, and procedures that are repeatable,

thereby improving PHMSA’s ability to prioritize strategic investments. Develop an organizationwide standards and common data architecture. Eliminate IT development activities that continue 

to perpetuate stove-pipe systems and result in long time-to-deploy timeframes, increased costs, 

and missed expectations.

• Data Architecture and Management Institute a data architecture and management plan to

include how PHMSA will define and access data, what governance controls will be in place to 

control changes to data, how it identifies common services and standards for data, how it will 

apply risk models, how it measure data, etc. This was identified as a top priority recommendation 

and is essential to support a data driven organization.
United States Department of Transportation 183

• Technical Architecture Establish data-marts for the Offices of Hazardous Materials

Safety and Pipeline Safety that leverage business intelligence tools to enhance decision making 

that is based on trusted enterprise data and information. Provide the capability to mine data, 

dynamically generate reports, automate analysis of data, apply risk models, provide enterprisewide consistency in analysis, and increase Program Analysts efficiencies. Establish a plug-n-play 

environment leveraging common and reusable components to reduce costs and increase business 

performance.

Contingent on the availability of funding, execution and implementation of the recommendations will take 

two years. The projects identified under items one and two above are being executed with existing resources. 

Funding and additional IT resources are required to design, develop, and implement the Data and Technical 

Architecture projects described above. The core capabilities being provided within the two year window are 

intended to provide the essential building blocks necessary to support a dynamic data driven organization.

185

financial report

United States Department of Transportation 187

u.s. Department of 

Memorandum

transportation 

Office of the Secretary 

of Transportation 

Office of Inspector General 

Subject: ACTION: Quality Control Review of Audited 

Consolidated Financial Statements for 

Fiscal Years 2008 and 2007, DOT 

Report Number: QC-2009-009

Date: November 14, 2008 

From: Calvin L. Scovel III

Inspector General 

Reply to 

Attn. of: JA–20

To: The Secretary

I respectfully submit the Office of Inspector General’s (OIG) Quality Control 

Review report on the Department of Transportation’s (DOT) audited Consolidated 

Financial Statements for Fiscal Years (FY) 2008 and 2007.

The audit of DOT’s Consolidated Financial Statements as of and for the year 

ended September 30, 2008, was completed by KPMG LLP, of Washington, D.C. 

(see Attachment), under contract to OIG. We performed a quality control review 

of the audit work to ensure that it complied with applicable standards. These 

standards include the Chief Financial Officers Act, as amended; Generally

Accepted Government Auditing Standards; and Office of Management and Budget 

Bulletin 07-04, “Audit Requirements for Federal Financial Statements,” as 

amended. 

KPMG concluded that the consolidated financial statements present fairly, in all 

material respects, the financial position of the U.S. Department of Transportation 

as of September 30, 2008, and its net costs, changes in net position, and budgetary 

resources, for the year then ended, in conformity with U.S. generally accepted 

accounting principles. OIG audited last year’s DOT consolidated financial 

statements, and we also expressed an unqualified opinion on those statements.1

We congratulate the Department for reaching a significant milestone this year. 

The DOT consolidated financial statements have been audited since FY 1996, and 

DOT this year received the best outcome yet - an unqualified (clean) audit opinion 

 

1

 Report on Consolidated Financial Statements for FY 2007 and FY 2006, Department of Transportation, 

Report Number FI-2008-011, November 13, 2007. 
188 FY 2008 Performance & Accountability Report

2

with no internal control material weaknesses. This signals to the public that the 

Department is maintaining a mature and reliable financial environment to account 

for its available financial resources of nearly $134 billion.

This would not have occurred without your emphasis and personal commitment to 

improving financial management practices, along with that of your senior 

leadership team, including the departmental Chief Financial Officer and the 

Acting Federal Aviation Administrator. This commitment enabled the Department 

to sustain clean audit opinions in the last 2 years and make significant progress 

toward improving a long-standing concern associated with the Federal Aviation 

Administration’s (FAA) Property, Plant, and Equipment Account. 

The Department must, however, remain vigilant in sustaining good financial 

management operations to ensure effective use of financial resources in an 

environment of uncertain financial markets, volatile fuel prices, rising deficits, and 

a softening economy. This environment presents a special challenge to the 

Highway Trust Fund and Aviation Trust Fund revenue receipts, which financed 

more than 70 percent of DOT’s operating costs. The following summarizes the 

key financial management challenges that the Department continues to face.

Improving Financial Reporting

The Department needs to sustain clean audit opinions with no material 

weaknesses, continue enhancing its financial management oversight, and improve 

the quality of its financial information throughout the year. Several of the 

significant deficiencies reported by KPMG - use of journal entries, analysis of 

proprietary and budgetary account relationships, calculating grant accruals, 

eliminating intradepartmental activity, and implementing managerial cost 

accounting capabilities - have been reported as internal control deficiencies for 

several years, especially for the DOT Operating Administrations funded by the 

Highway Trust Fund. DOT needs to continue working to correct these internal 

control deficiencies to ensure that financial records accurately reflect operational 

results to support management decisions in today’s tight financial environment. 

Correcting these long-standing deficiencies will also bring DOT into full 

compliance with Federal Financial Management Improvement Act (FFMIA) 

requirements.

Implementing New CIP Processes

The Department needs to ensure that FAA remains vigilant and continues to 

implement new policies and procedures in accounting for Property, Plant, and 

Equipment, especially Construction in Progress (CIP) transactions. The 

significant deficiency associated with accounting for FAA Property, Plant, and 
United States Department of Transportation 189

3

Equipment, including the CIP account, was reported as a material weakness in the 

last three consecutive years and resulted in a qualified opinion on the DOT 

consolidated financial statements in FY 2006. Similarly, DOT slipped to a 

qualified opinion in FY 2000 because of a material weakness in accounting for 

FAA Property, Plant, and Equipment. On both occasions, DOT and FAA had to 

execute expensive corrective action plans to improve accounting for Property, 

Plant, and Equipment, and to get back to an unqualified audit opinion.

Effectively Managing the Highway Trust Fund Resources 

The Highway Trust Fund (HTF) is the primary source for financing highway 

construction projects; it experienced a solvency problem during FY 2008. In 

August, the Department worked closely with Congress to have $8 billion 

transferred from the General Fund to help alleviate fund shortages. While the 

Department is researching alternative funding sources, it also needs to ensure 

effective use of available funds. As of September 30, 2008, DOT reported a total 

of $80 billion in outstanding obligations, most of which were associated with 

HTF-related grants. KPMG estimated that about $300 million of these obligations 

were no longer needed and should have been released (de-obligated) for other use. 

In today’s budget environment in which highway investment needs exceed 

available resources, allowing unneeded obligations to sit idle leaves fewer funds 

available for expanding and preserving National Highway System infrastructure.

KPMG FY 2008 Audit Report

KPMG reported seven internal control significant deficiencies, none of which 

were believed to be material weaknesses, and four instances of potential or known 

noncompliance with laws and regulations: 

Significant Deficiencies

1. Journal Entries and Account Relationships 

2. Property, Plant, and Equipment, including the Construction in Progress 

Account

3. Grant Accruals

4. Exchange Revenue 

5. Financial Reporting 

6. Undelivered Orders

7. Information Technology Controls over Financial Systems and Applications 
190 FY 2008 Performance & Accountability Report

4

Noncompliance with Laws and Regulations

1. Antideficiency Act

2. Federal Financial Management Improvement Act of 1996 

3. Federal Managers’ Financial Integrity Act of 1982

4. Improper Payments Information Act of 2002

KPMG made 25 recommendations for corrective action; we agree with all and, 

therefore, are making no additional recommendations. DOT officials concurred 

with the significant deficiencies and potential or known instances of 

noncompliance, and committed to developing a detailed action plan to address the 

findings contained in the report no later than December 29, 2008. In accordance 

with DOT Order 8000.1C, the corrective actions taken in response to the findings 

are subject to follow-up. Please provide us with actual amounts de-obligated as a 

result of actions taken in response to the “Undelivered Orders” significant 

deficiency by June 30, 2009. 

In our opinion, the audit work performed by KPMG complied with applicable 

standards.

We appreciate the cooperation and assistance of DOT and KPMG representatives. 

If we can answer any questions, please call me at (202) 366-1959; David Dobbs, 

Principal Assistant Inspector General for Auditing and Evaluation, at 

(202) 366-1427; or Rebecca Leng, Assistant Inspector General for Financial and 

Information Technology Audits, at (202) 366-1407.

Attachment

#
United States Department of Transportation 191

Independent Auditors’ Report 

Secretary and Inspector General 

U.S. Department of Transportation: 

We have audited the accompanying consolidated balance sheet of the U.S. Department of Transportation 

(DOT) as of September 30, 2008, and the related consolidated statements of net cost and changes in net 

position, and combined statement of budgetary resources (hereinafter referred to as “consolidated financial 

statements”) for the year then ended. The objective of our audit was to express an opinion on the fair 

presentation of these consolidated financial statements. In connection with our audit, we also considered 

the DOT’s internal controls over financial reporting and tested the DOT’s compliance with certain 

provisions of applicable laws, regulations, contracts, and grant agreements that could have a direct and 

material effect on these consolidated financial statements. The accompanying consolidated financial 

statements of the DOT as of, and for the year ended, September 30, 2007 were audited by other auditors 

whose report thereon dated November 9, 2007, expressed an unqualified opinion on those statements. 

Summary 

As stated in our opinion on the consolidated financial statements, we concluded that the U.S. Department 

of Transportation’s consolidated financial statements as of and for the year ended September 30, 2008 are 

presented fairly, in all material respects, in conformity with U.S. generally accepted accounting principles. 

As discussed in our opinion, the DOT changed its method of accounting for and reporting of heritage assets 

to adopt changes in accounting standards in fiscal year 2008, and reports certain significant estimates in its 

excise tax revenues. 

Our consideration of internal control over financial reporting resulted in the following conditions being 

identified as significant deficiencies: 

A. Journal Entries and Account Relationships 

B. Property, Plant, and Equipment, including the Construction in Progress Account 

C. Grant Accruals 

D. Exchange Revenue 

E. Financial Reporting 

F. Undelivered Orders 

G. Information Technology Controls over Financial Systems and Applications 

However, none of the significant deficiencies are believed to be material weaknesses. 

The results of our tests of compliance with certain provisions of laws, regulations, contracts, and grant 

agreements disclosed the following instances of actual or potential noncompliance or other matters that are 

KpMg llp 

2001 M Street, NW 

Washington, DC 20036 

KPMG LLP. KPMG LLP, a U.S. limited liability partnership, is 

a member of KPMG International, a Swiss cooperative. 
192 FY 2008 Performance & Accountability Report

2

required to be reported under Government Auditing Standards, issued by the Comptroller General of the 

United States, and Office of Management and Budget (OMB) Bulletin No. 07-04, Audit Requirements for 

Federal Financial Statements.

H. Anti-Deficiency Act 

I. Federal Financial Management Improvement Act of 1996 

J. Federal Managers’ Financial Integrity Act of 1982 

K. Improper Payments Information Act of 2002 

The following sections discuss our opinion on the DOT’s fiscal year 2008 consolidated financial 

statements; our consideration of the DOT’s internal controls over financial reporting; our tests of the 

DOT’s compliance with certain provisions of applicable laws, regulations, contracts, and grant agreements; 

and management’s and our responsibilities. 

Opinion on the Financial Statements 

We have audited the accompanying consolidated balance sheet of the U.S. Department of Transportation as 

of September 30, 2008, and the related consolidated statements of net cost and changes in net position, and 

the combined statement of budgetary resources for the year then ended. 

In our opinion, the consolidated financial statements referred to above present fairly, in all material 

respects, the financial position of the U.S. Department of Transportation as of September 30, 2008, and its 

net costs, changes in net position, and budgetary resources, for the year then ended, in conformity with 

U.S. generally accepted accounting principles. 

As discussed in Notes 1 and 9, the DOT changed its method of accounting for and reporting heritage assets 

in fiscal year 2008 to adopt the provisions of the Federal Accounting Standards Advisory Board’s 

Statement of Federal Financial Accounting Standards No. 29, Heritage Assets and Stewardship Land.

As discussed in Notes 1 and 20, the consolidated financial statements reflect actual excise tax revenues 

deposited in the Highway Trust Fund and the Airport and Airway Trust Fund through June 30, 2008 and 

excise tax receipts estimated by the Department of Treasury’s Office of Tax Analysis for the quarter ended 

September 30, 2008. 

The information in the Management’s Discussion and Analysis, Required Supplementary Information, and 

Required Supplementary Stewardship Information sections is not a required part of the consolidated 

financial statements, but is supplementary information required by U.S. generally accepted accounting 

principles. We have applied certain limited procedures, which consisted principally of inquiries of 

management regarding the methods of measurement and presentation of this information. However, we did 

not audit this information and, accordingly, we express no opinion on it. 

Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements 

taken as a whole. The information in the Other Accompanying Information section is presented for 

purposes of additional analysis and are not required as part of the consolidated financial statements. This 

information has not been subjected to auditing procedures and, accordingly, we express no opinion on it. 

Internal Control Over Financial Reporting 

Our consideration of the internal control over financial reporting was for the limited purpose described in 

the Responsibilities section of this report and would not necessarily identify all deficiencies in the internal 

control over financial reporting that might be significant deficiencies or material weaknesses. 
United States Department of Transportation 193

3

A control deficiency exists when the design or operation of a control does not allow management or 

employees, in the normal course of performing their assigned functions, to prevent or detect misstatements 

on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, 

that adversely affects the DOT’s ability to initiate, authorize, record, process, or report financial data 

reliably in accordance with U.S. generally accepted accounting principles such that there is more than a 

remote likelihood that a misstatement of the DOT’s consolidated financial statements that is more than 

inconsequential will not be prevented or detected by the DOT’s internal control. A material weakness is a 

significant deficiency, or combination of significant deficiencies, that results in more than a remote 

likelihood that a material misstatement of the financial statements will not be prevented or detected by the 

DOT’s internal control. 

In our fiscal year 2008 audit, we consider the deficiencies described in Exhibit I to be significant 

deficiencies in internal control over financial reporting. However, we believe that none of the significant 

deficiencies described in Exhibit I are material weaknesses. Exhibit III presents the status of prior year 

significant deficiencies. 

We noted certain additional matters that we will report to management of the DOT in a separate letter. 

Compliance and Other Matters 

The results of certain of our tests of compliance as described in the Responsibilities section of this report, 

exclusive of those referred to in the Federal Financial Management Improvement Act of 1996 (FFMIA),

disclosed two potential and one other instances of noncompliance that are required to be reported herein 

under Government Auditing Standards or OMB Bulletin No. 07-04, and are described in Exhibit II. 

The results of our other tests of compliance as described in the Responsibilities section of this report, 

exclusive of those referred to in FFMIA, disclosed no instances of noncompliance or other matters that are 

required to be reported herein under Government Auditing Standards or OMB Bulletin No. 07-04. 

The results of our tests of FFMIA disclosed instances, described in Exhibit II, where the DOT did not 

substantially comply with applicable Federal accounting standards. 

The results of our tests of FFMIA disclosed no instances in which the DOT did not substantially comply 

with the Federal financial management systems requirements, and the United States Government Standard 

General Ledger at the transaction level. 

Exhibit III presents the status of prior year instances of non-compliance. 

* * * * * * * 

Responsibilities

Management’s Responsibilities. Management is responsible for the consolidated financial statements; 

establishing and maintaining effective internal control; and complying with laws, regulations, contracts, 

and grant agreements applicable to the DOT. 

Auditors’ Responsibilities. Our responsibility is to express an opinion on the fiscal year 2008 

consolidated financial statements of the DOT based on our audit. We conducted our audit in accordance 

with auditing standards generally accepted in the United States of America; the standards applicable to 

financial audits contained in Government Auditing Standards, issued by the Comptroller General of the 

United States; and OMB Bulletin No. 07-04. Those standards and OMB Bulletin No. 07-04 require that we 

plan and perform the audit to obtain reasonable assurance about whether the consolidated financial 

statements are free of material misstatement. An audit includes consideration of internal control over 

financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but 
194 FY 2008 Performance & Accountability Report

4

not for the purpose of expressing an opinion on the effectiveness of the DOT’s internal control over 

financial reporting. Accordingly, we express no such opinion. 

An audit also includes: 

x Examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated 

financial statements; 

x Assessing the accounting principles used and significant estimates made by management; and 

x Evaluating the overall consolidated financial statement presentation. 

We believe that our audit provides a reasonable basis for our opinion. 

In planning and performing our audit, we considered the DOT’s internal control over financial reporting by 

obtaining an understanding of the DOT’s internal control, determining whether internal controls had been 

placed in operation, assessing control risk, and performing tests of controls as a basis for designing our 

auditing procedures for the purpose of expressing our opinion on the consolidated financial statements. We 

did not test all internal controls relevant to operating objectives as broadly defined by the Federal 

Managers’ Financial Integrity Act of 1982. The objective of our audit was not to express an opinion on the 

effectiveness of the DOT’s internal control over financial reporting. Accordingly, we do not express an 

opinion on the effectiveness of the DOT’s internal control over financial reporting. 

As part of obtaining reasonable assurance about whether the DOT’s fiscal year 2008 consolidated financial 

statements are free of material misstatement, we performed tests of the DOT’s compliance with certain 

provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a 

direct and material effect on the determination of the consolidated financial statement amounts, and certain 

provisions of other laws and regulations specified in OMB Bulletin No. 07-04, including the provisions 

referred to in Section 803(a) of FFMIA. We limited our tests of compliance to the provisions described in 

the preceding sentence, and we did not test compliance with all laws, regulations, contracts, and grant 

agreements applicable to the DOT. However, providing an opinion on compliance with laws, regulations, 

contracts, and grant agreements was not an objective of our audit and, accordingly, we do not express such 

an opinion. 

______________________________ 

The DOT’s response to the findings identified in our audit is presented in Exhibit IV. We did not audit the 

DOT’s response and, accordingly, we express no opinion on it. 

This report is intended solely for the information and use of the DOT’s management, the DOT Office of 

Inspector General (OIG), OMB, the U.S. Government Accountability Office, and the U.S. Congress and is 

not intended to be and should not be used by anyone other than these specified parties. 

November 12, 2008
United States Department of Transportation 195

U.S. DEPARTMENT OF TRANSPORTATION EXHIBIT I

Independent Auditors’ Report 

Significant Deficiencies in Internal Control 

5

SIGNIFICANT DEFICIENCIES

A. Journal Entries and Account Relationships 

Background/Criteria: From fiscal year (FY) 2003 until FY 2006, the DOT OIG reported that material 

weaknesses existed in internal controls over financial management and reporting activities in the DOT, 

specifically in the Highway Trust Fund (HTF) agencies. In FY 2007, the HTF agencies implemented significant 

improvements in internal controls over financial management and reporting activities. In the FY 2007 audit 

report, the DOT OIG identified deficiencies in controls, as required by the DOT Financial Management Policies 

Manual and other DOT guidance, over journal entries and analysis of proprietary and budgetary account 

relationships as a significant deficiency. 

Conditions: We noted the following internal control weaknesses in the DOT’s use of journal entries and analysis 

of proprietary and budgetary account relationships.

Use of Journal Entries

We reviewed 389 journal entries processed by the HTF agencies and 6 other operating administrations (OAs) for 

the year ended September 30, 2008, and we noted 67 instances in which these entries could have been avoided by 

following existing DOT policies and procedures. Specifically, these entries could have been entered using one of 

the modules within Delphi, the DOT’s core accounting system, or by using standardized posting models. 

Further, we noted that the DOT lacks a consistent journal entry numbering scheme and journal entry 

nomenclature that ensures the journal entries were sequentially numbered. 

Analysis of Proprietary and Budgetary Account Relationships 

During our review of account relationship tests as of and for the year ended September 30, 2008 for the same 

agencies listed above, we noted the following exceptions related to analyzing, resolving, or explaining the 

variances identified by the account relationship tests: 

x Some variances did not appear to be properly researched, researched timely or have timely corrective action 

documented and taken. While the DOT reduced the total amount of out-of-balance conditions by 

approximately $3.4 billion during FY 2008, there are significant variances that remain unresolved from yearto-year and quarter-to-quarter. At the end of the first, second, and third quarters of FY 2008, journal entries 

were posted to balance certain proprietary and budgetary accounts without completely researching the related 

variance. These entries were reversed at the beginning of the next quarter in order to continue the research. 

As of September 30, 2008, management believed the variances to be immaterial, and did not record journal 

entries to balance the proprietary and budgetary accounts. 

x DOT’s policy of obtaining analysis and support for all variances above $500 thousand is not consistently 

being completed in a timely manner. 

x The current account relationship tool used by DOT personnel has limitations and does not allow for the 

accurate analysis of certain account relationships. 

In July 2008, the DOT formed a dedicated team of experienced accountants to focus on improving the timeliness, 

accuracy, and comprehensiveness of the account reconciliations. As a result, the team’s improvement efforts 

were only partially completed as of year-end. 

Cause: The DOT Office of Financial Management developed a consistent and comprehensive set of proprietary 

and budgetary account relationship tests for all DOT agencies to use beginning with the quarter ended June 30, 

2007. However, certain of DOT’s OAs have not adequately implemented the related policies and procedures 

over the analysis and resolution of variances identified between proprietary and budgetary accounts. In addition, 

the policies and procedures did not establish a firm due date for the resolution of any variances identified. 
196 FY 2008 Performance & Accountability Report

U.S. DEPARTMENT OF TRANSPORTATION EXHIBIT I

Independent Auditors’ Report 

Significant Deficiencies in Internal Control 

6

Finally, the resources dedicated to the effort of researching and resolving differences in the proprietary and 

budgetary account relationships vary during the year, and increased substantially in the months prior to year-end. 

Effect: Failure to research and resolve proprietary and budgetary account variances increases the risk that 

quarterly or the year-end financial statements may be misstated or not properly supported. 

Recommendations: We recommend that the DOT: 

1. Enforce existing policies and procedures to reduce the use of manual journal entries, especially in instances 

when the entry should have been processed through the Delphi modules or by using standardized posting 

models. 

2. Develop effective policies and procedures to ensure that journal entries are sequentially numbered. 

3. Revise the existing policies to include a firm due date for the timely resolution of variances and to require a 

thorough review and resolution of variances prior to posting “balancing” journal entries to the general ledger. 

4. Follow the existing and revised policies and procedures to review and document the resolution of account 

relationship variances at the accounting fund level on a monthly basis. 

5. Review each OA’s analysis in order to ensure compliance with the existing policies and procedures and to 

ensure that transactions posted to the general ledger are accurate. 

B. Property, Plant, and Equipment, including the Construction in Progress Account 

Background/Criteria: The Federal Aviation Administration (FAA) constructs significant capital assets, such as 

radar, navigational, communications, and other technology equipment that is used to operate the United States 

National Airspace System. The FAA’s property, plant and equipment (PP&E) portfolio totals approximately 

$13.8 billion, including construction in progress (CIP) of approximately $2.3 billion as of September 30, 2008. 

From FY 2005 through FY 2007, the DOT OIG reported that FAA had a material weakness in internal controls 

over the timely processing of PP&E transactions and related accounts.

Conditions: During FY 2008, we noted: 

x Weaknesses in the controls over the additions and adjustment to fixed assets (excluding CIP) at the FAA 

regional level.

x Weaknesses in the controls over the additions to CIP at the headquarters and regional level. 

x Weaknesses in the controls over FAA’s quarterly PP&E accrual. 

x A lack of adherence to policies and procedures by program offices to ensure the timely removal of fixed 

assets from the accounting system upon retirement.

x Improper expensing during FY 2008 of CIP projects. 

x Improper up-front coding of a headquarters project as capital when the project met the criteria for expense 

coding. 

x Improper classification of CIP projects as of September 30, 2008. 

x Correction of asset useful life, date placed in service, and/or asset cost during FY 2008, due to input errors in 

the prior year. 

The issues noted above resulted in actual and projected errors totaling $130 million. 

Cause/Effect: Weaknesses noted during FY 2008 are the result of newly developed policies and procedures not 

operating effectively or not being implemented throughout the FAA. If FAA is unable to correct these 

conditions, the CIP, PP&E and related financial statement balances may be misstated. 
United States Department of Transportation 197

U.S. DEPARTMENT OF TRANSPORTATION EXHIBIT I

Independent Auditors’ Report 

Significant Deficiencies in Internal Control 

7

Recommendations: We recommend that the DOT: 

6. Continue to work with personnel in the FAA to resolve the weaknesses identified above. During our audit, 

we communicated seven recommendations to FAA management, including improving existing policies and 

procedures, ensuring supporting documentation is maintained and available, implementing a three-year 

rolling inventory, strengthening communication and reporting within the FAA, continuing to review the 

useful life and date placed in service of capitalized assets, continuing to automate transactions, and 

continuing training of and communication with FAA’s accounting offices. 

C. Grant Accruals 

Background/Conditions: For year-end reporting, the DOT, specifically the Federal Highway Administration 

(FHWA), the Federal Transit Administration (FTA), and the FAA, calculates and records an estimated liability 

for the amount of work performed by its grantees (including their contractors) but not yet billed to or reimbursed 

by DOT. The DOT Financial Management Policies Manual requires that estimated accruals should be carefully 

analyzed and compared with subsequent actual numbers to ensure the accrual process is continuously refined to 

improve accuracy. Further, the DOT Financial Management Policies Manual requires that accruals be made as 

accurate as possible based on actual events. 

During FY 2008, these OAs did not receive sufficient information from their grantees in order to either evaluate 

the accuracy and reliability of the accrual estimated as of September 30, 2007 or update their estimates for FY 

2008. As a result, the grant accrual is not based on current sufficient information provided by grantees. 

Cause: Personnel in these OAs do not have effective processes in place to receive the appropriate information 

from their grantees in order to perform appropriate analyses of the accuracy of the prior year’s accruals or to 

update their estimates for the current year. The OAs are hampered in their efforts by the Paperwork Reduction 

Act, which limits the amount of information that agencies of the Federal government may request from state and 

local government entities, who are the vast majority of the DOT’s grantees. 

Effect: Application of a grant accrual methodology without a proper comparison of estimates to subsequent 

actual results and consideration of current year information may result in improperly accruing expenses and 

accounts payable, and the associated liability and expense reported on the Balance Sheet and Statement of Net 

Cost may be misstated. 

Recommendations: We recommend that the DOT: 

7. Enhance its internal controls over the development of its grant accrual methodology to ensure that 

information submitted from selected grantees used in the development of the methodology constitutes 

sufficient and appropriate evidence on which to base the grant accrual estimate. 

8. Update its policies and procedures to obtain and review appropriate information from each of its grantees and 

utilize the information therein to compare to the DOT’s prior year grant accrual estimate in order to refine 

the DOT’s current year grant accrual estimate. 

D. Exchange Revenue 

Background/Criteria: The DOT reported approximately $1.7 billion in earned revenue in FY 2008 resulting 

from the sale of goods and services to other Federal agencies and to the public. The DOT Financial Management 

Policies Manual requires that revenues are recorded when earned and expenses are recorded when incurred 

(goods are received and services performed even though the receipt of the revenue or the payment of the expense 

may take place, in whole or part, in another accounting period). 
198 FY 2008 Performance & Accountability Report

U.S. DEPARTMENT OF TRANSPORTATION EXHIBIT I

Independent Auditors’ Report 

Significant Deficiencies in Internal Control 

8

Conditions: During FY 2008, the DOT was in the process of reviewing a number of prior year transactions 

based on errors in one of the accounting modules in Delphi and in the processing of certain prior year 

reimbursable revenue agreements. During our audit, we noted approximately 17% of the transactions sampled 

were recorded in the wrong fiscal year. 

Cause: Partly due to the current corrective action efforts and partly due to breakdowns in internal controls, the 

OAs are not following existing policies and procedures requiring them to recognize revenue in the appropriate 

period.

Effect: The errors noted in our audit resulted in a net overstatement in FY 2008 of $17.4 million, and projected 

to a net revenue overstatement in FY 2008 of $268.5 million. Management did not adjust for these errors as they 

deemed the actual and projected overstatement to be immaterial to the financial statements taken as a whole. 

Recommendations: We recommend that the DOT: 

9. Continue its current cleanup efforts for prior revenue transactions, and complete such efforts as quickly as 

possible.

10. Ensure that existing policies are consistently followed to ensure revenue is recognized in the appropriate 

period.

E. Financial Reporting 

Background/Criteria: Financial reporting in the Federal environment is a complicated and evolving process. In 

addition, the complex and varied operations of the DOT and its 13 OAs makes consolidated reporting, under 

standards issued by the Federal Accounting Standards Advisory Board (FASAB) and OMB, a challenge for the 

Department.

Conditions: During our FY 2008 audit, we noted several areas for improvement in the DOT’s financial reporting 

process, including: 

x Classification and reporting of DOT’s environmental liabilities and lease expenses; 

x Eliminations of intra-departmental activity; and 

x Implementation of Statement of Federal Financial Accounting Standards (SFFAS) No. 29, Heritage Assets 

and Stewardship Land.

We also noted deficiencies in the disclosure of the credit reform and loan guarantee information and in the 

calculation of the subsidy cost and loan guarantee allowances. Specifically, we noted the subsidy cost model for 

the FHWA Transportation Infrastructure Finance and Innovative Act program had not been formally evaluated or 

updated, and relied upon outdated data from 2002 and 2005.

Further, we noted that nine OAs are not in compliance with the requirements of SFFAS No. 4, Managerial Cost 

Accounting Concepts & Standards for the Federal Government. Specifically, we noted that a formal managerial 

cost accounting system that captures and reports the full costs of programmatic activity has not been 

implemented at those OAs. These nine OAs are the FHWA, the Maritime Administration (MARAD), the Office 

of the Secretary of Transportation, the National Highway Traffic Safety Administration, the Federal Railroad 

Administration, the Research and Innovative Technology Administration, the Federal Motor Carrier Safety 

Administration, the Pipeline and Hazardous Materials Safety Administration, and the Surface Transportation 

Board. Without a proper cost accounting system, these OAs are unable to properly track and present their costs 

in accordance with the requirements of SFFAS No. 4, and the DOT is unable to produce a Statement of Net Cost 

by its strategic goals. 
United States Department of Transportation 199

U.S. DEPARTMENT OF TRANSPORTATION EXHIBIT I

Independent Auditors’ Report 

Significant Deficiencies in Internal Control 

9

Cause: The DOT has limited resources in the office of the DOT CFO, which makes compliance with FASAB 

standards and OMB guidance difficult. 

Effect: Without sufficient resources and processes in place, the DOT’s financial statements may be incomplete 

or misstated. 

Recommendations: We recommend that the DOT: 

11. Ensure sufficient resources and processes are in place to enable timely and accurate financial reporting. 

12. Provide more frequent training on technical accounting topics for DOT’s accountants. 

13. Enhance and improve the DOT’s policies and procedures over financial reporting to ensure consistent 

treatment of accounting transactions among the DOT’s OAs, and provide more opportunities for sharing best 

practices among the OAs on how to account for similar transactions. 

14. More fully integrate the OA’s accounting service provider, the Enterprise Service Center, and the OA’s 

accountants into the DOT CFO’s quarterly and year-end compilation and financial reporting process. 

15. Improve the ability of DOT’s core financial system to report DOT’s financial statements and notes on a 

consolidated and combined basis with limited manual intervention. 

16. Continue its efforts to implement managerial cost accounting processes. 

F. Undelivered Orders 

Background/Criteria: In carrying out its mission, the DOT signs contracts or agreements for the purchase of 

goods and services from other Federal agencies and the public, and for the execution of grant agreements with 

state and local governments and other grantees. As of September 30, 2008, the DOT reported $80.3 billion in 

obligations. The DOT Financial Management Policies Manual requires that OAs should monitor their open 

obligations to ensure that existing obligations are valid. 

Condition: During our audit, we noted that the DOT did not consistently de-obligate funds in a timely manner 

and could not support all balances recorded at June 30, 2008, resulting in an overstatement of the DOT’s 

undelivered orders (UDOs). Further, we noted that the subsidiary ledger used by FHWA personnel to monitor 

and manage active grants did not agree to the amounts reported in grant obligations in Delphi. Finally, partly as 

a result of conversion to Delphi in 2003 and partly due to DOT’s current business process, approximately $187 

million of generic obligations not associated with a specific purchase order (“null undelivered orders”) remain 

recorded. When payments or activity takes place against these items, an extensive manual effort is required by 

DOT personnel to research and identify the original purchase order, and then to ensure that the activity is 

properly recorded. 

Cause: We noted that the OAs are not following existing policies and procedures requiring them to periodically 

review UDO balances and take action to promptly de-obligate excess funds or close-out inactive balances and 

completed projects. Further, the OAs do not maintain proper documentation to support all UDO balances. 

Finally, we noted that the OAs do not have enough personnel or adequately trained personnel to effectively 

assess the UDO balances in a timely manner in accordance with DOT policy. 

Effect: As of June 30, 2008, we noted that the UDO balances in the sample we selected were overstated by a 

known error of $3.9 million, which resulted in a projected error of $340.5 million. Without properly recording 

obligations in Delphi, there is an increased risk of inaccuracies or errors in financial reporting. Further, we noted 

that FHWA personnel were using a subsidiary ledger system to monitor active grant obligations that did not 

agree to Delphi by approximately $143 million. Finally, the $187 million of generic obligations could be 
200 FY 2008 Performance & Accountability Report

U.S. DEPARTMENT OF TRANSPORTATION EXHIBIT I

Independent Auditors’ Report 

Significant Deficiencies in Internal Control 

10

overstated if DOT personnel incorrectly linked activity from the original purchase order to the wrong purchase 

order.

Recommendations: We recommend that the DOT: 

17. Ensure that existing policies and procedures are consistently followed to include the periodic review of the 

validity of UDO balances and enhance the policies and procedures to include formal documentation of the 

OA’s review and to ensure inactive and completed projects are de-obligated and closed-out in a timely 

fashion.

18. Identify and determine the specific cause of recurring differences between the subsidiary ledger used by 

FHWA personnel and Delphi, and develop a corrective action plan to prevent the recurrence of such 

differences.

19. Continue to research and reconcile the outstanding issues related to the generic obligations that remain in 

Delphi.

G. Information Technology Controls over Financial Systems and Applications 

Background/Criteria: Last year, the DOT OIG reported a significant deficiency in the DOT’s financial system 

controls, including system control weaknesses in Delphi and computer security deficiencies in DOT systems that 

provide financial data to Delphi. OMB Circular No. A-130, Security of Federal Automated Information 

Resources, emphasizes the importance of technical and operations controls as part of management controls to 

protect Federal systems and data commensurate with the risk and magnitude of harm resulting from the loss, 

misuse, or unauthorized access to or modification of information. 

In FY 2008, DOT made significant progress in strengthening the design and implementation of controls over 

Delphi. However, we identified several areas in which system control weaknesses continue. 

Conditions: Despite progress in some areas, continued improvements are needed in the DOT’s general controls 

and in controls in the following systems:

x Departmental system: Delphi and the Delphi datacenter; 

x FAA systems: System of Airports Reporting (SOAR), Purchase Request Information System Management 

(PRISM), Cost Accounting System (CAS), and Consolidated Automation System for Time and Labor Entry 

(CASTLE);

x FHWA systems: Fiscal Management Information System (FMIS); and 

x FTA Systems: Transportation Electronic Award Management System (TEAMS), Electronic Clearing House 

Operation (ECHO), and the Delphi Online Transaction System (DOTS). 
United States Department of Transportation 201

U.S. DEPARTMENT OF TRANSPORTATION EXHIBIT I

Independent Auditors’ Report 

Significant Deficiencies in Internal Control 

11

Cause: Effective policies and procedures have not been implemented to ensure that controls are in place and 

operating effectively in the information technology environment. 

Effect: The deficiencies noted could adversely affect the DOT’s ability to record, process, summarize, and report 

financial data consistent with the assertions of management in the DOT’s consolidated financial statements. In 

addition, we also noted that these weaknesses impacted the DOT’s ability to comply with financial management 

system requirements listed in OMB Circular No. A-127, Policies and Standards for Financial Management 

Systems, Section 7 – Financial Management System Requirements, regarding computer security act requirements, 

internal controls, and systems maintenance activities. 

Recommendation: We recommend that the DOT: 

20. Continue to improve the information technology environment applicable to the DOT applications by 

implementing the specific recommendations provided to management. 
202 FY 2008 Performance & Accountability Report

U.S. DEPARTMENT OF TRANSPORTATION EXHIBIT II

Independent Auditors’ Report 

Compliance and Other Matters 

12

COMPLIANCE AND OTHER MATTERS

H. Anti-Deficiency Act

Background/Criteria: Title 31 U.S. Code (U.S.C.) Section 1517 states that an officer or an employee of the 

United States Government may not make or authorize an expenditure or obligation exceeding an apportionment 

or an amount permitted by regulations as specified by Title 31 U.S.C. Section 1514. 

Condition: During FY 2007, MARAD’s management identified a potential violation at the U.S. Merchant 

Marine Academy. During FY 2008, the DOT and representatives from the Government Accountability Office 

(GAO) began in-depth reviews of transactions associated with the U.S. Merchant Marine Academy. Executives 

within the U.S. Maritime Administration, the agency responsible for oversight of the U.S. Merchant Marine 

Academy, concluded that there were likely both isolated and systemic violations of the Anti-Deficiency Act.

Although these potential violations occurred in fiscal years 2008 and prior, management’s review of the potential 

violations has been ongoing and complicated by a lack of a unified accounting system at the U.S. Merchant 

Marine Academy and its affiliates. As of the date of our report, the DOT and the GAO had not completed their 

reviews of this matter. 

Effect: The DOT is potentially not in compliance with the Anti-Deficiency Act. 

Recommendations: We recommend that the DOT:

21. Make it a priority to work with OMB and the Congress to formally report these potential violations, in 

accordance with the Anti-Deficiency Act and the applicable implementation guidance. 

22. Implement appropriate policies and procedures to correct the weaknesses identified at the U.S. Merchant 

Marine Academy. 

I. Federal Financial Management Improvement Act of 1996 (FFMIA)

Background/Criteria: FFMIA requires that an agency’s financial management systems substantially comply 

with Federal financial management systems requirements, accounting standards issued by the Federal 

Accounting Standards Advisory Board, and the U.S. Government Standard General Ledger at the transaction 

level. When evaluating an entity’s compliance with FFMIA, OMB Bulletin No. 07-04 recommends that auditors 

evaluate whether an agency can: (1) prepare financial statements and other required financial budget reports 

using information generated by the financial management system(s); (2) provide reliable and timely financial 

information for managing current operations; (3) account for their assets reliably, so that they can be properly 

protected from loss, misappropriation, or destruction; and do all three in a way that is consistent with generally 

accepted accounting standards and the U.S. Government Standard General Ledger at the transaction level. 

Condition: The DOT was not in substantial compliance with FFMIA because the DOT did not substantially 

comply with applicable Federal accounting standards during the year, and was not able to provide reliable and 

timely financial information for managing current operations at intervals throughout the year. However, our 

audit procedures enabled us to conclude that the DOT had substantially complied with Federal accounting 

standards in its year-end financial statements. 

This finding is based on the various significant deficiencies in internal control over financial reporting discussed 

in Exhibit I of this report. Specifically, we found that: 

x The DOT was not able to produce meaningful managerial cost accounting reports at nine of its 13 OAs; 

x Certain transaction types or processes, such as construction in progress, revenue, and obligations, were not 

recorded in a timely or accurate manner during the year; and 

x Account relationships were not appropriately addressed until late in the year. 
United States Department of Transportation 203

U.S. DEPARTMENT OF TRANSPORTATION EXHIBIT II

Independent Auditors’ Report 

Compliance and Other Matters 

13

The DOT has been making substantial progress in its efforts to create a world-class financial reporting 

organization that enables the OA and DOT managers to obtain meaningful information from the core accounting 

system and its subsidiary ledgers throughout the year. The operations of the DOT are complex and diverse, and 

standardization of accounting operations is critical. The DOT’s Enterprise Service Center (ESC) is recognized 

by the OMB as a center of excellence, and is continuing to grow as additional Federal agencies choose the 

DOT’s ESC as their accounting service provider. The continued progress by DOT, along with the additional 

agencies that are choosing the DOT as a service provider, demonstrate the commitment by DOT management to 

correct the existing deficiencies in internal control over financial reporting. 

Effect: The weaknesses in internal control, discussed above, prevent the DOT from being able to produce timely 

and reliable financial information for managing current operations throughout the year. 

Recommendation: We recommend that the DOT: 

23. Address and resolve the deficiencies in internal control, as described in Exhibit I of this report. 

J. Federal Managers’ Financial Integrity Act of 1982 (FMFIA)

Background/Criteria: FMFIA and OMB Circular No. A-123, Management’s Responsibility for Internal 

Control, requires agency managers and staff to report annually on the three objectives of internal control: the 

effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws 

and regulations. The DOT has put in place a significant structure and process to evaluate its reliability of 

financial reporting and compliance with applicable laws and regulations. The DOT has demonstrated a 

consistent and reliable process in evaluating those areas of internal control, and is working diligently on 

establishing a similar structure and process to evaluate the effectiveness and efficiency of its operations. 

Condition: During FY 2008, we noted that there were inconsistencies in the consideration and reporting of 

internal controls over the effectiveness and efficiency of operations within the DOT. Specifically, the OAs do 

not have a consistent process to evaluate and report program weaknesses required under FMFIA.

Effect: Without a unified DOT-wide process to evaluate the effectiveness and efficiency of internal controls 

over operations, the DOT and its OAs may not identify and report programmatic weaknesses on a consistent 

basis.

Recommendation: We recommend that the DOT: 

24. Address and resolve the weakness noted above, and fully comply with FMFIA in FY 2009. 

K. Improper Payments Information Act of 2002 (IPIA)

Background/Criteria: OMB Circular A-123, Appendix C, issued on August 10, 2006, entitled “Requirements 

for Effective Measurement and Remediation of Improper Payments,” implements the requirements of IPIA. The 

circular defines an improper payment as any payment that should not have been made or that was made in an 

incorrect amount under statutory, contractual, administrative, or other legally applicable requirements. Incorrect 

amounts include overpayments and underpayments, payments made to an ineligible recipient or for an ineligible 

service, duplicate payments, and payments for services not received. 
204 FY 2008 Performance & Accountability Report

U.S. DEPARTMENT OF TRANSPORTATION EXHIBIT II

Independent Auditors’ Report 

Compliance and Other Matters 

14

The circular prescribes a four-step approach for use by agencies in evaluating improper payments: (1) review all 

programs and identify those susceptible to significant erroneous payments; (2) statistically estimate the annual 

amount of improper payments; (3) implement a plan to reduce erroneous payments; and (4) report estimates of 

the annual amount of improper payments and progress in reducing them. 

During FY 2008, the DOT reported that it successfully completed its review of improper payments of the 

FHWA’s Federal-aid Highway Program, the FAA’s Airport Improvement Program, the FTA’s Formula Grants 

Program, and the FTA’s Capital Investment Grants Program. The DOT found improper payments in all four 

grant programs, and projected the improper payments to a range of $175.3 million to $206.1 million. The 

improper payments found in two of the programs (the FTA’s Formula Grants Program and the FTA’s Capital 

Investment Grants Program) exceeded the OMB’s definition of significant improper payments. 

Condition: To evaluate the DOT’s compliance with IPIA, we worked with the DOT OIG’s IPIA evaluation 

team, including their sampling specialists. However, neither we nor the DOT OIG were provided information by 

DOT with sufficient time before the issuance of our report in order to determine if the sampling plan used by 

DOT was statistically valid. Specifically, we could not determine if the projection of sampling results to the 

program totals were based on generally accepted conventional formulas. 

Effect: The DOT is potentially not in compliance with the Improper Payments Information Act.

Recommendation: We recommend that DOT: 

25. Work to ensure that information is provided to the OIG and other appropriate parties with sufficient time to 

evaluate whether the improper payment testing performed in FY 2009 is based on valid statistical sampling 

techniques.
United States Department of Transportation 205

U.S. DEPARTMENT OF TRANSPORTATION EXHIBIT III

Independent Auditors’ Report 

Status of Prior Year Findings 

15

STATUS OF PRIOR YEAR REPORTABLE CONDITIONS, AND NON-COMPLIANCE WITH 

SIGNIFICANT LAWS AND REGULATIONS 

Prior Year Condition As Reported At September 30, 

2007

Status As Of September 30, 

2008

Timely Processing of 

Transactions and 

Accounting for FAA 

Property, Plant, and 

Equipment, including the 

CIP Account

Material weakness: The FAA 

lacked adequate policies, procedures, 

and controls to monitor its CIP 

activity. 

Downgraded to a significant 

deficiency

Journal Entries and 

Account Relationships for 

the HTF Agencies 

Significant Deficiency: The DOT 

has weaknesses in following policies 

and procedures over journal entries, 

and in the timely reconciliation and 

resolution of differences identified in 

the DOT’s budgetary to proprietary 

account relationships. 

Repeated as a significant 

deficiency

Financial System Controls Significant Deficiency: Certain

general controls related to the DOT’s 

primary financial applications need to 

be strengthened.

Repeated as a significant 

deficiency

DOT Information Security 

Program

Significant Deficiency: The DOT 

did not meet Government security 

standards to protect information 

systems and did not take sufficient 

action to correct identified security 

deficiencies.

Closed with respect to Federal 

financial management systems

FTA Grant Accrual Significant Deficiency: Certain

controls were not in place in FTA to 

ensure that the FTA’s grant accrual 

was based on sufficient information 

provided by its grantees. 

Repeated as a significant 

deficiency
206 FY 2008 Performance & Accountability Report

U.S. DEPARTMENT OF TRANSPORTATION EXHIBIT III

Independent Auditors’ Report 

Status of Prior Year Findings 

16

Prior Year Condition As Reported At September 30, 

2007

Status As Of September 30, 

2008

Non-compliance with the 

Federal Financial 

Management Improvement 

Act

Instance of non-compliance: The

DOT did not substantially comply 

with the FFMIA because the FAA 

was unable to account for property, 

plant, and equipment transactions, 

including the CIP account, and 

present balances in its periodic 

financial statements in accordance 

with generally accepted accounting 

principles as of and for the fiscal year 

ended September 30, 2007. 

Repeated as an instance of noncompliance

Non-compliance with the 

Anti-Deficiency Act 

Instance of non-compliance:

During FY 2007, the Maritime 

Administration CFO reported a 

potential violation at the U.S. 

Merchant Marine Academy.

Repeated as a potential instance 

of non-compliance 

Non-compliance with the 

Improper Payments 

Information Act of 2002 

Instance of non-compliance:

During FY 2007, the DOT OIG was 

not provided with sufficient 

information by DOT before the 

issuance of the DOT FY 2007 PAR to 

determine if the sampling plan used 

by DOT was statistically valid. 

Repeated as a potential instance 

of non-compliance 

Non-compliance with the 

SFFAS No. 4, Managerial 

Cost Accounting Concepts 

and Standards 

Instance of non-compliance:

As of September 30, 2007, nine OAs 

of the DOT had not fully 

implemented cost accounting 

processes in accordance with SFFAS 

Number 4. 

Reclassified as part of the noncompliance with FFMIA
United States Department of Transportation 207

U.S. DEPARTMENT OF TRANSPORTATION EXHIBIT IV

Independent Auditors’ Report 

Management’s Response 

17
208 FY 2008 Performance & Accountability Report

U.S. DEPARTMENT OF TRANSPORTATION

CONSOLIDATED BALANCE SHEETS

As of September 30, 2008 2007

Dollars in Thousands

ASSETS

Intragovernmental

Fund Balance with Treasury (Note 2) $ 22,074,754 $ 23,392,470

Investments, Net (Note 3) 21,699,531 21,144,083 

Accounts Receivable (Note 4) 235,638 509,692

Other (Note 5) 38,915 2,453

Total Intragovernmental 44,048,838 45,048,698

Cash 54,675 24,358

Investments, Net (Note 3) 28,707 74,085

Accounts Receivable, Net (Note 4) 67,852 114,118

Direct Loan and Loan Guarantees (Note 6) 1,670,284 889,885

Inventory and Related Property, Net (Note 7) 802,368 785,760

General Property, Plant and Equipment, Net (Note 8) 14,512,568 14,683,890

Other (Note 5) 182,492 211,044

Total Assets $ 61,367,784 $ 61,831,838 

Stewardship Property, Plant and Equipment (Note 9)

LIABILITIES (Note 10)

Intragovernmental

Accounts Payable $ 11,046 $ 30,424 

Debt (Note 11) 1,762,985 1,040,761

Other (Note 15) 3,263,123 3,418,078

Total Intragovernmental 5,037,154 4,489,263

Accounts Payable 532,579 614,861

Loan Guarantee Liability (Note 6) 258,050 336,626

Federal Employee Benefits Payable (Note 12) 984,710 946,408

Environmental and Disposal Liabilities (Note 13) 828,757 852,366

Grant Accrual (Note 14) 5,810,147 5,526,288

Other (Note 15) 1,365,257 1,309,411

Total Liabilities 14,816,654 14,075,223 

Commitments and Contingencies (Note 17) 

NET POSITION (Note 18)

Unexpended Appropriations - Earmarked Funds 1,010,409 1,213,189

Unexpended Appropriations - Other Funds 7,643,564 8,563,101 

Cumulative Results of Operations - Earmarked Funds 25,944,043 26,552,761 

Cumulative Results of Operations - Other Funds 11,953,114 11,427,564 

Total Net Position 46,551,130 47,756,615

Total Liabilities and Net Position $ 61,367,784 $ 61,831,838

The accompanying notes are an integral part of these financial statements.
United States Department of Transportation 209

U.S. DEPARTMENT OF TRANSPORTATION

CONSOLIDATED STATEMENT OF NET COST

For the Years Ended September 30, 2008 2007

Dollars in Thousands

PROGRAM COSTS (Note 19)

SURFACE TRANSPORTATION

Gross Costs $ 50,416,782 $ 47,649,334

Less: Earned Revenue 263,771 264,028

Net Program Costs 50,153,011 47,385,306

AIR TRANSPORTATION

Gross Costs 15,913,667 15,263,468 

Less: Earned Revenue 381,546 449,014

Net Program Costs 15,532,121 14,814,454

MARITIME TRANSPORTATION

Gross Costs 706,649 759,803

Less: Earned Revenue 491,570 189,076

Net Program Costs 215,079 570,727

CROSS-CUTTING PROGRAMS

Gross Costs 565,861 511,524 

Less: Earned Revenue 542,360 500,076

Net Program Costs 23,501 11,448

Costs Not Assigned to Programs 386,130 388,392

Less: Earned Revenues Not Attributed to Programs 39,379 30,295

NET COST OF OPERATIONS $ 66,270,463 $ 63,140,032 

The accompanying notes are an integral part of these financial statements.
210 FY 2008 Performance & Accountability Report

U.S. DEPARTMENT OF TRANSPORTATION

CONSOLIDATED STATEMENTS OF CHANGES IN NET POSITION

For the Years Ended September 30, 2008 2007

Dollars in Thousands

Earmarked 

Funds

All Other 

Funds

Total Earmarked 

Funds

All Other 

Funds

Total

Cumulative Results of Operations

Beginning Balance $26,552,761 $ 11,427,564 $ 37,980,325 $30,175,061 $12,465,748 $42,640,809 

Budgetary Financing Sources

Other Adjustments (783) 756 (27) (166,601) 166,625 24 

Appropriations Used 2,582,284 14,220,954 16,803,238 2,095,506 4,156,871 6,252,377 

Non-Exchange Revenue (Note 20) 48,688,029 (3,679) 48,684,350 51,531,076 2,197 51,533,273 

Donations/Forfeitures of Cash/Cash 

Equivalents

1,557 – 1,557 2,422 – 2,422 

Transfers-In/(Out) Without 

Reimbursement

8,035,031 (7,997,976) 37,055 6,883 76,568 83,451 

Other Financing Sources (Non-Exchange)

Transfers-In/(Out) Without 

Reimbursement

(1,898,408) 1,919,255 20,847 (2,443,652) 2,446,463 2,811 

Imputed Financing 548,956 93,192 642,148 506,686 98,504 605,190 

Other – (1,873) (1,873) – – – 

Total Financing Sources 57,956,666 8,230,628 66,187,295 51,532,320 6,947,228 58,479,548 

Net Cost of Operations 58,565,384 7,705,079 66,270,463 55,154,620 7,985,412 63,140,032 

Net Change (608,718) 525,550 (83,168) (3,622,300) (1,038,184) (4,660,484)

Cumulative Results of Operations 25,944,043 11,953,114 37,897,157 26,552,761 11,427,564 37,980,325 

Unexpended Appropriations

Beginning Balance 1,213,189 8,563,101 9,776,290 612,378 7,806,902 8,419,280 

Budgetary Financing Sources

Appropriations Received 2,404,596 13,319,232 15,723,828 2,841,381 4,974,437 7,815,818 

Appropriations Transferred-In/(Out) (6) 28,006 28,000 621 (606) 15 

Other Adjustments (25,086) (45,821) (70,907) (145,134) (60,761) (205,895)

Appropriations Used (2,582,284) (14,220,954) (16,803,238) (2,096,057) (4,156,871) (6,252,928)

Total Budgetary Financing Sources (202,780) (919,537) (1,122,317) 600,811 756,199 1,357,010 

Total Unexpended Appropriations 1,010,409 7,643,564 8,653,973 1,213,189 8,563,101 9,776,290 

NET POSITION $26,954,452 $ 19,596,678 $ 46,551,130 $27,765,950 $19,990,665 $47,756,615 

The accompanying notes are an integral part of these financial statements.
United States Department of Transportation 211

U.S. DEPARTMENT OF TRANSPORTATION

COMBINED STATEMENTS OF BUDGETARY RESOURCES

For the Years Ended September 30, 2008 2007

Dollars in Thousands

NonBudgetaryNonBudgetary

Credit Reform Credit Reform

Budgetary Financing 

Accounts

Budgetary Financing 

Accounts

BUDGETARY RESOURCES (Note 21)

Unobligated Balance, Brought Forward, October 1 $ 46,511,710 $332,405 $ 46,566,672 $ 358,827

Recoveries of Prior Year Unpaid Obligations 909,305 37,788 658,023 207,000

Budget Authority

Appropriations Received 79,462,754 - 62,551,786 - 

Borrowing Authority 215,000 950,094 225,000 865,759

Contract Authority 55,933,312 - 55,040,320 - 

Spending Authority from Offsetting Collections

Earned

Collected 2,182,754 507,519 2,212,610 167,921

Change in Receivables from Federal Sources (66,642) (188) (69,617) (3,616)

Change in Unfilled Customer Orders

Advance Received 216,149 - 89,251 - 

Without Advance from Federal Sources (192,676) 33,973 184,966 (20,491)

Expenditure Transfers from Trust Funds 6,447,419 - 5,673,226 - 

Subtotal 144,198,070 1,491,398 125,907,542 1,009,573

Nonexpenditure Transfers, Net 2,000 - 2,220 - 

Temporarily not Available Pursuant to Public Law - - (5,489) - 

Permanently Not Available (59,405,333) (359,787) (51,763,052) (287,959)

Total Budgetary Resources $ 132,215,752 $ 1,501,804 $ 121,365,916 $ 1,287,441

STATUS OF BUDGETARY RESOURCES

Obligations Incurred 

Direct $ 84,438,020 $ 1,261,574 $ 72,701,475 $ 955,036

Reimbursable 1,970,779 - 2,152,731 - 

Subtotal 86,408,799 1,261,574 74,854,206 955,036

Unobligated Balance

Apportioned 26,059,115 4,796 22,742,862 4,394

Exempt from Apportionment 299,415 - 307,808 - 

Subtotal 26,358,530 4,796 23,050,670 4,394

Unobligated Balance Not Available 19,448,423 235,434 23,461,040 328,011

Total Status of Budgetary Resources $ 132,215,752 $ 1,501,804 $ 121,365,916 $ 1,287,441

The accompanying notes are an integral part of these financial statements.
212 FY 2008 Performance & Accountability Report

DEPARTMENT OF TRANSPORTATION

COMBINED STATEMENTS OF BUDGETARY RESOURCES (CONT.)

For the Years Ended September 30, 2008 2007

Dollars in Thousands

NonBudgetary

Credit Reform

NonBudgetary

Credit Reform

Budgetary Financing 

Accounts

Budgetary Financing 

Accounts

CHANGE IN OBLIGATED BALANCES

Obligated Balance, Net

Unpaid Obligations, Brought Forward, October 1 $ 76,707,884 $ 2,017,708 $ 72,330,387 $ 1,706,951

Uncollected Customer Payments from Federal Sources, Brought 

Forward, October 1

(1,707,556) (135,484) (1,590,193) (159,590)

Total Unpaid Obligated Balance, Net 75,000,328 1,882,224 70,740,194 1,547,361

Obligations Incurred 86,408,799 1,261,574 74,854,206 955,036

Gross Outlays (82,157,078) (1,391,414) (69,820,935) (437,279)

Unpaid Obligations 25,000 - 2,250 - 

Recoveries of Prior Year Unpaid Obligations, Actual (909,305) (37,788) (658,023) (207,000)

Change In Uncollected Customer Payments from Federal Sources 262,920 (33,784) (117,363) 24,106

Obligated Balance, Net, End of Period

Unpaid Obligations 80,075,300 1,850,080 76,707,884 2,017,708

Uncollected Customer Payments From Federal Sources (1,444,636) (169,268) (1,707,556) (135,484)

Total Unpaid Obligated Balance, Net, End Of Period $ 78,630,664 $ 1,680,812 $ 75,000,328 $ 1,882,224

NET OUTLAYS

Net Outlays

Gross Outlays $ 82,157,078 $ 1,391,414 $ 69,820,935 $ 437,279

Offsetting Collections (8,850,341) (507,519) (7,973,071) (167,921)

Distributed Offsetting Receipts (219,003) (106,676) (46,779) -

Net Outlays $ 73,087,734 $ 777,219 $ 61,801,085 $ 269,358

The accompanying notes are an integral part of these financial statements.
United States Department of Transportation 213

Note 1. Significant Accounting Policies

A. reporting entity

The Department of Transportation (DOT or Department) serves as the focal point in the Federal Government’s 

coordinated national transportation policy. It is responsible for helping cities and States meet their 

local transportation needs through financial and technical assistance, ensuring the safety of all forms of 

transportation; protecting the interests of consumers; promoting international transportation agreements; and 

conducting planning and research for the future.

The Department is comprised of the Office of the Secretary and the DOT Operating Administrations, each 

having its own management and organizational structure, and collectively provides the necessary services and 

oversight to ensure the best transportation system possible. The Department’s consolidated financial statements 

present the financial data, including various trust funds, revolving funds, appropriations and special funds, of the 

following organizations:

 Office of The Secretary (OST) [includes OST Working Capital Fund]

 Federal Aviation Administration (FAA)

 Federal Highway Administration (FHWA)

 Federal Motor Carrier Safety Administration (FMCSA)

 Federal Railroad Administration (FRA)

 National Highway Traffic Safety Administration (NHTSA)

 Maritime Administration (MARAD)

 Federal Transit Administration (FTA) 

 Surface Transportation Board (STB)

 Office of Inspector General (OIG)

 Pipeline and Hazardous Materials Safety Administration (PHMSA)

 Research and Innovative Technology Administration (RITA) [includes Volpe National 

Transportation System Center]

The Saint Lawrence Seaway Development Corporation (SLSDC) is also a DOT entity. However, since it is subject 

to separate reporting under the Government Corporation Control Act and the dollar value of its activities is not 

material to that of the Department’s, SLSDC’s financial data is not included in the DOT consolidated financial 

statements. However, condensed information about SLSDC’s financial position is presented in Note 24.

B. basis of presentation

The Department’s consolidated financial statements have been prepared to report the financial position and 

results from operations of DOT, as required by the Chief Financial Officers Act of 1990 (CFO Act) and Title 

IV of the Government Management Reform Act of 1994 (GMRA). The statements have been prepared from 

the DOT books and records in accordance with Office of Management and Budget (OMB) form and content 

requirements for entity financial statements and DOT’s accounting policies and procedures. Unless otherwise 

noted, all dollar amounts are presented in thousands.
214 FY 2008 Performance & Accountability Report

The Consolidated Balance Sheets present agency assets and liabilities, and the resulting agency net position 

(which is the difference between the two amounts). Agency assets substantially include entity assets (those 

which are available for use by the agency). Non-entity assets (those which are managed by the agency but not 

available for use in its operations) are immaterial. Agency liabilities include both those covered by budgetary 

resources (funded) and those not covered by budgetary resources (unfunded).

The Consolidated Statements of Net Cost present the gross costs of programs less earned revenue to arrive at the 

net cost of operations for both the programs and the agency as a whole.

The Consolidated Statements of Changes in Net Position report beginning balances, budgetary and other 

financing sources, and net cost of operations, to arrive at ending balances.

The Combined Statements of Budgetary Resources provide information about how budgetary resources were 

made available as well as their status at the end of the period. Recognition and measurement of budgetary 

information reported on this statement is based on budget terminology, definitions, and guidance in OMB 

Circular No. A-11, “Preparation, Submission, and Execution of the Budget,” dated June 2008.

Since DOT custodial activity is incidental to Departmental operations and is not considered material to the 

consolidated financial statements taken as a whole, a Statement of Custodial Activity has not been prepared. 

However, sources and dispositions of collections have been disclosed in Note 22 to the consolidated financial 

statements.

The Department is required to be in substantial compliance with all applicable accounting principles and 

standards established, issued, and implemented by the Federal Accounting Standards Advisory Board (FASAB), 

which is recognized by the American Institute of Certified Public Accountants (AICPA) as the entity to establish 

Generally Accepted Accounting Principles (GAAP) for the Federal Government. The Federal Financial 

Management Improvement Act (FFMIA) of 1996 requires the Department to comply substantially with (1) 

Federal financial management systems requirements, (2) applicable Federal accounting standards, and (3) the 

U.S. Government Standard General Ledger requirements at the transaction level.

C. Budgets and Budgetary Accounting

DOT follows standard Federal budgetary accounting policies and practices in accordance with OMB Circular 

No. A-11, “Preparation, Submission, and Execution of the Budget,” dated June 2008. Budgetary accounting 

facilitates compliance with legal constraints and controls over the use of Federal funds. Each year, Congress 

provides each Operating Administration within DOT appropriations to incur obligations in support of agency 

programs. For FY 2008 and FY 2007, the Department was accountable for trust fund appropriations, general 

fund appropriations, revolving fund activity and borrowing authority. DOT recognizes budgetary resources as 

assets when cash (funds held by Treasury) is made available through warrants and trust fund transfers.

Programs are financed from authorizations enacted in authorizing legislation and codified in Title 23 of the 

United States Code (U.S.C.). The DOT receives its budget authority in the form of contract authority and direct 

appropriations. Contract authority permits programs to incur obligations in advance of an appropriation, 

offsetting collections, or receipts. Subsequently, Congress provides an appropriation for the liquidation of the 

contract authority to allow payments to be made for the obligations incurred. Funds apportioned by state under 

Titles 23 and 49 of the U.S.C., Subtitle III by the Secretary of Transportation for activities in advance of the 

liquidation of appropriations are available for a specific time period.
United States Department of Transportation 215

D. Basis of Accounting

Transactions are generally recorded on both an accrual accounting basis and a budgetary basis. Under the 

accrual method, revenues are recognized when earned, and expenses are recognized when a liability is incurred, 

without regard to receipt or payment of cash. Budgetary accounting facilitates compliance with legal constraints 

and controls over the use of Federal funds. All material intra-departmental transactions and balances have been 

eliminated for presentation on a consolidated basis. However, the Statement of Budgetary Resources is presented 

on a combined basis, in accordance with OMB Circular A-136.

Intragovernmental transactions and balances result from exchange transactions made between DOT and 

another Federal government reporting entity, while those classified as “with the public” result from exchange 

transactions between DOT and non-federal entities. For example, if DOT purchases goods or services from the 

public and sells them to another Federal entity, the costs would be classified as “with the public,” but the related 

revenues would be classified as “intragovernmental.” This could occur, for example, when DOT provides goods 

or services to another Federal government entity on a reimbursable basis. The purpose of this classification is 

to enable the Federal government to prepare consolidated financial statements, and not to match public and 

intragovernmental revenue with costs that are incurred to produce public and intragovernmental revenue.

DOT accounts for earmarked funds separately from other funds. 

E. funds with the U.S. treasury and cash

DOT does not generally maintain cash in commercial bank accounts. Cash receipts and disbursements are 

processed by the U.S. Treasury. The funds with the U.S. Treasury are appropriated, revolving, and trust funds 

that are available to pay current liabilities and finance authorized purchases. Lockboxes have been established 

with financial institutions to collect certain payments, and these funds are transferred directly to Treasury on a 

daily (business day) basis. DOT does not maintain any balances of foreign currencies.

F. Investments in U.S. government securities

Investments that consist of U.S. Government Securities are reported at cost and adjusted for amortized cost 

net of premiums or discounts. Premiums or discounts are amortized into interest income over the term of 

the investment using the interest or straight-line method. The Department’s intent is to hold investments to 

maturity. Investments, redemptions, and reinvestments are controlled and processed by the Department of the 

Treasury. The market value is calculated by multiplying the total number of shares by the market price on the 

last day of the fiscal year.

Securities with the Public include marketable Treasury securities that were purchased using deposit fund monies 

(Maritime Escrow Fund) and are required to be classified as securities with the public and are not considered 

intragovernmental investments. The funds can be utilized to cover the construction costs of vessels and serve as 

additional security in the event of a default on the guaranteed loan.

G. Receivables

Accounts receivable consist of amounts owed to the Department by other Federal agencies and the public. 

Federal accounts receivable are generally the result of the provision of goods and services to other Federal 

agencies and, with the exception of occasional billing disputes, are considered to be fully collectible. Public 

accounts receivable are generally the result of the provision of goods and services or the levy of fines and 

penalties from the Department’s regulatory activities. Amounts due from the public are presented net of an 

allowance for loss on uncollectible accounts, which is based on historical collection experience and/or an 

analysis of the individual receivables.
216 FY 2008 Performance & Accountability Report

Loans are accounted for as receivables after funds have been disbursed. For loans obligated prior to October 1, 

1991, loan principal, interest, and penalties receivable are reduced by an allowance for estimated uncollectible 

amounts. The allowance is estimated based on past experience, present market conditions, and an analysis of 

outstanding balances. Loans obligated after September 30, 1991, are reduced by an allowance equal to the present 

value of the subsidy costs (resulting from the interest rate differential between the loans and Treasury borrowing, 

the estimated delinquencies and defaults net of recoveries, the offset from fees, and other estimated cash flows) 

associated with these loans.

H. Inventory and related Operating Materials and Supplies

Inventory primarily consists of supplies that are for sale or used in the production of goods for sale. Operating 

materials and supplies primarily consist of unissued supplies that will be consumed in future operations. 

Valuation methods for supplies on hand at year-end include historical cost, last acquisition price, standard price/

specific identification, standard repair cost, weighted average, and moving weighted average. Expenditures 

or expenses are recorded when the materials and supplies are consumed or sold. Adjustments for the proper 

valuation of reparable, excess, obsolete, and unserviceable items are made to appropriate allowance accounts.

I. property and equipment

DOT agencies have varying methods of determining the value of general purpose property and equipment and 

how it is depreciated. DOT currently has a capitalization threshold of $200,000 for structures and facilities and 

for internal use software, and $25,000 for other property, plant and equipment. Capitalization at lesser amounts 

is permitted. Construction in progress is valued at direct (actual) costs plus applied overhead and other indirect 

costs as accumulated by the regional project material system. The system accumulates costs by project number 

assigned to the equipment or facility being constructed. The straight line method is generally used to depreciate 

capitalized assets.

DOT’s heritage assets, consisting of Union Station in Washington, DC, the Nuclear Ship Savannah and 

collections of maritime artifacts, are considered priceless and are not capitalized in the Consolidated Balance 

Sheets. (See Note 9 and the Required Supplementary Information section for additional information related to 

DOT’s heritage assets).

J. Prepaid and Deferred Charges

Payments in advance of the receipt of goods and services are recorded as prepaid charges at the time of 

prepayment and recognized as expenses or capitalized, as appropriate, when the related goods and services are 

received.

K. Liabilities

Liabilities represent amounts expected to be paid as the result of a transaction or event that has already occurred. 

Liabilities covered by budgetary resources are liabilities incurred which are covered by realized budgetary 

resources as of the balance sheet date. Available budgetary resources include new budget authority, spending 

authority from offsetting collections, recoveries of unexpired budget authority through downward adjustments 

of prior year obligations, unobligated balances of budgetary resources at the beginning of the year or net 

transfers of prior year balances during the year, and permanent indefinite appropriations or borrowing authority. 

Unfunded liabilities are not considered to be covered by such budgetary resources. An example of an unfunded 

liability is actuarial liabilities for future Federal Employees’ Compensation Act payments. The Government, 

acting in its sovereign capacity, can abrogate liabilities arising from other than contracts.
United States Department of Transportation 217

L. Contingencies

The criteria for recognizing contingencies for claims are (1) a past event or exchange transaction has occurred 

as of the date of the statements; (2) a future outflow or other sacrifice of resources is probable; and (3) the future 

outflow or sacrifice of resources is measurable (reasonably estimatable). DOT recognizes material contingent 

liabilities in the form of claims, legal actions, administrative proceedings and environmental suits that have been 

brought to the attention of legal counsel, some of which will be paid by the Treasury Judgment Fund. It is the 

opinion of management and legal counsel that the ultimate resolution of these proceedings, actions and claims, 

will not materially affect the financial position or results of operations.

M. Annual, Sick, and Other Leave

Annual leave is accrued as it is earned, and the accrual is reduced as leave is taken. For each bi-weekly pay 

period, the balance in the accrued annual leave account is adjusted to reflect the latest pay rates and unused 

hours of leave. Liabilities associated with other types of vested leave, including compensatory, credit hours, 

restored leave, and sick leave in certain circumstances, are accrued based on latest pay rates and unused hours 

of leave. Sick leave is generally nonvested, except for sick leave balances at retirement under the terms of certain 

union agreements, including the National Air Traffic Controllers Association (NATCA) agreement, Article 

25, Section 13. Funding will be obtained from future financing sources to the extent that current or prior year 

appropriations are not available to fund annual and other types of vested leave earned and not taken. Nonvested 

leave is expensed when used.

N. retirement plan

For DOT employees who participate in the Civil Service Retirement System (CSRS), DOT contributes a 

matching contribution equal to 7 percent of pay. On January 1, 1987, FERS went into effect pursuant to Public 

Law (P.L.) 99-335. Most employees hired after December 31, 1983, are automatically covered by FERS and Social 

Security. Employees hired prior to January 1, 1984, could elect to either join FERS and Social Security or remain 

in CSRS. A primary feature of FERS is that it offers a savings plan to which DOT automatically contributes 1 

percent of pay and matches any employee contribution up to an additional 4 percent of pay. For most employees 

hired since December 31, 1983, DOT also contributes the employer’s matching share for Social Security.

Employing agencies are required to recognize pensions and other post retirement benefits during the employees’ 

active years of service. Reporting the assets and liabilities associated with such benefit plans is the responsibility 

of the administering agency, the Office of Personnel Management (OPM). Therefore, DOT does not report 

CSRS or FERS assets, accumulated plan benefits, or unfunded liabilities, if any, applicable to employees. 

O. Federal Employees Health Benefit (FEHB) Program

Most Department employees are enrolled in the FEHB Program, which provides post-retirement health benefits. 

OPM administers this program and is responsible for the reporting of liabilities. Employer agencies and covered 

employees are not required to make any contributions for post-retirement health benefits. OPM calculates the 

U.S. Government’s service cost for covered employees each fiscal year. The Department has recognized the entire 

service cost of these post-retirement benefits for covered employees as an imputed cost and an imputed financing 

source.

P. Federal Employees Group Life Insurance (FEGLI) Program

Most Department employees are entitled to participate in the FEGLI Program. Participating employees can 

obtain basic term life insurance where the employee pays two-thirds of the cost and the Department pays 

one-third of the cost. OPM administers this program and is responsible for the reporting of liabilities. OPM 

calculates the U.S. Government’s service cost for the post-retirement portion of the basic life coverage each fiscal 
218 FY 2008 Performance & Accountability Report

year. Because OPM fully allocates the Department’s contributions for basic life coverage to the pre-retirement 

portion of coverage, the Department has recognized the entire service cost of the post-retirement portion of 

basic life coverage as an imputed cost and an imputed financing source.

Q. Federal Employee Compensation Benefits (FECA)

A liability is recorded for actual and estimated future payments to be made for workers’ compensation pursuant 

to the Federal Employees’ Compensation Act (FECA). The actual costs incurred are reflected as a liability 

because DOT will reimburse the Department of Labor (DOL) two years after the actual payment of expenses. 

Future revenues will be used to reimburse DOL. The liability consists of (1) the net present value of estimated 

future payments calculated by the DOL, and (2) the unreimbursed cost paid by DOL for compensation to 

recipients under FECA.

R. Environmental and Disposal Liabilities

DOT recognizes two types of environmental liabilities: unfunded environmental remediation and unfunded 

asset disposal liability. The liability for environmental remediation is an estimate of costs necessary to bring a 

known contaminated site into compliance with applicable environmental standards. The asset disposal liability 

includes both the cost to remove and dismantle an asset when that asset is no longer in service and the estimated 

cost that will be incurred to remove, contain, and/or dispose of hazardous materials. DOT estimates the 

environmental remediation and asset disposal costs at the time a DOT-owned asset is placed in service.

Estimating the Department’s environmental remediation liability requires making assumptions about future 

activities and is inherently uncertain. Costs for estimates of environmental and disposal liabilities are not 

adjusted for inflation and are subject to revision as a result of changes in technology and environmental laws and 

regulations.

S. use of estimates

Management has made certain estimates and assumptions when reporting assets, liabilities, revenue, and 

expenses. Actual results could differ from these estimates. Significant estimates underlying the accompanying 

financial statements include the allocation of trust fund receipts by Treasury’s Office of Tax Analysis (OTA), 

accruals of accounts and grants payable, accrued workers’ compensation, the allowance for doubtful accounts 

receivable, and accrued legal, contingent, environmental and disposal liabilities.

T. allocation transfers

DOT is a party to allocation transfers with other federal agencies as a transferring (parent) entity. Allocation 

transfers are legal delegations by one department of its authority to obligate budget authority and outlay funds 

to another department. A separate fund account (allocation account) is created in the U.S. Treasury as a subset 

of the parent fund account for tracking and reporting purposes. All allocation transfers of balances are credited 

to this account and subsequent obligations and outlays incurred by the receiving entity (child) are charged to 

this allocation account as the delegated activity is executed on the parent entity’s behalf. Generally, all financial 

activity related to these allocation transfers (e.g. budget authority, obligations, outlays) is reported in the financial 

statements of the parent entity, from which the underlying legislative authority, appropriations and budget 

apportionments are derived.
United States Department of Transportation 219

DOT allocates funds, as the parent, to the following non-DOT Federal agencies in accordance with applicable 

public laws and statutes: Bureau of Indian Affairs, Bureau of Reclamation, U.S. Forest Service, National Park 

Service, Bureau of Land Management, Fish and Wildlife Service, Department of the Army, Appalachian Regional 

Commission, Tennessee Valley Authority, U.S. Army Corps of Engineers, Internal Revenue Service, Department 

of Housing and Urban Development, Denali Commission, Department of Navy, and Department of Energy.

U. Revenues and Other Financing Sources

DOT receives the majority of the funding needed to support its programs through non-exchange earmarked 

excise tax revenues related to the Highway Trust Fund (HTF) and the Airport and Airway Trust Fund (AATF). 

DOT also receives annual, multi-year and no-year appropriations. Appropriations are recognized as revenues 

when related program and administrative expenses are incurred. Additional amounts are obtained from 

offsetting collections and user fees (e.g., landing and registry fees) and through reimbursable agreements for 

services performed for domestic and foreign governmental entities. Additional revenue is received from gifts 

of donors, sales of goods and services to other agencies and the public, the collection of fees and fines, interest/

dividends on invested funds, loans and cash disbursements to banks. Interest income is recognized as revenue 

on the accrual basis rather than when received.

Excise taxes collected are initially deposited to the General Fund of the U.S. Treasury. The IRS does not receive 

sufficient information at the time the taxes are collected to determine how these payments should be distributed 

to specific earmarked funds. Therefore, the U.S. Treasury makes initial semi-monthly distributions to earmarked 

funds based on estimates prepared by OTA. These estimates are based on historical excise tax data applied to 

current excise tax receipts. When actual amounts are certified by the IRS, generally four months after each 

quarter-end, adjustments are made to the estimated amounts and the difference is adjusted as a transfer of 

resources to the HTF and AATF accounts.

The DOT September 30, 2008 financial statements reflect excise taxes certified by the IRS through June 30, 

2008 and excise taxes estimated by OTA for the period July 1, 2008 to September 30, 2008 as specified by SFFAS 

Number 7, Accounting for Revenue and Other Financing Sources. Actual tax collections data for the quarter 

ended September 30, 2008 will not be available from the IRS until January 2009. Management does not believe 

that the actual tax collections for the quarter ended September 30, 2008 will be materially different than the OTA 

estimate. 

V. Reclassifications

Certain reclassifications were made to the FY 2007 consolidated financial statement presentation to conform to 

that used in FY 2008.
220 FY 2008 Performance & Accountability Report

NOTE 2. FUND BALANCE WITH TREASURY

FY 2008 FY 2007

Fund Balances

Trust Funds $ 6,283,435 $ 5,593,882

Revolving Funds 636,287 643,114 

General Funds 14,831,421 16,871,467 

Other Fund Types 323,611 284,007 

Total $ 22,074,754 $ 23,392,470 

Status of Fund Balance with Treasury

Unobligated Balance

Available $ 7,453,124 $ 5,055,441

Unavailable 2,380,690 1,537,890 

Obligated Balance Not Yet Disbursed 12,021,987 16,465,645 

Non-Budgetary Fund Balance with Treasury 218,953 333,494 

Total $ 22,074,754 $ 23,392,470 

Fund Balances with Treasury are the aggregate amounts of the entity’s accounts with Treasury for which the 

entity is authorized to make expenditures and pay liabilities. Other Fund Types include uncleared suspense 

accounts, which temporarily hold collections pending clearance to the applicable account, and deposit funds, 

which are established to record amounts held temporarily until ownership is determined.

The U.S. Treasury processes cash receipts and disbursements. DOT receives appropriations as budget authority, 

which permits it to incur obligations and make outlays (payments). In addition, DOT also receives contract 

authority to permit the incurrence of obligations in advance of an appropriation. The contract authority is 

subsequently replaced with the appropriation or the spending authority from offsetting collections to first cover 

and then liquidate the obligations. As a result, DOT does not have typical Fund Balance with Treasury amounts 

as funds remain invested in securities until needed to make payments.
United States Department of Transportation 221

NOTE 3. INVESTMENTS

As of September 30, 2008 Cost

Amortized 

(Premium) 

Discount

Investments

(Net)

Market Value

Disclosure

Intragovernmental Securities

Marketable $ 41,403 $ 650 $ 42,053 $ 42,594 

Non-Marketable, Par Value 20,484,837 - 20,484,837 20,484,837 

Non-Marketable, Market-Based 1,087,268 (533) 1,086,735 1,120,012 

Subtotal 21,613,508 117 21,613,625 21,647,443 

Accrued Interest 85,906 - 85,906 

Total Intragovernmental Securities $ 21,699,414 $ 117 $ 21,699,531 $ 21,647,443 

Securities with the Public

Marketable 28,535 (250) 28,285 28,355 

Subtotal 28,535 (250) 28,285 28,355 

Accrued Interest 422 - 422 

Total Securites with the Public 28,957 (250) 28,707 28,355 

As of September 30, 2007

Intragovernmental Securities

Marketable $ 35,300 $ (371) $ 34,929 $ 35,665 

Non-Marketable, Par Value 20,135,487 - 20,135,487 20,135,487 

Non-Marketable, Market-Based 886,403 - 886,403 895,914 

Subtotal 21,057,190 (371) 21,056,819 21,067,066 

Accrued Interest 87,264 - 87,264 

Total Intragovernmental Securities $ 21,144,454 $ (371) $ 21,144,083 $ 21,067,066 

Securities with the Public

Marketable $ 75,252 $ (1,167) $ 74,085 $ 74,205 

Investments include non-marketable par value and market-based Treasury securities and marketable securities 

issued by the Treasury and other Federal entities. Non-marketable par value Treasury securities are issued by the 

Bureau of Public Debt to Federal accounts and are purchased and redeemed at par exclusively through Treasury’s 

Federal Investment Branch. Non-marketable market-based Treasury securities are also issued by the Bureau of 

Public Debt to Federal accounts. They are not traded on any securities exchange, but mirror the prices of particular 

Treasury securities trading in the Government securities market. Marketable Federal securities can be bought and 

sold on the open market.
222 FY 2008 Performance & Accountability Report

NOTE 3. INVESTMENTS (Cont.)

The Federal Government does not set aside assets to pay future benefits or other expenditures associated with 

earmarked funds. The cash receipts collected from the public for an earmarked fund are deposited in the U.S. 

Treasury, which uses the cash for Government purposes. Non-Marketable par value Treasury securities are issued 

to DOT as evidence of these receipts. These securities provide DOT with authority to draw upon the U.S. Treasury 

to make future expenditures. When DOT requires redemption of these securities to make expenditures, the 

Government finances those expenditures out of accumulated cash balances by raising taxes or other receipts, by 

borrowing from the public or repaying less debt, or by curtailing other expenditures. This is the same way that the 

Government finances all other expenditures.

Treasury securities are an asset of DOT and a liability of the U.S. Treasury. Because the DOT and the U.S. 

Treasury are both a part of the Government, these assets and liabilities offset each other from the standpoint of the 

Government as a whole. For this reason, they do not represent an asset or liability in the U.S. Government-wide 

financial statements.
United States Department of Transportation 223

NOTE 4. ACCOUNTS RECEIVABLE

Gross Amount 

Due

Allowance for 

Uncollectible 

Amounts

Net Amount 

Due

As of September 30, 2008

Intragovernmental

Accounts Receivable $ 235,620 $ - $ 235,620 

Accrued Interest 18 - 18 

Total Intragovernmental 235,638 - 235,638 

Public

Accounts Receivable 85,141 (17,722) 67,419 

Accrued Interest 896 (463) 433 

Total Public 86,037 (18,185) 67,852 

Total Receivables $ 321,675 $ (18,185) $ 303,490 

As of September 30, 2007

Intragovernmental

Accounts Receivable $ 509,692 - $ 509,692 

Public

Accounts Receivable 123,422 (9,345) 114,077 

Accrued Interest 41 - 41 

Total Public 123,463 (9,345) 114,118 

Total Receivables $ 633,155 $ (9,345) $ 623,810 
224 FY 2008 Performance & Accountability Report

NOTE 5. OTHER ASSETS

FY 2008 FY 2007

Intragovernmental

Advances and Prepayments $ 38,915 $ 1,739 

Other - 714 

Total Intragovernmental $ 38,915 $ 2,453 

Public

Advances to the States for the Right of Way $ 91,529 $ 98,861 

Other Advances and Prepayments 90,646 112,029 

Other 317 154 

Total Public $ 182,492 $ 211,044 

Intragovernmental Other Assets are comprised of advance payments to other Federal Government entities 

for agency expenses not yet incurred and for goods and services not yet received and undistributed assets and 

payments for which DOT is awaiting documentation. Public Other Assets are comprised of advances to States 

and advances to Amtrak, employees and contractors.
United States Department of Transportation 225

NOTE 6. DIRECT LOANS AND LOAN GUARANTEES, NON-FEDERAL BORROWERS

The Federal Credit Reform Act of 1990 divides direct loans and loan guarantees into two groups:

 (1) Pre-1992 the direct loan obligations or loan guarantee commitments made prior to FY 1992 and the 

resulting direct loans obligations or loan guarantees, and

 (2) Post-1991 the direct loan obligations or loan guarantee commitments made after FY 1991 and the resulting 

direct loans or loan guarantees.

The Act provides that, for direct loan obligations or loan guarantee commitments made after FY 1991, the 

present value of subsequent subsidy costs (which arises from interest rate differentials, interest subsidies, 

delinquencies and defaults, fee offsets, and other cash flows) be recognized in the year the direct or guaranteed 

loan is disbursed. Direct loans are reported net of an allowance for subsidy at present value, and loan guarantee 

liabilities are reported at present value. Foreclosed property is valued at the net realizable value. Loans 

receivable, net, or their value of assets related to direct loans, is not the same as the proceeds that would be 

expected to be received from selling the loans. DOT has calculated the allowance for pre-1992 loans using the 

allowance for loss method.

DOT administers the following direct loan and/or loan guarantee programs:

 (1) The Railroad Rehabilitation Improvement Program is used to acquire, improve, or rehabilitate intermodal 

or rail equipment or facilities, including track, components of tract, bridges, yards, buildings, and shops; 

refinance outstanding debt incurred; and develop or establish new intermodal or railroad facilities.

 (2) The Transportation Infrastructure Finance Innovation Act (TIFIA) Loan Program provides Federal 

credit assistance to major transportation investments of critical national importance such as highway, transit, 

passenger rail, certain freight facilities, and certain port projects with regional and national benefits. The TIFIA 

credit program is designed to fill market gaps and leverages substantial private co-investment by providing 

supplemental and subordinate capital.

 (3) The Federal Ship Financing Fund (Title XI) offers loan guarantees to qualified shipowners and shipyards. 

The guarantee provides the benefit of long term financing at stable interest rates to the approved applicants.

 (4) The OST Minority Business Resource Center Guaranteed Loan Program helps small businesses gain 

access to the financing needed to participate in transportation-related contracts.

An analysis of loans receivable, allowance for subsidy costs, liability for loan guarantees, foreclosed property, 

modifications and reestimates associated with direct loans and loan guarantees is provided in the following 

sections:
226 FY 2008 Performance & Accountability Report

NOTE 6. DIRECT LOANS AND LOAN GUARANTEES, NON-FEDERAL BORROWERS (CONT.)

Direct Loans

Obligated Prior to FY 1992 (Allowance for Loss Method)

FY 2008 

Loans 

Receivable, 

Gross

Interest 

Receivable

Allowance 

for Loan 

Losses

Value of 

Assets 

Related 

to Direct 

Loans, Net

Direct Loan Programs

1. Railroad Rehabilitation Improvement Program $ 13,757 $ 154 $ - $ 13,911 

Direct Loan Programs

FY 2008 

Loans 

Receivable, 

Gross

Interest 

Receivable

Allowance 

for Subsidy 

Cost(Present 

Value)

Value of 

Assets 

Related 

to Direct 

Loans, Net

Obligated After FY 1991

1. Railroad Rehabilitation Improvement Program $ 289,862 $ 552 $ (2,408) $ 288,006 

2. TIFIA Loans 1,488,123 - (158,716) 1,329,407 

Total $ 1,777,985 $ 552 $ (161,124) $ 1,617,413 

Obligated Prior to FY 1992 (Allowance for Loss Method)

FY 2007 

Loans 

Receivable, 

Gross

Interest 

Receivable

Allowance 

for Loan 

Losses

Value of 

Assets 

Related 

to Direct 

Loans, Net

Direct Loan Programs

1. Railroad Rehabilitation Improvement Program $ 17,479 $ 90 $ - $ 17,569 

Obligated After FY 1991

1. Railroad Rehabilitation Improvement Program $ 497,166 $ - $ 9,889 $ 507,055 

2. TIFIA Loans 377,058 - (39,998) 337,060 

Total $ 874,224 $ - $ (30,109) $ 844,115 

Total Amount of Direct Loans Disbursed (Post-1991)

FY 2008 FY 2007

Direct Loan Programs

1. Railroad Rehabilitation Improvement Program $ 70,027 $ 99,832 

2. TIFIA Loans 1,079,316 246,033 

Total $ 1,149,343 $ 345,865 

TIFIA loan disbursements increased significantly in FY 2008 over 2007 levels, primarily due to loan 

disbursements for three large surface transportation system projects totaling $950 million.
United States Department of Transportation 227

NOTE 6. DIRECT LOANS AND LOAN GUARANTEES, NON-FEDERAL BORROWERS (CONT.)

Subsidy Expense for Direct Loans by Program and Component

Subsidy Expense for New Direct Loans Disbursed

FY 2008

Interest Fees and Other Other

Differential Defaults Collections Subsidy Costs Total

Direct Loan Programs

1. Railroad Rehabilitation Improvement Program $ - $ - $ 1,409 $ - $ 1,409 

2. TIFIA Loans - 118,763 - - 118,763 

Total $ - $ 118,763 $ 1,409 $ - $ 120,172 

FY 2007

Interest Fees and Other Other

Differential Defaults Collections Subsidy Costs Total

Direct Loan Programs

1. Railroad Rehabilitation Improvement Program $ - $ - $ 1,786 $ - $ 1,786 

2. TIFIA Loans - 27,576 - - 27,576 

Total $ - $ 27,576 $ 1,786 $ - $ 29,362 

Modifications and Re-estimates

FY 2008

Total Interest Rate Technical Total

Modifications Re-estimates Re-estimates Re-estimates

Direct Loan Programs

1. Railroad Rehabilitation Improvement Program $ - $ - $ 13,801 $ 13,801 

2. TIFIA Loans - - 11,944 11,944 

Total $ - $ - $ 25,745 $ 25,745 

FY 2007

Total Interest Rate Technical Total

Modifications Re-estimates Re-estimates Re-estimates

Direct Loan Programs

1. Railroad Rehabilitation Improvement Program $ (1,745) $ - $ 1,567 $ 1,567 

2. TIFIA Loans 2,959 1,328 7,099 8,427 

Total $ 1,214 $ 1,328 $ 8,666 $ 9,994 

Total Direct Loan Subsidy Expense

FY 2008 FY 2007

Direct Loan Programs

1. Railroad Rehabilitation Improvement Program $ 15,210 $ 1,608 

2. TIFIA Loans 130,707 2,959 

Total $ 145,917 $ 4,567 
228 FY 2008 Performance & Accountability Report

NOTE 6. DIRECT LOANS AND LOAN GUARANTEES, NON-FEDERAL BORROWERS (CONT.)

Budget Subsidy Rates for Direct Loans for the Current Year Cohort

FY 2008 

Interest

Fees and 

Other

Differential Defaults Collections Other Total

Direct Loan Programs

1. Railroad Rehabilitation Improvement Program -0.95% 3.85% -2.90% 0.00% 0.00%

2. TIFIA Loans -0.04% 5.04% 0.00% 0.00% 5.00%

Total -0.99% 8.89% -2.90% 0.00% 5.00%

Schedule for Reconciling Subsidy Cost Allowance Balances (Post-1991 Direct Loans)

Beginning Balance, Changes, and Ending Balance FY 2008 FY 2007

Beginning Balance of the Subsidy Cost Allowance $ 30,109 $ (570)

Add: Subsidy Expense for Direct Loans Disbursed during the Reporting Years by Component

Default Costs (net of recoveries) 118,763 - 

Fees and Other Collections 1,409 - 

Other Subsidy Costs - 29,362 

Total of the Above Subsidy Expense Components 120,172 29,362 

Adjustments

Loan Modifications - 3,207 

Fees Received - (55)

Subsidy Allowance Amortization (14,902) (8,518)

Ending Balance of the Subsidy Cost Allowance Before Reestimates 135,379 23,426 

Add or Subtract Subsidy Reestimates by Component:

Technical/Default Reestimate 25,745 6,683 

Total of the Above Reestimate Components 25,745 6,683 

Ending Balance of the Subsidy Cost Allowance $ 161,124 $ 30,109 

Defaulted Guaranteed Loans from Post-1991 Guarantees

Loan Guarantee Programs

FY 2008 Defaulted 

Guaranteed Loans 

Receivable, Gross

Interest 

Receivable

Foreclosed 

Property

Allowance 

for Subsidy

Value of Assets 

Related to Default 

Guaranteed Loans 

Receivable, Net

3. Federal Ship Financing Fund (Title XI) $ 43,680 $ 600 $ - $ (5,320) $ 38,960 

Loan Guarantee Programs

FY 2007 Defaulted 

Guaranteed Loans 

Receivable, Gross

Interest 

Receivable

Foreclosed 

Property

Allowance 

for Subsidy

Value of Assets 

Related to Default 

Guaranteed Loans 

Receivable, Net

3. Federal Ship Financing Fund (Title XI) $ 7,501 $ 200 $ 19,000 $ 1,500 $ 28,201 
United States Department of Transportation 229

NOTE 6. DIRECT LOANS AND LOAN GUARANTEES, NON-FEDERAL BORROWERS (CONT.)

Guaranteed Loans Outstanding

Loan Guarantee Programs

Outstanding Principal of 

Guaranteed Loans, Face Value

Amount of Outstanding 

Principal Guaranteed

3. Federal Ship Financing Fund (Title XI) $ 2,421,273 $ 2,421,273 

4. OST Minority Business Resource Center 3,350 2,513 

Total $ 2,424,623 $ 2,423,786 

New Guaranteed Loans Disbursed

2008

Outstanding Principal of 

Guaranteed Loans, Face Value

Amount of Outstanding 

Principal Guaranteed

4. OST Minority Business Resource Center $ 2,600 $ 1,950 

Loan Guarantee Programs

2007

Outstanding Principal of 

Guaranteed Loans, Face Value

Amount of Outstanding 

Principal Guaranteed

4. OST Minority Business Resource Center $ 3,415 $ 2,651

Total $ 3,415 $ 2,651

Liability for Loan Guarantees (Present Value Method Post-1991 Guarantees):

Loan Guarantee Programs

FY 2008

Liabilities for

Post-1991 Guarantees,

Present Value

3. Federal Ship Financing Fund (Title XI) $ 257,929 

4. OST Minority Business Resource Center 121 

Total $ 258,050 
230 FY 2008 Performance & Accountability Report

NOTE 6. DIRECT LOANS AND LOAN GUARANTEES, NON-FEDERAL BORROWERS (CONT.)

Subsidy Expense for Loan Guarantees by Program and Component

Subsidy Expense for New Loan Guarantees Disbursed

Loan Guarantee Programs

2008

Interest 

Supplements Defaults

Fees and Other 

Collections Other Total

3. Federal Ship Financing Fund (Title XI) $ - $ 38,599 $ (23,108) $ - $ 15,491

4. OST Minority Business Resource Center - 53 - - 53 

Total $ - $ 38,652 $ (23,108) $ - $ 15,544

Loan Guarantee Programs

2008

Interest 

Supplements Defaults

Fees and Other 

Collections Other Total

3. Federal Ship Financing Fund (Title XI) $ - $ 891 $ 774 $ 20,499 $ 22,164

4. OST Minority Business Resource Center 62 - - - 62

Total $ 62 $ 891 $ 774 $ 20,499 $ 22,226

Modifications and Re-estimates

FY 2008

Total Interest Rate Technical Total

Loan Guarantee Programs Modifications Re-estimates Re-estimates Re-estimates

3. Federal Ship Financing Fund (Title XI) $ - $ - $ (106,400) $ (106,400)

4. OST Minority Business Resource Center - - (153) (153) 

Total $ - $ - $ (106,553) $ (106,553)

FY 2007

Total Interest Rate Technical Total

Loan Guarantee Programs Modifications Re-estimates Re-estimates Re-estimates

3. Federal Ship Financing Fund (Title XI) $ (31,096) $ - $ 31,096 $ 31,096 

4. OST Minority Business Resource Center - 12,992 (15,208) (2,216)

Total $ (31,096) $ 12,992 $ 15,888 $ 28,880 

Total Loan Guarantee Subsidy Expense

Loan Guarantee Programs FY 2008 FY 2007

3. Federal Ship Financing Fund (Title XI) $ (90,909) $ 22,164 

4. OST Minority Business Resource Center (100) (2,154)

Total $ (91,009) $ 20,010 

Budget Subsidy Rates for Loan Guarantees for the Current Year Cohort

2008

Interest

Supplements Defaults

Fees and 

Other

Collections Other Total

Loan Guarantee Programs

3. Federal Ship Financing Fund (Title XI) 0.00% 9.23% -4.88% 0.00% 4.35%

4. OST Minority Business Resource Center 0.00% 2.03% 0.00% 0.00% 2.03%

Total 0.00% 11.26% -4.88% 0.00% 6.38%
United States Department of Transportation 231

NOTE 6. DIRECT LOANS AND LOAN GUARANTEES, NON-FEDERAL BORROWERS (CONT.)

Schedule for Reconciling Loan Guarantee Liability Balances (Post-1991 Loan Guarantees)

Beginning Balance, Changes, and Ending Balance FY 2008 FY 2007

Beginning Balance of the Loan Guarantee Liability $ 336,626 $ 345,864 

Add: Subsidy Expense for Guaranteed Loans Disbursed during the Reporting Years by Component

Default Costs (net of recoveries) 38,652 571 

Fees and Other Collections (23,108) 774 

Other Subsidy Costs - 3,299 

Total of the Above Subsidy Expense Components 15,544 4,644 

Adjustments

Interest Accumulation on the Liability Balance 11,910 17,216 

Other 523 - 

Ending Balance of the Loan Guarantee Liability Before Reestimates 364,603 367,724 

Add or Subtract Subsidy Reestimates by Component:

Technical/Default Reestimate (106,553) (31,098)

Total of the Above Reestimate Components (106,553) (31,098)

Ending Balance of the Loan Guarantee Liability $ 258,050 $ 336,626 

Interest on the loans is accrued based on the terms of the loan agreement. DOT does not accrue interest on nonperforming loans that have filed for bankruptcy protection. DOT management considers administrative costs to 

be insignificant.

The downward reestimate on the Federal Ship Financing Fund (Title XI) was a result of significant reductions 

in principal outstanding each year on the loan guarantees as well as the reassessment of risk levels on high risk 

loans. The economic assumptions of the TIFIA loan program has been revised resulting in an upward reestimate 

of costs over the life of the loan. The Railroad Rehabilitation Improvement Program’s upward reestimate was 

a result of an update for change in the discount rate between time of loan obligation and disbursement and an 

update for actual cash flows and changes in technical assumptions.

The downturn in economy has led to volatility in financial markets which could affect loan repayments under 

direct and loan guarantee programs. Under the Federal Credit Reform Act, upward reestimates are automatically 

covered by permanent indefinite budget authority, which ensures DOT will have sufficient resources to cover any 

losses incurred in its existing portfolio without further action by Congress. DOT continues to evaluate the risks 

to affected markets in light of evolving economic conditions, but the impact of such risks on DOT’s loan and 

loan guarantee portfolio reserves, if any, cannot be fully known at this time. The sufficiency of DOT’s portfolio 

reserves at September 30, 2008 will largely depend on future economic and market conditions and could differ 

from current estimates.
232 FY 2008 Performance & Accountability Report

NOTE 7. Inventory and Related Property

Allowance

Cost for Loss Net

As of September 30, 2008

Inventory:

Inventory Held for Current Sale $ 82,350 $ (96) $ 82,254 

Excess, Obsolete and Unserviceable Inventory 19,583 (19,583) - 

Inventory Held for Repair 487,117 (96,240) 390,877 

Other 26,299 (10,591) 15,708 

Total Inventory $ 615,349 $ (126,510) $ 488,839 

Operating Materials and Supplies:

 Items Held for Use $ 229,430 $ (4,856) $ 224,574 

 Items Held in Reserve for Future Use 65,903 - 65,903 

 Excess, Obsolete and Unserviceable Items 526 (526) - 

 Items Held for Repair 41,024 (17,972) 23,052 

Total Operating Materials & Supplies $ 336,883 $ (23,354) $ 313,529 

Total Inventory and Related Property $ 802,368 

As of September 30, 2007

Inventory:

Inventory Held for Current Sale $ 82,975 $ (6,631) $ 76,344 

Inventory Held for Repair 466,346 (95,600) 370,746 

Other 35,992 (17,996) 17,996 

Total Inventory $ 585,313 $ (120,227) $ 465,086 

Operating Materials and Supplies:

Items Held for Use $ 233,470 $ (3,923) $ 229,547 

Items Held in Reserve for Future Use 69,998 - 69,998 

Excess, Obsolete and Unserviceable Items 480 (480) - 

Items Held for Repair 38,385 (17,256) 21,129 

Total Operating Materials & Supplies $ 342,333 $ (21,659) $ 320,674 

Total Inventory and Related Property $ 785,760 
United States Department of Transportation 233

NOTE 8. general property, plant and equipment

Major Classes

Service 

Life

Acquisition 

Value

Accumulated 

Depreciation Book Value

As of September 30, 2008

 Land and Improvements 30 $ 103,056 $ (1,084) $ 101,972 

 Buildings and Structures 15-40 5,054,765 (2,665,384) 2,389,381 

 Furniture and Fixtures 15-20 67,509 (65,050) 2,459 

 Equipment 15-20 18,797,474 (9,843,868) 8,953,606 

 ADP Software 15-20 252,778 (208,227) 44,551 

 Assets Under Capital Lease 6-10 166,387 (125,137) 41,250 

 Leasehold Improvements 40 90,392 (43,519) 46,873 

 Aircraft 40 401,614 (314,282) 87,332 

 Ships and Vessels 11-20 1,656,764 (1,241,137) 415,627 

 Small Boats 20 17,724 (15,180) 2,544 

 Construction in Progress 2,409,108 - 2,409,108 

 Property Not in Use 95,013 (77,148) 17,865 

 Total $ 29,112,584 $ (14,600,016) $ 14,512,568 

As of September 30, 2007

 Land and Improvements 30 $ 208,742 $ (89,679) $ 119,063 

 Buildings and Structures 15-40 4,823,882 (2,485,100) 2,338,782 

 Equipment 15-20 17,666,943 (9,054,817) 8,612,126 

 ADP Software 15-20 208,130 (180,104) 28,026 

 Assets Under Capital Lease 6-10 166,387 (111,373) 55,014 

 Leasehold Improvements 40 67,494 (35,541) 31,953 

 Aircraft 40 401,614 (297,508) 104,106 

 Ships and Vessels 11-20 1,656,764 (1,176,540) 480,224 

 Small Boats 20 17,564 (14,712) 2,852 

 Construction in Progress 2,892,154 - 2,892,154 

 Property Not in Use 93,593 (74,003) 19,590 

 Total $ 28,203,267 $ (13,519,377) $ 14,683,890 
234 FY 2008 Performance & Accountability Report

NOTE 9. stewardship Property, plant and equipment

Personal Property Heritage Assets

Implied within the Maritime Administration’s mission is the promotion of the nation’s rich maritime heritage. 

One aspect of this entails the collection, maintenance and distribution of maritime artifacts removed from 

agency-owned ships prior to their disposal. As ships are assigned to a non-retention status, artifact items 

are collected, inventoried, photographed and relocated to secure shore-side storage facilities. This resulting 

inventory is made available on a long-term loan basis to qualified organizations for public display purposes.

MARAD artifacts and other collections are generally on loan to single purpose memorialization and 

remembrance groups, such as AMVets and preservation societies. MARAD maintains a web-based inventory 

system that manages the artifact loan process. The program also supports required National Historical 

Preservation Act processing prior to vessel disposal. Funding for the maintenance of heritage items is typically 

the responsibility of the organization requesting the loan. The artifacts and other collections are composed of 

ships’ operating equipment obtained from obsolete ships. The ships are inoperative and in need of preservation 

and restoration. As all items are durable and restorable, disposal is not a consideration. A total of 604 units 

of artifacts and other collections were collected as of September 30, 2008 and 598 units were collected as of 

September 30, 2007.

Real Property Heritage Assets

Washington’s Union Station support’s DOT’s mobility mission, facilitating the movement of intercity and 

commuter rail passengers through the Washington DC metropolitan area. The Federal Railroad Administration 

(FRA) has an oversight role in the management of Washington’s Union Station. FRA received title through 

legislation, and sublets the property to Union Station Venture Limited which manages the property.

Washington’s Union Station is an elegant and unique turn-of-the-century rail station in which a wide variety 

of elaborate, artistic workmanship characteristic of the period is found. Union Station is listed on the National 

Register of Historic Places. The station consists of the renovated original building and a parking garage, which 

was added by the National Park Service.

The Nuclear Ship Savannah is the world’s first nuclear-powered merchant ship. It was constructed as a joint 

project of the Maritime Administration and the Atomic Energy Commission (AEC) as a signature element of 

President Eisenhower’s “Atoms for Peace” program. In 1965 the AEC issued a commercial operating license 

and ended its participation in the joint program. The ship remains licensed and regulated by the U.S. Nuclear 

Regulatory Commission (successor to the AEC). The Nuclear Ship Savannah is listed on the National Register of 

Historic Places. The ship is a boldly-styled passenger/cargo vessel powered by a nuclear reactor.

Actions taken by the Maritime Administration since 2006 have stabilized the ship and rehabilitated portions of 

its interior for work-day occupancy by staff and crew. The ship is currently located in Baltimore, MD, where it is 

being prepared for continued “SAFSTOR” retention under the provisions of its NRC license.
United States Department of Transportation 235

NOTE 10. liabilities not covered by budgetary resources

Intragovernmental FY 2008 FY 2007

Debt $ - $ 1,726 

Other Liabilities (Note 15) 364,516 440,686 

Total Intragovernmental 364,516 442,412 

Federal Employee Benefits Payable 984,710 946,408 

Environmental and Disposal Liabilities (Note 13) 828,757 852,366 

Other Liabilities 864,520 782,120 

Total Liabilities Not Covered by Budgetary Resources 3,042,503 3,023,306 

Total Liabilities Covered by Budgetary Resources 11,774,151 11,051,917 

Total Liabilities $ 14,816,654 $ 14,075,223 
236 FY 2008 Performance & Accountability Report

NOTE 11. debt

FY 2007 FY 2007 FY 2007 FY 2008 FY 2008

Beginning Net Ending Net Ending

Balance Borrowing Balance Borrowing Balance

Intragovernmental Debt

 Debt to the Treasury $ 836,680 $ 201,623 $ 1,038,303 $ 722,458 $ 1,760,761 

 Debt to the Fed Financing Bank 2,677 (219) 2,458 (234) 2,224 

 Total Intragovernmental Debt $ 839,357 $ 201,404 $ 1,040,761 $ 722,224 $ 1,762,985 
United States Department of Transportation 237

NOTE 12. Federal Employee Benefits Payable

2008 2007

Intragovernmental Liability for FECA (Note 15) $ 221,586 $ 214,787 

Expected Future Liability for FECA 984,710 946,408 

Total Federal Employee Benefits Payable $ 1,206,296 $ 1,161,195 

The Department of Labor calculates the FECA liability for DOT as a whole. FECA liabilities include the 

expected liability for death, disability, medical and miscellaneous costs for approved compensation cases, plus a 

component for incurred but not reported claims. The estimated liability is not covered by budgetary resources 

and thus will require future appropriated funding.

The intragovernmental FECA liability represents amounts billed to DOT by the DOL for FECA payments 

made on DOT’s behalf. Funding for the liability will be made provided by future appropriations. The 

intragovernmental amount is not an actuarial liability.
238 FY 2008 Performance & Accountability Report

NOTE 13. Environmental and Disposal Liabilities

September 30, 2008 September 30, 2007

Public

Environmental Remediation $ 464,081 $ 316,748 

Asset Disposal 364,676 535,618 

Total Public $ 828,757 $ 852,366 

Environmental remediation generally occurs under the Resource Conservation and Recovery Act of 1976 

(RCRA), the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA or 

Superfund), or the Toxic Substances Control Act (TSCA). Environmental remediation includes the fuel storage 

tank program, fuels, solvents, industrial, and chemicals, and other environmental cleanup activities associated 

with normal operations or the result of an accident. The increase or decrease in the annual liability is charged to 

the current year expense.

As of September 30, 2008 and 2007, DOT’s environmental remediation liability primarily includes the removal 

of contaminants on the Nuclear Ship Savannah, containment of exfoliating ship paint for the non-retention 

ships in the National Defense Reserve Fleet (Fleet), and remediation at various sites managed by the FAA and 

MARAD.

DOT has not recorded a liability for potential contamination at a MARAD site in Portland, Oregon. Because 

the remedial investigation/feasibility study has not been completed and because MARAD is listed as one of 

hundreds of potentially responsible parties, it is not yet possible to reasonably estimate MARAD’s portion, if any, 

of the remediation costs.

The National Maritime Heritage Act requires that MARAD dispose of certain merchant vessels owned by the 

U.S. government, including non-retention ships in the Fleet. The asset disposal liability at September 30, 2008 

includes the estimated cost of disposing 187 ships. In addition, FAA records an asset disposal liability upon the 

decommissioning of an asset to cover preparatory costs required to meet regulatory standards allowing for the 

safe disposition of the asset.
United States Department of Transportation 239

NOTE 14. grant accrual

The grant accrual consists of an estimate of grantee expenses incurred but not yet paid by DOT. Grantees 

primarily include state and local governments and transit authorities.

Grant accruals by Operating Administration at September 30, 2008 and 2007 are summarized as follows:

FY 2008 FY 2007

Federal Highway Administration $ 3,730,005 $ 4,144,949 

Federal Transit Administration 1,373,270 707,996 

Federal Aviation Administration 642,041 653,790 

Other 64,831 19,553 

Total Grant Accrual $ 5,810,147 $ 5,526,288 
240 FY 2008 Performance & Accountability Report

NOTE 15. other liabilities

Non-Current Current Total

As of September 30, 2008

Intragovernmental

 Advances and Prepayments $ - $ 2,786,860 $ 2,786,860 

 Accrued Pay and Benefits - 79,188 79,188 

 FECA Billings (Note 12) 126,117 95,469 221,586 

 Deferred Credits - 458 458 

 Other Accrued Liabilities 92,427 82,604 175,031 

Total Intragovernmental $ 218,544 $ 3,044,579 $ 3,263,123 

Public

 Other Accrued Unbilled Payments $ - $ 50,177 $ 50,177 

 Advances and Prepayments - 60,101 60,101 

 Accrued Pay and Benefits 48,386 698,169 746,555 

 Deferred Credits - 93,676 93,676 

 Legal Claims 2,901 109,787 112,688 

 Capital Leases 49,271 12,400 61,671 

 Other Custodial Liability - 17,956 17,956 

 Other Accrued Liabilities 197,131 25,302 222,433 

Total Public $ 297,689 $ 1,067,568 $ 1,365,257 

As of September 30, 2007 Non-Current Current Total

Intragovernmental

 Advances and Prepayments $ (79,321) $ 2,911,830 $ 2,832,509 

 Accrued Pay and Benefits 2,533 83,810 86,343 

 FECA Billings (Note 12) 126,127 88,660 214,787 

 Deferred Credits 34,972 - 34,972 

 Other Accrued Liabilities 227,405 22,062 249,467 

 Total Intragovernmental $ 311,716 $ 3,106,362 $ 3,418,078 

Public

 Other Accrued Unbilled Payments $ 11 $ 1,752 $ 1,763 

 Advances and Prepayments 31,420 142,852 174,272 

 Accrued Pay and Benefits 160,135 568,817 728,952 

 Deferred Credits 129,891 - 129,891 

 Legal Claims 2,431 14,205 16,636 

 Capital Leases 57,612 14,499 72,111 

 Other Custodial Liability (2) 26,796 26,794 

 Other Accrued Liabilities 93,421 65,571 158,992 

 Total Public $ 474,919 $ 834,492 $ 1,309,411 
United States Department of Transportation 241

NOTE 16. capital leases

ENTITY AS LESSEE

Capital Leases

2008 2007

 Summary of Assets Under Capital Lease by Category

 Land, Buildings & Machinery $ 166,387 $ 166,387 

 Accumulated Amortization (125,137) (111,373)

 Net Assets Under Capital Lease $ 41,250 $ 55,014 

Future Payments Due

Fiscal Year

Year 1 (2009) $ 13,502 

Year 2 (2010) 12,833 

Year 3 (2011) 11,816 

Year 4 (2012) 8,637 

Year 5 (2013) 5,709 

After 5 Years (2014+) 54,240 

Total Future Lease Payments $ 106,737 

Less: Imputed Interest 45,066 

Net Capital Lease Liability $ 61,671 

The capital lease payments disclosed above relate to FAA and are authorized to be funded annually as codified in the 

United States Code - Title 49 - Section 40110(c)(1) which addresses general procurement authority. The remaining 

principal payments are recorded as unfunded lease liabilities. The imputed interest is funded and expensed annually.

Operating Leases

Future Payments Due

Land, Buildings,

 Fiscal Year Machinery & Other

Year 1 (2008) $ 208,288 

Year 2 (2009) 200,604 

Year 3 (2010) 177,565 

Year 4 (2011) 161,468 

Year 5 (2012) 108,545 

After 5 Years (2013+) 670,297 

Total Future Lease Payments $ 1,526,767 

Operating lease expense incurred during the years ended September 30, 2008 and 2007 was $251 million and $236 million, 

respectively, including General Services Administration (GSA) leases that have a short termination privilege; however, 

DOT intends to remain in the leases. The FY 2008 lease expense and related future payments disclosed above include 

amounts related to DOT’s new Southeast Federal Center Building located in the District’s Anacostia Watershed and do not 

include immaterial lease amounts of DOT field offices. The operating lease amounts due after five years does not include 

estimated payments for leases with annual renewal options. Estimates of the lease termination dates are subjective, and any 

projection of future lease payments would be arbitrary.
242 FY 2008 Performance & Accountability Report

NOTE 17. commitments and contingencies

Legal Claims

As of September 30, 2008 and 2007, DOT’s contingent liabilities, in excess of amounts accrued, for asserted and 

pending legal claims reasonably possible of loss were estimated at $88.2 million and $33.1 million, respectively. 

DOT does not have material amounts of known unasserted claims.

Grant Programs

FHWA pre-authorizes states to establish construction budgets without having received appropriations from 

Congress for such projects. FHWA does not guarantee the ultimate funding to the states for these “Advance 

Construction” projects and, accordingly, does not obligate any funds for these projects. When funding becomes 

available to FHWA, the states can then apply for reimbursement of costs that they have incurred on such 

projects, at which time FHWA can accept or reject such requests. For the fiscal year ended September 30, 2008 

and 2007, FHWA has pre-authorized $46.2 billion and $46.2 billion, respectively, under these arrangements. 

These commitments have not been recognized in the DOT consolidated financial statements at September 30, 

2008 and 2007.

FTA executes Full Funding Grant Agreements (FFGAs) under its Capital Investment program (New Starts) 

authorizing transit authorities to establish project budgets and incur costs with their own funds in advance of 

Congress appropriating New Starts funds to the project. As of September 30, 2008 and September 30, 2007, 

FTA had approximately $1.7 billion and $3.9 billion respectively, in funding commitments under FFGAs, which 

Congress had not yet appropriated. Congress must first provide the budget authority (appropriations) to allow 

FTA to incur obligations for these programs. Until Congress appropriates funds, FTA is not liable to grantees 

for any costs incurred. There is no liability related to these commitments reflected in the DOT consolidated 

financial statements at September 30, 2008 and 2007.

FAA’s Airport Improvement Program provides grants for the planning and development of public-use airports 

that are included in the National Plan of Integrated Airport Systems. Eligible projects generally include 

improvements related to enhancing airport safety, capacity, security and environmental concerns. FAA’s share is 

75 percent of the eligible costs for large and medium primary hub airports with the exception of noise program 

implementation, which is 80 percent of the eligible costs. For remaining airports (small primary, reliever, and 

general aviation airports), FAA’s share is 95 percent of the eligible costs.

FAA has authority under 49 U.S.C. 47110(e) to issue letters of intent to enter into Airport Improvement Program 

grant agreements. FAA records an obligation when a grant is awarded. Through September 30, 2008, FAA issued 

letters of intent covering FY 1988 through FY 2020 totaling $5.7 billion. As of September 30, 2008, FAA had 

obligated $4.6 billion of this total amount leaving $1.1 billion unobligated. Through September 30, 2007, FAA 

issued letters of intent covering FY 1988 through FY 2020 totaling $5.6 billion. As of September 30, 2007, FAA 

had obligated $4.3 billion of this total amount, leaving $1.3 billion unobligated.

Contract Options and Negotiations

As of September 30, 2008 and 2007, FAA had contract options of $3.7 billion and $3.5 billion, respectively. These 

contract options give FAA the unilateral right to purchase additional equipment or services or to extend the 

contract terms. Exercising this right would require the obligation of funds in future years.
United States Department of Transportation 243

NOTE 17. commitments and contingencies (CONT.)

Aviation Insurance Program

FAA is authorized to issue hull and liability insurance under the Aviation Insurance Program for air carrier 

operations for which commercial insurance is not available on reasonable terms and when continuation of U.S. 

flag commercial air service is necessary in the interest of air commerce, national security, and U.S. foreign policy. 

FAA may issue (1) non-premium insurance, and (2) premium insurance for which a risk-based premium is 

charged to the air carrier, to the extent practical.

During FY 2008, FAA provided premium war-risk insurance to 77 airlines. For these airlines, combined hull and 

liability per occurrence coverage limits range from $100 million to $4 billion. FAA also provided non-premium 

war-risk insurance to 38 carriers with 1,667 aircraft for Department of Defense charter operations for Central 

Command and standby non-premium war-risk insurance policies for 8 carriers for State Department charter 

operations.

As of September 30, 2008, there are no pending aviation insurance claims. There is approximately $1.1 billion 

available in the Aviation Insurance Revolving Fund to pay claims to carriers covered by premium insurance. 

If premium insurance claims should exceed that amount, additional funding could be appropriated from the 

General Fund. The Department of Defense and State Department have agreed to pay claims to the carriers 

covered by non-premium insurance.

Environmental Liabilities

MARAD is named as a defendant in a case alleging violations of the Resource Conservation and Recovery 

Act, the Clean Water Act, and the hazardous waste code for the State of California. Based on the nature of the 

lawsuit, management is currently unable to quantify its liability in this area.

As of September 30, 2008, FAA has estimated contingent liabilities, categorized as reasonably possible of $114.1 

million related to environmental remediation. Contingency costs are defined for environmental liabilities as 

those costs that may result from incomplete design, unforeseen and unpredictable conditions or uncertainties 

within a defined project scope.
244 FY 2008 Performance & Accountability Report

NOTE 18. earmarked funds

DOT administers certain earmarked funds, which are specifically identified revenues, often supplemented by 

other financing sources, that remain available over time. No new legislation was enacted as of September 30, 

2008 that significantly changed the purpose of the earmarked funds or redirected a material portion of the 

accumulated balance. Descriptions of the significant earmarked funds are as follows:

Highway Trust Fund

The Highway Trust Fund (HTF) is comprised of the Highway Corpus Trust Fund and certain accounts of the 

Federal Highway Administration, Federal Motor Carrier Safety Administration, Federal Transit Administration, 

Federal Railroad Administration and the National Highway Traffic Safety Administration. The HTF was 

created in 1956 by the Highway Revenue Act of 1956 with the main objective of funding the construction of the 

Dwight D. Eisenhower System of Interstate and Defense Highways. Over the years, the use of the fund has been 

expanded to include mass transit and other surface transportation programs such as highway safety and motor 

carrier safety programs. Overall, there are 73 separate treasury symbols in the HTF.

HTF’s programs and activities are primarily financed from excise taxes collected on specific motor fuels, truck 

taxes, and fines and penalties. The Highway Revenue Act of 1982 established two accounts within the HTF, 

the Highway Account and the Mass Transit Account. In September 2008, Congress appropriated an $8 billion 

transfer from the Treasury General Fund to the HTF Highway Account to alleviate the cash shortfall created by 

increases in fuel prices, and corresponding declines in gas tax revenues.

Airport and Airway Trust Fund

The Airport and Airway Trust Fund (AATF) was authorized by the Airport and Airway Revenue Act of 1970 

to provide funding for the Federal commitment to the nation’s aviation system and typically includes annual 

funding for four distinct areas within FAA: Operations; Grant in Aid for Airports; Facilities and Equipment; and 

Research, Engineering and Development. 

Funding currently comes from several aviation related excise tax collections from passenger tickets, passenger 

flight segments, international arrivals/departures, cargo waybills and aviation fuels. 

Mass Transit Account

In FY-2005 and prior, FTA’s formula and bus grant programs were funded 80 percent by certain earmarked 

excise tax revenues and 20 percent from the Treasury general receipts account. These funds are considered 

earmarked but not reported as part of the HTF. 

Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) legislation 

(PL 109-59) changed the way FTA programs are funded. Beginning in FY-2006, the FTA formula and bus grant 

programs are funded 100 percent by the HTF.
United States Department of Transportation 245

The following is a list of other earmarked funds for which the DOT has program management responsibility:

Other Earmarked Funds

Aviation Insurance Revolving Fund

Pipeline Safety

Emergency Preparedness Grant

Aviation User Fees

Essential Air Service and Rural Airport Improvement Fund

University Transportation Centers

Contributions for Highway Research Program

Cooperative Work, Forest Highways

Safety of Cross-Border Trucking Between the United States and Mexico

Payment to Air Carriers

Right of Way Revolving Fund Program Account

Alaska Pipeline Task Force, Oil Spill Liability Trust Fund

Right-of-Way Revolving Fund Trust Fund

Technical Assistance, United States Dollars Advanced from Foreign Governments

Gifts and Bequests, Maritime Administration

Special Studies, Services and Projects

Gifts and Bequests, DOT Office of the Secretary

Equipment, Supplies, etc., for Cooperating Countries
246 FY 2008 Performance & Accountability Report

NOTE 18. earmarked funds (CONT.)

Highway

Trust Fund

Airport & 

Airway

Trust Fund Mass Transit

Other 

Earmarked 

Funds

FY 2008

Total 

Earmarked

Balance Sheet as of September 30, 2008

Assets

Fund Balance with Treasury $ 4,005,470 $ 848,372 $ 2,157,264 $ 3,196,326 $ 10,207,432 

Investments, Net 12,811,128 7,746,547 - 1,142,277 21,699,952 

Accounts Receivable, Net 27,112,794 - - 3,918,375 31,031,169 

Inventory and Related Property, Net - - - - - 

Property, Plant & Equipment 112,119 - - 3,794 115,913 

Other 380,932 - 777 2,579,181 2,960,890 

Total Assets $ 44,422,443 $ 8,594,919 $ 2,158,041 $ 10,839,953 $ 66,015,356 

Liabilities and Net Position

Accounts Payable $ 27,125,748 $ 3,772,307 $ 2,039 $ 315,627 $ 31,215,721 

AATF Amounts due to FAA - - - - - 

FECA Liabilities 856,966 - 181 1,120,534 1,977,681 

Grants Accrual 3,791,266 - 135,443 644,311 4,571,020 

Other Liabilities 212,999 - 3,360 1,080,123 1,296,482 

Unexpended Appropriations - - 41,197 969,212 1,010,409 

Cumulative Results of Operations 12,435,464 4,822,612 1,975,821 6,710,146 25,944,043 

Total Liabilities and Net Position $ 44,422,443 $ 8,594,919 $ 2,158,041 $ 10,839,953 $ 66,015,356 

Statement of Net Cost For the Period Ended September 30, 2008

Program Costs $ 43,416,975 $ 13,466,390 $ 1,322,007 $ 866,911 $ 59,072,283 

Less Earned Revenue 111,467 - (15,330) 558,714 654,851 

Net Program Costs 43,305,508 13,466,390 1,337,337 308,197 58,417,432 

Costs Not Attibutable to Programs - - - 147,952 147,952 

Net Cost of Operations $ 43,305,508 $ 13,466,390 $ 1,337,337 $ 456,149 $ 58,565,384 

Statement of Changes in Net Position For the Period Ended September 30, 2008

Beginning Net Position $ 11,293,841 $ 6,046,786 $ 3,357,240 $ 7,068,083 $ 27,765,950 

Budgetary Financing Sources 44,414,017 12,242,216 (2,885) 2,449,990 59,103,338 

Other Financing Sources 33,114 - - (1,382,566) (1,349,452)

Net Cost of Operations 43,305,508 13,466,390 1,337,337 456,149 58,565,384 

Change in Net Position 1,141,623 (1,224,174) (1,340,222) 611,275 (811,498)

Net Position End of Period $ 12,435,464 $ 4,822,612 $ 2,017,018 $ 7,679,358 $ 26,954,452 
United States Department of Transportation 247

NOTE 18. earmarked funds (CONT.)

Highway

Trust Fund

Airport & 

Airway

Trust Fund Mass Transit

Other 

Earmarked 

Funds

FY 2007

Total 

Earmarked

Balance Sheet as of September 30, 2007

Assets

Fund Balance with Treasury $ 3,209,239 $ 715,578 $ 3,542,996 $ 3,231,336 $ 10,699,149 

Investments, Net 12,204,544 8,006,774 - 933,401 21,144,719 

Accounts Receivable, Net 46,987 179,673 15,646 3,057,058 3,299,364 

Property, Plant & Equipment 95,744 - - 2,891,344 2,987,088 

Other 192,639 - 1,322 23,130 217,091 

Total Assets $ 15,749,153 $ 8,902,025 $ 3,559,964 $ 10,136,269 $ 38,347,411 

Liabilities and Net Position

Liabilities $ 310,363 $ 2,855,239 $ 4,564 $ 3,060,529 $ 6,230,695 

Grants Accrual 4,144,949 - 198,160 7,657 4,350,766 

Unexpended Appropriations - - 49,232 1,163,957 1,213,189 

Cumulative Results of Operations 11,293,841 6,046,786 3,308,008 5,904,126 26,552,761 

Total Liabilities and Net Position $ 15,749,153 $ 8,902,025 $ 3,559,964 $ 10,136,269 $ 38,347,411 

Statement of Net Cost For the Period Ended September 30, 2007

Program Costs $ 39,942,210 $ 12,695,908 $ 1,779,049 $ 1,308,782 $ 55,725,949 

Less Earned Revenue 108,695 - 56,279 508,634 673,608 

Net Program Costs 39,833,515 12,695,908 1,722,770 800,148 55,052,341 

Costs Not Attibutable to Programs - - - 102,279 102,279 

Net Cost of Operations $ 39,833,515 $ 12,695,908 $ 1,722,770 $ 902,427 $ 55,154,620 

Statement of Changes in Net Position For the Period Ended September 30, 2007

Beginning Net Position $ 11,932,051 $ 6,398,812 $ 5,290,939 $ 7,165,637 $ 30,787,439 

Budgetary Financing Sources 39,160,532 12,343,882 (210,929) 2,776,612 54,070,097 

Other Financing Sources 34,773 - - (1,971,739) (1,936,966)

Net Cost of Operations 39,833,515 12,695,908 1,722,770 902,427 55,154,620 

Change in Net Position (638,210) (352,026) (1,933,699) (97,554) (3,021,489)

Net Position End of Period $ 11,293,841 $ 6,046,786 $ 3,357,240 $ 7,068,083 $ 27,765,950 
248 FY 2008 Performance & Accountability Report

NOTE 19. intragovernmental costs and exchange revenues

For the Year Ended September 30, 2008 Intragovernmental With the Public Total

Surface Transportation

Federal-Aid Highway Program

Gross Costs $ 261,106 $ 35,462,448 $ 35,723,554 

Less Earned Revenue 4,541 63,819 68,360 

Net Program Costs 256,565 35,398,629 35,655,194 

Mass Transit Program

Gross Costs 5,517 10,137,413 10,142,930 

Less Earned Revenue 16,215 766 16,981 

Net Program Costs (10,698) 10,136,647 10,125,949 

Other Surface Transportation Programs

Gross Costs 307,817 4,242,481 4,550,298 

Less Earned Revenue 31,350 147,080 178,430 

Net Program Costs 276,467 4,095,401 4,371,868 

Total Surface Transportation Program Costs 522,334 49,630,677 50,153,011 

Air Transportation

Air Traffic Organization

Gross Costs 1,993,589 8,456,418 10,450,007 

Less Earned Revenue 24,273 528 24,801 

Net Program Costs 1,969,316 8,455,890 10,425,206 

Airports

Gross Costs 18,138 3,735,702 3,753,840 

Less Earned Revenue - 165 165 

Net Program Costs 18,138 3,735,537 3,753,675 

Aviation Safety

Gross Costs 169,358 986,409 1,155,767 

Less Earned Revenue 870 25 895 

Net Program Costs 168,488 986,384 1,154,872 

Commercial Space Transportation

Gross Costs 1,693 9,564 11,257 

Other Federal Aviation Administration Programs

Gross Costs 68,719 474,077 542,796 

Less Earned Revenue 2,520 353,165 355,685 

Net Program Costs 66,199 120,912 187,111 

Total Air Transportation Program Costs 2,223,834 13,308,287 15,532,121 
United States Department of Transportation 249

NOTE 19. intragovernmental costs and exchange revenues (CONT.)

For the Year Ended September 30, 2008 Intragovernmental With the Public Total

Maritime Transportation

Gross Costs $ 19,364 $ 687,285 $ 706,649 

Less Earned Revenue 282,959 208,611 491,570 

Net Program Costs (263,595) 478,674 215,079 

Cross-Cutting Programs

Gross Costs 6,335 559,526 565,861 

Less Earned Revenue 539,109 3,251 542,360 

Net Program Costs (532,774) 556,275 23,501 

Costs not Assigned to Programs 129,209 256,921 386,130 

Less: Earned Revenues not Attributed to Programs 39,196 183 39,379 

Net Cost of Operations $ 2,039,812 $ 64,230,651 $ 66,270,463 
250 FY 2008 Performance & Accountability Report

NOTE 19. intragovernmental costs and exchange revenues (CONT.)

For the Year Ended September 30, 2007 Intragovernmental With the Public Total

Surface Transportation

Federal-Aid Highway Program

Gross Costs $ 243,314 $ 34,329,482 $ 34,572,796 

Less Earned Revenue 26,824 56,822 83,646 

Net Program Costs 216,490 34,272,660 34,489,150 

Mass Transit Program

Gross Costs 12,037 8,892,451 8,904,488 

Less Earned Revenue 49,783 978 50,761 

Net Program Costs (37,746) 8,891,473 8,853,727 

Other Surface Transportation Programs

Gross Costs 293,537 3,878,513 4,172,050 

Less Earned Revenue 44,554 85,067 129,621 

Net Program Costs 248,983 3,793,446 4,042,429 

Total Surface Transportation Program Costs 427,727 46,957,579 47,385,306 

Air Transportation

Air Traffic Organization

Gross Costs 2,002,801 7,703,336 9,706,137 

Less Earned Revenue 24,644 1,017 25,661 

Net Program Costs 1,978,157 7,702,319 9,680,476 

Airports

Gross Costs 17,955 3,905,764 3,923,719 

Less Earned Revenue - 114 114 

Net Program Costs 17,955 3,905,650 3,923,605 

Aviation Safety

Gross Costs 158,478 859,837 1,018,315 

Less Earned Revenue 2,231 3,335 5,566 

Net Program Costs 156,247 856,502 1,012,749 

Commercial Space Transportation

Gross Costs 94,081 510,448 604,529 

Less Earned Revenue 100,381 317,292 417,673 

Net Program Costs (6,300) 193,156 186,856 

Other Federal Aviation Administration Programs

Gross Costs 1,676 9,092 10,768 

Net Program Costs 1,676 9,092 10,768 

Total Air Transportation Program Costs 2,147,735 12,666,719 14,814,454 
United States Department of Transportation 251

NOTE 19. intragovernmental costs and exchange revenues (CONT.)

For the Year Ended September 30, 2007 Intragovernmental With the Public Total

Maritime Transportation

Gross Costs $ 173,064 $ 586,739 $ 759,803 

Less Earned Revenue 183,089 5,987 189,076 

Net Program Costs (10,025) 580,752 570,727 

Cross-Cutting Programs

Gross Costs 25,177 486,347 511,524 

Less Earned Revenue 492,603 7,473 500,076 

Net Program Costs (467,426) 478,874 11,448 

Costs not Assigned to Programs 270,670 117,722 388,392 

Less: Earned Revenues not Attributed to Programs 14 30,281 30,295 

Net Cost of Operations $ 2,368,667 $ 60,771,365 $ 63,140,032 

Surface Transportation Program costs includes those operating costs incurred by the Operating Administrations 

authorized by SAFETEA-LU (FHWA, NHTSA, FMCSA, and FTA), plus the FTA, to promote safety and mobility 

of the nation’s highways and railroads and among the nation’s drivers and auto manufacturers.

Air Transportation Program costs include those operating costs incurred to promote aviation safety and mobility 

by building, maintaining, and operating the Nation’s air traffic control system; overseeing commercial and 

general aviation safety through regulation and inspection; and providing assistance to improve the capacity and 

safety of our airports.

Maritime Transportation Program Costs include those operating costs incurred to promote the development and 

maintenance of a U.S. merchant marine that is sufficient to carry the Nation’s domestic waterborne commerce, a 

substantial portion of which is trade with other nations, and to serve as a naval and military auxiliary in time of 

war and national emergency.

Cross -cutting Program costs include those operating costs incurred to provide goods and services on a 

reimbursable basis for those Operating Administrations whose mission is primarily cross modal.
252 FY 2008 Performance & Accountability Report

NOTE 20. consolidated statement of changes in net position

Non-Exchange Revenue

Highway Trust Fund

Excise Taxes and Other Non-Exchange 

Revenue FY 2008 FY 2007

Gasoline $ 25,325,646 $ 25,418,957 

Diesel and Special Motor Fuels 10,531,919 9,916,020 

Trucks 2,870,560 5,302,320 

Fines and Penalties 17,989 16,869 

Total Taxes 38,746,114 40,654,166 

Less: Transfers (1,305,069) (468,003)

Gross Taxes 37,441,045 40,186,163 

Less: Refunds of Taxes (1,056,512) (1,047,659)

Total Excise Taxes 36,384,533 39,138,504 

Other Non-Exchange Revenue 2,628 19,980 

Net Highway Trust Fund Excise Taxes & 

Other Non-Exchange Revenue 36,387,161 39,158,484 

Federal Aviation Administration

Excise Taxes and Other Non-Exchange 

Revenue:

Passenger Ticket 8,260,611 8,376,680 

International Departure 2,462,375 2,136,257 

Fuel (Air) 624,493 850,454 

Waybill 521,040 574,404 

Investment Income 429,572 502,937 

Tax Refunds and Credits (55,957) (67,229)

Other 36,626 64 

Net Federal Aviation Administration Excise 

Taxes & Other Non-Exchange Revenue 12,278,760 12,373,567 

Other Miscellaneous Net Non Exchange Revenue 18,429 1,222 

Total Non-Exchange Revenue $ 48,684,350 $ 51,533,273 

For the Highway Trust Fund and the Airport and Airway Trust Fund, the consolidated financial statements 

reflect actual tax collections for the nine months ended June 30, plus an estimate of tax collections expected for 

the quarter ended September 30. Actual tax collection data for the quarter ended September 30 is not available 

from the IRS until December of each year.
United States Department of Transportation 253

NOTE 21. combined statement of budgetary resources

The amount of direct and reimbursable obligations incurred against amounts apportioned under Category 

A, B and Exempt from apportionment, as defined in OMB Circular No. A-11, Part 4, Instructions on Budget 

Execution, are as follows:

2008 2007

Direct Reimbursable Total Direct Reimbursable Total

Category A $ 9,147,943 $ 1,009,893 $ 10,157,836 $ 8,317,117 $ 885,289 $ 9,202,406 

Category B 76,467,131 727,083 77,194,214 65,307,451 816,961 66,124,412 

Exempt from apportionment 87,419 230,904 318,323 261,488 220,936 482,424 

Total $ 85,702,493 $ 1,967,880 $ 87,670,373 $ 73,886,056 $ 1,923,186 $ 75,809,242 

2008 2007

Available Contract Authority at year-end $ 26,974,765 $ 17,995,498 

Available Borrowing Authority at year-end $ 207,985 $ 232,807 

Undelivered Orders at year-end $ 75,032,596 $ 72,184,302 

The amounts reported for undelivered orders only include balances obligated for goods and services not 

delivered and does not include prepayments.

Terms of Borrowing Authority Used

Under the provisions of the Federal Credit Reform Act of 1990, DOT direct loan and loan guarantee programs 

are authorized to borrow funds from Treasury to support its credit programs. All loan draw downs are dated 

October 1 of the applicable fiscal year. Interest is payable at the end of each fiscal year based on activity for 

that fiscal year. Principal can be repaid at any time funds become available. Repayment is effectuated by a 

combination of loan recoveries and upward re-estimates.

Existence, Purpose, and Availability of Permanent Indefinite Appropriations

DOT has permanent indefinite appropriations for the Facilities and Equipment, Grants in Aid and Research, 

Development and Engineering appropriations to fully fund special projects that were on-going and spanned 

several years.

Additional Disclosures

Unobligated balances of budgetary resources for unexpired accounts are available in subsequent years until 

expiration, upon receipt of an apportionment from OMB. Unobligated balances of expired accounts are not 

available.
254 FY 2008 Performance & Accountability Report

NOTE 21. combined statement of budgetary resources (CONT.)

Statement of Budgetary Resources vs Budget of the United States Government

The reconciliation for the year ended September 30, 2007 is presented below. The reconciliation for the fiscal 

year ended September 30, 2008 is not presented, because the submission of the Budget of the United States 

(Budget) for FY 2010, which presents the execution of the FY 2008 budget, occurs after publication of these 

financial statements. The Department of Transportation Budget Appendix can be found on the OMB website 

(http://www.whitehouse.gov/omb/budget) and will be available in early February 2009.

For the Fiscal Year Ended September 30, 2007 (Dollars in millions)

Budgetary

Resources

Obligations

Incurred

Distributed 

Offsetting 

Receipts

Net

Outlays

Combined Statement of Budgetary Resources $ 122,653 $ 75,809 $ (47) $ 62,070 

Funds not Reported in the Budget

Expired Funds (264) - - - 

Recoveries of prior year obligations (11) - - - 

Expenditure transfers from trust funds (15) - - - 

Rescission not reflected on SBR (7) - - - 

Distributed Offsetting Receipts - - 47 47 

Other (25) (7) - 1 

Budget of the United States Government $ 122,331 $ 75,802 $ - $ 62,118 

Other differences represent financial statement adjustments, timing differences and other immaterial differences 

between amounts reported in the Department’s Statement of Budgetary Resources and the Budget of the United 

States.
United States Department of Transportation 255

NOTE 22. incidental custodial collections

FY 2008 FY 2007

Revenue Activity

Sources of Cash Collections:

 Miscellaneous Receipts $ 32,061 $ 28,332 

 Fines, Penalties and Forfeitures 17,873 4,498 

Total Cash Collections 49,934 32,830 

Total Custodial Revenue 49,934 32,830 

Disposition of Collections

 Transferred to Treasury’s (General Fund) 49,934 32,830 

Net Custodial Revenue Activity $ - $ - 
256 FY 2008 Performance & Accountability Report

NOTE 23. reconciliation of net cost of operations to budget

FY 2008 FY 2007

Resources Used to Finance Activities

Budgetary Resources Obligated

Obligations Incurred $ 87,670,373 $ 75,809,242 

Less: Spending Authority from Offsetting Collections and Recoveries 10,075,399 9,099,273 

Obligations Net of Offsetting Collections and Recoveries 77,594,974 66,709,969 

Less: Distributed Offsetting Receipts (325,679) (46,779)

Net Obligations 77,269,295 66,663,190 

Other Resources

Transfers In/Out Without Reimbursement 20,847 2,812 

Imputed Financing From Costs Absorbed by Others 642,148 605,189 

Other (1,873) - 

Net Other Resources Used to Finance Activities 661,122 608,001 

Total Resources Used to Finance Activities 77,930,417 67,271,191 

Resources Used to Finance Items Not Part of the Net Cost of Operations

Change in Budgetary Resources Obligated for Goods, Services and Benefits Ordered but not yet Provided 3,137,262 4,018,636 

Resources That Fund Expenses Recognized in Prior Periods 259,382 283,949 

Credit Program Collections That Increase Liabilities for Loan Guarantees or Allowances for Subsidy (513,984) (115,714)

Other/Change in Unfilled Customer Orders (126,464) (461,855)

Resources That Finance the Acquisition of Assets 2,569,811 1,395,553

Other Resources or Adjustments to Net Obligated Resources that do not Affect Net Cost of Operations 7,984,827 216,115

Total Resources Used to Finance Items Not Part of the Net Cost Of Operations 13,310,834 5,336,684 

Total Resources Used to Finance the Net Cost of Operations $ 64,619,583 $ 61,934,507 

Components of the Net Cost of Operations that will not Require or Generate Resources in the Current Period:

Components Requiring or Generating Resources in Future Periods:

Increase in Annual Leave Liability $ 45,281 $ 10,696 

Upward/Downward Reestimates of Credit Subsidy Expense 98,889 (1,818)

Increase in exchange revenue receivable from the public (1,600) (43,314)

Change in Other Liabilities 210,361 25,584 

Total Components of Net Cost of Operations That Will Require or Generate Resources in Future Periods 352,931 (8,852)

Components Not Requiring or Generating Resources:

Depreciation and Amortization 1,213,539 1,279,474 

Revaluation of Assets or Liabilities 21,850 (17,179)

Other Expenses and Adjustments not Otherwise Classified Above 62,560 (47,918)

Total Components of Net Cost of Operations That Will Not Require or Generate Resources 1,297,949 1,214,377 

Total Components of Net Cost of Operations That Will Not Require or Generate Resources in the Current Period 1,650,880 1,205,525 

Net Cost of Operations $ 66,270,463 $ 63,140,032 
United States Department of Transportation 257

NOTE 23. reconciliation of net cost of operations to budget (CONT.)

The reconciliation of Net Cost of Operations to Budget is intended to be a bridge between the entity’s budgetary 

and financial (proprietary) accounting. This reconciliation first identifies total resources used by an entity during 

the period (budgetary and other) and then makes adjustments to the resources based upon how they were used 

to finance net obligations or cost. The budgetary information used to calculate net obligations (the first four 

lines) must be presented on a combined basis to enable a direct tie to the Statement of Budgetary Resources. 

The Reconciliation of Net Cost of Operations to Budget explains the difference between the budgetary net 

obligations and the proprietary net cost of operations by setting forth the items that reconcile the two amounts. 

The budgetary net obligations and the proprietary net cost of operations are different in that (1) the net cost of 

operations may be financed by non-budgetary resources; (2) the budgetary and non-budgetary resources used by 

an agency may finance activities which are not components of the net cost of operations; and (3) the net cost of 

operations may contain components which do not use or generate resources in the period.
258 FY 2008 Performance & Accountability Report

NOTE 24. reporting on dot affiliated activities

Saint Lawrence Seaway Development Corporation

The U.S. Saint Lawrence Seaway Development Corporation (SLSDC), a wholly owned Government corporation 

and operating administration of the Department, is responsible for the operation and maintenance of the U.S. 

portion of the St. Lawrence Seaway. This responsibility includes maintaining and operating two U.S. locks, 

controlling vessel traffic and promoting trade development activities on the seaway.

Condensed Information:

FY 2008 FY 2007

Cash and Short-Term Time Deposits $ 16,176 $ 15,430 

Long-Term Time Deposits 2,153 980 

Accounts Receivable 108 115 

Inventories 266 253 

Other Current Assets 1 6 

Property, Plant and Equipment 73,181 74,578 

Deferred Charges 3,705 3,478 

Other Assets 605 599 

TOTAL ASSETS $ 96,195 $ 95,439 

Current Liabilities 2,790 $ 2,577 

Actuarial Liabilities 3,705 3,478 

TOTAL LIABILITIES 6,495 6,055 

Invested Capital 88,219 89,617 

Cumulative Results of Operations 1,481 (233)

TOTAL NET POSITION $ 89,700 $ 89,384 

TOTAL LIABILITIES AND NET POSITION $ 96,195 $ 95,439 

Operating Revenues 17,993 17,092 

Operating Expenses 19,169 19,488 

Operating Income (loss) (1,176) (2,396)

Other Financing Sources 2,890 2,973 

Operating revenues and other financing sources over (under) operating expenses 1,714 577 

Beginning cumulative results of operations (deficit) (233) (810)

Ending cumulative results of operations (deficit) $ 1,481 $ (233)

MARAD Non-Appropriated Fund Instrumentality (NAFI)

The Non-Appropriated Fund Instrumentality (NAFI) operates as a separate fiscal entity under MARAD 

to provide or assist the U.S. Merchant Marine Academy in providing programs and services for students, 

personnel and authorized civilians from sources other than Congressional appropriations. Although considered 

Governmental, NAFI assets and operations are separate and distinct from those recorded in the books of Federal 

Government. The dollar value of NAFI activities are immaterial to that of the Department.
United States Department of Transportation 259

Required supplementary information
This page is intentionally blank.
United States Department of Transportation 261

DEFERRED MAINTENANCE

DOT

Entity Major Class of Asset

Method of

Measurement

Asset 

Condition*

2008

Cost to 

Return to 

Acceptable 

Condition**

2007

Cost to 

Return to 

Acceptable 

Condition**

FAA Buildings Condition 

Assessment Survey

4 & 5 $ 116,785 $ 79,970 

Other Structures and Facilities Condition 

Assessment Survey

4 & 5 124,828 25,254 

MARAD Vessels, Ready Reserve Force (Various Locations) Condition 

Assessment Survey

2 4,511 22,600 

Real Property, Buildings (Anchorage) Condition 

Assessment Survey

3 40 14,695 

Other (Fleet Craft) Condition 

Assessment Survey

3 350 2,520 

Other (Pier and Berthing Surveys and Studies) Estimate 3 35 235 

Other (Heritage Assets) Condition 

Assessment

3&4 200 200 

Total $ 246,749 $ 145,474

*Asset Condition Rating Scale:

1 - Excellent

2 - Good

3 - Fair

4 - Poor

5 - Very Poor

Asset **Acceptable Condition is Comments

FAA Buildings 3 - Fair 

FAA Other Structures and Facilities 3 - Fair 

MARAD Vessels, Ready Reserve Force 1 - Excellent Ships are seaworthy and ready for mission 

assignments within prescribed time limits.

MARAD Real Property, Buildings 3 - Fair Buildings are safe and inhabitable.

MARAD Real Property, Structures 3 - Fair Adequate water depth, shore power, and mooring 

capabilities.

MARAD Stewardship Heritage Assets 3 - Fair 

Deferred Maintenance is maintenance that was not performed when it should have been or was scheduled to be 

performed and delayed until a future period. Maintenance is keeping fixed assets in acceptable condition, and 

includes preventative maintenance, normal repairs, replacement of parts and structural components, and other 

activities needed to preserve assets in a condition to provide acceptable service and to achieve expected useful 

lives.
262 FY 2008 Performance & Accountability Report

HERITAGE ASSETS SUMMARY

REQUIRED SUPPLEMENTAry INFORMATION, SEPTEMBER 30, 2008

NUMBER OF PHYSICAL UNITS added and withdrawn

Heritage Assets

Units as of Units as of 

09/30/2007 Additions Withdrawals 09/30/2008

Personal Property 

Artifacts and Other Collections 598 6 - 604

Total Personal Property Heritage Assets 598 6 - 604

Units as of Units as of 

09/30/2006 Additions Withdrawals 09/30/2007

Artifacts and Other Collections 597 2 1 598 

Total Real Property Heritage Assets 597 2 1 598 

Artifacts and Other Collections are owned by the Maritime Administration. They are generally on loan to 

single purpose memorialization and remembrance groups, such as AMVets and preservation societies, and are 

composed of ship operating equipment obtained from obsolete ships.
United States Department of Transportation 263

U.S. DEPARTMENT OF TRANSPORTATION

REQUIRED SUPPLEMENTARY INFORMATION

COMBINING STATEMENT OF BUDGETARY RESOURCES BY MAJOR ACCOUNT

For the Year Ended September 30, 2008

Dollars in Thousands

Federal-Aid FAA FTA MARAD All Other TOTAL

BUDGETARY RESOURCES

Unobligated Balance, Brought Forward, October 1 $ 35,724,487 $ 2,753,668 $ 5,353,911 $ 427,378 $ 2,584,671 $ 46,844,115 

Recoveries of Prior Year Unpaid Obligations - 471,076 79,042 52,851 344,124 947,093 

Budget Authority

Appropriations Received 41,965,861 15,810,521 8,578,755 597,088 12,510,529 79,462,754 

Borrowing Authority - - - 219,000 946,094 1,165,094 

Contract Authority 43,146,419 3,675,000 7,872,893 - 1,239,000 55,933,312 

Spending Authority from Offsetting Collections

Earned

Collected 78,823 865,313 72,599 458,420 1,215,118 2,690,273 

Change in Receivables from Federal Sources (2,158) (59,596) (20,667) (5,874) 21,465 (66,830)

Change in Unfilled Customer Orders

Advance Received 278 (25,761) (41,718) 9,539 273,811 216,149 

Without Advance from Federal Sources 66,990 (2,903) (21,666) 34,007 (235,131) (158,703)

Expenditure Transfers from Trust Funds - 6,397,061 - 6,500 43,858 6,447,419 

Subtotal 85,256,213 26,659,635 16,440,196 1,318,680 16,014,744 145,689,468 

Nonexpenditure Transfers, Net (1,001,981) (41,566) 989,651 7,747 48,149 2,000 

Permanently Not Available (46,138,460) (4,697,732) (6,990,753) (202,232) (1,735,943) (59,765,120)

Total Budgetary Resources $ 73,840,259 $ 25,145,081 $ 15,872,047 $ 1,604,424 $ 17,255,744 $133,717,556 

STATUS OF BUDGETARY RESOURCES

Obligations Incurred 

Direct $ 38,365,681 $ 21,643,568 $ 11,398,632 $ 646,991 $ 13,644,722 $ 85,699,594 

Reimbursable 35,080 679,233 16,613 457,462 782,391 1,970,779 

Subtotal 38,400,761 22,322,801 11,415,245 1,104,453 14,427,113 87,670,373 

Unobligated Balance

Apportioned 18,524,318 1,395,626 4,451,447 178,515 1,514,005 26,063,911 

Exempt from Apportionment - - - 2,944 296,471 299,415 

Subtotal 18,524,318 1,395,626 4,451,447 181,459 1,810,476 26,363,326 

Unobligated Balance Not Available 16,915,180 1,426,654 5,355 318,512 1,018,156 19,683,857 

Total Status of Budgetary Resources $ 73,840,259 $ 25,145,081 $ 15,872,047 $ 1,604,424 $ 17,255,745 $133,717,556 
264 FY 2008 Performance & Accountability Report

REQUIRED SUPPLEMENTARY INFORMATION

COMBINING STATEMENT OF BUDGETARY RESOURCES BY MAJOR ACCOUNT

For the Year Ended September 30, 2008

Dollars in Thousands

Federal-Aid FAA FTA MARAD All Other TOTAL

CHANGE IN OBLIGATED BALANCES

Obligated Balance, Net

Unpaid Obligations, Brought Forward, October 1 $ 46,367,132 $ 9,008,582 $ 16,730,015 $ 298,285 $ 6,321,578 $ 78,725,592 

Uncollected Customer Payments from Federal 

Sources, Brought Forward, October 1

(373,708) (495,387) (147,119) (116,622) (710,204) (1,843,040)

Total Unpaid Obligated Balance, Net 45,993,424 8,513,195 16,582,896 181,663 5,611,374 76,882,552 

Obligations Incurred 38,400,761 22,322,801 11,415,245 1,104,453 14,427,113 87,670,373 

Gross Outlays (35,794,527) (21,955,876) (10,040,658) (980,544) (14,776,887) (83,548,492)

Unpaid Obligations - - - - 25,000 25,000 

Recoveries of Prior Year Unpaid Obligations, 

Actual

- (471,076) (79,042) (52,851) (344,124) (947,093)

Change In Uncollected Customer Payments from 

Federal Sources

(64,833) 62,499 46,768 (28,134) 212,836 229,136 

Obligated Balance, Net, End of Period

Unpaid Obligations 48,973,366 8,904,431 18,025,560 369,343 5,652,680 81,925,380 

Uncollected Customer Payments From Federal 

Sources (438,541) (432,888) (100,351) (144,756) (497,368) (1,613,904)

Total Unpaid Obligated Balance, Net, End Of 

Period $ 48,534,825 $ 8,471,543 $ 17,925,209 $ 224,587 $ 5,155,312 $ 80,311,476 

NET OUTLAYS

Net Outlays

Gross Outlays $ 35,794,527 $ 21,955,876 $ 10,040,658 $ 980,544 $ 14,776,887 $ 83,548,492 

Offsetting Collections (79,107) (7,237,024) (35,315) (469,514) (1,536,900) (9,357,860)

Distributed Offsetting Receipts - (1,970) (2,764) (177,100) (143,845) (325,679)

Net Outlays $ 35,715,420 $ 14,716,882 $ 10,002,579 $ 333,930 $ 13,096,142 $ 73,864,953 
United States Department of Transportation 265

U.S. DEPARTMENT OF TRANSPORTATION

REQUIRED SUPPLEMENTARY INFORMATION

COMBINING STATEMENT OF BUDGETARY RESOURCES BY MAJOR ACCOUNT

For the Year Ended September 30, 2007

Dollars in Thousands

Federal-Aid FAA FTA MARAD All Other TOTAL

BUDGETARY RESOURCES

Unobligated Balance, Brought Forward, October 1 $ 35,318,886 $ 2,305,222 $ 6,169,750 $ 516,882 $ 2,614,759 $ 46,925,499 

Recoveries of Prior Year Unpaid Obligations - 291,059 91,235 3,240 479,489 865,023 

Budget Authority

Appropriations Received 36,042,237 15,433,314 6,407,000 585,480 4,083,755 62,551,786 

Borrowing Authority - - - 225,000 865,759 1,090,759 

Contract Authority 42,268,565 4,292,480 7,262,775 - 1,216,500 55,040,320 

Spending Authority from Offsetting Collections

Earned

Collected 53,933 1,024,399 105,963 390,738 805,498 2,380,531 

Change in Receivables from Federal Sources 7,220 (89,887) 19,357 (2,731) (7,193) (73,233)

Change in Unfilled Customer Orders

Advance Received - 11,670 (10,110) (6,262) 93,953 89,251 

Without Advance from Federal Sources 264,529 (71,478) (58,212) (3,788) 33,425 164,476 

Expenditure Transfers from Trust Funds - 5,627,900 - - 45,326 5,673,226 

Subtotal 78,636,484 26,228,398 13,726,773 1,188,437 7,137,023 126,917,116 

Nonexpenditure Transfers, Net (1,096,504) (46,331) 973,287 - 171,768 2,219 

Temporarily Not Available Pursuant to Public Law - - - (4,945) (544) (5,489)

Permanently Not Available (40,372,513) (5,058,781) (4,660,856) (376,527) (1,582,334) (52,051,011)

Total Budgetary Resources $ 72,486,353 $ 23,719,567 $ 16,300,189 $ 1,327,087 $ 8,820,161 $ 122,653,357 

STATUS OF BUDGETARY RESOURCES

Obligations Incurred 

Direct $ 36,533,084 $ 20,307,497 $ 10,743,441 $ 585,643 $ 5,486,846 $ 73,656,511 

Reimbursable 228,781 658,402 202,835 314,065 748,649 2,152,731 

Subtotal 36,761,865 20,965,899 10,946,276 899,708 6,235,495 75,809,242 

Unobligated Balance

Apportioned 14,013,972 1,347,769 5,320,503 11,746 2,053,266 22,747,256 

Exempt from Apportionment 1,972 - - 1,360 304,476 307,808 

Subtotal 14,015,944 1,347,769 5,320,503 13,106 2,357,742 23,055,064 

Unobligated Balance Not Available 21,708,544 1,405,899 33,410 414,273 226,925 23,789,051 

Total Status of Budgetary Resources $ 72,486,353 $ 23,719,567 $ 16,300,189 $ 1,327,087 $ 8,820,162 $ 122,653,357 
266 FY 2008 Performance & Accountability Report

REQUIRED SUPPLEMENTARY INFORMATION

COMBINING STATEMENT OF BUDGETARY RESOURCES BY MAJOR ACCOUNT

For the Year Ended September 30, 2007

Dollars in Thousands

Federal-Aid FAA FTA MARAD All Other TOTAL

CHANGE IN OBLIGATED BALANCES

Obligated Balance, Net

Unpaid Obligations, Brought Forward, October 1 $ 43,366,976 $ 9,151,262 $ 15,169,501 $ 297,867 $ 6,051,732 $ 74,037,338 

Uncollected Customer Payments from Federal 

Sources, Brought Forward, October 1

(101,959) (656,752) (185,974) (123,141) (681,957) (1,749,783)

Total Unpaid Obligated Balance, Net 43,265,017 8,494,510 14,983,527 174,726 5,369,775 72,287,555 

Obligations Incurred 36,761,865 20,965,899 10,946,276 899,708 6,235,494 75,809,242 

Gross Outlays (33,761,709) (20,817,520) (9,294,527) (896,050) (5,488,408) (70,258,214)

Unpaid Obligations - - - - 2,250 2,250 

Recoveries of Prior Year Unpaid Obligations, 

Actual

- (291,059) (91,235) (3,240) (479,489) (865,023)

Change In Uncollected Customer Payments from 

Federal Sources

(271,749) 161,365 38,855 6,519 (28,247) (93,257)

Obligated Balance, Net, End of Period

Unpaid Obligations 46,367,132 9,008,582 16,730,015 298,285 6,321,578 78,725,592 

Uncollected Customer Payments From Federal 

Sources (373,708) (495,387) (147,119) (116,622) (710,204) (1,843,040)

Total Unpaid Obligated Balance, Net, End Of Period 45,993,424 8,513,195 16,582,896 $181,663 $5,611,374 76,882,552 

NET OUTLAYS

Net Outlays

Gross Outlays $ 33,761,709 $ 20,817,520 $ 9,294,527 $ 896,050 $ 5,488,408 $ 70,258,214 

Offsetting Collections (53,933) (6,663,969) (95,852) (384,476) (942,762) (8,140,992)

Distributed Offsetting Receipts - (20,941) (9,854) (17,638) 1,654 (46,779)

Net Outlays $ 33,707,776 $ 14,132,610 $ 9,188,821 $ 493,936 $ 4,547,300 $ 62,070,443 
United States Department of Transportation 267

Required supplementary stewardship information
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United States Department of Transportation 269

NON FEDERAL PHYSICAL PROPERTY

ANNUAL STEWARDSHIP INFORMATION, SEPTEMBER 30, 2008

TRANSPORTATION INVESTMENTS

Dollars in Thousands

Surface Transportation: FY 2004 FY 2005 FY 2006 FY 2007 FY 2008

Federal Highway Administration 

 Federal Aid Highways (HTF) $ 29,207,012 $ 29,750,120 $ 32,190,231 $ 32,800,748 $ 34,470,595 

 Other Highway Trust Fund Programs 300,493 445,083 452,022 366,672 481,762 

 General Fund Programs 962,370 330,790 14,240 51,119 31,740 

 Appalachian Development System 263,430 425,810 366,816 329,161 185,316 

 Federal Motor Carrier 299,450 195,740 117,004 196,967 144,455 

Total Federal Highway Administration 31,032,755 31,147,543 33,140,313 33,744,667 35,313,868 

Federal Transit Administration

Discretionary Grants $ 160,655 $ 119,277 $ 91,961 $ 11,719 $ 27,174 

Formula Grants 4,723,674 4,521,288 3,376,068 2,086,876 1,329,811 

Capital Investment Grants 2,788,920 3,375,206 3,073,294 2,662,845 2,473,141 

Washington Metro Area Transit Authority 12,409 1,719 4,255 28,430 46 

Interstate Transfer Grants 1,479 1,411 206 1,774 360 

Formula and Bus Grants - - 1,862,772 4,193,989 5,968,651 

Total Federal Transit Administration 7,687,137 8,018,901 8,408,556 8,985,633 9,799,183 

Total Surface Transportation Nonfederal 

Physical Property Investments $ 38,719,892 $ 39,166,444 $ 41,548,869 $ 42,730,300 $ 45,113,051 
270 FY 2008 Performance & Accountability Report

NON FEDERAL PHYSICAL PROPERTY

ANNUAL STEWARDSHIP INFORMATION, SEPTEMBER 30, 2008

TRANSPORTATION INVESTMENTS

Dollars in Thousands

Air Transportation: FY 2004 FY 2005 FY 2006 FY 2007 FY 2008

Federal Aviation Administration

Airport Improvement Program $ 2,977,300 $ 3,712,423 $ 3,852,141 $ 3,923,719 $ 3,753,840 

Total Air Transportation Nonfederal Physical Property Investments $ 2,977,300 $ 3,712,423 $ 3,852,141 $ 3,923,719 $ 3,753,840 

Total Nonfederal Physical Property Investments $ 41,697,192 $ 42,878,867 $ 45,401,010 $ 46,654,019 $48,866,891 

The Federal Highway Administration reimburses States for construction costs on projects related to the Federal Highway 

System of roads. The main programs in which the States participate are the National Highway System, Interstate Systems, 

Surface Transportation, and Congestion Mitigation/Air Quality Improvement programs. The States’ contribution is ten 

percent for the Interstate System and twenty percent for most other programs.

The Federal Transit Administration provides grants to State and local transit authorities and agencies.

Formula grants provide capital assistance to urban and non-urban areas and may be used for a wide variety of mass 

transit purposes, including planning, construction of facilities, and purchases of buses and railcars. Funding also includes 

providing transportation to meet the special needs of elderly individuals and individuals with disabilities.

Capital investment grants, which replaced discretionary grants in FY 1999, provide capital assistance to finance 

acquisition, construction, reconstruction, and improvement of facilities and equipment. Capital investment grants fund 

the categories of new starts, fixed guideway modernization, and bus and bus-related facilities.

The Washington Metropolitan Area Transit Authority provides funding to support the construction of the Washington 

Metrorail System.

Interstate Transfer Grants provided Federal financing from FY 1976 through FY 1995 to allow States and localities to fund 

transit capital projects substituted for previously withdrawn segments of the Interstate Highway System.

The Federal Aviation Administration (FAA) makes project grants for airport planning and development under the 

Airport Improvement Program (AIP) to maintain a safe and efficient nationwide system of public-use airports that meet 

both present and future needs of civil aeronautics. FAA works to improve the infrastructure of the nation’s airports, in 

cooperation with airport authorities, local and State governments, and metropolitan planning authorities. 
United States Department of Transportation 271

HUMAN CAPITAL INVESTMENT EXPENSES

ANNUAL STEWARDSHIP INFORMATION, SEPTEMBER 30, 2008

Dollars in Thousands

Surface Transportation FY 2004 FY 2005 FY 2006 FY 2007 FY 2008

Federal Highway Administration 

 National Highway Institute Training $ 4,069 $ 11,844 $ 14,123 $ 4,083 $ 1,205 

Federal Motor Carrier Safety Administration 

 California Highway Patrol 192 41 - 127 722 

 Safety Grants - - - 748 426 

 Idaho Video 344 208 - - 302 

 Kentucky IT Conference - - 175 - - 

 Massachusetts Training Academy 9 53 - 172 - 

 Minnesota Crash Investigation 21 - 1 - - 

 New York Crash Reconstruction - - - 36 180 

 Tennessee Crash Investigation - - - 165 167 

Federal Transit Administration

 National Transit Institute Training (1) 4,667 3,318 3,961 3,879 4,577 

National Highway Safety Administration 

 Section 403 Highway Safety Programs 53,964 110,981 221,523 235,382 162,038 

 Highway Traffic Safety Grants 205,509 216,702 279,244 416,241 485,721 

Pipeline and Hazardous Materials Safety Administration

 Hazardous Materials (Hazmat) Training 7,780 8,065 7,800 7,798 13,263 

Total Surface Transportation Human Capital Investments 276,555 351,212 526,827 668,631 668,601 

Maritime Transportation FY 2004 FY 2005 FY 2006 FY 2007 FY 2008

Maritime Administration

 State Maritime Academies Training (1) 9,208 9,215 7,528 8,978 9,406 

 Additional Maritime Training 388 328 134 555 800 

Total Maritime Transportation Human Capital Investments 9,596 9,543 7,662 9,533 10,206 

Total Human Capital Investments $ 286,151 $ 360,755 $ 534,489 $ 678,164 $ 678,807 
272 FY 2008 Performance & Accountability Report

The National Highway Institute develops and conducts various training courses for all aspects of Federal 

Highway Administration. Students are typically from the State and local police, State highway departments, 

public safety and motor vehicle employees, and U.S. citizens and foreign nationals engaged in highway work of 

interest to the Federal Government. Types of courses given and developed are modern developments, technique, 

management, planning, environmental factors, engineering, safety, construction, and maintenance.

The California Highway Patrol educates the trucking industry for the Federal Motor Carrier Safety 

Administration about Federal and State commercial motor vehicle/carrier inspection procedures, and to 

increase CMV driver awareness. The Idaho Video Program develops video training material utilized by the 

FMCSA National Training Center for the purpose of training State and Local law enforcement personnel. The 

Massachusetts Training Academy provides training to State law enforcement personnel located in the northeast 

region of Massachusetts. The Minnesota Crash Investigation program provides training and develops processes 

and protocols for commercial motor vehicle crash investigations.

The National Transit Institute of the Federal Transit Administration develops and offers training courses to 

improve transit planning and operations. Technology courses cover such topics as alternative fuels, turnkey 

project delivery systems, communications-based train controls, and integration of advanced technologies.

The National Highway Safety Administration’s programs authorized under the Highway Trust Fund provide 

resources to State and Local governments, private partners, and the public, to effect changes in driving behavior 

on the nation’s highways to increase safety belt usage and reduce impaired driving. NHTSA provides technical 

assistance to all states on the full range of components of the impaired driving system as well as conducting 

demonstrations, training and public information/education on safety belt usage.

The Pipeline and Hazardous Materials Safety Administration administers Hazardous Material Training 

(Hazmat). The purpose of Hazmat Training is to train State and local emergency personnel on the handling of 

hazardous materials in the event of a hazardous material spill or storage problem.

(1) Does not include funding for the Student Incentive Payment (SIP) program which produces graduates who are obligated to serve in 

a reserve component of the United States armed forces. Does not include funding for maintenance and repair (M&R).
United States Department of Transportation 273

RESEARCH AND DEVELOPMENT INVESTMENTS

ANNUAL STEWARDSHIP INFORMATION, SEPTEMBER 30, 2008

Dollars in Thousands

Surface Transportation: FY 2004 FY 2005 FY 2006 FY 2007 FY 2008

Federal Highway Administration 

 Intelligent Transportation Systems $ 146,852 $ 183,634 $ 129,219 $ 152,799 $ 128,931 

 Other Applied Research and Development 142,557 114,315 105,336 74,942 63,906 

Federal Railroad Administration 

 Railroad Research and Development Program $ 9,342 $ 6,032 $ 11,681 $ 5,551 $ 3,049 

Federal Transit Administration

Applied Research and Development

 Transit Planning and Research $ 3,483 $ 2,546 $ 6,543 $ 3,144 $ 6,076 

Office of the Secretary

Applied Research and Development

 Emergency Transportation $ 8 $- $- $- $- 

Pipeline and Hazardous Materials Safety Administration

Applied Research and Development

 Pipeline Safety $ 6,375 $ 10,810 $ 12,953 $ 5,494 $ 12,762 

 Hazardous Materials 1,489 1,638 2,225 1,072 1,084 

Research and Innovative Technology Administration

Applied Research and Development

 Research and Technology $ 1,134 $ 1,564 $ 1,110 $ 1,036 $ 1,036 

Total Surface Transportation Research and Development 

Investments $ 311,240 $ 320,539 $ 269,067 $ 244,038 $ 216,844 

Air Transportation FY 2004 FY 2005 FY 2006 FY 2007 FY 2008

Federal Aviation Administration

 Research and Development Plant $ 4,230 $ 5,287 $ 3,821 $ 4,217 $ 3,498 

 Applied Research 91,743 103,659 106,390 102,782 88,114 

 Development 478 547 587 844 814 

 Administration 28,643 29,163 30,566 32,050 33,519 

Total Air Transportation Research and Development Investments $ 125,094 $ 138,656 $ 141,364 $ 139,893 $ 125,945 

 Total Research and Development Investments $ 436,334 $ 459,195 $ 410,431 $ 383,931 $ 342,789 

The Federal Highway Administration’s research and development programs are earmarks in the appropriations 

bills for the fiscal year. Typically these programs are related to safety, pavements, structures, and environment. 

Intelligent Transportation Systems were created to promote automated highways and vehicles to enhance the 

national highway system. The output is in accordance with the specifications within the appropriations act.

The Federal Transit Administration supports research and development in the following program areas:
274 FY 2008 Performance & Accountability Report

Research and development in Transit Planning and Research supports two major areas: the National Research 

Program and the Transit Cooperative Research Program. The National Research Program funds the research 

and development of innovative transit technologies such as safety-enhancing commuter rail control systems, 

hybrid electric buses, and fuel cell and battery-powered propulsion systems. The Transit Cooperative Research 

Program focuses on issues significant to the transit industry with emphasis on local problem-solving research.

Transit University Transportation Centers, combined with funds from the Highway Trust Fund, provide 

continued support for research, education, and technology transfer.

Capital investment grants, which replaced discretionary grants in FY 1999, provide capital assistance to finance 

acquisition, construction, reconstruction, and improvement of facilities and equipment. Capital investment 

grants fund the categories of new starts, fixed guideway modernization, and bus and bus-related activities.

The Office of the Secretary’s Office of Emergency Transportation is involved in research and development of 

mapping software for the Crisis Management Center, transportation policy, and outreach efforts.

The Pipeline and Hazardous Materials Safety Administration funds research and development activities for the 

following organizations and activities:

The Office of Pipeline Safety is involved in research and development in information systems, risk assessment, 

mapping, and non-destructive evaluation.

The Office of Hazardous Materials is involved in research, development, and analysis in regulation compliance, 

safety, and information systems.

The Research and Innovative Technology Administration’s Office of Research and Technology is involved in 

research and development for the University of Technology and Education.

The Federal Aviation Administration (FAA) conducts research and provides the essential air traffic control 

infrastructure to meet increasing demands for higher levels of system safety, security, capacity, and efficiency. 

Research priorities include aircraft structures and materials; fire and cabin safety; crash injury-protection; 

explosive detection systems; improved ground and in-flight de-icing operations; better tools to predict and warn 

of weather hazards, turbulence and wake vortices; aviation medicine, and human factors.
275

other accompanying information
276 FY 2008 Performance & Accountability Report

Performance Data Completeness and Reliability Details

Each table includes a description of a performance measure and associated data provided by the agencies in charge of the measure. The 

Scope statement gives an overview of the data collection strategy for the underlying data behind the performance measure. The Source 

statement identifies the data system(s) from which the data for each measure was taken. The Statistical Issues statement has comments, 

provided by the Bureau of Transportation Statistics (BTS) and the agency in charge of the measure, which discuss variability of the 

measure and other points. The Completeness statement indicates limitations due to missing data or availability of current measures, 

methods used to develop projections are also provided, as appropriate. The Reliability statement gives the reader a feel for how the 

performance data are used in program management decision making inside DOT.

For further information about the source and accuracy (S&A) of these data, and DOT’s data quality guidelines in accordance with 

Section 515 of the Treasury and General Government Appropriations Act for Fiscal Year 2001 (P.L. 106-554), please refer to the BTS 

S&A compendium available at http://www.bts.gov/programs/statistical_policy_and_research/source_and_accuracy_compendium/

index.html.

Details on DOT Safety Measures

Passenger Vehicle Occupant Highway Fatality Rate (NHTSA / FHWA / FMSCA)

Measure Passenger Vehicle Occupant Highway fatalities per 100 million vehicle-miles traveled (VMT). Calendar Year 

(CY) 2008

An occupant is any person who is in or upon a motor vehicle in transport. This includes the driver, passengers, and 

persons riding on the exterior of a motor vehicle. VMT includes all vehicle miles traveled by all types of vehicles 

including passenger cars, motorcycles, buses, other 2-axle 4 tire vehicles (including vans, pickup trucks, and sport/

utility vehicles), single unit 2-axle 6 tire or more trucks, and combination trucks.

Scope The number of fatalities is a count of passenger occupant deaths which occur within 30 days of a crash involving 

motor vehicle traffic traveling on a trafficway customarily open to the public within the 50 States and Washington, 

D.C.

VMT represent the total number of vehicle miles traveled by all motor vehicles on public roadways within the 50 

States and Washington, D.C.

Sources Motor vehicle traffic fatality data are obtained from the National Highway Traffic Safety Administration’s Fatality 

Analysis Reporting System (FARS). The FARS database is based on police crash reports and other State data.

Estimated 2008 VMT data is preliminary and comes from FHWA’s Traffic Volume Trends (TVT); a monthly 

report based on hourly traffic count data in the Highway Performance Monitoring System (HPMS).

Statistical

Issues

While based on historical data, the 2008 fatality rate projection is dependent on the continuation of both 

individual and market behavior regarding vehicle miles traveled, seat belt use and motorcycle rider and alcohol 

related fatalities. The assumptions inherent in these projections, together with the normal levels of uncertainty 

inherent in statistical evaluations, may influence the accuracy of the projection.

Completeness FARS has been in use since 1975 and is generally accepted as a complete measure for describing safety on the 

Nation’s highways. Total annual fatalities are available through CY 2007. The fatality projection used to calculate 

the 2008 rate shown in this report was estimated by modifying the 2007 fatality total for the subsequent phase-in 

of safety features in the on-road fleet, the scrapping of vehicles with existing safety features, a projected change in 

safety belt usage, a projected trend in motorcycle fatalities, and other safety-related considerations.
United States Department of Transportation 277

Reliability The measure informs and guides NHTSA, FHWA, and FMCSA regarding highway safety policy, safety program 

planning, regulatory development, resource allocation, and operational mission performance, and tracks progress 

toward the goal of saving lives by preventing highway crashes.

VMT estimates from the early months of CY 2008 are lower than for the comparable period of CY 2007. 

Contributing factors include, but are not limited to: high price of fuel, which my continue into the future; 

economic downturn; change in the mix of vehicles towards smaller and lighter cars; increased use of walking, 

bicycling, and motorcycle riding, as well as a greater use of mass transit. All of these factors are indications of 

fundamental changes in our mode of transportation that will adversely impact our ability to accurately estimate 

fatality and VMT projections for 2008 and beyond.

Details on DOT Safety Measures

Large Truck and Bus Fatality Rate (NHTSA / FMCSA)

Measure Fatalities involving large trucks and buses per 100 million total VMT (CY).

Large Trucks are trucks over 10,000 pounds gross vehicle weight rating (GVWR), including single unit trucks 

and truck tractors. A Bus is a large motor vehicle used to carry more than ten (10) passengers, including school 

buses, inter-city buses, and transit buses. VMT includes all vehicle miles traveled by all types of vehicles including 

passenger cars, motorcycles, buses, other 2-axle 4 tire vehicles (including vans, pickup trucks, and sport/utility 

vehicles), single unit 2-axle 6 tire or more trucks, and combination trucks.

Scope The measure includes all fatalities associated with crashes involving trucks with a gross vehicle weight rating 

(GVWR) of 10,000 pounds or more. Vehicle Miles Traveled (VMT) represents the total number of vehicle miles 

traveled by all motor vehicles (including vehicles other than Large Trucks and Buses) on public roadways within 

the 50 States and the District of Columbia.

Sources The number of fatalities comes from NHTSA’s Fatality Analysis Reporting System (FARS) data, a census of fatal 

traffic crashes within the 50 States and the District of Columbia. Estimated 2008 VMT data is preliminary and 

comes from FHWA’s Traffic Volume Trends (TVT); a monthly report based on hourly traffic count data in the 

Highway Performance Monitoring System (HPMS).

Statistical

Issues

The fatality counts in FARS are generally quite accurate. The major sources of error are under reporting by some 

precincts and inconsistent use of the definition of a truck.

Because the TVMT data provided to FHWA from each State are estimates based on a sample of road segments, 

the numbers have associated sampling errors. The methodology used by each of the States to estimate TVMT 

varies and may introduce additional non-sampling error. Although States provide TVMT estimates on an annual 

basis, they are only required to update their traffic counts at all sampling sites once every three years. Thus, a 

portion of each States’ sample sites will report estimated traffic rather then actual traffic counts.

Completeness The FARS has been in use since 1975 and is generally accepted as a complete measure for describing safety on the 

Nation’s highways. Large truck and bus-related fatality data are complete through 2007. For 2008, the FARS data 

for crashes involving large trucks and buses are not available until October 2009. The value used for the 2008 rate 

is projected from recent trend data. The TVMT is complete through 2006. For 2007 and 2008, it is projected as a 

percentage of the total VMT projections. The final TVMT estimate for 2007 will be available in December 2008, 

and the final TVMT estimate for 2008 will be available in December 2009.
278 FY 2008 Performance & Accountability Report

Reliability The measure informs and guides FMCSA, NHTSA, and FHWA highway safety policy, safety program planning, 

regulatory development, resource allocation, and operational mission performance, and tracks progress toward the 

goal of saving lives by preventing large truck crashes.

VMT estimates from the early months of CY 2008 are lower than for the comparable period of CY 2007. 

Contributing factors include, but are not limited to: high price of fuel, which my continue into the future; 

economic downturn; change in the mix of vehicles towards smaller and lighter cars; increased use of walking, 

bicycling, and motorcycle riding, as well as a greater use of mass transit. All of these factors are indications of 

fundamental changes in our mode of transportation that will adversely impact our ability to accurately estimate 

fatality and VMT projections for 2008 and beyond.

Details on DOT Safety Measures

Motorcycle Rider Fatalities (NHTSA / FHWA)

Measure Motorcycle rider fatality rate per 100,000 motorcycle registrations A motor cycle is a two- or three-wheeled 

motor vehicle designed to transport one or two people, including motorscooters, minibikes, and mopeds.

Scope The number of motorcycle rider fatalities is a count of motorcycle rider (driver and passenger) deaths which occur 

within 30 days of a crash involving motorcycle traffic traveling on a trafficway customarily open to the public 

within the 50 States and Washington, D.C.

Sources Motor vehicle traffic fatality data are obtained from the National Highway Traffic Safety Administration’s Fatality 

Analysis Reporting System (FARS). The FARS database is based on police crash reports and other State data.

The States collect motor vehicle registration data and provide the data to the Federal Highway Administration 

(FHWA), which then provides the data to the public.

Statistical

Issues

While based on historical data, the 2008 fatality rate projection is dependent on the continuation of both 

individual and market behavior regarding vehicle miles traveled, seat belt use and motorcycle rider and alcohol 

related fatalities. The assumptions inherent in these projections, together with the normal levels of uncertainty 

inherent in statistical evaluations, may influence the accuracy of the projection.

The FHWA estimates of registered motorcycles may underestimate the number of motorcycles that are used 

on the roads each year. Data collected by the Motorcycle Industry Council (MIC) corroborate this possibility 

and have noted that not all motorcyclists register their bikes. (National Transportation Safety Board -- Safety 

Recommendation Date: Oct 3, 2007)
United States Department of Transportation 279

Completeness FARS has been in use since 1975 and is generally accepted as a complete measure for describing safety on the 

Nation’s highways. Total annual fatalities are available through CY 2007. The fatality projection used to calculate 

the 2008 rate shown in this report was estimated by modifying the 2007 fatality total for the subsequent phase-in 

of safety features in the on-road fleet, the scrapping of vehicles with existing safety features, a projected change in 

safety belt usage, a projected trend in motorcycle fatalities, and other safety-related considerations.

The vehicle registration date varies among the States. Although many States continue to register specific vehicle 

types on a calendar year basis, all States use some form of the “staggered” system to register motor vehicles. The 

“staggered” system permits a distribution of the renewal workload throughout all months. Most States allow preregistration or permit “grace periods” to better distribute the annual registration workload.

In order to present vehicle registration data uniformly for all States, the information is shown as nearly as possible 

on a calendar-year basis. Insofar as possible, the registrations reported exclude transfers and re-registrations and 

any other factors that could otherwise result in duplication in the vehicle counts. Motor vehicle registrations are 

reported by major vehicle classes: automobiles, buses, trucks, and motorcycles.

Reliability The measure informs and guides NHTSA, FHWA, and FMCSA regarding highway safety policy, safety program 

planning, regulatory development, resource allocation, and operational mission performance, and tracks progress 

toward the goal of saving lives by preventing highway crashes.

All State reported data are analyzed by FHWA for completeness, reasonableness, consistency, and compliance 

with data reporting instructions contained in A Guide to Reporting Highway Statistics. State reported data 

is adjusted if necessary to eliminate mistakes and to improve data uniformity among the States. The analysis 

and adjustment process is accomplished in cooperation with the States supplying the data. In some instances, 

corrections or revisions have been made in previously published data.

The FHWA data includes all vehicles that have been registered at any time throughout the calendar year. Data 

includes vehicles that were retired during the year and vehicles that were registered in more than one State. 

In some States, it is also possible that contrary to the FHWA reporting instructions, vehicles that have been 

registered twice in the same State may be reported as two vehicles. The NHTSA data includes only those vehicles 

that are registered as of July 1 of the given year. Therefore, they do not include vehicles registered in the last half of 

the calendar year or vehicles that may only be registered for a part of a year such as those for farm use.

Motorcycle registration projections into future years are problematic. Contributing factors include, but are 

not limited to: high price of fuel, which my continue into the future; economic downturn; change in the mix 

of vehicles towards smaller and lighter cars; increased use of walking, bicycling, and motorcycle riding, as well 

as a greater use of mass transit. All of these factors are indications of fundamental changes in our mode of 

transportation that will adversely impact our ability to accurately estimate fatality and VMT projections for 2008 

and beyond.
280 FY 2008 Performance & Accountability Report

Details on DOT Safety Measures

Non-occupant Fatality Rate (NHTSA / FHWA / FMCSA)

Measure Non-occupant fatality rate per 100 million VMT. A non-occupant is any person who is not an occupant of a 

motor vehicle in transport and includes: pedestrians. pedalcyclists, occupants of parked motor vehicles, others such 

as joggers, skateboard riders, people riding on animals, and persons riding in animal-drawn conveyances. VMT 

includes all vehicle miles traveled by all types of vehicles including passenger cars, motorcycles, buses, other 2-axle 

4 tire vehicles (including vans, pickup trucks, and sport/utility vehicles), single unit 2-axle 6 tire or more trucks, 

and combination trucks.

Scope The number of fatalities is a count of occupant and non-motorist deaths which occur within 30 days of a crash 

involving motor vehicle traffic traveling on a trafficway customarily open to the public within the 50 States and 

Washington, D.C.

VMT represent the total number of vehicle miles traveled by motor vehicles on public roadways within the 50 

States and Washington, D.C.

Sources Motor vehicle traffic fatality data are obtained from the National Highway Traffic Safety Administration’s Fatality 

Analysis Reporting System (FARS). The FARS database is based on police crash reports and other State data.

VMT data for 2008 are estimated based on preliminary 2008 VMT data from FHWA’s Traffic Volume Trends 

(TVT); a monthly report based on hourly traffic count data in the Highway Performance Monitoring System 

(HPMS).

Statistical

Issues

While based on historical data, the 2008 fatality rate projection is dependent on the continuation of both 

individual and market behavior regarding vehicle miles traveled, seat belt use and motorcycle rider and alcohol 

related fatalities. The assumptions inherent in these projections, together with the normal levels of uncertainty 

inherent in statistical evaluations, may influence the accuracy of the projection.

Completeness FARS has been in use since 1975 and is generally accepted as a complete measure for describing safety on the 

Nation’s highways. Total annual fatalities are available through CY 2007. The fatality projection used to calculate 

the 2008 rate shown in this report was estimated by modifying the 2007 fatality total for the subsequent phase-in 

of safety features in the on-road fleet, the scrapping of vehicles with existing safety features, a projected change in 

safety belt usage, a projected trend in motorcycle fatalities, and other safety-related considerations.

Reliability The measure informs and guides NHTSA, FHWA, and FMCSA regarding highway safety policy, safety program 

planning, regulatory development, resource allocation, and operational mission performance, and tracks progress 

toward the goal of saving lives by preventing highway crashes.

VMT estimates from the early months of CY 2008 are lower than for the comparable period of CY 2007. 

Contributing factors include, but are not limited to: high price of fuel, which my continue into the future; 

economic downturn; change in the mix of vehicles towards smaller and lighter cars; increased use of walking, 

bicycling, and motorcycle riding, as well as a greater use of mass transit. All of these factors are indications of 

fundamental changes in our mode of transportation that will adversely impact our ability to accurately estimate 

fatality and VMT projections for 2008 and beyond.
United States Department of Transportation 281

Details on DOT Safety Measures

Commercial Air Carrier Fatal Accident Rate (FAA)

Measure Number of commercial air carrier fatalities per 100 million persons onboard (FY)

Scope This measure includes both scheduled and nonscheduled flights of large U.S. air carriers (14 CFR Part 121) 

and scheduled flights of regional operators (14 CFR Part 135). It excludes on -demand (i.e., air taxi) service 

and general aviation. Accidents involving passengers, crew, ground personnel, and the uninvolved public are all 

included.

Sources The data on commercial fatalities come from the National Transportation Safety Board’s (NTSB’s) Aviation 

Accident Database. Aviation accident investigators under the auspices of the NTSB develop the data. Air 

carriers submit data for all passengers on board to the Office of Airline Information (OAI) within the Bureau 

of Transportation Statistics. FAA will estimate crew on board based on the distribution of aircraft departures by 

make and model, plus an average of 3.5 persons on board per Part 121 cargo flight.

Statistical

Issues

Both accidents and passengers on board are censuses, having no sampling error. However, crew on board will be 

an estimate, but crew staffing in fact varies only within a very small range for any given make-model. Departure 

data and enplanements for Part 121 are from the Bureau of Transportation Statistics (BTS). The crew estimate 

is based on fleet makeup and crew requirements per number of seats. For the current fleet, the number of crew 

is equal to about seven percent of all Part 121 enplanements. The average number of cargo crew on board is 

3.5 per departure, based on data from subscription services such as Air Claims, a proprietary database used by 

insurers to obtain information such as fleet mix, accidents and claims. Cargo crews typically include two flight 

crew members, and occasionally another pilot or company rep, or two deadheading passengers. Part 135 data also 

comes from BTS and Air Claims databases, but is not as complete. AEP calls the operators where BTS data have 

gaps. Based on previous accident and incident reports, the average Part 135 enplanement is five per departure. 

Crew estimates for Part 135 are based on previous accident and incident data. Any error that might be introduced 

by estimating crew will be very small and will be overwhelmed by the passenger census. Also note that the fatality 

rate is small and could significantly fluctuate from year to year due to a single accident.

Completeness The FAA does comparison checking of the departure data collected by BTS. This data is needed for crew 

estimates. However, FAA has no independent data sources against which to validate the numbers submitted to 

BTS. FAA compares its list of carriers to the DOT list to validate completeness and places the carriers in the 

appropriate category (i.e., Part 121 or Part 135).

The number of actual persons on board data for any given period of time is considered preliminary for up to 

12 months after the close of the reporting period. This is due to amended reports subsequently filed by the air 

carriers. Preliminary estimates are based on projections of the growth in departures developed by the Office of 

Policy, Planning and Environment. However, changes to the number of persons on board should rarely have an 

effect on the annual fatality rate. NTSB and FAA’s Office of Accident Investigation meet regularly to validate the 

accident and fatality count.

To overcome reporting delays of 60 to 90 days, FAA must rely on historical data, partial internal data sources, and 

Official Airline Guide (OAG) scheduling information to project at least part of the fiscal year activity data. FAA 

uses OAG data until official BTS data are available. 

Reliability Results are considered preliminary based on projected activity data. FAA uses performance data extensively 

for program management, personnel evaluation, and accountability. Most accident investigations are a joint 

undertaking. NTSB has the statutory responsibility to determine probable cause, while FAA has separate 

statutory authority to investigate accidents and incidents in order to ensure that FAA meets its broader 

responsibilities.. FAA’s own accident investigators and other FAA employees participate in all accident 

investigations led by NTSB investigators.
282 FY 2008 Performance & Accountability Report

Details on DOT Safety Measures

General Aviation Fatal Accidents (FAA)

Measure Total number of fatal general aviation accidents. (FY)

Scope The measure includes on-demand (non-scheduled FAR Part 135) and general aviation flights. General aviation 

comprises a diverse range of aviation activities from single-seat homebuilt aircraft, helicopters, balloons, single and 

multiple engine land and seaplanes to highly sophisticated extended range turbojets. 

The FAA would prefer to use a fatal accident rate rather than fatal accidents as the performance measure because 

the use of a rate measure would take into account variation in activity levels from year to year. However, unlike 

commercial aviation activity that is reported regularly to the Bureau of Transportation Statistics by the carriers, 

general aviation flight hours are based on an annual voluntary survey conducted by the FAA. Due to the 

voluntary nature of the survey, the accuracy of the flight hours collected is suspect and there is no readily available 

way to verify the data. For these reasons, the general aviation community is unwilling to use a rate measure until 

the validity and reliability of the survey data can be assured.

The general aviation community and the General Aviation Joint Steering Committee of the Safer Skies initiative 

recommend development of a data collection program that will yield more accurate and relevant data on general 

aviation demographics and utilization. Improved survey and data collection methodologies have been developed. 

As a result of these efforts, the FAA, working with the General Aviation Manufacturers Association, has made 

several improvements to the survey. First, the sample size has been significantly increased. Second, a reporting 

sheet has been created to make it much easier for organizations with large fleets to report. Third, the agency 

worked with the Aircraft Registry to improve the accuracy of contact information. As a result, a survey was 

completed in FY 2004 that, for the first time, creates a statistically valid report of general aviation activity that 

the GA community agrees on. The next step is to create the baseline and work with the GA community on a 

reasonable target for the rate.

Sources The data on general aviation fatalities come from the National Transportation Safety Board’s Aviation Accident 

Database (NTSB). Aviation accident investigators under the auspices of the NTSB develop the data.

Statistical

Issues

There is no major error in the accident counts. Random variation in air crashes results in a significant variation in 

the number of fatal accidents over time.

Completeness NTSB and FAA’s Office of Accident Investigations meet regularly to validate information on the number of 

accidents. Initial results are considered preliminary. NTSB continues to review accident results from FY 2006 

and 2007.

Numbers are final when the NTSB releases its report each March. NTSB continues to review accident results 

from FY 2007. So in March 2009, FY 2007 accident numbers will be finalized. However, the number is not likely 

to significantly change from the end of each fiscal year to when the rate is finalized.

Reliability FAA uses performance data extensively for program management and personnel evaluation and accountability. 

Most accident investigations are a joint undertaking between FAA and NTSB. NTSB has the statutory 

responsibility, but, in fact, most of the accident investigations related to general aviation are conducted by FAA 

Aviation Safety Inspectors without NTSB direct involvement. FAA’s own accident investigators and other FAA 

employees participate in all accident investigations led by NTSB investigators.
United States Department of Transportation 283

Details on DOT Safety Measures

Train Accidents Rate (FRA)

Measure Train accidents per million train-miles (FY)

Scope The Railroad Safety Information System (RSIS) is the principal monitoring strategy used by the FRA for 

the management, processing, and reporting on railroad-reported accidents/incidents; railroad inspections; 

highway-rail grade crossing data; and related railroad safety activities. The Railroad Accident/Incident Reporting 

Subsystem (RAIRS) is the repository of all FRA-mandated reports of railroad accidents, incidents, casualties, 

highway-rail grade crossing collisions, and operating information.

A train accident is any collision, derailment, fire, explosion, act of God, or other event involving the operation of 

railroad on-track equipment (standing and moving), which results in damages greater than the current reporting 

threshold to railroad on-track equipment, signals, track, track structures, and roadbed. Train accidents are reported 

on form FRA F6180.54, Rail Equipment Accident/Incident Report. The reporting threshold for 2008 is $8,500.

A train incident is any event involving the movement of on-track equipment that results in a reportable casualty 

but does not cause reportable damage above the current threshold established for train accidents. Operational 

data, including train-miles, are reported on the form FRA F6180.55, Railroad Injury and Illness Summary.

Sources FRA’s Railroad Accident/Incident Reporting Subsystem.

Statistical

Issues

None

Completeness Railroads are required by regulation (49 CFR Part 225) to file monthly reports to the FRA of all train accidents 

that meet a dollar threshold (currently $8,500). They are also required to file monthly operations reports of trainmiles, employee-hours, and passenger train-miles.

Reports must be filed within 30 days after the close of the month. Data must be updated when the costs 

associated with an accident vary by more than 10 percent (higher or lower) from that initially reported.

Railroad systems that do not connect with the general rail system are excluded from reporting to FRA. Examples 

include subway systems (e.g., Washington, D.C. Metro, New York City subway, San Francisco Bay Area Rapid 

Transit District), track existing inside an industrial compound, and insular rail (e.g., rail that is not connected to 

the general system and does not have a public highway rail crossing or go over a navigable waterway).

Reliability FRA uses the data in prioritizing its inspections and safety reviews, and for more long-term strategic management 

of its rail safety program.

FRA has inspectors who review the railroads’ reporting records, and who have the authority to write violations if 

railroads are not reporting accurately. Violations may result in monetary fines.

Details on DOT Safety Measures

Transit Fatality Rate (FTA)

Measure Transit fatalities per 100 million passenger-miles traveled. (CY)
284 FY 2008 Performance & Accountability Report

Scope Transit fatality data includes passengers, revenue facility occupants, trespassers, employees, other transit workers 

(contractors), and others. A transit fatality is a death within 30 days after the incident, which occurs under the 

categories of collision, derailment, personal casualty (not otherwise classified), fire, or bus going off the road in 

the National Transit Database (NTD) reporting systems. Previous to 2002, transit involved parties that were 

defined as patrons, employees, and others (the safety data was collected on a fiscal year, as opposed calendar year 

basis). Fatalities for the performance measurement only use transit agency Directly Operated (DO) mode data. 

Purchased Transportation (PT) data are not part of this measure. Certain fatalities are excluded, as they are not 

considered to be directly related to the operation of transit vehicles. Those include suicides and fatalities occurring 

in parking facilities and stations, as well as fires in right-of-ways and stations. Also, the measure includes only the 

major transit modes (motor/trolleybus, light rail, heavy rail, commuter rail with vanpool, automated guideway, and 

demand response) and excludes ferryboat, monorail, inclined plane, cable car, and jitney.

The passenger-miles traveled on public transit vehicles (e.g., buses, heavy and light railcars, commuter railcars, 

ferries, paratransit vans, and vanpools) only refer to miles while in actual revenue service to the general public.

These data are reported annually by operators to the FTA National Transit Database (NTD) and to the Federal 

Railroad Administration’s (FRA) Rail Accident and Incident Reporting System (RAIRS). FRA RAIRS data are 

used exclusively for commuter rail (CR) safety data. NTD and RAIRS data are an input to FTA’s Transit Safety 

and Security Statistics and Analysis program (formerly known as Safety Management Information Statistics 

[SAMIS]).

Sources The Transit Safety and Security Statistics and Analysis Annual Report, formerly SAMIS, is a compilation and 

analysis of transit accident, casualty, and crime statistics reported under the Federal Transit Administration’s 

(FTA’s) NTD Reporting System by transit systems that are beneficiaries of FTA Urbanized Area Formula funds. 

(Section 5307 grantees). Starting in 2002, commuter rail safety data are being collected from the FRA Rail 

Accident Reporting System (RAIRS) in order to avoid redundant reporting to NTD. Transit fatalities: Transit 

Safety and Security Statistics and Analysis Annual Report. Transit passenger miles: Transit Safety and Security 

Statistics and Analysis Annual Report.

Statistical

Issues

The fatality counts in FTA’s Transit Safety and Security Statistics and Analysis are a census. The major source 

of uncertainty in the measure relates to passenger-miles traveled. Passenger-miles are an estimate derived from 

reported passenger trips and average trip length. Passenger-miles are the cumulative sum of the distances ridden 

on passenger trips.

Transit authorities have accurate counts of unlinked passenger trips and fares. An unlinked trip is recorded each 

time a passenger boards a transit vehicle, even though the rider may be on the same journey. Transit authorities do 

not routinely record trip length. To calculate passenger-miles, total unlinked trips are multiplied by average trip 

length. To obtain an average trip length for their bus routes, transit authorities use Automatic Passenger Counters 

(APCs) with GPS Technology or a FTA-approved sampling technique. To obtain passenger mile data on rail 

systems, ferry boats, and paratransit, transit authorities often use Smart Card or other computerized tracking 

systems. Passenger-miles are the only data element that is sampled in the NTD. Validation based on annual 

trend analysis is performed on the passenger mile inputs from the transit industry. The validation is performed by 

statistical analysts at the NTD contractor (Technology Solution Providers/General Dynamics Corporation).

Completeness The information for this measure comes from the FTA’s Transit Safety and Security Statistics and Analysis 

program, formerly FTA’s Safety Management Information System (SAMIS), which uses data reported by transit 

operators to the NTD. Many categories and definitions were added or changed in the new NTD in 2002, and 

have allowed for improvements and more timely analysis of trends and contributing factors. The 20072008 

measure is an extrapolation of partial-year data, particularly of passenger-miles traveled.
United States Department of Transportation 285

Reliability An independent auditor and the transit agency’s CEO certify that data reported to the NTD are accurate. Using 

data from the NTD to compile the Transit Safety & Security Statistics & Analysis program (formerly SAMIS) 

data, the USDOT Volpe National Transportation Systems Center compares current safety statistics with previous 

years, identifies any questionable trends, and seeks explanation from operators.

Details on DOT Safety Measures

Natural Gas and Hazardous Liquid Pipeline Incidents (PHMSA)

Measure Number of serious incidents for natural gas pipeline incidents and hazardous liquid pipeline accidents (CY)

Scope Gas pipeline incidents are reportable under 49 CFR 191.15 if they involve: 

 a release of gas from a pipeline or of liquefied natural gas or gas from an LNG facility; and a 

death or personal injury requiring in-patient hospitalization, or estimated property damage, 

including cost of gas lost, of $50,000 or more; 

 an event that results in an emergency shutdown of an LNG facility; and, 

 an event that is significant in the judgment of the operator, even if it does not meet any other 

reporting criteria. 

Liquid pipeline accidents are reportable under 49 CFR 195.50 if there is a release of hazardous liquid or carbon 

dioxide and any one of the following: 

 unintentional explosion or fire; 

 release of five gallons or more (except certain maintenance activities); 

 death or injury requiring hospitalization; and, 

 estimated property damage, including cots of cleanup and recovery, value of lost product, and 

other property damage exceeding $50,000. 

Gas incidents include both gas transmission and gas distribution pipeline systems. Data are adjusted/normalized 

for time series comparisons to account for changes in reporting criteria over time. This includes screening out 

hazardous liquid spills of less than 50 barrels (or five barrels for highly-volatile liquids) unless the accident meets 

one of the other reporting criteria.

Sources DOT/Pipeline and Hazardous Materials Safety Administration (PHMSA) Incident Data - derived from 

Pipeline Operator reports submitted on PHMSA Form F-7100.1 and F-7000.1.

Statistical

Issues

A response percentage cannot be calculated as the actual population of reportable incidents cannot be precisely 

determined. Results in any single year need to be interpreted with some caution. Targets could be missed or met 

as a result of normal annual variation in the number of reported incidents.

Completeness Compliance in reporting is very high and most incidents that meet reporting requirements are submitted. 

Operators must submit reports within 30 days of an incident or face penalties for non-compliance. The reported 

estimates are based upon incident data reported in January through June 2008. There may be a 60-day lag in 

reporting and compiling information in the database for analysis. Traditionally, there are more incidents in the 

summer than the winter. Preliminary estimates are based on data available as of middle of August, with six 

months of data through the end of June. The CY 2008 estimate is a projection using both a seasonal adjustment 

(using a 10-year baseline) and a separate adjustment to account for the historical filing of late reports (92.5 

percent of reports for January - June were filed by this time last year).
286 FY 2008 Performance & Accountability Report

Reliability PHMSA routinely cross-checks incident/accident reports against other sources of data, such as the telephonic 

reporting system for incidents requiring immediate notification provided to the National Response Center 

(NRC). PHMSA is developing a Best Management Practice to ensure quality of the incident data. Data are 

not normalized to account for inflation. A fixed reporting threshold ($50,000) for property damage results in an 

increasing level of reporting over time. This threshold was set for gas pipeline incidents in 1985 and for hazardous 

liquid accidents in 1994.

Data are not normalized to account for the subjective judgment of the operator in filing reports for incidents that 

do no meet any of the quantitative reporting criteria. This may result in variations over time due to changes in 

industry reporting practices. The performance measure is not normalized for changes in exposure-external factors 

like changes in pipeline mileage that could affect the number of incidents without affecting the risk per mile of 

pipeline.

PHMSA uses these data in prioritizing its inspections and safety reviews, and for more long-term strategic 

management of its pipeline safety program.

Details on DOT Safety Measures

Serious Hazardous Materials Incidents (PHMSA)

Measure Number of serious hazardous materials transportation incidents. (CY)

Scope Hazardous materials transportation incidents are reportable under 49 CFR Parts 100-185. Serious hazardous 

materials incidents include those incidents resulting in: 

 a fatality or major injury; 

 the evacuation of 25 or more employees or responders or any number of the general public; 

 the closure of a major transportation artery, the alteration of an aircraft flight plan or operation 

caused by the release of a hazardous material; 

 the exposure of hazardous material to fire; or, 

 any release of radioactive materials from Type B packaging, Risk Group 3 or 4 infectious 

substances, over 11.9 gallons or 88.2 pounds of a severe marine pollutant, or a bulk quantity 

(over 119 gallons or 882 pounds) of a hazardous material. 

This measure tracks only transportation-related releases of hazardous materials that are in commerce. It includes 

incidents in all modes of transportation (air, truck, rail, and water) except pipelines. 

Sources Hazardous Material Information System (HMIS) maintained by DOT/Pipeline and Hazardous Materials Safety 

Administration-derived from reports submitted on Form DOT F 5800.1.

Statistical

Issues

A response percentage cannot be calculated as the actual population of reportable incidents cannot be precisely 

determined. Results in any single year need to be interpreted with some caution. Targets could be missed or met as 

a result of normal variation in the number of reported incidents.
United States Department of Transportation 287

Completeness Each person in physical possession of a hazardous material at the time that any of the incidents occurs (loading, 

unloading, and temporary storage) during transportation must submit a Hazardous Materials Incident Report 

on DOT Form F 5800.1 (01-2004) within 30 days of discovery of the incident. Incident reports are received 

continuously by PHMSA.

Carriers are required to submit incident reports to PHMSA within 30 days of an incident. Once received by 

PHMSA, it takes approximately one month for incident reports to be processed and verified. The data are then 

made available in the HMIS database during the next monthly update.

PHMSA continues to receive reports from calendar year 2008. By the end of September 2008 actual incident data 

was received through August 31, 2008. PHMSA is projecting the remainder of the calendar year using the actual 

number of incidents that occurred during September, October, November, and December of 2007-the previous 

calendar year. This methodology for projecting the CY 2008 estimate is expected to be within 2-4 percent of the 

final estimate, which becomes available during the second quarter of CY 2008.

Reliability PHMSA routinely cross-checks incident data against other sources of data, including the use of a news clipping 

service to provide information on significant hazmat incidents that might not be reported. The performance 

measure is not normalized for changes in exposure - external factors like changes in the amount of hazmat 

shipped that could affect the number of incidents without affecting the risk per ton shipped.

Annual hazmat incident data are used to track program performance, plan regulatory and outreach initiatives, 

and provide a statistical basis for research and analysis. The data is also used on a daily basis to target entities for 

enforcement efforts, and review of applications for exemption renewals.

Details on DOT Mobility Measures

Highway Infrastructure Condition (FHWA)

Measure Percent of travel on the National Highway System (NHS) meeting pavement performance standards for “good” 

rated ride. (CY)

Scope Data include vehicle-miles traveled on the Highway Performance Monitoring System (HPMS) reported 

NHS sections and pavement ride quality data reported using the International Roughness Index (IRI). IRI is a 

quantitative measure of the accumulated response of a quarter-car vehicle suspension experienced while traveling 

over a pavement. An IRI of 95 inches per mile or less is necessary for a good rated ride. Vehicle-Miles of Travel 

(VMT) represents the total number of vehicle-miles traveled by motor vehicles on public roadways within the 50 

States, Washington, D.C., and Puerto Rico.

Sources Data for this measure are collected by the State Highway Agencies using calibrated measurement devices that 

meet industry set standards and reported to FHWA. Measurement procedures are included in the FHWA HPMS 

Field Manual. The VMT data are derived from the HPMS.

Statistical

Issues

The major source of error in the percentages is the differences in data collection methodologies between the States 

and the differences in data collection intervals. FHWA is working on revisions to the HPMS data collection 

guidelines to minimize these potential errors. VMT data are also subject to sampling errors. The magnitude 

of error depends on how well the sites of the continuous counting stations represent nationwide traffic rates. 

HPMS is also subject to estimation differences between the States, even though FHWA works to minimize 

such differences and differing projections on growth, population, and economic conditions that impact driving 

behavior.

Completeness The 2008 actual results for this measure are reported based on 2007 data, which may be incomplete as late as 

October 2008. Prior to 2007, actual results were reported in the prior year and a projection for the current year 

was made based on the prior year data.
288 FY 2008 Performance & Accountability Report

Reliability The HPMS data are collected by the 50 States, the District of Columbia, and Puerto Rico in cooperation with 

local governments. While many of the geometric data items, such as type of median, rarely change; other items, 

such as traffic volume, change yearly. Typically, the States maintain data inventories that are the repositories of a 

wide variety of data. The HPMS data items are simply extracted from these inventories, although some data are 

collected just to meet Agency requirements.

The FHWA provides guidelines for data collection in the HPMS Field Manual. Adherence to these guidelines 

varies by State, depending on issues such as staff, resources, internal policies, and uses of the data at the data 

provider level. An annual review of reported data is conducted by the FHWA, both at the headquarters level 

and in the Division Offices in each State. The reported data are subjected to intense editing and comparison 

with previously reported data and reasonability checks. A written annual evaluation is provided to each State to 

document potential problems and to encourage corrective actions. Data re-submittal is requested in cases where 

major problems are identified.

Details on DOT Mobility Measures

Highway Bridge Condition (FHWA)

Measures Percent of deck area on National Highway System Bridges classified as deficient

Scope The National Bridge Inspection Standards (NBIS) requires the inspection of all highway bridges located on 

public roads and the submission of the collected bridge inventory and inspection data to the FHWA for inclusion 

in the National Bridge Inventory (NBI). The FHWA maintains the NBI, which contains data on nearly 600,000 

highway bridges. The information in the NBI contains 95 data items for each of the bridges as required by the 

Recording and Coding Guide for the Structure Inventory and Appraisal of the Nation’s Bridges. From the data 

provided, the FHWA monitors the condition of the Nation’s bridges, which includes identifying those bridges 

that are either Functionally Obsolete or Structurally Deficient.

Sources The bridge information is collected by the State DOTs and other bridge owners and is provided to the FHWA 

at least annually. As part of the FHWA NBI, NBIS, and Highway Bridge Program monitoring and oversight 

responsibilities, the accuracy and reliability of the submitted NBI information is constantly evaluated through 

data checks and field reviews by both Headquarters and field office personnel.

Statistical

Issues

As with any very large dynamic database, there is always the potential for data quality issues. However, 

procedures are in-place to identify and correct data issues as part of the annual submittal process. Because the 

performance measure relies on data associated with nearly 116,000 NHS bridges, the impact of any localized data 

quality problem is minimized in the overall national analysis.

Completeness The NBI is the world’s most comprehensive database of bridge information. The 2008 actual results for this 

measure are reported based on 2007 data, which may be incomplete as late as October 2008.

Reliability The bridge information is collected by the State DOTs and other bridge owners and is provided to the FHWA 

at least annually (Note: Some States provide data quarterly). As part of the FHWA’s NBI, NBIS, and Highway 

Bridge Replacement and Rehabilitation Program monitoring and oversight responsibilities, the accuracy and 

reliability of the submitted NBI information is constantly evaluated through data checks and field reviews by both 

Headquarters and field office personnel.

Details on DOT Mobility Measures

Highway Congestion (FHWA)

Measure Percent of total annual urban-area travel occurring in congested conditions. (CY)
United States Department of Transportation 289

Scope Data are derived from approximately 400 urban areas. The data reflects travel conditions on freeway and principal 

arterial street networks. An urban area is a developed area with a density of greater than 1,000 persons per square 

mile. Congested conditions exist when travel occurs below the posted speed limit(s).

Sources Data collected and provided by the State Departments of Transportation from existing State or local government 

databases, including those of Metropolitan Planning Organizations. FHWA’s Highway Performance Monitoring 

System (HPMS) serves as the repository of the data. The Texas Transportation Institute utilizes HPMS data to 

derive the above measures.

Statistical

Issues

The methodology used to calculate performance measures has been developed by the Texas Transportation 

Institute (TTI) and reported in their annual Mobility Study. With sponsorship from the National Cooperative 

Highway Research Program of the Transportation Research Board, the methodology was significantly revised in 

2007 and 2008 to take advantage of new studies and detailed data sources that have not been available in previous 

studies.

Completeness The 2006 and prior measures are final. The 2007 measure is preliminary, as partial 2007 HPMS data were used to 

construct the estimates. HPMS data is compiled from the States and verified approximately 10 months from the 

base year, e.g., 2008 actual numbers will not be available from HPMS until October 2009. The 2008 measure is a 

projection based on recent year trends.

Reliability The HPMS data are collected by the 50 States, the District of Columbia, and Puerto Rico in cooperation with 

local governments. While many of the geometric data items, such as type of median, rarely change; other items, 

such as traffic volume, change yearly. Typically, the States maintain data inventories that are the repositories of a 

wide variety of data. The HPMS data items are simply extracted from these inventories, although some data are 

collected just to meet Agency requirements. The FHWA provides guidelines for data collection in the HPMS 

Field Manual. Adherence to these guidelines varies by State, depending on issues such as staff, resources, internal 

policies, and uses of the data at the data provider level. An annual review of reported data is conducted by the 

FHWA, both at the headquarters level and in the Division Offices in each State. The reported data are subjected 

to intense editing and comparison with previously-reported data and reasonability checks. A written annual 

evaluation is provided to each State to document potential problems and to encourage corrective actions. Data resubmittal is requested in cases where major problems are identified.

Details on DOT Mobility Measures

Transit Ridership (FTA)

Measure Average percent change in transit boardings per transit market (150 largest transit agencies). (CY)

Scope The metric is the average percent change in transit boardings. The component is transit passenger boardings 

within a transit market. The modes covered are: Motor Bus (MB), Heavy Rail (HR), Light Rail (LR), Commuter 

Rail (CR), Demand Response (DR), Vanpool (VP), and Automated Guideway (AG).

Sources Transit Passengers: Data derived from counts made on bus and rail routes by transit agencies that are beneficiaries 

of FTA Urbanized Area Formula funds, as part of their monthly National Transit Database (NTD) Reporting 

System submissions. Data are collected from the 150 largest transit systems
290 FY 2008 Performance & Accountability Report

Statistical

Issues

The sources of uncertainty include coverage errors and auditing issues. These data are validated by the FTA Office 

of Budget and Policy, contractor staff.

By statute, every FTA formula grant recipient in an urbanized area (defined by the Census as having a population 

of 50,000 or more) must report to the National Transit Database (NTD). In cities of this size, virtually every 

transit authority receives FTA funding, and there are only a few cities with over 50,000 persons that do not 

provide public transit service. Publicly-funded transit service can be directly-operated or purchased transportation.

Transit authorities have accurate counts of unlinked passenger trips and fares. An unlinked trip is recorded each 

time a passenger boards a transit vehicle, even though the rider may be on the same journey. As a check, trips are 

routinely reconciled against fare revenues. The sources of uncertainty include coverage errors and auditing issues. 

Until 2002, reports were required only on an annual basis.

Completeness DOT has revised this measure to better account for the impact of ridership by counting actual monthly boardings.

Reliability For 20072008, the indicator compares transit ridership for the urbanized areas containing the 150 largest 

transit agencies, aggregated by mode, with the year ending June 30, 20072008. An independent auditor and the 

transit agency’s CEO certify that annual data reported to the NTD are accurate. FTA also compares data to key 

indicators such as vehicle revenue-miles, number of buses in service during peak periods, etc.

FTA has undertaken a major initiative to increase ridership nationwide with the planned results being a reduction 

in congestion. This measure is built into all FTA senior executive performance standards.

Details on DOT Mobility Measures

Transportation Accessibility (FTA) 

Measures 1. Percentage of bus fleets compliant with the Americans with Disabilities Act (ADA). (CY)

2. Percent of key rail stations compliant with the Americans with Disabilities Act (ADA). (CY)

Scope Accessibility for bus fleet means that vehicles are equipped with wheelchair lifts or ramps.

Transit buses are buses used in urbanized areas to provide public transit service to the general public. Transit buses 

do not include private intercity buses (e.g., Greyhound), private shuttle buses, charter buses, or school buses.

The percentage of bus fleets that are equipped with lifts or ramps is only a partial measure of overall accessibility 

under the ADA as it measures only the availability of transit buses in our National fleet that can accommodate 

wheelchairs through the use of mechanical lifts or ramps. Accessibility for transit vehicles under the ADA 

includes other equipment and operational practices that are not reflected in this indicator.

Accessibility for key rail facilities is determined by standards for ADA compliance. Transit systems were 

required to identify key stations. A key station is one designated as such by public entities that operate existing 

commuter, light, or rapid rail systems. Each public entity has determined which stations on its system have been 

designated as key stations through its planning and public participation process using criteria established by DOT 

regulations.

All new rail stations are required to be ADA compliant upon completion and must meet standards for new rail 

stations, not key stations. All altered stations are required to be ADA compliant upon completion and must meet 

standards for alterations of transportation facilities by public entities.
United States Department of Transportation 291

Sources Compliant bus fleets: National Transit Database (NTD).

Compliant rail stations: Rail Station status reports to the FTA.

Statistical

Issues

Data are obtained from a census of publicly-funded transit buses in urbanized areas. Information on the ADA 

key rail stations is reported to FTA by transit authorities. These data are not based on a sample.

Completeness At a transit authority, vehicle purchases are significant capital expenditures. Vehicles purchased with FTA funds 

must have a useful life of 12 years. Whether a bus is purchased or leased, the equipment on the bus is recorded, 

including lifts and ramps. For the last 20 years, transit agencies have reported on the equipment in their bus fleets 

to the FTA in their annual NTD submissions. There is a census of publicly-funded transit buses in urbanized 

areas. It is not a sample. Urbanized areas have more than 50,000 persons, and are defined by the Census 

Department. By statute, every FTA formula grant recipient in an urbanized area must report to the NTD. In 

cities of this size, virtually every transit authority receives FTA funding. There are only a few cities of over 50,000 

persons that do not provide public transit service. Publicly funded transit service can be directly operated or 

purchased transportation.

Data reported for key station accessibility have historically excluded those stations for which time extensions had 

been granted under 49 CFR 37.47(c) (2) or 37.51(c) (2). There are a total of 138 such stations for which time 

extensions of various lengths were granted, some of them through 2020, the maximum permitted. These deadlines 

are now beginning to pass, and these stations can no longer be excluded from the total key station accessibility 

figures; the total number of time extensions from 20072008 through 2020 stands at 19. The total number of key 

stations will therefore increase, and the percentage of compliant stations may decrease as they are added to the 

total key station count. Beginning in 20072008, the key station accessibility figures began reporting the total 

number of key stations, the total number that are accessible, and the number with outstanding time extensions.

Reliability All data in the NTD are self-reported by the transit industry. The transit agency’s Chief Executive Officer and 

an independent auditor for the transit agency certify the accuracy of this self-reported data. The data are also 

compared with fleet data reported in previous years and crosschecked with other related operating and financial 

data in the report. Fleet inventory is also reviewed as part of FTA’s Triennial Review, and a visual inspection is 

made at that time.

Information on ADA key rail stations is reported to FTA by transit authorities. The FTA’s Office of Civil Rights 

conducts oversight assessments to verify the information on key rail station accessibility. Quarterly rail station 

status reports and key rail station assessments have significantly increased the number of key rail stations that 

have come into compliance over the last several years.

FTA will primarily influence the goal through Federal transit infrastructure investment, which speeds the rate 

at which transit operators can transition to ADA-compliant facilities and equipment, oversight, and technical 

assistance.

Details on DOT Mobility Measures

Aviation Delay (FAA)

Measure Percentage of flights arriving no more than 15 minutes late.
292 FY 2008 Performance & Accountability Report

Scope A flight is considered on-time if it arrives no later than 15 minutes after its published, scheduled arrival time. 

This definition is used in both the DOT Airline Service Quality Performance (ASQP), and Aviation System 

Performance Metrics (ASPM) reporting systems. Air carriers, however, also file up-to-date flight plans for 

their services with the FAA that may differ from their published flight schedules. This metric measures on-time 

performance against the carriers filed flight plan, rather than what may be a dated published schedule.

The time of arrival of completed passenger flights to and from the 35 OEP airports is compared to their flight 

plan scheduled time of arrival. For delayed flights, delay minutes attributable to extreme weather, carrier caused 

delay, security delay, and a prorated share of delay minutes due to a late arriving flight at the departure airport are 

subtracted from the total minutes of delay. If the flight is still delayed, it is counted as a delayed flight attributed 

to the National Aviation System (NAS) and the FAA.

Sources The Aviation System Performance Metrics (ASPM) database, maintained by the FAA’s Office of Aviation Policy 

and Plans, supplemented by DOT’s Airline Service Quality Performance (ASQP) causation database, provides 

the data for this measure. By agreement with the FAA, ASPM flight data are filed by certain major air carriers 

for all flights to and from most large and medium hubs, and is supplemented by flight records contained in the 

Enhanced Traffic Management System (ETMS) and flight movement times provided by Aeronautical Radio, Inc. 

(AIRINC).

Statistical

Issues

Data are not reported for all carriers, only 19 carriers report monthly into the ASQP reporting system.

Completeness Fiscal year data are finalized approximately 90 days after the close of the fiscal year.

Reliability The reliability of ASPM is verified on a daily basis by the execution of a number of audit checks, comparison to 

other published data metrics, and through the use of ASPM by over 1500 registered users. ASQP data is filed 

monthly with DOT under 14 CFR 234, Airline Service Quality Performance Reports, which separately requires 

reporting by major air carriers on flights to and from all large hubs.

Details on DOT Global Connectivity Measures

Disadvantaged and Women-Owned Small Businesses (OST S-40)

Measure 1. Percent share of the total dollar value of DOT direct contracts that are awarded to women-owned businesses. 

(FY)

2. Percent share of the total dollar value of DOT direct contracts that are awarded to small disadvantaged 

businesses. (FY)

Scope Includes contracts awarded by DOT Operating Administrations through direct procurement. It does not include 

FAA contracts exempt from the Small Business Act.

Sources Prior to October 1, 2003, these data were derived from the USDOT Contract Information System (CIS, which 

fed the old Federal Procurement Data System (FPDS). The CIS included all USDOT contracting activities that 

reported to the Federal Procurement Data Center (FPDC). Migration to the new Federal Procurement Data 

System on October 1, 2003 enabled the removal of agency FPDS feeder systems government-wide (including 

CIS).

New data reports will come directly from FPDS. Data are compiled by USDOT Contracting staff from 

Department contract documents. Selected information is either transmitted from the operating administration 

contract writing systems, or manually data-keyed via the FPDS web site, into the FPDS database, which can be 

queried to compute needed statistics. All USDOT contracts are enumerated.
United States Department of Transportation 293

Statistical

Issues

Until recently the reliability of the Federal Procurement Data System/Next Generation (FPDS/NG) was an issue 

with DOT and other federal agencies including the Government Accountability Office (GAO). The FPDS is 

designed to be an accurate and reliable system, as required by the Small Business Act, Section 644(g). However, 

it is recognized that at least through the transitional periods of FY 2003 through FY 2007, there may be issues of 

synchronization and data reliability between federal agencies and the FPDS/NG.

DOT currently is required to scrub FPDS/NG data and resubmit it for validation. After re-verifying these data 

against internal sources, there are no known major errors present in the data. Business types are as identified in the 

Central Contractor Registration (CCR) database. However, random variation in the number of DOT contracts 

as well as the number of women-owned and small disadvantaged businesses each year results in some random 

variation in these measures from year to year.

Completeness The Federal Procurement Data System (FPDS) is prescribed by regulations as the official data collection 

mechanism for DOT acquisitions.

Reliability There is extensive regulatory coverage to ensure data reliability. The system is used to prepare many reports to 

Congress, the Small Business Administration, and others. Performance goals actual data, as finalized by the Small 

Business Administration is the only reliable basis for program evaluations as mandated by the Small Business Act, 

Section 644(g).

Details on DOT Global Connectivity Measures

St. Lawrence Seaway System Availability (SLSDC)

Measure Percent of days in the shipping season that the U.S. portion of the St. Lawrence Seaway is available. (FY)

Scope The availability and reliability of the U.S. sectors of the St. Lawrence Seaway, including the two U.S. Seaway locks 

in Massena, N.Y., are critical to continuous commercial shipping during the navigation season (late March to late 

December). System downtime due to any condition (weather, vessel incidents, malfunctioning equipment) causes 

delays to shipping, affecting international trade to and from the Great Lakes region of North America. Downtime 

is measured in hours/minutes of delay for weather (visibility, fog, snow, ice); vessel incidents (human error, 

electrical and/or mechanical failure); water level and rate of flow regulation; and lock equipment malfunction.

Sources Saint Lawrence Seaway Development Corporation (SLSDC) Office of Lock Operations and Marine Services.

Statistical

Issues

None.

Completeness As the agency responsible for the operation and maintenance of the U.S. portion of the St. Lawrence Seaway, 

SLSDC’s lock operations unit gathers primary data for all vessel transits through the U.S. Seaway sectors and 

locks, including any downtime in operations. Data is collected on site, at the U.S. locks, as vessels are transiting 

or as operations are suspended. This information measuring the System’s reliability is compiled and delivered 

to SLSDC senior staff and stakeholders each month. In addition, SLSDC compiles annual System availability 

data for comparison purposes. Since SLSDC gathers data directly from observation, there are no limitations. 

Historically, the SLSDC has reported this performance metric for its entire navigation season (late March/

early April to late December). Unfortunately due to reporting timelines, system availability data is only reported 

through September in this report.

Reliability SLSDC verifies and validates the accuracy of the data through review of 24-hour vessel traffic control computer 

records, radio communication between the two Seaway entities and vessel operators, and video and audiotapes of 

vessel incidents.
294 FY 2008 Performance & Accountability Report

Details on DOT Global Connectivity Measures

Bilateral Agreements (FAA)

Measure Number of executive agreements signed and/or implementation procedures agreements concluded.

Scope U.S. Bilateral Agreements related to aviation safety have two components: executive agreements and 

implementation procedures. The executive agreement is signed by the Department of State and the target 

country’s Ministry of Foreign Affairs. It lays the essential groundwork for cooperation between the two 

governments and their respective aviation authorities. The implementation procedures, the second component, 

provide detailed operational safety and certification arrangements between the FAA and the target country’s civil 

aviation authority. The implementation procedure is the operational portion of the bilateral agreement that allows 

for acceptance of aviation goods and services between the two countries.

The target is achieved when either a new Executive Agreement is signed or a new or expanded implementation 

procedure is signed, or all substantive issues relating to the content of the agreement are completed with the target 

country or regional authority. (Interim measures related to the progress of negotiations may also be tracked for 

internal purposes during a specific fiscal year.)

Sources The executive agreements are negotiated and maintained by the Department of State. The implementation 

procedures are negotiated and concluded by FAA. The official, signed implementation procedure is maintained at 

FAA Headquarters.

Statistical

Issues

None.

Completeness There are no completeness data issues associated with this measure since it is a simple count of the final signed 

new executive agreement or implementation procedures agreement. This performance target is monitored monthly 

by tracking interim negotiation steps leading to completion of a BASA and tracking FAA internal coordination 

of the negotiated draft text.

The final signing of executive agreements is generally out of the control of the FAA. Many sovereign nations view 

these agreements as treaties that require legislative approval. The FAA and U.S. Government cannot control the 

timing of legislatures in other countries. Therefore, the FAA will count executive agreements only when signed. 

The negotiation of implementation procedures is more within FAA’s control.

The signed document of the executive agreement constitutes evidence of completion. For implementation 

procedures, evidence will be either a signed procedure or some form of agreement between both parties that 

material negotiations are concluded, but a formal signing ceremony is pending. This can take the form of an 

e-mail, meeting minutes, or other mutual agreement between the two parties that the implementation procedures 

activity has been concluded.

Reliability No issues.
United States Department of Transportation 295

Details on DOT Global Connectivity Measures

Reduced Barriers to Trade in Transportation (OST-X)

Measure Number of potential air transportation consumers (in billions) in international markets.

Scope The number of potential air transportation consumers is the total population of the U.S. and countries with open 

skies aviation agreements with the U.S. By the end of FY 2008, there were more than 90 open skies agreements. 

This measurement includes the annual increase in population for the countries where open skies have been 

achieved, as well as the additional populations for newly negotiated open skies agreements. The estimate for the 

additional population is based on the median population size of the countries without open skies agreements. The 

measurement thus reflects the extent to which the liberalization resulting from open skies agreements, negotiated 

by DOT, increases travel opportunities between the U.S. and countries with previously restricted aviation 

agreements.

Sources Estimate of the population of the U.S. and countries with open skies agreements with the U.S., Midyear 

Population, International Data Base, and U.S. Bureau of the Census (per website).

Statistical

Issues

The International Data Base of the U.S. Bureau of the Census is a reliable source of population estimates. The 

Bureau’s website and publications provide qualifying data notes that more fully describe technical and other issues. 

These qualifying notes do not significantly affect our analyses.

Completeness The International Data Base of the U.S. Bureau of the Census is a reliable source of population estimates. The 

Bureau’s website and publications provide qualifying data notes that more fully describe technical and other issues. 

These qualifying notes do not significantly affect our analyses.

Reliability The International Data Base of the U.S. Bureau of the Census is a reliable source of population estimates. The 

Bureau’s website and publications provide qualifying data notes that more fully describe technical and other issues. 

These qualifying notes do not significantly affect our analyses.

Details on DOT Global Connectivity Measures

Enhanced International Competitiveness of U.S. Transportation Providers (OST-X)

Measure Number of international negotiations conducted annually to remove market-distorting barriers to trade in air 

transportation.

Scope The number of international negotiations conducted annually to remove market-distorting barriers to trade in 

transportation is the number (or rounds) of meetings and negotiations that are conducted in an effort to reach 

open skies agreements, other liberalized aviation agreements, or to resolve problems. By the end of FY 2008, there 

were more than 80 open skies agreements, and 19 liberalized (but not open skies) agreements. These numbers, 

however, do not represent, but understate, the number of negotiating sessions that have historically been held to 

complete these agreements. The measurement thus reflects an estimate of the extent of and manner by which the 

DOT might best apply the necessary resources to open the competitive environment and provide increased travel 

opportunities and economic benefits.

Sources Estimate of the number of annual negotiating sessions that are required to achieve further international aviation 

liberalization. It is an internal estimate generated by the Office of the Assistant Secretary for Aviation and 

International Affairs based on a number of analytical, economic and geopolitical factors.

Statistical

Issues

Due to geopolitical factors, the nature of international aviation negotiations can follow an unpredictable course. 

It is impossible to gauge or comment upon the data limitations, statistical issues, data completeness and data 

reliability.
296 FY 2008 Performance & Accountability Report

Completeness Due to geopolitical factors, the nature of international aviation negotiations can follow an unpredictable course. 

It is impossible to gauge or comment upon the data limitations, statistical issues, data completeness and data 

reliability.

Reliability Due to geopolitical factors, the nature of international aviation negotiations can follow an unpredictable course. 

It is impossible to gauge or comment upon the data limitations, statistical issues, data completeness and data 

reliability.

Details on DOT Global Connectivity Measures

Travel in Freight Significant Corridors (FHWA)

Measure Number of freight corridors with an annual decrease in the average buffer index rating. (CY)

Scope Travel time reliability is a key indicator of transportation system performance. The FHWA uses measured speed 

data to calculate a Buffer Index (BI) for each freight significant corridor. The BI is a measure of travel time 

reliability and variability that represents the extra time (or time cushion) that would have to be added to the 

average travel time to ensure on-time arrival 95 percent of the time.

Sources Travel time data for freight significant corridors is derived using time and location data from satellite 

communications equipment on-board mobile commercial vehicles. A Global Positioning Satellite (GPS) device in 

the vehicle transmits a continuous or periodic signal to an earth orbit satellite. This technology allows commercial 

vehicles to serve as probes and enables direct measurement of commercial vehicle average operating speeds and 

travel rates and travel times. Selection of freight significant corridors and highway segments is largely based on 

the volume of freight moved on the segment.

Statistical

Issues

The key issues are long term viability of data source, sampling size of the commercial vehicle probes, and 

frequency of the time and position sampling. In FY 2008, FHWA made progress in addressing the issues of 

a sample size frequency of sampling. By entering into arrangements with two additional technology partners, 

FHWA added more than 150,000 vehicles to the sample size and enabled more precise detection of a vehicle 

location, direction, and speed.

Completeness FHWA is partnering with vendors that collect automatic vehicle location probe information from a customer 

base, primarily interstate long-haul carriers. The data provides nationwide coverage from approximately 400,000 

vehicles (trucks and trailers) in the United States, Canada and Mexico. The largest majority of the data is from 

fleets that have signals sent to vehicles and readings taken as often as every 15 minutes. The interval between 

probe readings is dependent upon the subscription and services contracted for by each individual carrier. These 

intervals may range from every 15 minutes to every two hours. The data transmitted are: truck ID, latitude, 

longitude, date and time, and interstate route. In FY 2008, FHWA enhanced the completeness of the data set by 

adding two additional vendors that increases the percentage of local and less than truckload carriers, increases the 

coverage area, and provides access to the data that more accurately pinpoints a vehicle’s location, direction and 

speed. FHWA processes and manages the data provided by the vendors to derive the information for this measure.
United States Department of Transportation 297

Reliability Probe vehicle performance systems are designed to provide travel time, speed and delay information without 

traditional fixed-location traffic monitoring and data collection systems. Probe-based systems enable coverage of 

much larger geographic areas (i.e., entire roadway networks) without the cost of building fixed-location traffic 

data collection systems throughout those networks. This technique takes advantage of the significant reductions in 

the cost of GPS devices that report current location and time information with a high degree of accuracy. When 

placed in vehicles and combined with electronic map information, GPS devices are the primary component of 

excellent vehicle location systems. Storage and analysis of the GPS location data allow for very accurate roadway 

performance measurement. To provide reliable roadway performance estimates, a large enough number of 

vehicles must be equipped with GPS to provide an unbiased measure of roadway performance, and to provide the 

temporal and geographic diversity desired by the performance measurement system. A significant drawback to 

probe vehicle-based performance monitoring is that it does not provide information about the level of roadway 

use (i.e., vehicle volume), but only provides information about the speeds and travel times being experienced.

Details on DOT Global Connectivity Measures

Border Crossing Operation Reliability (FHWA)

Measure Number of U.S. border crossings with an increase in operational reliability.

Scope U.S. Border Crossings with an increase in operational reliability, calculated as the average annual hours of 

unexpected delay, compares high-delay crossing times to average delay crossing times. The reliability measure, or 

Buffer Index, uses the 95th percentile crossing times to represent border crossing times during periods with the 

heaviest volumes and/or most limited capacity and the average crossing time to represent the expected time for 

commercial vehicles to cross the border.

Sources Data is being collected at five U.S.-Canada border crossings: 1) Blaine (Pacific Highway): Blaine, WA, 2) 

Pembina: Pembina, ND, 3) Ambassador Bridge: Detroit, MI, 4) Peace Bridge: Buffalo, NY and 5) Champlain: 

Champlain, NY. Data collection is best described as an automated, large-scale probe vehicle performance 

monitoring system using satellite-based automated vehicle location (AVL) data. Using the satellite-based 

method, the specific location of vehicles is determined at regular, predetermined time intervals using latitude 

and longitude positioning. The locations are stamped with a time, date, and vehicle identification number. The 

data collected is used to compute the average crossing time. The baseline crossing time (i.e., best crossing time 

under ideal operating conditions) and average crossing time are used to calculate average delay at the crossings 

under study.To support data collection, FHWA has established a partnership with the American Transportation 

Research Institute (ATRI). ATRI is partnering with technology vendors and commercial carriers to gain access 

to the data.

Statistical

Issues

The key issues are long term viability of data source, sampling size of the commercial vehicle probes, and 

frequency of the time and position sampling. In FY 2008, FHWA made positive progress in addressing the issues 

of a sample size frequency of sampling. By entering into arrangements with two additional technology partners, 

FHWA added more than 150,000 vehicles to the sample size and enabled more précising detection of a vehicle 

location, direction and speed.

Completeness Traffic travel time information is traditionally collected with fixed-location systems (e.g. loop detectors embedded 

in the roads and video cameras). While the border data collection methodology provides a non-intrusive way 

of measuring border delay, data are not collected on the universe of commercial trucks for a particular crossing. 

There is continuous sampling over time, but data are collected only for commercial vehicles equipped with the 

technology. Also, the data collection and analysis does not account for important information about the crossings 

that can significantly influence travel times, such as the number of inspection and processing booths, the traffic 

volume, or threat level. The addition of additional vendors postures FHWA to be able to collect data on the USMexico border in FY 2009.
298 FY 2008 Performance & Accountability Report

Reliability Probe vehicle performance systems are designed to provide border crossing time and delay information without 

traditional fixed-location traffic monitoring and data collection systems. Probe-based systems enable coverage of 

much larger geographic areas (e.g. the entire Northern border) without the cost of building fixed-location traffic 

data collection systems throughout those networks. Storage and analysis of the GPS location data allow for very 

accurate border performance measurement. To provide reliable border performance estimates, a large enough 

number of vehicles must be equipped with GPS to provide an unbiased measure of border transportation system

Details on DOT Global Connectivity Measures

International Technology/Information Agreements (FHWA)

Measure Number of Technology/Information Agreements that promote the U.S. Highway Transportation Industry 

(FHWA). To date, four agreements have been signed.

Scope Signed memorandums of cooperation between FHWA and a foreign entity (usually a foreign government). 

Section 506 of Title 23 U.S.C. provides that FHWA “[E]ngage in activities...to promote U.S. highway 

transportation expertise, goods, and services in foreign countries to increase transfers of U.S. highway 

transportation technology to foreign countries.”

Sources Data are collected by the FHWA Office of International Programs.

Statistical

Issues

None. Data reflect a census of administrative records.

Completeness None.

Reliability None.

Details on DOT Environmental Stewardship Measures

Exemplary Human Environment Initiatives (FHWA)

Measure Number of Exemplary Human Environment Initiatives undertaken. (FY)

Scope The FHWA seeks to recognize exemplary examples of transportation projects that either create or improve 

conditions for human activities. Projects are exemplary if they meet a specific documented need; are 

innovative; are significant; demonstrate results; offer the potential for transferability; demonstrate partnering 

and collaboration; provide specific benefits to human activity; are mainstreamed into transportation decisionmaking; and benefit more than one project category. Each year a number of Exemplary Human Environment 

Initiatives will be selected for nationwide recognition and promotion as models for other localities to consider for 

implementation.

Sources State DOT and FHWA field offices submit a list and description of human environment initiatives for 

consideration to FHWA Headquarters.

Statistical

Issues

The data may not represent all ecosystem and habitat conservation initiatives underway. Submittals are made at 

the discretion of the States and FHWA field offices.

Completeness All identified initiatives are included. However, there may be other potential qualifying initiatives that have not 

been identified.

Reliability The identification of Exemplary Human Environment Initiatives may not be consistent across all States and 

FHWA field offices. While the criteria are carefully defined and complete, they are still subject to interpretation.
United States Department of Transportation 299

Details on DOT Environmental Stewardship Measures

DOT Facility Cleanup (OST M-93)

Measure Twelve-month moving average number of areas in conformity lapse. (FY)

Scope The transportation conformity process is intended to ensure that transportation plans, programs, and projects will 

not create new violations of the National Ambient Air Quality Standards (NAAQS), increase the frequency or 

severity of existing NAAQS violations, or delay the attainment of the NAAQS in designated non-attainment (or 

maintenance) areas.

Sources The FHWA and FTA jointly make conformity determinations within air quality non-attainment and 

maintenance areas to ensure that Federal actions conform to the purpose of State Implementation Plans (SIP). 

With DOT concurrence, the U.S. Environmental Protection Agency (EPA) has issued regulations pertaining to 

the criteria and procedures for transportation conformity, which were revised based on stakeholder comment.

Statistical

Issues

None. 

Completeness If conformity cannot be determined within 24 months after certain State Implementation Plan (SIP) actions 

(e.g., EPA’s approval of motor vehicle emissions budgets), or if four years have passed since the last conformity 

determination, a 12-month conformity lapse grace period will start before the consequences of a conformity 

lapse apply. During a conformity lapse, no new non-exempt projects may advance until a new determination for 

the plan and Transportation Improvement Program (TIP) can be made. This condition affects transit as well as 

highway projects. During a conformity lapse, FHWA and FTA can only make approvals or grants for projects 

that are exempt from the conformity process (pursuant to Sections 93.126 and 93.127 of the conformity rule) 

such as a safety project and transportation control measures that are included in an approved SIP. Only those 

project phases that have received approval of the project agreement, and transit projects that have received a full 

funding grant agreement, or equivalent approvals, prior to the conformity lapse may proceed. This measure is 

current and has no missing data.

Reliability There are no reliability issues. FHWA and FTA jointly make conformity determinations within air quality nonattainment and maintenance areas to ensure that Federal actions conform to the purpose of the SIP.

Details on DOT Environmental Stewardship Measures

Hazardous Liquid Materials Spilled from Pipelines (PHMSA)

Measure Number of hazardous liquid pipeline spills in high consequence areas. (CY)
300 FY 2008 Performance & Accountability Report

Scope Liquid pipeline accidents (spills) are reportable under 49 CFR 195.50 if there is a release of hazardous liquid or 

carbon dioxide and any one of the following:

1. unintentional explosion or fire; 

2. release of five gallons or more (except certain maintenance activities); 

3. death or injury requiring hospitalization; or, 

4. estimated property damage, including costs of cleanup and recovery, value of lost product, and other property 

damage exceeding $50,000. 

Data are adjusted/normalized for time series comparisons to account for changes in reporting criteria over time. 

This includes screening out hazardous liquid spills of less than 50 barrels (or five barrels for highly-volatile liquids) 

unless the accident meets one of the other reporting criteria. Highly-volatile liquid (HVL) spills are not included 

in this performance measure. HVLs evaporate on release and don’t impact the environment in the usual way that 

other liquid petroleum products do.

Sources DOT/Pipeline and Hazardous Materials Safety Administration (PHMSA) Incident Data-derived from Pipeline 

Operator reports submitted on PHMSA Form F-7000.1. Ton-mile data are calculated using a base figure 

reported in a 1982 USDOT study entitled Liquid Pipeline Director and then combined with data from the 

Association of Oil Pipe Lines and the Oil Pipeline Research Institute.

Statistical

Issues

A response percentage cannot be calculated as the actual population of reportable incidents cannot be precisely 

determined. Results in any single year need to be interpreted with some caution. Targets could be missed or met 

as a result of normal annual variation in the number of reported incidents.

The performance measure is a ratio of “Tons Net Loss” and “Ton-Miles Shipped.” Uncertainty in either the 

numerator or the denominator can have a large effect on the overall uncertainty. Some factors of possible variance 

in the numerator include: 1) a few large spills can make PHMSA miss this goal, and 2) even when the total 

number of spills fluctuates, the net volume lost may increase. The denominator may fluctuate with the overall 

economy, i.e., the volume shipped increases with economic boom and decreases when the economy slows down. 

The environmental metric tracks a highly variable trend and PHMSA has noted in the past that the variability of 

this metric warrants close study.

The past long term pattern for the trend was to generally meet or miss the goal every other year as the actual 

performance bounced above and below the trend line regularly. PHMSA continues to lessen the overall standard 

deviation of the metric over time (the performance of the trend is getting statistically more sound over time). This 

measure also has continued a general downward trend even though it bounces above and below the trend line over 

time.

Completeness Compliance in reporting is very high and most incidents that meet reporting requirements are submitted. 

Operators must submit reports within 30 days of an incident or face penalties for non-compliance.

The reported estimates are based upon incident data reported in January through June 2008. There may be a 60-

day lag in reporting and compiling information in the database for analysis. Traditionally, there are more incidents 

in the summer than the winter. Preliminary estimates are based on data available as of middle of August, with six 

months of data through the end of June. The CY 2008 estimate is a projection using both a seasonal adjustment 

(using a 10-year baseline) and a separate adjustment to account for the historical filing of late reports (92.5 

percent of reports for January-June were filed by this time last year).
United States Department of Transportation 301

Reliability Projection of the environmental measure is less precise due to the nature of pipeline spills. A single large spill 

(10,000 barrels or more) can easily dwarf the total for all other CY spills combined. These large spills cannot be 

factored into a projection model due to their magnitude and infrequent and unpredictable occurrences. Thus, 

projections for the remaining six months of this CY assume that the average spill volume in the past six months 

will remain the same in the next six months. However, any large spill of non-highly volatile hazardous liquid in 

the next six months can move the projection upwards.

PHMSA routinely cross-checks accident reports against other sources of data, such as the telephonic reporting 

system for incidents requiring immediate notification provided to the National Response Center (NRC). 

PHMSA is developing a Best Management Practice to ensure quality of the incident data.

Data are not normalized to account for inflation. A fixed reporting threshold ($50,000) for property damage 

results in an increasing level of reporting over time. This threshold was set for hazardous liquid accidents in 1994.

Data are not normalized to account for the subjective judgment of the operator in filing reports for accidents that 

do no meet any of the quantitative reporting criteria. This may result in variations over time due to changes in 

industry reporting practices.

Lack of additional information for ton-mile data raises definitional and methodological uncertainties about the 

data’s reliability. Moreover, the three different information sources introduce data discontinuities, making time 

comparisons unreliable. (National Transportation System (NTS) 2002).

PHMSA uses this data in conjunction with pipeline safety data in prioritizing compliance and enforcement plans. 

However, beginning in FY 2009, PHMSA will begin reporting on the number of spills in high consequence areas 

as a new performance measure to replace the current one. This will address many of the reliability issues with the 

current measure.

Details on DOT Environmental Stewardship Measures

Environmental Impact Statements (FHWA / FAA/ FTA)

Measure Median elapsed time in months to complete environmental impact statements for DOT funded infrastructure 

projects

Scope The purpose of an Environmental Impact Statement (EIS) is to provide full and open evaluation of environmental 

issues and alternatives, and to inform decision-makers and the public of reasonable alternatives that could avoid 

or minimize adverse impacts and enhance the quality of the environment. Environmental impact statement 

completion time covers the period from publication of the notice of intent to publication of the record of decision 

for DOT-funded infrastructure projects

This is a tool for measuring the agency’s performance in preparing and completing Environmental Impact 

Statements (EISs) for DOT funded infrastructure projects. Not only will it provide a measure of the time to 

complete an EIS and the intermediate steps, it will also help assess the success of environmental streamlining 

initiatives undertaken by the DOT operating administrations.
302 FY 2008 Performance & Accountability Report

Sources Data are derived from FHWA, FTA, and FAA statistical compilations. FHWA data is collected primarily 

through the FHWA’s Environmental Document Tracking System (EDTS). The EIS processing time is 

tracked from the Notice of Intent (NOI) to the Record of Decision (ROD) and from the date of initiation to 

a FONSI for EA processing time. Frequent reports are an integral part of a national communication strategy 

for environmental streamlining and are absolutely essential in responding to Congressional inquiries, periodic 

hearings, and mandated Congressional reports. FHWA prepares more than 80 percent of environmental impact 

statements prepared during the fiscal year.

FAA has developed and initiated a database maintained by the FAA’s Office of Environment and Energy. The 

database collects information on all agency EISs, data heretofore not readily available. In addition the database 

provides information on agency Environmental Assessments, Endangered Species Expenditures, and EIS 

Cooperating Agency Information that are used to provide reports to DOT, Congress, and the White House. 

Start and completion dates of EISs are taken from published dates associated with the Notice of Intent to 

Prepare an EIS (start) through Draft EIS, Final EIS, and Record of Decision (completion). Source materials are 

contained in the project files. The project manager for the EIS maintains the files and records.

FHWA collects data for all projects primarily through the FHWA’s Environmental Document Tracking System 

(EDTS). The EIS processing time is tracked from the Notice of Intent (NOI) to the Record of Decision (ROD). 

FTA collects its data from a regional survey performed annually. Survey information is compiled and inputted 

into the agency’s EIS excel tracking workbook. 

Statistical

Issues

For FAA data, the various lines-of-business are responsible for providing and updating the data on a regular 

basis. In most cases the data is recorded in the database by the EIS project manager. This is the sole source of the 

information for the database. The most likely external factor that could impact the measurement of results would 

be related to the project manager’s workload and the ability to record data in a timely fashion.

Note that this measure does not account for “down time” in the process—for example, inactivity due to vacillating 

support for a project or diminished funding sources, and time required to complete ancillary studies.

FHWA: None

FTA: A list of EISs is compiled annually for the Council on Environmental Quality. The list does not always 

include EISs that are developed in the regions by sponsor consultants.

Completeness All Environmental Impact Statements (EISs) that have a Notice of Intent (NOI) are entered into the system. As 

the NEPA process progresses, the dates for the Draft EIS, Final EIS, and the ROD are also entered. These data 

are relatively complete.

For FAA, completeness and reliability of the data is the responsibility of the reporting lines-of-business. The 

project manager’s workload can affect the timeliness of recording data and therefore the completeness of the 

database and accuracy of the reported performance measure. When the start and completion of each EIS is 

recorded then the total time to complete can be calculated and the mean time to complete can be computed for 

the total number of projects over the time period being considered.

Reliability There are no reliability issues. The data is submitted by the states and Headquarters verifies those dates by the 

Federal Register Publication dates. This measure is reliable insofar as time to complete the “environmental 

process,” which contemplates satisfying all—in some cases, up to 20 or more—environmental laws and permitting 

requirements that apply to a DOT-funded infrastructure project after subtracting “down time”.

Details on DOT Security Measures

Shipping Capacity (MARAD)
United States Department of Transportation 303

Measure Percent of DOD-required shipping capacity, complete with crews, available within mobilization timelines. (FY)

Scope This measure is based on the material availability of 44 ships in the Maritime Administration’s Ready Reserve 

Force (RRF) and approximately 125 ships enrolled in the Voluntary Intermodal Sealift Agreement (VISA) 

program, which includes 60 ships enrolled in the Maritime Security Program (MSP).

The performance measure represents the number of available ships (compared to the total number of ships in the 

RRF and VISA) that can be fully crewed within the established readiness timelines. Crewing of the RRF vessels 

is accomplished by commercial mariners employed by private sector companies under contract to the government. 

Currently there are more qualified mariners than jobs, even in the most under represented categories. However, 

due to the voluntary nature of this system, there is no guarantee that sufficient mariners will be available on time 

and as needed especially during a large, rapid activation.

Sources Material availability of ships. Maritime Administration records (and information exchanged with DOD) on the 

readiness/availability status of each ship by the Office of Sealift Support (MSP/VISA ships) and the Office of 

Ship Operations (RRF ships). Typical reasons why a ship is not materially available include: the ship is in drydock, 

the ship is undergoing a scheduled major overhaul, or the ship is undergoing an unscheduled repair. The Maritime 

Administration and DOD also maintain records of the sealift ships enrolled in the MSP and VISA and their crew 

requirements.

Availability of mariners. The Maritime Administration, through their Mariner Outreach System, extracts the 

number of qualified mariners from the data recorded in the U.S. Coast Guard’s Merchant Mariner Licensing and 

Documentation (MMLD) system. The willingness and availability of these mariners to sail is then estimated using 

all available information including total U.S. requirements for deep sea mariners, recent sea service, and mariner 

surveys.

Statistical

Issues

None.

Completeness Data are complete.

Reliability The data is reasonably reliable and useful in managing the reserve fleet readiness program.

Details on DOT Security Measures

DoD-Designated Port Facilities (MARAD)

Measure Percent of DoD-designated commercial strategic ports for military use that are available for military use within 

DoD established readiness timelines.

Scope The measure consists of the total number of DOD-designated commercial strategic ports for military use that 

forecast their ability to able to meet DOD-readiness requirements within 48-hours of written notice from the 

Maritime Administration, expressed as a percentage of the total number of DOD-designated commercial strategic 

ports. Presently, there are 15 DOD-designated commercial strategic ports. Port readiness is based on monthly 

forecasts submitted by the ports and semi-annual port readiness assessments by the Maritime Administration in 

cooperation with other National Port Readiness Network partners.

The semi-annual port assessments provide data or other information on a variety of factors, including the 

following: the capabilities of channels, anchorages, berths, and pilots/tugboats to handle larger ships; rail access, rail 

restrictions, rail ramp offloading areas, and rail storage capacities; the availability of trained labor gangs and bosses; 

number and capabilities of available cranes; long-term leases and contracts for the port facility; distances from 

ports to key military installations; intermodal capabilities for handling containers; highway and rail access; number 

of port entry gates; available lighting for night operations; and number and capacity of covered storage areas and 

marshalling areas off the port.
304 FY 2008 Performance & Accountability Report

Sources The Maritime Administration’s data are derived from monthly reports submitted by the commercial strategic ports 

and from MARAD/DOD semi-annual port assessments.

Statistical

Issues

None.

Completeness Data are complete.

Reliability The data is reasonably reliable according to the Bureau of Transportation Statistics and useful in managing its port 

readiness program.

Details on Organizational Excellence Measures

DOT Major System Acquisition Performance (FAA)

Measure 1. For major DOT aviation systems, percentage of cost goals established in the acquisition project baselines that 

are met. 

2. For major DOT aviation systems, percentage of scheduled milestones established in acquisition project baselines 

that are met.

Scope This performance measure encompasses acquisition management data for all of DOT’s major systems acquisition 

contracts, primarily in the FAA, but also from any office procuring a major system as defined in OMB Circular 

A-11, and DOT’s Capital Programming and Investment Control order.

Sources The data for acquisition programs comes from each DOT organization procuring major systems.

FAA tracks and reports status of all schedule and cost performance targets using an automated database, providing 

a monthly Red, Yellow, or Green assessment that indicates their confidence level in meeting their established 

milestones. Comments are provided monthly that detail problems, issues, and corrective actions, ensure milestones 

and cost are maintained within the established performance target. The performance status is reported monthly to 

the FAA Administrator through FAA Flight Plan meetings.

Statistical

Issues

The programs that are selected each fiscal year represent a cross section of programs within the Air Traffic 

Organization. They include programs that have an Exhibit 300 as well as what is referred to as “buy-by-the-pound” 

programs. The latter are typically not required to undergo a standard acquisition life cycle process. There is no 

bias with the selection of milestones. The milestones selected represent the program office’s determination as to 

what effort they deem “critical” or important enough to warrant inclusion in the Acquisition Performance goal 

for the year. Typically there are anywhere from two to four milestones. Interim milestones are also tracked but not 

included in the final performance calculation.

Completeness This measure is current with no missing data. Each DOT organization maintains its own quality control checks 

for cost, schedule, and technical performance data of each major systems acquisition in accordance with OMB 

Circulars A-11, A-109, and A-130, Federal Acquisition Regulations, and Departmental orders implementing those 

directives and regulations.

Reliability Each DOT organization having major system acquisitions uses the data during periodic acquisition program 

reviews, for determining resource requests. It is also used during the annual budget preparation process, for 

reporting progress made in the President’s Budget and for making key program management decisions.
United States Department of Transportation 305

Details on DOT Organizational Excellence Measures

Major DOT Infrastructure Project Cost and Schedule Performance (FHWA / FTA / FAA)

Measure 1. Percentage of major federally funded transportation infrastructure projects with less than 2 percent annual 

growth for project completion milestones. (FY) 

2. Percentage of finance plan cost estimates for major federally funded transportation infrastructure projects with 

less than 2 percent annual growth in project completion cost. (FY)

Scope Active FTA New Starts projects with Full Funding Grant Agreements larger than $1 billion; FHWA projects 

with a total cost of $500 million or more, or projects approaching $500 million with a high level of interest by the 

public, Congress, or the Administration; and FAA runway projects with a total cost of $1 billion or more.

Sources FTA - FTA uses independent reviews and third-party assessment providers such as the Corps of Engineers and 

other oversight contractors to validate the accuracy of project budgets and schedules before grantees are awarded 

Full Funding Grant Agreements. Project/Financial Management Oversight contractors review project budgets on 

a monthly basis and FTA assesses projected total project costs against baseline cost estimates and schedules.

FHWA - The percent cost estimates and scheduled milestones for a FHWA Major Project are measured from 

when the Initial Financial Plan (IFP) is prepared and approved to the required Annual Project Update or from 

the previous Annual Update. The update contains the latest information about the cost and schedule for each of 

the Major Projects. Project Oversight Managers in FHWA Division Offices provide monthly status reports as a 

supplement to the Annual Update.

FAA - Project cost performance for each major project is measured from cost estimates submitted by the airport 

sponsor to support its letter of intent (LOI) and actual expenditure data sources (for grants) and airport sponsor 

submissions (for overall project cost). Project schedule performance is measured from the Runway Template 

Action Plan (RTAP), as specified in the National Airspace System Operational Evolution Partnership.

Statistical

Issues

FAA - Schedule completion performance is measured for two milestones-the project design and the project 

construction. A project milestone is considered to meet the performance target if actual annual rate of completion 

is not more than 2 percent behind scheduled cumulative rate of completion, using the RTAP schedule as a base. 

Cost performance is measured by comparing cumulative actual costs incurred at the end of each fiscal year with 

cumulative costs shown in the scheduled of costs submitted with the LOI application. A project will be considered 

to meet the cost performance target if annual costs are no more than 2 percent higher than projected costs in the 

cost schedule. 

FHWA - A scheduled milestone is defined as being achieved upon completion of the project. Major Projects 

generally require 6 to 10 years from an IFP to completion. Cost estimates are prepared by comparing the costs in 

the most recent Annual Update to the IFP estimate or the last Annual Update.

FTA - Scheduled milestone achievement is measured by the difference between the actual Revenue Operations 

Date and the date of the execution of the Full Funding Grant Agreement divided by the difference between the 

Revenue Operations Date in the Full Funding Grant Agreement and the date of execution of the Full Funding 

Grant Agreement. Cost estimate achievement is measured by the actual Total Project Cost divided by the Total 

Project Cost in the Full Funding Grant Agreement.
306 FY 2008 Performance & Accountability Report

Completeness FAA - Federal financial commitments to airport sponsors are tracked by two automated systems, the System 

of Airports Reporting (SOAR) and the Delphi financial system. These systems are updated immediately when 

a grant payment is made or a grant is amended or closed-out. The FAA relies on the airport sponsor to report 

actual project costs on a quarterly basis. Project design and construction milestones (scheduled and actual) are 

contained in the RTAP and developed by all involved FAA lines of business, the airport sponsor and airlines. The 

RTAP is comprised of tasks that must be considered when commissioning the runway and assigns accountability 

to the airport, airline, and FAA allowing early identification and resolution of issues that might impact the runway 

schedule.

 FHWA - The FHWA Major Projects Team maintains the project schedules and cost estimate information in a 

spreadsheet, which is updated when a Project IFP is approved and/or the Annual Update is received and accepted. 

The data is available and reported on a semi-annual basis.

FTA - This measure is current with no missing data. The information is currently tracked with an in-house MS 

Excel database. A Web-based database, FASTTrak, is being developed to track this type of project information in 

the future. The measures are calculated monthly by an FTA Headquarters Engineer, checked by the Team Leader 

and reviewed by the Office Director.

Reliability FAA - Reporting of Federal financial commitments to airport sponsors is done in accordance with FAA policy 

and guidance related to administering the Airport Improvement Program (AIP) and the authorizing statute. 

The FAA’s AIP Branch monitors FAA regional offices for compliance with policy and guidance, including 

input into SOAR and Delphi, and conducts periodic regional evaluations. Actual project costs reported by the 

airport sponsor are verified by an annual single audit required by OMB. Such audits cover the entire financial 

and compliance operation of the airport sponsor’s governing body. Status of the project design and construction 

schedule contained in the RTAP is updated quarterly, based on meetings held with the airport sponsor and airlines.

FHWA - Both the IFP and the Annual Update undergo a rigorous review by the Division Office and the Major 

Projects Team prior to approval and acceptance. 

FTA - Calculations of schedule achievement are based on month of this report, and not on projected Revenue 

Operations Date. Re-calculations of schedule and cost baselines are made to reflect amendments to the Full 

Funding Grant Agreements. FTA uses independent reviews and third-party assessment providers such as the 

Corps of Engineers and other oversight contractors to validate the accuracy of project budgets and schedules before 

grantees’ are awarded Full Funding Grant Agreements. FTA continues to work to improve its rigorous oversight 

program and has made project cost and budget performance a core accountability of every senior manager in the 

agency.

Details on DOT Organizational Excellence Measures

Transit Grant Process Efficiency (FTA)

Measure Average number of days to award a grant after submission of a completed application. (FY)

Scope FTA grants obligated during a fiscal year period for major programs: Urbanized area, non-Urbanized area, and 

Elderly and Persons with Disabilities formula grants; Capital grants; Job Access and Reverse Commute grants; 

Over-The-Road Bus grants; and Planning grants.

Sources FTA internal databases including the Transportation Electronic Award Management (TEAM) system.

Statistical

Issues

Processing time is calculated from submission date to obligation date. Zero-dollar, non-funding grant amendments 

are excluded from analysis.
United States Department of Transportation 307

Completeness Data are current with no missing data, since FTA uses internal databases, including the TEAM system. All grants 

obligated during the fiscal year for the selected programs (see Scope section) are included in the original data set. 

In rare cases where the submission date is omitted (which prevents processing time calculation), missing dates are 

researched and added to the database prior to reporting. The zero-dollar amendments are excluded because they are 

not representative of the grant processing action being tested.

Reliability The files that contain raw data from TEAM have been tested to ensure that all fiscal-year-to-date obligated grants 

are included and that data is current. Report programs screen various date fields to identify any missing or out-ofsequence dates that would skew averages; dates are corrected prior to reporting. Reconciliation reports of TEAM 

data are produced monthly and anomalies are explored and resolved. Detailed monthly grant processing progress 

reports provide management tools to the Regional Administrators, who continue to make this goal a top priority.
308 FY 2008 Performance & Accountability Report

summary of financial statement audit

and management assurances

Table 1. Summary of financial statement audit

Audit Opinion: Unqualified

Restatement: No

Material

Weaknesses

Beginning 

Balance

New Resolved Consolidated Ending

Balance

Timely Processing of Transactions 

and Accounting for Property, Plant & 

Equipment, including the Construction 

in Progress Account at the FAA 

  0

Total Material Weaknesses 1 1 0

Table 2. summary of management assurances

Effectiveness of Internal Control over Financial Reporting (FMFIA, Section 2)

Statement of Assurance: Unqualified

Material Weaknesses

Beginning 

Balance New Resolved Consolidated Reassessed

Ending 

Balance

Timely Processing of 

Transactions and Accounting 

for Property, Plant & 

Equipment, including the 

Construction in Progress 

Account at the FAA 

  0

Total Material Weaknesses 1 1 0

Effectiveness of Internal Control over Operations (FMFIA, Section 2)

Statement of Assurance: Qualified

Material Weaknesses

Beginning 

Balance New Resolved Consolidated Reassessed

Ending 

Balance

Weaknesses in the Stewardship 

and Oversight of Federal-Aid 

Projects Administered by Local 

Program Agencies

  0

FISMA Noncompliance  1

Total Material Weaknesses 1 1 1 1

Conformance with Financial Management System Requirements (FMFIA, Section 4)
United States Department of Transportation 309

Statement of Assurance: Unqualified

Non-Conformances

Beginning 

Balance New Resolved Consolidated Reassessed

Ending 

Balance

Federal Accounting Standards   0

Total Non-Conformances 1 1 0

Conformance with Federal Financial Management Improvement Act (FFMIA)

Agency Auditor

Overall Substantial Compliance Yes No

1. System Requirements Yes Yes

2. Accounting Standards Yes No

3. USSGL at Transaction Level Yes Yes
310 FY 2008 Performance & Accountability Report

DEPARTMENT OF TRANSPORTATION

Office of the chief information officer

PENDING Material Weakness

HIGH RISK AREA: Non-compliance with Federal Information Security Management Act (FISMA) 

of 2002, and OMB requirements for security information systems and providing privacy protection 

of personally identifiable information (PII).

EXECUTIVE SUMMARY MILESTONES

PLANNED DATES

O=Original

L=Last Year

C=Current

How shall we fix it?

Improve policy and process.

Evaluate and reprioritize information 

assurance and privacy activities and 

resources.

Increase the visibility of 

performance.

Tie performance to investment and 

program budget.

Engage senior management for 

corrective actions.

How will we know it’s fixed?

Weekly scorecards.

Monthly progress reviews and 

reporting.

Monthly reviews with the auditors 

for validation of direction and 

progress.

Quarterly reviews and reporting of 

compliance and progress to senior 

management and OMB.

Monthly reporting of internal 

assessment and verification of 

technical performance.

Year Identified:

Planned (Near-Term)

1. Improve Information Security 

and Privacy program policy, 

planning, reporting, and 

processes.

C - 2008

6/2009

2. Enhance network security, 

configuration management, 

situational awareness, and 

incident response capabilities.

10/2009

3. Ensure security awareness and 

privacy training for Federal 

and contractor employees 

using the Departmental 

network.

6/2009

4. Improve the identification, 

tracking, prioritization, and 

management of weaknesses 

and system vulnerabilities.

6/2009

5. Strengthen the security 

of Departmental systems 

through certification 

and accreditation, use of 

appropriate authentication 

methods, and testing of 

contingency plans.

10/2009

Planned (Long-Term)

Incorporate Information Assurance 

and Privacy performance metrics 

into operating administration 

performance standards.

10/2010
United States Department of Transportation 311

IPIA Reporting Details

1. Improper Payment Program Risk Assessment Description

In prior years, the Department identified the following ten programs as being susceptible to 

significant improper payments. At that time, the Department identified the ten programs in the table 

below as having the highest potential for improper payments.

Operating Administration Program

Federal Highway Administration Federal-aid Highway Program – State Project*

Federal Lands Highway Program – Contracts

Federal Aviation Administration Operations

Facilities and Equipment

Airport Improvement Program*

Federal Transit Administration Capital Investment Grants*

Formula Grants*

Office of the Secretary of Transportation Working Capital Fund

DOT Payroll**

Federal Railroad Administration Grants

*Identified in the former Section 57 of OMB Circular A-11

**For administrative purposes, payroll was reviewed as a single program for all of DOT

Bolded programs were included in the FY 2008 nationwide IPIA review

In accordance with Improper Payments Information Act (IPIA) requirements and OMB guidelines, 

during FY 2004 and 2005 six of the Programs reflected in the Table above were subject to a risk 

assessment and an in-depth improper payment review, including a review of payments by the 

Department to grantees. No improper payments exceeding both 2.5 percent of program payments 

and $10 million were found. The six programs were subject to a risk assessment based on the 

following criteria: Gross Expended Amount, Complexity of Payments, Established Internal Controls 

and Oversight, Type of Program Recipient, Number of Program Recipients, Volume of Payments, 

Probability of Growth, and Changes in the Program from the previous year. The risk criterion was 

used to determine the sampling size for each program. From that, each program underwent an in 

depth statistically based improper payment review.

Based on the FY 2004 and 2005 reviews, the Department concluded that the six programs subject 

to the risk assessment and improper payment test procedures were not susceptible to significant 

improper payments as defined by the OMB. For the remaining four programs, because of the 

significance of grantee payments and the fact that such payments were not tested under previous 

efforts due to a lack of data required for testing at the Federal level, additional testing was required. 

The four programs are the Federal Highway Administration (FHWA) Federal-aid Highway 

Program, Federal Aviation Administration (FAA) Airport Improvement Program, Federal Transit 

Administration (FTA) Formula Grants Program, and the FTA Capital Investment Grants Program.
312 FY 2008 Performance & Accountability Report

2. Sampling Process and Results

In FY 2008, the Department completed full implementation of the IPIA, which requires that agencies: 

(1) review programs and identify those susceptible to significant improper payments (2) report to 

Congress on the amount and causes of improper payments and (3) develop approaches for reducing 

such payments. 

The Department’s FY 2008 review covered the FHWA Federal-aid Highway Program, FAA Airport 

Improvement Program, FTA Formula Grants Program, and the FTA Capital Investment Grants 

Program. With respect to the Formula Grants Program, as described below, successful completion 

pertains to approximately one-third of the grantees. 

The Department re-engaged AOC Solutions, Inc. to develop the nationwide sampling plan, collect 

the results from the application of test procedures, and provide a nationwide estimate of improper 

payments for Federal-aid Highway Program, Airport Improvement Program, Formula Grants 

Program, and Capital Investment Grants Program. As noted above, with respect to the Formula 

Grants Program, the sampling plan, test procedures, and test results only apply to approximately 

one-third of the grantees covered by the FTA’s Formula Grant Triennial Review Program. 49 U.S.C. 

5307 prescribes a Triennial Review of all Formula Grant grantees. OMB Circular A-123, Attachment 

C, paragraph F, provides for alternative approaches, including determining the amount of improper 

payments for components, such as those addressed in the foregoing statute. 

The sampling plan provided sample size of sufficient size to yield an estimate with a 90 percent 

confidence interval within +/- 2.5 percent points around the estimate of the percentage of erroneous

payments, as prescribed by OMB. The results of these efforts are discussed below.

Federal-aid Highway Program

The FHWA executed the nationwide sampling plan using personnel from the FHWA division offices 

and covered Federal payments to grantees over the twelve-month period March 1, 2008 through 

February 29, 2008.

The sampling plan involved a multi-staged statistical approach that included the selection of 40 

Federal payments totaling $109,732,056, 49 state payments totaling $30,910,426, and then 182 testable 

line items totaling $20,733,729 for testing. Consistent with the sampling plan used in 2007, the 2008 

sample was designed to support a nationwide estimate of improper payments and was not designed 

to provide sample items to all states and territories. The states that did not appear in the IPIA sample 

received sample items for FIRE testing.

The test procedures applied to the line items were designed to test a range of administrative elements 

and contractual elements. Tests of administrative elements included determining whether payments 

were properly approved, billed at the correct federal participation rate, and whether billings and 

payments were mathematically accurate. Tests of contractual elements included determining whether 

payments were in accordance with contract rates/prices for specified materials and whether material 

quality tests indicated that materials met contractual requirements.
United States Department of Transportation 313

Improper payments totaling $149,035 were found in the sample of 182 tested items. The projection 

of known improper payments to the population of program payments for the twelve-month period 

results in an improper payment estimate of $55.1 million +/- $4 million. The estimated improper

payment rate is .17% +/- .1%. This projection does not meet OMB’s definition of significant improper

payments ($10 million and 2.5 percent of total program payments). 

The improper payments reported resulted from factors such as underpayments related to retainage 

not covered by contract provisions and incorrect calculations.

FTA Formula Grants Program

The FTA executed the nationwide testing program for grantees covered by the 2008 Triennial Review 

Program using contractor personnel. The review covered the twelve-month period March 1, 2007 

through February 29, 2008. 

The sampling plan involved a multi-staged statistical approach that included the selection of 8 

Federal payments totaling $95,650,747, 24 transportation authorities’ payments totaling $29,989,649, 

and then 44 testable line items from supporting invoices totaling $10,657,250 for testing. The test 

procedures applied to the line items were designed to test a range of administrative elements and 

contractual elements. Tests of administrative elements included determining whether payments were 

properly approved, billed at the correct federal participation rate, and whether billings and payments 

were mathematically accurate. Tests of contractual elements included determining whether payments 

were in accordance with contract rates/prices for specified materials and whether material quality 

tests indicated that materials met contractual requirements. 

Improper payments totaling$199,874 were found in the sample of 44 tested items. The projection 

of known improper payments to the population of program payments for the twelve-month period 

results in an improper payment estimate of $47.6 million +/- 5.3 million. The estimated improper

payment rate is 5.63% +/- .63%. This projection meets OMB’s definition of significant improper

payments ($10 million and 2.5 percent of total program payments). 

The improper payments reported are attributable primarily to the absence of documentation in 

support of the fringe benefit rate used to recover fringe benefit costs allowable under the Formula 

Grants Program. While such costs are allowable charges, OMB Circular A-87, Attachment E, requires 

that fringe benefit charges to Federal programs be supported by formal documentation and retained 

in accordance with the records retention provisions of the Grants Management Common Rule.

FTA Capital Investment Grants Program

In FY 2008 the FTA completed its first nationwide testing for this program. As with the Formula 

Grants Program, the sampling plan involved a multi-staged statistical approach that included the 

selection of 10 Federal payments totaling $321,661,382, 31 transportation authorities’ payments 

totaling $35,783,951, and then 66 testable line items from supporting invoices totaling $12,804,680 for 

testing. 
314 FY 2008 Performance & Accountability Report

The test procedures applied to the line items were designed to test a range of administrative elements 

and contractual elements. Tests of administrative elements included determining whether payments 

were properly approved, billed at the correct federal participation rate, and whether billings and 

payments were mathematically accurate. Tests of contractual elements included determining whether 

payments were in accordance with contract rates/prices for specified materials and whether material 

quality tests indicated that materials met contractual requirements. 

Improper payments totaling $43,672 were found in the sample of 66 tested items. The projection of 

known improper payments to the population of program payments for the twelve-month period 

results in an improper payment estimate of $87 million +/- $6 million. The estimated improper

payment rate is 3.13% +/- .23%. This projection meets OMB’s definition of significant improper

payments ($10 million and 2.5 percent of total program payments). 

The improper payments reported resulted from draw-downs in excess of federal participation share. 

The grantee reimbursed the known overdraw.

FAA Airport Improvement Program

The FAA developed and executed a sampling plan to determine the amount and cause of improper 

payments in the Airport Improvement Program. The FAA review covered the twelve-month period 

March 1, 2007 through February 29, 2008. 

The sampling plan involved a multi-staged statistical approach that included the selection of 30 

Federal payments to sponsors totaling $48,796,094, 30 sponsor payments totaling $37,107,109, 

and then 63 testable line items from invoices totaling $15,390,373 for testing. The test procedures 

applied to the line items were designed to test a range of administrative elements and contractual 

elements. Tests of administrative elements included determining whether payments were properly 

approved, billed at the correct federal participation rate, and whether billings and payments were 

mathematically accurate. Tests of contractual elements included determining whether payments were 

in accordance with contract rates/prices for specified materials and whether material quality tests 

indicated that materials met contractual requirements. 

Improper payments totaling $658.44 were found in the sample of 63 tested items. The projection of 

known improper payments to the population of program payments for the twelve-month period 

results in an improper payment estimate of $.973 million +/- $0.128 million. The estimated improper

payment rate is .02 percent. This projection does not meet OMB’s definition of significant improper 

payments ($10 million and 2.5 percent of total program payments). 

The known improper payments are attributable to unexplained differences between payments to 

sponsors and payments to contractors.
United States Department of Transportation 315

3. Corrective Action Plans for Reducing the Estimated Rate of Improper 

Payments. 

FHWA Federal-aid Highway Program

FHWA Division Offices listed the following reasons for the improper payments identified as a result 

of the IPIA review: underpayments related to retainage not covered by contract provisions and 

incorrect calculations. 

The Department and the FHWA will continue full implementation the FHWA’s Financial Integrity 

Review and Evaluation Program in FY 2009 to monitor State and Territory payments and provide 

a mechanism for assisting these entities with addressing effectively operational issues that result 

or could result in improper payments. The Department believes that this proactive approach will 

establish internal control mechanisms for both preventing and detecting improper payments through 

effective oversight and outreach, the latter being intended to assist grantees in improving program 

management.

FTA Formula Grants Program

The FTA plans on adapting its statutorily required Triennial Review Program to include procedures 

to test for improper payments. 

In addition, the FTA will advise grantees of the provisions of OMB Circular A-87 with particular 

attention to the requirement that fringe benefit and indirect cost rates used for cost reimbursement 

be documented and retained for audit and program review. Finally, the FTA will assess the feasibility 

of follow-up actions to assess the extent to which grantees covered by the 2009 review are addressing 

deficiencies that resulted in improper payment determinations.

FTA Capital Investment Grants Program

The FTA will advise grantees of actions needed to ensure reimbursement requests are in accordance 

with grant cost sharing or matching requirements.

FAA Airport Improvement Program

The FAA will advise field personnel and sponsors of the need to establish control procedures for 

ensuring agreement between payments and requests for Federal reimbursement.

4. Department Accomplishments in Grant Programs

The Department completed its implementation of the IPIA in its major grant programs. The FHWA 

review of the Federal-aid Highway Program, FAA Airport Improvement Program, FTA Formula 

Grants Program, and the FTA Capital Investment Grants Program represented the nationwide 

application of an innovative research and develop strategy implemented in FY 2005 and finalized 

in FY 2008. Testing over the past several years has shown that the amount and rate of improper 

payments are not the result of systemic problems but rather are associated with generalized 

operational issues at some grantees.
316 FY 2008 Performance & Accountability Report

5. Improper Payment Estimated Error Rates, Dollar Estimates1, and Outlook2

Program

PY CY3 CY +1 CY +2 CY +3

 Outlays IP % IP $ Outlays IP % IP $ Est. Outlays IP % IP $ Est. Outlays IP % IP $ Est. Outlays IP % IP $

FHWA: 

Federal-aid 

Highway 

Program

33,347 0.2 55.2 32,190 0.17 55.1 39,264 NA NA 37,513 NA NA 35,046 NA NA

FTA: Formula 

Grants 

Program4

6,2815 0.3 4.32 7,298 5.63 47.6 8,557 .5 14.26 9,080 .05 1.51 8,597 .05 1.43

FTA: Capital 

Investment 

Grants 

Program

2,663 1.16 .6 2,473 3.13 87.0 2,626 .5 13.0 2,218 .05 1.11 2,098 .05 1.05

FAA: Airport 

Improvement 

Program

3,874 NA 0 4,428 .02 .973 3,967 NA NA 4,075 NA NA 4,200 NA NA

1. Dollars are in millions

2. Future (CY+1 – CY+3) improper payment rates for the FAA programs are estimated to be consistent with PY and CY rates.

3. CY outlays are for the period March 2007 through February 2008 and represent the population of Federal payments for IPIA testing.

4. Results for the FTA Formula Grants Program applies only to approximately one-third of the grantees as described in Section 2 above.

5. Outlays for grantees covered by 2008 IPIA testing and upon which the FTA Formula Grants Program IP % is based, approximates $846 million.

6. PY statistics for the Capital Investment Grants Program pertain only to a single grantee.
United States Department of Transportation 317

top ManageMent challenges 

Department of Transportation 

Report Number: PT-2009-005

Date Issued: November 17, 2008
318 FY 2008 Performance & Accountability Report

u.s. Department of 

Memorandum

transportation 

Office of the Secretary 

of Transportation 

Office of Inspector General 

Subject: INFORMATION: DOT’s Fiscal Year 2009 

Top Management Challenges 

Report Number PT-2009-005 

Date: November 17, 2008 

From: Calvin L. Scovel III 

Inspector General

Reply to 

Attn. of: JA-1

To: The Secretary 

Deputy Secretary

The U.S. transportation system is vital to the Nation’s economy and the quality of 

life for all Americans. Each year, the Department of Transportation (DOT) spends 

about $70 billion on a wide range of efforts to enhance mobility and safety. As 

required by law, we have identified nine top management challenges for the 

Department for fiscal year (FY) 2009. 

The next Administration and the 111th Congress will face an array of challenges 

and difficult decisions with respect to transportation programs. This is particularly 

the case with relieving congestion, reaching agreement on long-term financing 

mechanisms for aviation and surface transportation programs, and addressing 

surface infrastructure, including aging bridges.

The Department faces these challenges in an environment of uncertain financial 

markets, volatile fuel prices, rising deficits, and a softening economy. These 

factors will impact all modes of transportation and require a careful reassessment 

of how Federal agencies do business and manage investment portfolios. 

Notwithstanding the unprecedented level of uncertainty, there are important 

opportunities to strategically position the Department, set priorities, and adjust 

strategies to maximize investments in transportation. 

Improving transportation safety is—and must remain—the Department’s 

overarching goal. Strong leadership will be a prerequisite for meeting the 

challenges facing the Department. The Department’s top management challenges 

for FY 2009 are summarized below. An exhibit to this report compares this year’s 

management challenges with those published in FY 2008. 

i
United States Department of Transportation 319

x Enhancing Aviation Safety and Maintaining Confidence in FAA’s Ability To 

Provide Effective Oversight of a Rapidly Changing Industry 

x Enhancing Mobility and Reducing Congestion in America’s Transportation 

System

x Developing a Plan To Address Projected Highway and Transit Funding 

Shortfalls

x Maximizing the Return on Current Highway and Transit Infrastructure 

Investments 

x Operating the National Airspace System While Developing and Transitioning 

to the Next Generation Air Transportation System 

x Protecting Against Increasing Cyber Security Risks and Enhancing the 

Protection of Personally Identifiable Information 

x Preventing Catastrophic Failures and Obsolescence in the Nation’s Aging 

Surface Transportation Infrastructure 

x Improving Contract Operations and Maintaining Procurement Integrity 

x Enhancing and Deploying Programs for Reducing the Serious Consequences of 

Surface Transportation Crashes 

Key Focus Areas for the New Administration and the 111th Congress 

Over the next several years, Congress, the Department, and stakeholders will face 

unique challenges. Our report highlights key, near-term areas of emphasis for 

each top management challenge. These areas include bolstering the integrity of 

the oversight of a rapidly changing airline industry; addressing congestion in the 

air and on the ground; and advancing a data-driven, risk-based approach to 

addressing nationwide bridge safety risks. We recognize that solution sets involve 

policy decisions for the current and future Administration as well as the next 

Congress. Our comments are aimed at enhancing safety, reducing risk with 

multibillion-dollar investments, and improving Federal oversight of transportation 

investments regardless of the chosen policy approach. 

We remain committed to a proactive audit and investigative approach to prevent 

fraud, waste, and abuse in transportation programs and to our efforts to keep 

decision makers informed so that timely corrective actions can be taken. This 

report and the Department’s response will be incorporated into the DOT 

Performance and Accountability Report as required by law (see appendix).

If you have any questions concerning this report, please contact me at (202) 

366-1959. You may also contact David A. Dobbs, Principal Assistant Inspector 

General for Auditing and Evaluation, at (202) 366-1427. 

#

ii
320 FY 2008 Performance & Accountability Report

table of contents 

1. Enhancing Aviation Safety and Maintaining Confidence in FAA’s Ability To 

Provide Effective Oversight of a Rapidly Changing Industry ...........................1

2. Enhancing Mobility and Reducing Congestion in America’s Transportation 

System ............................................................................................................8

3. Developing a Plan To Address Projected Highway and Transit Funding 

Shortfalls .......................................................................................................14

4. Maximizing the Return on Current Highway and Transit Infrastructure 

Investments ...................................................................................................17

5. Operating the National Airspace System While Developing and Transitioning 

to the Next Generation Air Transportation System ........................................21

6. Protecting Against Increasing Cyber Security Risks and Enhancing the 

Protection of Personally Identifiable Information............................................26

7. Preventing Catastrophic Failures and Obsolescence in the Nation’s Aging 

Surface Transportation Infrastructure............................................................30

8. Improving Contract Operations and Maintaining Procurement Integrity ........34

9. Enhancing and Deploying Programs for Reducing the Serious Consequences 

of Surface Transportation Crashes................................................................38

Exhibit. Comparison of FY 2009 and FY 2008 Top Management Challenges ...44

Appendix. Department Response ......................................................................45
United States Department of Transportation 321

1

1. enhancing aviation safety and Maintaining confidence in 

faa’s ability to provide effective oversight of a rapidly 

changing industry 

Over the last several years, the aviation industry has experienced the safest period 

in history. This is due in part to the Federal Aviation Administration’s (FAA) 

oversight and the industry’s efforts to advance aviation safety. However, airline 

consolidation and downsizing continue to dramatically change the industry, and 

widely publicized lapses in FAA oversight in 2008 emphasize the need for FAA to 

continually adapt its oversight to further enhance safety. Key challenges for FAA 

include:

x maintaining confidence in FAA’s oversight of air carriers and certification and 

production of new segments of the aircraft industry;

x following through on longstanding commitments to improve oversight of 

external repair facilities; and

x improving runway safety by implementing new technologies, making airportspecific changes, and reinvigorating FAA initiatives.

Maintaining Confidence in FAA’s Oversight of Air Carriers and Certification 

and Production of New Segments of the Aircraft Industry 

A significant challenge for FAA will be to maintain confidence in its oversight of 

air carrier operations and aircraft certification and production. Our congressional 

testimonies in April before the House of Representatives and the Senate disclosed 

serious lapses in FAA’s oversight at Southwest Airlines (SWA). We also testified 

before the House Subcommittee on Aviation in September on FAA’s certification 

of the Eclipse Aviation EA-500 very light jet (VLJ). FAA actions in both of these 

instances appeared to focus primarily on promoting aviation over safety, which 

diminishes the public perception of FAA’s ability to provide objective oversight.

The importance of these issues was underscored by the Department’s recent 

actions to review FAA’s safety oversight. In response to the safety lapses at 

SWA, on May 1, 2008, the Secretary of Transportation commissioned a panel to 

examine FAA’s safety culture and its approach to safety management. In its final 

report, issued in September, the panel disclosed that it found FAA’s safety staff 

was “unambiguously committed” to its safety mission but acknowledged that a 

remarkable degree of variation in regulatory philosophies exists among inspectors, 

which could create widespread inconsistencies in regulatory decision making. 

Enhancing Oversight of Air Carrier Operations: In April and June, we 

reported that an FAA safety inspector had an overly collaborative relationship 

with SWA and violated FAA safety directives by permitting the air carrier to 

operate 46 planes without required inspections for fuselage cracks. Although FAA 
322 FY 2008 Performance & Accountability Report

2

identified the situation as early as April 2007, it did not attempt to determine the 

root cause of the safety issue nor initiate enforcement action against the carrier 

until November 2007. This review also identified concerns regarding FAA’s 

failure to protect whistleblowers from retaliation. For example, after a 

whistleblower voiced concerns about SWA to FAA, an anonymous hotline 

complaint—which was never substantiated—was lodged against him, and FAA 

removed the whistleblower from duty for 5 months while he was under 

investigation. In 2007, we raised similar concerns regarding maintenance 

practices at Northwest Airlines, where FAA reviews of an inspector’s safety 

concerns overlooked key findings identified by other inspectors. 

Our work at SWA and other carriers has also found weaknesses in FAA’s national 

program for risk-based oversight, the Air Transportation Oversight System 

(ATOS). At SWA, multiple missed ATOS inspections allowed safety directive 

compliance issues in SWA’s maintenance program to go undetected for several 

years. At the time of the SWA disclosure, FAA inspectors had not completed 

21 key inspections in at least 5 years. 

Over the past 6 years, we have identified system-wide problems with ATOS, such 

as inconsistent inspection methods across FAA field offices and incomplete 

inspections. We recommended, among other things, that FAA strengthen its 

national oversight and accountability to ensure consistent and timely ATOS 

inspections. However, FAA still has not fully addressed this concern. We have 

recommended other actions to help maintain public confidence in FAA’s oversight 

of air carriers. FAA has agreed to some of these, such as creating a national 

review team to conduct quality assurance reviews of FAA’s air carrier oversight 

and implementing a process to monitor field office ATOS inspections. However, 

FAA has disagreed with other key recommendations, including the following: 

x Periodically rotating supervisory inspectors to ensure reliable and objective air 

carrier oversight. FAA has stated that it is not financially feasible to rotate 

inspectors annually. Given budget constraints, FAA should consider other 

alternatives to ensure objective oversight. Possible alternatives include 

(1) incorporating assessments into its air carrier evaluation program to determine 

if an overly collaborative relationship exists between inspectors and the air 

carriers they oversee and (2) modifying its inspector training program to include 

additional sensitivity and integrity training for air carrier relations.

x Establishing an independent organization to investigate safety issues identified 

by FAA employees. FAA states that it has already deployed a new internal 

hotline for employees to resolve safety issues without fear of repercussion. 

However, we question the effectiveness of the hotline, which remains under the 

control of the Aviation Safety line of business. The serious weaknesses we 

identified underscore the need for an independent organization. In fact, FAA has 
United States Department of Transportation 323

3

an independent organization to investigate employee complaints about its Air 

Traffic Organization. This group is staffed with former controllers and other 

technical experts. It recently worked with our office to conduct a high-profile 

investigation at the Dallas/Fort-Worth Terminal Radar Approach Control 

facility. The investigation substantiated serious whistleblower allegations that 

facility management underreported controller operational errors (when a 

controller fails to maintain separation between two aircraft), which created, at a 

minimum, the appearance of complicity. 

Improving Certification and Production Oversight of New Segments of the 

Aircraft Industry: Another challenge for FAA will be improving its oversight of 

new segments of the aircraft industry. Introduction of VLJs into the National 

Airspace System is a key change occurring in the industry and is expected to 

continue over the next 2 decades. VLJs are small aircraft with advanced 

technologies that cost less than other business jets. In 2006, FAA certified the first 

VLJs, including the Eclipse EA-500. While the industry was generally excited 

about the introduction of this jet, some FAA employees were also concerned that it 

was pushed through the certification process too quickly. 

A significant issue overshadowing FAA’s certification of the EA-500 was the 

inherent risks associated with a new aircraft utilizing new technology, produced by 

a new manufacturer, and marketed with a new business model for its use. Because 

of these factors, FAA should have exercised heightened scrutiny in certifying the 

aircraft. Instead, our investigation found a combination of FAA actions or 

inactions indicating that the Agency expedited the certification processes for the 

EA-500 to meet a September 2006 deadline. 

More importantly, because the EA-500 has advanced avionics and turbine engine 

technology typical of large transport aircraft combined with the light weight of 

smaller, private aircraft, it did not easily fit into FAA’s existing certification 

framework. FAA chose to certify the EA-500 and other VLJs using certification 

requirements for general aviation aircraft rather than the more stringent 

certification requirements for larger transport aircraft.

A September 2008 Special Certification Review conducted by an independent 

FAA team concluded that the aircraft met applicable certification requirements for 

the four areas reviewed. However, FAA managers acknowledged that the general 

aviation certification requirements were inadequate to address the advanced 

concepts introduced on the aircraft. We understand that FAA is developing a 

Notice of Proposed Rulemaking (NPRM) to clarify certification requirements for 

VLJs. Given the issues surrounding the EA-500 certification, FAA should 

expedite the NPRM to allay future concerns with this expanding industry segment. 
324 FY 2008 Performance & Accountability Report

4

Following Through on Longstanding Commitments To Improve Oversight 

of External Repair Facilities 

FAA continues to face challenges in identifying where critical aircraft 

maintenance is performed. A key issue is that FAA’s risk-based oversight system 

does not include critical repairs performed by non-certificated repair facilities. 

FAA set up a system in fiscal year (FY) 2007 for air carriers and repair stations to 

report the volume of outsourced repairs. However, in our September 2008 report, 

we found that FAA’s system was inadequate because it did not require mandatory 

air carrier reporting, an inclusive air carrier listing of all repair stations performing 

repairs to critical components, or FAA inspector validation.

We also raised concerns with FAA’s guidance planned for issuance by the end of 

calendar year 2008. We found that the guidance, as currently drafted, does not 

require air carriers to report volume data for all repairs of critical components and 

inspectors to validate the data. Without this information, FAA cannot be assured 

that it has the precise and timely information needed to determine where it should 

focus its inspections. FAA is revising the guidance to address these issues.

Gathering adequate data to target inspections is important since FAA does not 

have a specific policy governing when inspectors should initially visit repair 

stations performing substantial maintenance for air carriers. Instead, FAA allows 

inspectors to rely on the air carriers’ initial audits as a basis for approving those 

facilities for air carrier use. As a result, we found significant delays between 

FAA’s initial approval of repair stations and its first inspections at those locations. 

For example, during a 3-year period, FAA inspectors inspected only 4 of its 

15 substantial maintenance providers used by 1 air carrier. Among those 

uninspected was a major foreign engine repair facility that FAA inspectors did not 

visit until 5 years after it had received approval for carrier use—even though it had 

worked on 39 of the 53 engines repaired for the air carrier.

FAA needs to require its inspectors to conduct initial and follow-up on-site 

inspections of substantial maintenance providers to assess whether the 

maintenance providers comply with air carriers’ procedures. In addition to their 

own inspections, FAA inspectors must ensure that air carriers and repair stations 

have strong audit systems to correct identified deficiencies, as FAA relies heavily 

on air carriers’ oversight. In response to our report, FAA is reviewing its 

procedures and processes for opportunities to strengthen its guidance. However, it 

does not expect to complete these reviews until mid-2009. 

Improving Runway Safety by Implementing New Technologies, Making 

Airport-Specific Changes, and Reinvigorating FAA Initiatives 

Runway incidents continue to be a substantial threat to safety. The last fatal 

commercial aircraft accident in the United States (in 2006) occurred because the 

pilots of Comair flight 5191 attempted to take off from the wrong runway. A 
United States Department of Transportation 325

5

specific concern is runway incursions (any incident involving an unauthorized 

aircraft, vehicle, or person on a runway).1

 Since 2003, the number of runway 

incursions has increased again, reaching a high of 370 in FY 2007—a 13-percent 

increase over FY 2004 (see figure 1-1). Under FAA’s new definition for 

categorizing runway incursions, runway incursions continue to rise even more 

dramatically—a 39-percent increase since FY 2004 (see figure 1-2). 

Many see new technology as a key runway safety solution. However, our reviews 

of three major FAA acquisitions2 for improving runway safety disclosed serious 

concerns about what can be effectively deployed within the next several years. 

For example, for the Airport Surface Detection Equipment-Model X—a ground 

surveillance system intended to alert controllers to potential ground collisions—

FAA may not meet its goal to commission all 35 systems by 2011 or achieve all 

planned safety benefits. 

The uncertain timeline and emerging risks of FAA’s runway safety technologies 

underscore the need for other near-term solutions. In May 2007, we reported on 

runway safety efforts at four airports that had experienced a surge in runway 

incursions: Boston, Chicago, Philadelphia, and Los Angeles. All four airports had 

made relatively low-cost, simple changes to their infrastructure and procedures 

that helped reduce the risk of runway incursions at their locations. These included 

improving airport lighting, signage, and runway and taxiway markings (before 

FAA’s June 2008 deadline). In addition, the airport operators and FAA managers 

began tightly controlling the testing and certification of airfield drivers.

1

 Effective October 1, 2007, FAA began categorizing runway incursions using the International Civil Aviation 

Organization (ICAO) definition. The new definition of runway incursions includes incidents that were previously 

defined by FAA as “surface incidents” (where a potential conflict did not exist). 2

 Airport Surface Detection Equipment-Model X (ASDE-X), Automatic Dependent Surveillance-Broadcast (ADS-B), 

and Runway Status Lights. 

Figure 1-2. Runway Incursions,

New Definition, FY 2004 to FY 2008

891

816

779

730

1,012*

0 250 500 750 1,000 1,250

fy 2008 

fy 2007

fy 2006

fy 2005

fy 2004

Source: FAA

* Preliminary

Figure 1-1. Runway Incursions, 

Originial Definition, FY 1999 to FY 2007

330

327

326

323

339

407

405

329

370

0 100 200 300 400 500

fy 2007

fy 2005

fy 2003

fy 2001

fy 1999

Source: FAA
326 FY 2008 Performance & Accountability Report

6

FAA convened a task force in August 2007 to address runway safety issues. The 

group agreed on a short-term plan to improve runway safety, which includes 

conducting safety reviews at airports based on runway incursion and wrong 

runway departure data, improving airport signage and markings at the 75 busiest, 

medium- to large-sized airports, and reviewing cockpit and air traffic clearance 

procedures. These are the type of “airport-specific” actions that are needed; the 

key now will be maintaining commitment and follow through on the part of all 

users.

FAA must also remain focused on reinvigorating national runway safety 

initiatives. In response to the surge in runway incursions between FY 1999 and 

FY 2001, FAA took national actions to prioritize runway safety, which 

significantly decreased incidents between 2001 and 2003 (from 407 to 323). 

However, some national initiatives for promoting runway safety have 

subsequently waned as FAA met its overall goals for reducing runway incursions.

For example, FAA established the Runway Safety Office in 2001 to provide 

central oversight and accountability for runway safety initiatives throughout the 

Agency. However, at the time of our review, that office had not had a permanent 

director for almost 3 years and had undergone significant reorganization and staff 

reductions. FAA has since hired a director for this office and plans to reinstate its 

National Plan for Runway Safety to reduce runway incursions. Sustained 

commitment and executive-level attention will be key to the success of these 

initiatives.

Near-Term Focus Areas for the Transition to a New Administration 

Aviation safety is and must remain FAA’s top priority. Key focus areas for the 

short term include the following actions. 

x Bolster the integrity of FAA’s airline oversight by protecting whistleblowers, 

improving risk-based systems for targeting inspector resources, and 

establishing mechanisms at the national level to provide quality assurance and 

independent assessments of regional inspection efforts. 

x Strengthen the certification process for new VLJs by clarifying certification 

requirements.

x Advance risk-based oversight of outsourced maintenance providers (both 

foreign and domestic) by developing and implementing a system for 

determining how much and where aircraft maintenance is performed. 

x Reinvigorate efforts with strong national leadership to enhance runway safety 

through revised procedures and airport-specific changes at high-risk locations 

while waiting for new technologies to be deployed. 
United States Department of Transportation 327

7

For further information regarding the issues identified in this chapter, please 

contact Lou Dixon, Assistant Inspector General for Aviation and Special 

Programs, at (202)-366-0500. The following related reports and testimonies can 

also be found on the OIG website at http://www.oig.dot.gov.

x Review of FAA’s Oversight of Airlines and Use of Regulatory Partnership 

Programs

x Testimony before the House Subcommittee on Aviation: FAA’s Certification of 

the Eclipse EA–500 Very Light Jet 

x FAA’s Actions Taken To Address Allegations of Unsafe Maintenance Practices 

at Northwest Airlines 

x Assessment of FAA’s Risk-Based System for Overseeing Aircraft 

Manufacturers’ Suppliers 

x Review of Air Carriers’ Use of Non-Certificated Repair Stations 

x Progress Has Been Made in Reducing Runway Incursions, but Recent 

Incidents Underscore the Need for Further Proactive Efforts 

x Air Carriers Outsourcing of Aircraft Maintenance
328 FY 2008 Performance & Accountability Report

8

2. enhancing Mobility and reducing congestion in america’s 

transportation system 

Congestion-related problems have impacted all modes of transportation; the 

Department estimates that congestion costs America almost $200 billion per year. 

Flight delays and cancellations have continued to be a concern in 2008, and the 

Nation’s highways continue to experience record levels of congestion. The 

Department has made progress in implementing several congestion-related 

initiatives this past year, and it is imperative that these remain a key Federal 

priority across all modes. For example, the Secretary recently released a reform 

plan that proposes a renewed Federal focus on maintaining and improving 

performance on the Interstate Highway System, addressing urban congestion, 

giving state and local leaders greater flexibility to invest in their transit and 

highway priorities, and creating accountability measures to ensure investments in 

transportation will actually deliver results.

The Department has also taken steps to ease aviation congestion by reducing 

flights in the New York City area and establishing new routes through airspace 

redesign and air traffic control procedures. The Department is also building new 

runways nationwide. However, while the Department decides where to invest 

Federal funds to operate and expand the air traffic control system, state and local 

authorities select most highway and transit projects for funding. Therefore, the 

Department will need to work with these stakeholders to target Federal 

infrastructure funding to congestion relief. Specific challenges in reducing 

congestion include: 

x reducing delays and improving airline customer service as the airlines struggle 

with higher fuel costs, 

x keeping airport infrastructure and airspace projects on track, and 

x improving intercity passenger rail’s efficiency and viability as a transportation 

alternative.

Reducing Delays and Improving Airline Customer Service as the Airlines 

Struggle With Higher Fuel Costs

Reducing delays, particularly at already congested airports, and improving airline 

customer service are important issues facing the Nation. Peak-year 2007 trends 

continued into the first 6 months of 2008, with more than 1 in 4 flights 

(29 percent) delayed or cancelled. Not until July and August did on-time 

performance show a substantial improvement compared to the same months last 

year. On the basis of the summer improvements, year-to-date delays (through 

August of 2008) at the 55 airports tracked by the Federal Aviation Administration 

(FAA) declined 7.3 percent from the same period in 2008. During the summer of 

2008, double-digit reductions in delays were experienced at 45 of the 55 airports. 
United States Department of Transportation 329

9

Notable exceptions were Newark, where delays were up slightly; LaGuardia; 

John F. Kennedy (JFK); and Chicago O’Hare, where delays were down only 

5.3 percent, 4.9 percent and 4.5 percent, respectively. 

The decline in delays primarily stems from higher fuel costs and is expected to 

continue through the remainder of the year. Specifically, to offset rising fuel 

costs, airlines have reduced flight schedules and taken aircraft out of service, and 

this has provided some relief from delays. In our view, however, reducing 

capacity and increasing load factors can also result in more passenger 

inconvenience and dissatisfaction with customer service. With more seats filled, 

air carriers have fewer options to accommodate passengers from cancelled flights 

or missed connections caused by flight delays. 

To explore solutions to congestion and delays in the New York City area, the 

Secretary formed the New York Aviation Rulemaking Committee last September. 

The Secretary also directed FAA to negotiate with the airlines and established 

temporary flight caps at JFK and Newark airports and proposed auctioning a 

limited number of take-off and landing opportunities (known as “slots”) at JFK, 

LaGuardia, and Newark airports. While limiting the number of flights may reduce 

congestion in the short term, it is not an ideal long-term solution. 

The current situation provides the Department with an important opportunity to 

revise its demand management policies, which are very controversial issues. Slot 

auctions in particular are strongly opposed by stakeholders, including the airlines 

and the operator of the New York area airports. Moreover, the Government 

Accountability Office recently concluded that FAA does not have the authority to 

auction arrival and departure slots.3

 The Government Accountability Office also 

stated that if FAA auctions slots without obtaining the necessary authority and 

retains and uses the proceeds, it would be in violation of the Anti-Deficiency Act. 

The Justice Department disagreed and found no potential for violation of the AntiDeficiency Act. FAA issued its final rules to auction slots at the three New York 

airports, which will go into affect in January 2009. We believe the Department 

needs to further study the pros and cons of each demand management option, 

including who benefits and who bears the cost of implementing each option. 

To improve airline customer service, the Department should continue moving 

forward with initiatives to improve the accountability, enforcement, and protection 

afforded air travelers. These initiatives include developing rulemakings to 

enhance passenger protection and implementing the necessary changes in the 

airlines’ on-time performance reporting to capture all long, on-board delays and 

3

 See GAO letter to Congressional Requestors, Federal Aviation Administration—Authority to Auction Airport Arrival 

and Departure Slots and to Retain and Use Auction Proceeds (September 30, 2008, B-316796). 
330 FY 2008 Performance & Accountability Report

10

plans to develop model contingency plans for minimizing the impact of long, onboard delays. 

Keeping Airport Infrastructure and Airspace Projects On Track 

The long-term solution to increasing capacity and reducing delays depends largely 

on expanding capacity through the Next Generation Air Transportation System 

(NextGen). However, NextGen is not targeted until the 2025 timeframe. While 

there is no “silver bullet” for addressing delays, several near-term initiatives can 

help relieve congestion. According to FAA, building new runways provides the 

largest increases in capacity. Currently, there are eight runway projects underway 

at seven major airports, which are expected to be complete by 2012. FAA 

estimates that runway projects at Washington-Dulles, Chicago O’Hare, and Seattle 

have the potential to accommodate an additional 300,000 operations annually. 

Table 2-1 provides details on the eight runway projects. 

Table 2-1. Current Airfield Construction Projects

Airports

Airfield Construction 

Projects Est. Completion Cost Estimate 

Philadelphia Runway Extension March 2009 $65 million 

Seattle-Tacoma Runway November 2008 $1.1 billion 

Washington-Dulles Runway November 2008 $356 million 

Chicago O’Hare Runway (9L/27R) 

Runway (10C/28C) 

November 2008 

2012 $1.7 billion 

Charlotte Runway February 2010 $300 million 

Dallas Ft. Worth End Around Taxiway December 2008 $79 million 

Boston Centerfield Taxiway November 2009 $55 million 

Airspace redesign efforts are critical to realizing the full benefits of runways and 

can also enhance capacity without new infrastructure. Currently, FAA is pursuing 

seven airspace redesign projects nationwide, including a major but controversial 

effort to revamp airspace in the New York/New Jersey/Philadelphia area. 

However, FAA’s airspace redesign efforts still do not function as a “national” 

program since FAA facilities are now using their own resources to redesign 

airspace without coordinating with Headquarters. FAA needs to complete 

guidelines for managing airspace projects across the Agency’s lines of business 

and establish realistic funding profiles for airspace projects. 

Another important near-term initiative is establishing new routes that rely on 

equipment onboard aircraft. These new routes rely on procedures (called Area 

Navigation/Required Navigation Performance) that allow aircraft to fly more 

precise routes, which reduces fuel burn. At this stage, the challenge facing FAA is 

shifting from localized operations to networking city pairs, like Washington, DC, 
United States Department of Transportation 331

11

and Chicago, IL, which will require considerable simulation modeling as well as 

close coordination with airspace redesign efforts and stakeholders.

Improving Intercity Passenger Rail’s Efficiency and Viability as a 

Transportation Alternative

Intercity passenger rail is an integral part of America’s transportation system, 

particularly in light of growing highway and aviation congestion and rising fuel 

prices. Amtrak, the Nation’s intercity passenger rail service provider, is 

experiencing record revenue and ridership. However, given the constrained 

Federal funding environment and Amtrak’s poor on-time performance, Amtrak’s 

ability to continue to grow and reduce congestion remains uncertain.

While Amtrak has recently made moderate improvement in its financial 

performance, its operational reform efforts have waned. Amtrak achieved 

$61 million in reform savings in fiscal year (FY) 2006 and $53 million in 

FY 2007, but it only budgeted $32 million in savings for FY 2008. As limited 

Federal funds are allocated to operating subsidies, it becomes more difficult to 

provide sufficient capital funds to improve Amtrak’s performance and prepare for 

its long-term expansion plans. The Department needs to ensure that Amtrak 

continues its efforts to implement strategic reform initiatives that reduce its 

reliance on Federal subsidies. 

Amtrak’s poor on-time performance undermines the viability of intercity 

passenger rail as an option for travelers and weakens Amtrak’s financial position 

by reducing its revenues and increasing its operating costs. Between FY 2003 and 

FY 2007, Amtrak’s on-time performance off the Northeast Corridor (NEC) for 

long-distance routes fell from an average of only 51 percent to 42 percent; for nonNEC corridor routes, on-time performance fell from an average of 76 percent to 

66 percent.

We recently reported that there are several root causes of Amtrak train delays that, 

if addressed, would improve Amtrak’s on-time performance and financial 

viability. Specifically, Amtrak trains are delayed by (1) freight railroad 

dispatching practices, some of which deny Amtrak trains their statutory right to 

preference in the use of freight rail tracks and infrastructure; (2) track maintenance 

practices by the freight railroads and the resulting track speed restrictions; 

(3) insufficient track capacity; and (4) external factors beyond the freight 

railroad’s control, such as weather. 

Achieving reliable on-time performance would substantially improve Amtrak’s 

finances. For example, an 85-percent on-time performance off the NEC in FY 

2006 would have reduced Amtrak’s operating loss by 30 percent, or by 

$136.6 million (see figure 2-1 below). 
332 FY 2008 Performance & Accountability Report

12

Figure 2-1. Calculation of Net Effects at 85 Percent On-Time Performance 

 Net Perform. 

Payments 

 ($14.1) 

million 

NET GAINS 

$136.6 million 

$50 million $100 million $150 million 

Cost Savings 

$39.3 million 

Additional Revenues

$111.4 million 

Numbers may not add up 

due to rounding. 

Source: OIG analysis

The Department needs to work with the freight railroads (over whose track 

Amtrak travels) and Amtrak to develop and implement comprehensive route 

management plans to improve service reliability on poor-performing Amtrak 

routes and seek additional funding for rail capacity expansion. The Department 

must also work with states that are making their own capital investments in freight 

rail capacity to improve the linkage between those investments and freight 

railroads’ commitment to enhancing Amtrak train on-time performance. 

Near-Term Focus Areas for the Transition to a New Administration 

Given the importance of transportation to the Nation’s economy and the impact of 

congestion, several efforts will be needed to: 

x keep short-term FAA capacity initiatives on track, including new runways and 

airspace redesign efforts, and 

x move forward with initiatives to improve the accountability, enforcement, and 

protection afforded air travelers. 
United States Department of Transportation 333

13

For further information regarding the issues identified in this chapter, please 

contact David Tornquist, Assistant Inspector General for Rail and Maritime 

Program Audits and Economic Analysis, at (202)-366-9970. The following 

related reports and testimonies can also be found on the OIG website at 

http://www.oig.dot.gov.

x FAA Short-Term Capacity Initiatives 

x Use of the National Airspace System 

x Aviation Industry Performance 

x Quarterly Reports on Amtrak’s FY 2008 Operational Reforms Savings and 

Financial Performance 

x Analysis of the Benefits of High–Speed Rail on the Northeast Corridor 

x Amtrak’s Future Outlook and Budgetary Needs 

x Root Causes of Amtrak Train Delays

x Effects of Amtrak’s Poor On–Time Performance

x Follow-Up Review: Performance of U.S. Airlines in Implementing Selected 

Provisions of the Airline Customer Service Commitment 

x Actions Needed To Improve Airline Customer Service and Minimize Long, OnBoard Delays 

x Status Report on Actions Underway To Address Flight Delays and Improve 

Airline Customer Service
334 FY 2008 Performance & Accountability Report

14

3. Developing a plan to address projected highway and transit 

funding shortfalls

The Department faces significant challenges regarding funding for Federal 

highway and transit programs. In the near term, the Department must take steps to 

prevent recurrence of this summer’s Highway Trust Fund (HTF) cash flow crisis. 

In the long term, it must work with Congress to enact a comprehensive funding 

framework that addresses revenue shortfalls in the HTF that may reduce future 

Federal highway spending. In addition, the Department needs to continue 

developing and encouraging innovative funding solutions for surface 

transportation infrastructure. The current surface reauthorization expires at the 

end of fiscal year (FY) 2009. The specific challenges the Department faces 

regarding highway and transit funding include: 

x ensuring the highway trust fund remains solvent and 

x developing a comprehensive highway funding framework for the future. 

Ensuring the Highway Trust Fund Remains Solvent 

To its credit, the Department recognized the urgency of a cash flow crisis in the 

HTF in August and requested Congress to approve legislation that would transfer 

$8 billion from the General Fund to the HTF. While the Department successfully 

managed HTF cash flow to minimize negative impacts on state departments of 

transportation, pending transfer of the $8 billion from the General Fund, it is 

uncertain how long this infusion of funds will last. The Department’s ability to 

pay bills submitted by states for authorized costs incurred depends on the amount 

of funds in the HTF. That balance largely depends on Federal motor fuel excise 

tax receipts, which have been declining steadily in response to the unprecedented 

increases in fuel prices. Essentially, as fuel prices increase, motorists are cutting 

back on their driving, purchasing more fuel-efficient vehicles, and buying less 

gasoline, thereby generating fewer receipts for the HTF (see figure 3-1 below).
United States Department of Transportation 335

15

Figure 3-1. Highway Trust Fund – Highway Account Balance

(FY 2005 – FY 2008) 

0

10

20

30

40

50

2005 2006 2007 2008 (prelim.)

0

2

4

6

8

10

12

 (w/o $8.0 Bil. transfer)

Revenues Disbursements Trust Fund Balance

Projected Revenues Projected Disbursements Trust Fund Balance

$9.1 Billion closing balance after $8.0 Billion

transfer from the General Fund

HTF Revenues and Disbursements 

($ Billions) 

Trust Fund Balance 

($ Billions) 

$1.1

Billion 

 Source: FHWA for actual Trust Fund revenues and disbursements and the President’s Budget for projected 

revenues and disbursements. 

Compounding the Department’s near-term challenge is the fact that it does not 

directly control the rate at which funds are drawn from the HTF. Instead, the pace 

of state highway construction drives when states submit bills to the Department to 

be paid from the HTF. While the Department has taken steps to better manage the 

cash in the HTF, the potential exists for a recurrence of this summer’s HTF 

insolvency crisis before a long-term solution can be reached. Therefore, the 

Department needs to maintain its focus on the HTF cash flow.

Developing a Comprehensive Highway Funding Framework for the Future 

The current highway authorization expires at the end of FY 2009. The 

Department has issued a proposal to reform how surface transportation decisions 

and investments are made. However, it has yet to propose a level of highway 

funding for the reauthorization or a means for supporting that level of funding. 

Historically, surface transportation funding has increased in successive 

reauthorizations:
336 FY 2008 Performance & Accountability Report

16

x $155 billion authorized in the Intermodal Surface Transportation Efficiency 

Act4

 (ISTEA). 

x $218 billion authorized in the Transportation Equity Act for the 21st Century5

(TEA-21)—a 41 percent increase.

x $286 billion authorized in the Safe, Accountable, Flexible, Efficient 

Transportation Equity Act: A Legacy for Users6

 (SAFETEA-LU)—a 

31 percent increase.

Surface transportation funding levels are generally determined by projected 

receipts into the HTF. The projections of HTF receipts for the upcoming surface 

reauthorization time period are unlikely to support current funding levels, let alone 

increased funding levels. The growth in highway construction and maintenance 

costs, which we reported on last year, and the growing demand for higher levels of 

surface infrastructure investment raise significant questions regarding the 

adequacy of a funding structure that heavily relies on the 18.4 cents per gallon 

Federal gasoline tax. The Department must help develop a consensus among the 

various stakeholders and Congress on what an appropriate level of Federal surface 

infrastructure investment should be and how that investment should be financed. 

Alternative or supplemental funding mechanisms that might be considered include 

increasing the current fuel tax or imposing fees on vehicle miles traveled, vehicle 

registration or sales, new tolls, or customs duties. Each revenue source would 

have a significant impact on highway users and the economy, which the 

Department would need to consider carefully. 

Near-Term Focus Area for the Transition to a New Administration 

There is a sense of urgency facing the Department because the current surface 

transportation reauthorization expires at the end of this fiscal year. The 

Department needs to monitor the solvency of the Highway Trust Fund until a 

long-term financing solution can be implemented. 

For further information regarding the issues identified in this chapter, please 

contact David Tornquist, Assistant Inspector General for Rail and Maritime 

Program Audits and Economic Analysis, at (202)-366-9970. The following 

related report can also be found on the OIG website at http://www.oig.dot.gov.

Growth in Highway Construction and Maintenance Costs 

4

 The Intermodal Surface Transportation Efficiency Act (ISTEA), Pub. L. No. 102-240 (1991). This law expired in 

1997 and was followed by TEA-21 and SAFETEA-LU. 5

 The Transportation Equity Act for the 21st Century (TEA-21), Pub. L. No. 105-178 (1998). 

6

 Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), Pub. L. No.

109-59 (2005). This law expires September 30, 2009. 
United States Department of Transportation 337

17

4. Maximizing the return on current highway and transit 

infrastructure investments 

As infrastructure needs are increasing faster than funding resources, the 

Department must maximize the return on its current Federal surface transportation 

investments. This is a critical priority because the Highway Trust Fund (HTF), 

which provides most of the funding for highway and transit projects, is facing 

insolvency earlier than expected. At the same time, the Nation’s roadways are 

already heavily congested and demand for public transportation is growing. The 

Federal Highway Administration’s (FHWA) and the Federal Transit 

Administration’s (FTA) early and continuous oversight of states’ project and 

financial management practices are key to controlling costs and schedules; 

avoiding construction quality problems; and preventing and detecting fraud, waste, 

and abuse. Considering the current tight fiscal environment at all levels of 

government, the Department needs to focus on: 

x strengthening stewardship over the Federal Government’s highway investment, 

x providing strong oversight of major transit projects to maximize limited 

funding, and 

x ensuring continued vigilance in protecting federally funded surface 

transportation projects from fraud. 

Strengthening Stewardship Over the Federal Government’s Highway 

Investment

To maximize the return on Federal highway funding provided to states (over 

$41 billion in fiscal year [FY] 2008), FHWA must continue to provide strong 

stewardship of major highway projects. To its credit, FHWA has enhanced its 

oversight of major projects and states’ management practices in recent years, but 

sustained focus is needed to ensure that these efforts attain their goals. This task is 

even more imperative since HTF revenues are falling short of meeting an 

overwhelming demand for highway infrastructure funding.

In the past, we have reported on major oversight deficiencies on highway projects, 

such as Boston’s Central Artery/Tunnel Project. For example, over the years, the 

finance plans for this project did not comply with FHWA guidance and 

significantly understated project costs. Moreover, our work on the Central 

Artery/Tunnel Project’s Stem to Stern Safety Review, which was prompted by a 

tunnel ceiling collapse that killed a motorist, showed that major problems in 

construction quality may have been prevented with greater oversight at the Federal 

and state levels. We have learned lessons from this troubled, high-profile project. 
338 FY 2008 Performance & Accountability Report

18

To strengthen oversight of highway funds, Congress made several important 

changes in the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A 

Legacy for Users. 7

x One major change involved lowering the definition of major projects from

$1 billion to $500 million. As a result, FHWA must provide enhanced 

oversight to projects now defined as major projects, including a review of the 

required finance plan. A finance plan is an important oversight tool that 

provides managers and the public with information on how much a project is 

expected to cost, when it will be completed, whether adequate funding is 

committed, and whether there are risks to completing the project on time and 

within budget.

x Another major change involved adding a requirement for major highway 

projects to have project management plans as well as finance plans. Project 

management plans serve as a “roadmap” to help the project team deliver a 

project in an efficient and effective manner by clearly defining roles, 

responsibilities, processes, and activities. 

FHWA needs to strengthen the use of these tools and remain vigilant in its 

oversight of major highway projects. 

Providing Strong Oversight of Major Projects To Maximize Limited Transit 

Funding

FTA has 15 New Starts projects with approved full funding grant agreements 

totaling $9.2 billion8

 in various stages of design or construction across the country 

that are seeking Federal funding in the FY 2009 New Starts report. FTA selects 

relatively few projects for New Starts each year. However, demand for New 

Starts funding is high and will likely continue to grow if the recent surge in transit 

ridership continues. FTA must ensure that its New Starts evaluation process 

selects the most promising projects. Accordingly, FTA must maintain a rigorous 

evaluation process, with particular emphasis in two key areas: 

x First, FTA must ensure that the capital cost estimate for each proposed project 

is credible and complete; this is a key element in determining whether a project 

is cost effective. For example, after assessing cost estimates for the Dulles 

Corridor Metrorail Project, which had been in the New Start pipeline for years, 

two independent consultants for FTA determined that the project sponsor 

7 Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), Pub. L. No.

109-59 (2005). This law expires September 30, 2009. 8

 FTA, “Annual Report on Funding Recommendations: Proposed Allocations of Funds for Fiscal Year 2009,” 

February 2008. FTA also had 16 New Starts projects that are in the preliminary engineering or final design stages 

(with total requested Federal funding of $9 billion). 
United States Department of Transportation 339

19

underestimated schedule delays; these delays increased the overall cost 

estimate to almost $3 billion—doubling an earlier estimate. Earlier scrutiny of 

cost estimates might have helped FTA avoid this situation.

To its credit, FTA is now requiring its project management oversight 

contractors to review cost estimates earlier in the New Starts process. FTA has 

also implemented a program establishing a consistent format for estimating, 

reporting, and managing capital costs on New Starts projects. The key to 

success is ensuring effective implementation across the country. 

x Second, FTA must carefully evaluate whether each New Starts grantee has 

demonstrated stable and dependable financing sources to construct, maintain, 

and operate a proposed transit system or extension as well as the existing 

transit system. 9

 This is important since the New Starts program generally 

provides only a maximum of 50 percent of a project’s funding. In light of tight 

economic conditions at all levels of government, FTA must be vigilant in 

scrutinizing the financial plans of local project sponsors.

FTA must also provide strong oversight to keep major transit projects on schedule 

and within budget during construction by exercising sound project and financial 

management. In particular, FTA must focus on the Lower Manhattan Recovery 

Projects in the coming year. These high priority projects (which are separate from 

the New Starts program) constitute a $4.55 billion Federal investment to 

reconstruct and enhance New York City’s transportation infrastructure after the 

September 11, 2001, terrorist attacks.

The Lower Manhattan Recovery Projects have experienced significant challenges, 

including cost estimate increases of as much as $800 million on the Permanent 

Port Authority-Trans Hudson Terminal Project. These projects are also being 

constructed in a difficult environment with large escalations in material and fuel 

costs and contractor shortages. The initial goal was to keep the projects as close to 

100 percent Federal funding as possible and within an overall cap, which now 

appears unlikely.

Consequently, local grantees will need to provide the remaining funding or reduce 

the scope of one or more of the projects, thereby potentially diminishing the 

benefits that the projects would provide to travelers in New York City. In the 

coming year, FTA must fully exercise its oversight authority and continue to work 

with grantees to minimize further estimated cost increases and schedule delays and 

address project management problems. 

9

 Local financial commitment is a major criterion that FTA uses to determine which New Starts projects are ultimately 

approved for a full funding grant agreement and therefore able to begin construction. 
340 FY 2008 Performance & Accountability Report

20

Ensuring Continued Vigilance in Protecting Federally Funded Surface 

Transportation Projects From Fraud 

To their credit, many senior Department leaders have taken seriously their 

responsibility to aggressively combat fraud, waste, abuse, and other irregularities. 

Specifically, during the past year, the FHWA and FTA Administrators have 

demonstrated support for our increased fraud awareness and education outreach 

efforts. Despite these efforts, continued vigilance at all levels of the Department 

will be needed to ensure that limited transportation funding is protected from 

fraud. During FY 2008, our highway- and transit-related contract and grant fraud 

investigations yielded 75 indictments, 45 convictions, nearly $500 million in 

monetary recoveries, and 28 suspensions or debarments. These investigations 

involved schemes such as bid rigging, price fixing, product substitution, bribery 

and kickbacks, conflicts of interest, false statements and false claims, labor and 

materials overbilling, and disadvantaged business enterprise fraud.

Near-Term Focus Area for the Transition to a New Administration 

To help maximize Federal infrastructure investments, we believe the Department 

will need to provide vigilant oversight of the $4.55 billion Lower Manhattan 

Recovery Projects to minimize further estimated cost increases and schedule 

delays.

For further information regarding the issues identified in this chapter, please 

contact Joseph Comé, Assistant Inspector General for Highway and Transit 

Audits at (202)-366-5630. The following related reports and testimonies can 

also be found on the OIG website at http://www.oig.dot.gov.

x Baseline Report on Major Project Monitoring of the Dulles Corridor Metrorail 

Project

x Report on the Central Artery/Tunnel Project May 2007 Finance Plan Update 

x Initial Assessment of the Central Artery/Tunnel Project Stem to Stern Safety 

Review

x Audit of FTA’s Oversight of Pioneer Valley Transit Authority Electric Bus 

Cooperative Agreement 

x Lower Manhattan Reconstruction: Lessons Learned from Large 

Transportation Projects 

x Baseline Report on the Lower Manhattan Recovery Projects 
United States Department of Transportation 341

21

5. operating the national airspace system While Developing and 

transitioning to the next generation air transportation system 

The Federal Aviation Administration (FAA) will face challenges in balancing the 

needs of the current National Airspace System, which is showing signs of strain, 

with future training, technological, and facility requirements. However, FAA does 

not have a long-term financing mechanism in place, and Congress has established 

stop-gap measures until agreement on funding aviation programs can be reached. 

How FAA is funded is clearly a policy call for Congress. The specific 

management challenges for the Department and FAA in the coming years include: 

x hiring and training 17,000 new controllers through 2017, 

x keeping existing projects on track and reducing risk with the Next Generation 

Air Transportation System (NextGen), and 

x sustaining FAA’s aging facilities. 

Hiring and Training 17,000 New Controllers Through 2017 

Over the next decade, FAA plans to hire and train nearly 17,000 controllers to 

replace those who were hired after the 1981 strike and are now retiring. Ensuring 

there are enough certified controllers at FAA’s more than 300 air traffic control 

facilities will remain a significant watch item for the Department and Congress.

Since 2005, 3,300 controllers have left the workforce—23 percent more than FAA 

had projected. To keep pace, 

FAA accelerated its hiring 

efforts and has hired 3,450 new 

controllers—25 percent more 

than projected (see figure 5-1).

With the surge in new hires over 

the last 4 years, FAA is facing a 

fundamental transformation in 

the composition of its controller 

workforce. While the overall 

size of the controller workforce remained relatively constant from April 200410 to 

June 2008, the number of controllers in training increased by nearly 68 percent 

and the number of fully certified professional controllers (CPC) decreased by 

nearly 12 percent. New controllers now represent 25 percent of the workforce (up 

from 15 percent in 2004). However, that percentage can vary extensively by 

2,683

3,300

2,751

3,450

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Projected

Attrition

Actual

Attrition

Projected

Hiring

Actual

Hiring

number of controllers

Figure 5-1. Controller Attrition and Hiring, 

Projected and Actual (FY 2005 – FY 2007) 

10 We chose 2004 as a benchmark for comparison purposes since 2004 was the last year we audited this program and 

because 2004 was the year FAA first published its Controller Workforce Plan. 
342 FY 2008 Performance & Accountability Report

22

location—from as little as zero percent (e.g., Pittsburgh, PA, air traffic control 

tower) to as much as 67 percent (e.g., Rochester, MN, air traffic control tower).

A major challenge in addressing controller attrition will be training new 

controllers to the CPC level at their assigned locations. In June, we issued our 

second report on FAA’s controller facility training program. FAA is taking 

actions at the national level to get this important program on track. For example, 

FAA is adding more training simulators at towers and increasing use of contractor 

training support—from 53 facilities in 2004 to 190 facilities in 2007. Many of 

FAA’s efforts, however, are still in the early stages. We identified problems that 

we also reported in 2004—that the facility training program continues to be 

extremely decentralized and the efficiency and quality of the training varies from 

one location to another. FAA has agreed to take the following actions we 

recommended to improve this program:

x Establish realistic standards for how many developmental controllers facilities 

can accommodate. 

x Continue to encourage veteran controllers to transfer to busier, higher-level 

facilities.

x Implement key initiatives it first proposed in 2004 to improve facility training.

As attrition increases, FAA must also continue addressing controller human factor 

issues. Congress has expressed concerns regarding these issues since the influx of 

new controllers will need both technical and human factors (fatigue and attention) 

training. For example, at the request of Senator Durbin of Illinois, we are 

reviewing factors that could affect controller fatigue at the Chicago O’Hare 

Tower, Chicago Terminal Radar Approach Control, and Chicago Center. 

At the request of Chairman Costello of the House Aviation Subcommittee, we are 

reviewing the rate and possible root causes of controller training failures 

(developmental controllers who fail training either at the FAA Academy or at their 

assigned facility). Our work on these requests is ongoing, and we plan to issue our 

final results early next year.

Keeping Existing Projects on Track and Reducing Risks With NextGen 

FAA’s capital account is now being shaped by NextGen—an enormously complex 

effort that will cost billions of dollars (see figure 5-2 below). FAA budget 

estimates show that the Agency will require $18 billion for capital efforts between 

fiscal year (FY) 2008 and FY 2013. This includes $5.6 billion specifically for 

NextGen initiatives, including demonstration projects and a satellite-based 

surveillance system called Automatic Dependent Surveillance-Broadcast

(ADS-B).
United States Department of Transportation 343

23

Figure 5-2. FAA Capital Funding for FY 2008-FY 2013

(Totals in Millions)

$2,325.9

$2,092.4 $2,099.5 $2,037.7 $2,118.1 $2,063.8

$187.7 $631.1

$986.5 $1,056.2

$1,227.5 $1,494.2

$0.0

$500.0

$1,000.0

$1,500.0

$2,000.0

$2,500.0

$3,000.0

$3,500.0

$4,000.0

FY 2008 (Enacted) FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

fiscal year

NextGen Funding

Remaining F&E

$2,513.6

$2,723.5

$3,086.0 $3,093.9

$3,345.6

$3,558.0

Overall, we are not seeing the significant cost growth and schedule slips that 

occurred in the past with FAA’s major modernization projects. This is because 

FAA has taken a more incremental approach to major acquisitions and has “rebaselined” a number of efforts. We recently examined progress with 18 programs 

valued at $17.5 billion. When comparing revised baselines, only 2 of the 

18 projects we reviewed have experienced additional cost growth ($53 million) 

and delays (5 years). However, since inception, six of these programs have 

experienced cost growth close to $4.7 billion and delays of up to 12 years. 

It will be important to keep existing projects on track because about 30 projects 

serve as platforms for NextGen initiatives. For example, core NextGen 

capabilities such as data link rely on enhancements to the $2.1 billion En Route 

Automation Modernization (ERAM) program, which provides new hardware and 

software for facilities that manage high-altitude traffic. Currently, the ERAM 

effort is on schedule; its software requirements related to NextGen are uncertain 

but are expected to be in the billions of dollars. 

A key challenge for the Department and FAA is reducing risk with the 

implementation of ADS-B—a centerpiece of the NextGen portfolio. In August 

2007, FAA awarded a service-based contract worth $1.8 billion for ADS-B ground 

infrastructure. FAA plans to implement “ADS-B Out” in the 2020 timeframe, 

which will require aircraft to broadcast their position to ground stations. However, 

the majority of capacity- and safety-related benefits are associated with 
344 FY 2008 Performance & Accountability Report

24

“ADS-B In,” which will display information to pilots in the cockpit. ADS-B 

implementation faces several risks, including gaining stakeholder acceptance and 

aircraft equipage, addressing broadcast frequency congestion concerns, integrating 

with existing systems, and assessing potential security vulnerabilities in managing 

air traffic. Much work remains to refine cost, requirements, and expected benefits 

of NextGen initiatives. We have identified areas requiring sustained management 

attention from FAA and made the following recommendations to help the Agency 

reduce risk with NextGen:

x Conduct a gap analysis between the existing National Airspace System and the 

expected NextGen capabilities to determine funding priorities and the full 

range of adjustments necessary for existing capital programs until the transition 

to NextGen. 

x Develop a mid-point architecture (a technical road map) in the 2015 timeframe 

that provides a way-point between the current system and NextGen. 

x Assess and obtain the necessary skills with respect to contract management and 

systems engineering needed to manage and execute NextGen. 

x Establish metrics for assessing progress with NextGen that focus on enhancing 

capacity, boosting productivity, and reducing operating costs. 

Sustaining FAA’s Extensive Network of Aging Facilities 

FAA has full or partial responsibility for 420 staffed air traffic control facilities. 

Many FAA air traffic control facilities have exceeded their useful lives, and their 

physical condition continues to deteriorate. While the average facility has an 

expected useful life of approximately 25 to 30 years, 59 percent of FAA facilities 

are over 30 years old.

However, FAA still does not have adequate controls in place to ensure that the 

Agency’s routine facility maintenance needs are sufficiently funded. Although 

FAA has a structured process for estimating its funding requirements for its capital 

account (used to fund facility replacements and large improvement projects), the 

same process does not exist for the Agency’s operations account (used to fund 

recurring facility maintenance). As result, FAA currently has a backlog of over 

$240 million in deferred maintenance.

More importantly, FAA’s newly developed processes for its capital maintenance 

needs are only short-term solutions that focus on sustaining the existing air traffic 

control infrastructure. This is because FAA has not made key decisions regarding 

facility consolidations and infrastructure needs—a key aspect of the transition to 

NextGen. 
United States Department of Transportation 345

25

FAA requested $17 million for FY 2009 to examine various alternatives for 

revamping its facilities. The re-alignment or consolidation of FAA facilities is a 

controversial issue and a key cost driver for NextGen. Therefore, FAA must 

ensure that this analysis clearly addresses the technological and security 

prerequisites, cost drivers, benefits, and logistical concerns associated with 

consolidation so decision makers in Congress and the Administration will know 

what can reasonably be accomplished.

Near-Term Focus Areas for the Transition to a New Administration 

The Department and FAA are at a crossroads with maintaining and modernizing 

the National Airspace System, and FAA must focus on the following efforts: 

x Implementing improvements to controller training programs, including 

establishing realistic standards for how many developmental controllers 

facilities can accommodate and offering incentives to encourage veteran 

controllers to transfer to busier, higher-level facilities. 

x Conducting a gap analysis between the existing National Airspace System and 

the vastly different Next Generation Air Transportation System and developing 

a mid-point architecture that provides a way-point between the current and 

NextGen systems in the 2025 timeframe. 

For further information regarding the issues identified in this chapter, please 

contact Lou Dixon, Assistant Inspector General for Aviation and Special 

Programs, at (202)-366-0500. The following related reports and testimonies can 

also be found on the OIG website at http://www.oig.dot.gov.

x Challenges Facing the Implementation of FAA’s Automatic Dependent 

Surveillance - Broadcast Program 

x Air Traffic Control Modernization: FAA Faces Challenges in Managing 

Ongoing Projects, Sustaining Existing Facilities, and Introducing New 

Capabilities

x Status of FAA’s Efforts To Develop the Next Generation Air Transportation 

System

x Review of the Air Traffic Controller Facility Training Program 

x Key Issues Facing the Federal Aviation Administration’s Controller Workforce

x FAA’s Fiscal Year 2009 Budget Request: Key Issues Facing the Agency
346 FY 2008 Performance & Accountability Report

26

6. protecting against increasing cyber security risks and 

enhancing the protection of personally identifiable information 

Like most Government agencies, the Department must address increased threats of 

sophisticated and organized attacks on departmental networks and computers. The 

Department must also continue to enhance security for critical national 

infrastructure, such as air traffic control systems. In addition, the Department 

continues to face challenges in protecting personally identifiable information 

entrusted to it. To strengthen the protection of information technology (IT) 

resources in fiscal year (FY) 2009, the Department will need to focus management 

attention on: 

x implementing a robust information security program to protect data and 

operations,

x enhancing security protection of the air traffic control system as a critical 

national infrastructure, and 

x enhancing the protection of personally identifiable information in its systems. 

Implementing a Robust Information Security Program To Protect the 

Department’s Data and Operations 

Although the Department established an information security program in FY 2001, 

it has failed to incorporate information security into its management culture. The 

Department continues to face significant challenges in FY 2009 as it seeks to 

protect its data and operations while combating increasing cyber threats: 

x Strengthening Chief Information Officer (CIO) Leadership To Establish 

and Oversee Implementation of Security Policies: As required by the 

Federal Information Security Management Act of 2002,11 the CIO is 

responsible for managing the Department’s information security program, 

including developing, implementing, and enforcing security policies. 

However, this office was assigned the additional responsibility of operating 

and maintaining the consolidated IT infrastructure to support the Operating 

Administrations, which has diverted management attention and resources away 

from its policy responsibilities. For example, the Department no longer has a 

designated senior official responsible for managing the information security 

program because that senior official position has been reassigned to the 

operational area.

Further, the Department identified 52 topics that require IT security policy, but 

the CIO office has issued final policy on only 11 of these (21 percent). The 

office now has a large backlog of draft security policy related to the remaining 

11 FISMA, Pub. L. 107-296 (Nov. 25, 2002), codified at 44 USC § 3541.
United States Department of Transportation 347

27

41 topics. In addition, the CIO office has made little progress in enforcing the 

Operating Administrations’ implementation of standard software configuration 

as required by governmental standards. As a result, the Department is behind 

most Federal agencies in configuring its computers to reduce vulnerabilities.

x Increasing the Influence of the CIO: Ineffective implementation of CIO 

office policies has been a longstanding problem within the Department. Unlike 

other Federal agencies, the Department’s CIO does not have budget or 

performance evaluation authority over the Operating Administrations. 

Operating Administrations are likely to continue implementing departmental 

security policies ineffectively until management or budgetary consequences are 

clear. The Department needs to develop mechanisms to hold Operating 

Administration management more accountable for consistently implementing 

policy and security guidance. 

x Strengthening Cyber Incident Monitoring and Correction: During 

FY 2008, the Department established a consolidated Cyber Security 

Management Center to monitor network activities in the Department and to 

coordinate incident reporting. The center has established a common 

framework to help detect cyber incidents and disseminate this information for 

coordinated action throughout the Department. This improved the visibility of 

Headquarters networks for security monitoring and better positioned the 

Department to combat increasing cyber security threats. However, the 

Department must provide full coverage of its networks for incident monitoring 

and ensure that incidents are reviewed and corrected in a timely manner. For 

example, as of June 30, 2008, there were 233 unresolved incidents, 77 of 

which (33 percent) had been open for more than 3 months.

Enhancing Security Protection of the Air Traffic Control System as a 

Critical National Infrastructure 

Due to the important role of commercial aviation in fostering and sustaining the 

national economy and ensuring citizens’ safety and mobility, the President 

designated air traffic control systems as part of the Nation’s critical infrastructure 

in Homeland Security Presidential Directive (HSPD)-7. We have reported that the 

Department must protect air traffic control systems with a two-pronged approach 

to fulfill HSPD-7 requirements: preventing disruption wherever possible and 

minimizing disruptions when they do occur. 

Implementing a business continuity plan (BCP) for en route services (which 

control high-altitude traffic and disseminate flight plan information to all other air 

traffic control facilities) and enhancing security reviews of air traffic control 

systems are key steps in this approach. In FY 2007 and FY 2008, the Federal 

Aviation Administration (FAA) made progress toward implementing a BCP for en 
348 FY 2008 Performance & Accountability Report

28

route services and expanded security evaluation of air traffic control systems. 

However, FAA’s ability to handle long-term service disruptions according to the 

mandate of HSPD-7 remains unknown, and the methodology used to identify and 

test the security of air traffic control systems needs improvement.

x Making En Route Business Continuity Capability Fully Functional: FAA 

has designated a recovery site to take over the responsibilities of inoperable en 

route centers and has taken good steps toward preparing it, such as installing 

additional emergency power. FAA plans to have the recovery site ready for 

activation by March 2009. However, unresolved technical challenges, human 

integration issues, and funding uncertainty could delay the recovery site’s 

readiness. In addition, FAA needs to assess the potential impact on air travel 

should it have to activate BCP operations. Mitigating the effects on the 

Nation’s economic interests in the event that critical infrastructure is 

incapacitated is a key requirement of HSPD-7. 

x Improving the Methodology Used To Identify and Test the Security of Air 

Traffic Control Systems: The security of the information systems that air 

traffic controllers rely upon is in doubt because the methodology used to 

identify and test system security control is inadequate. FAA’s approach to 

certifying and accrediting these systems is to test system security controls in a 

laboratory environment and at selected operational sites based on risk.12

However, there is no evidence that operational sites posing the greatest risk 

were the ones selected for review. Further, the review was ineffective because 

the review teams did not conduct independent testing; instead, they primarily 

relied on interviews with local system operators to determine whether security 

controls were implemented in operational air traffic control systems. FAA 

needs to enhance its reviews of operational sites and start with those that pose 

the greatest risk.

Enhancing the Protection of Personally Identifiable Information in DOT 

Systems

In recent years, the Department has made significant progress in addressing its 

statutory responsibility to protect personally identifiable information (PII). It has 

designated the CIO as Chief Privacy Officer; issued a privacy benchmark report to 

Congress; and established procedures for assessing the need for PII collection, use, 

and security. However, our tests of sampled PII systems identified the following 

deficiencies in how the Department implements prescribed procedures, placing 

these personal data at risk:

12 FAA relies on more than 100 automated systems to direct and manage air traffic. These systems are deployed for 

use to hundreds of operational sites. For example, the Host Computer System is used to direct high-altitude traffic at 

all 20 en route centers. 
United States Department of Transportation 349

29

x Although the departmental privacy office had evaluation documents for the 

109 systems contained in its PII inventory, it could not provide completed 

evaluations to support that no PII is stored in the Department’s other 

320 systems.

x The privacy officers were unable to produce evidence that a System of Records 

Notice was issued for 9 of 20 sampled systems. As a result, there was no 

assurance that the public was properly notified of the intended use of the 

collected information. 

x Some systems containing PII did not meet minimum security requirements, 

such as encrypting data during network transmission and using proper 

password controls to authenticate users. 

x The Department has not issued policy to notify those affected by breaches of 

sensitive information, implemented its plan to reduce utilization of Social 

Security numbers, or developed policy to establish rules for handling PII, 

including the consequences of not following those rules.

In our opinion, the reporting structure for the Chief Privacy Officer is contributing 

to these deficiencies. Specifically, the Chief Privacy Officer does not report 

directly to the CIO but to the Chief Information Security Officer. Experts in the 

field note that the placement of privacy officials can greatly affect their roles—

which, they say, require direct access to top management. Departmental 

management has agreed to reevaluate the reporting structure in FY 2009. 

Near-Term Focus Areas for the Transition to a New Administration 

Overall, the Department must strive to implement a mature and effective 

information security program and make it an integral part of the way it conducts 

business. In the near term, the Department needs to focus on the following issues: 

x Addressing the role and authority of the Department’s CIO to ensure timely 

issuance of information security policy and its enforcement across all 

Operating Administrations. 

x Increasing privacy protection of PII stored on Departmental systems. 

For further information regarding the issues identified in this chapter, please 

contact Rebecca Leng, Assistant Inspector General for Financial and 

Information Technology Audits at (202)-366-1496. The following related 

reports can also be found on the OIG website at http://www.oig.dot.gov.

x DOT Information Security Program 

x DOT Delphi Financial System Controls 

x Review of DOT Privacy Policies and Procedures 

x Audit of Security and Controls Over the National Driver Register 
350 FY 2008 Performance & Accountability Report

30

7. preventing catastrophic failures and obsolescence in the 

nation’s aging surface transportation infrastructure 

Fatal infrastructure failures in 2006 and 2007 have focused attention on 

obsolescence in the Nation’s aging surface transportation infrastructure and the 

need to strengthen oversight. The Department must work with states and localities 

to ensure the safety of our bridges and restore or replace those that present the 

highest risk of catastrophic failure. This task will be challenging because, 

according to the American Association of State Highway and Transportation 

Officials, the average bridge in the United States is 43 years old, and almost one in 

four bridges is either structurally deficient and in need of repair or functionally 

obsolete and too narrow for today’s traffic volumes. 13 To its credit, the 

Department has taken action. For example, the Federal Highway Administration 

(FHWA) has agreed to transition to data-driven, risk-based bridge oversight to 

target those bridges most in need of increased attention. This year, the 

Department must focus management attention on two key challenges: 

x FHWA must strengthen its efforts to ensure safety for bridges and tunnels and 

hold states accountable for Federal funds. 

x The Federal Transit Administration (FTA) must work with state and local 

transit agencies to identify ways to repair, rehabilitate, or replace aging transit 

systems.

Strengthening Efforts To Ensure Safety for Bridges and Tunnels and Hold 

States Accountable for Federal Funds 

Recent fatal infrastructure failures underscore the significance of bridge and tunnel 

safety as major challenges. In 2006, ceiling panels collapsed in a tunnel in 

Boston’s Central Artery/Tunnel Project, killing a motorist. In 2007, the 

catastrophic failure of the I-35W Bridge in Minneapolis killed 13 people. These 

tragic incidents brought renewed national attention to the safety of our bridges and 

tunnels. Shortly after each of these tragedies, we initiated audits to assess whether 

FHWA is exercising adequate oversight to help ensure public safety. FHWA 

must strengthen its oversight approach so that it proactively identifies safety risks, 

which presents an enormous oversight challenge. Specifically, of the nearly 

600,000 bridges across the country, approximately 72,500 are structurally 

deficient.14 Further, bridges that are classified as structurally deficient can have 

an array of significant problems (see figure 7-1 below). 

13 American Association of State Highway and Transportation Officials, “Bridging the Gap: Restoring and Rebuilding 

the Nation’s Bridges,” July 28, 2008. 14 The term “structurally deficient” refers to bridges with major deterioration, cracks, or other deficiencies in their 

structural components, including decks, girders, or foundations. In some cases, structurally deficient bridges require 

repair or even closure. However, most bridges classified as structurally deficient can serve traffic safely if they are 

properly inspected; if maximum load ratings are properly calculated; and, when necessary, the proper maximum 

weight limits are posted. 
United States Department of Transportation 351

31

Figure 7-1. How Bridges Become Structurally Deficient

Debris inhibits 

deck drainage.

Water and deicers 

corrode steel 

reinforcement,

causing spalling. 

Speed, surface roughness, and truck 

suspension interact to amplify stress. 

Bridge superstructure is 

susceptible to corrosion, water 

damage, metal fatigue, and stress 

caused by vibration. 

Water movement can scour 

away soil under foundation. 

Decay or 

misalignment

of bearings 

Surface corrosion

Debris-clogged joint 

prevents movement 

necessary to relieve 

superstructure stresses.

Improper drainage causes 

damage to concrete. 

Crack in substructure 

caused by settling of 

foundation.

Standing water 

promotes deck 

deterioration.

Source: Illustration by Jana Brenning. Copyright Jana Brenning. Reprinted with permission. 

Illustration first appeared in Scientific American, March 1993. 

To strengthen bridge safety oversight, FHWA needs to take action in three key 

areas:

FHWA must implement a data-driven, risk-based approach to overseeing the 

safety of the Nation’s bridges. A major challenge for FHWA is to make 

sustained progress toward implementing a data-driven, risk-based approach to 

overseeing the Nation’s bridges. Based on our past and ongoing work on bridge 

issues, FHWA must pursue the following efforts in this area:

x Assess bridge safety risks systematically across the country. FHWA’s 

oversight does not include systematic, data-driven oversight to 

comprehensively address nationwide bridge safety risks.15 FHWA Division 

Offices in each state conduct annual compliance reviews of bridges, but 

FHWA Headquarters does not routinely analyze results to identify nationwide 

bridge safety risks, prioritize them, and address higher priority risks. 

15 The National Bridge Inventory, maintained by FHWA, comprises data on bridges on the National Highway System, 

as well as bridges maintained and operated by various state and local entities. 
352 FY 2008 Performance & Accountability Report

32

x Encourage greater use of bridge management systems. FHWA agreed to 

support states’ use of computerized bridge management systems by conducting 

studies and providing technical assistance and training. However, FHWA must 

be more proactive in encouraging states to use these systems and helping those 

states most in need of technical assistance so they can implement effective 

bridge management systems. 

FHWA must improve accountability for Federal bridge funds. The Safe, 

Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users16

authorized $21.6 billion for the Highway Bridge Program through 2009 to fund 

bridge replacement, rehabilitation, and systematic preventive maintenance.

FHWA must ensure that this significant investment in addressing bridge needs is 

put to the best possible use by enhancing its ability to track states’ use of these 

funds. We have reported that FHWA is unable to determine how much of the 

funding provided to states is actually spent on structurally deficient bridges 

because its financial management system does not differentiate between spending 

on structurally deficient bridges and other bridge-related expenditures. It is 

imperative that FHWA better measure how states are spending Federal bridge 

funds so it can assess the impact of Federal dollars on bridge conditions and help 

Congress consider what changes, if any, it wants to make to the Highway Bridge 

Program. 

FHWA needs to establish a national tunnel inspection program. While the 

National Bridge Inspection Program has existed for decades, FHWA currently 

lacks a highway tunnel inspection program. In recent years, serious failures in 

construction quality on the troubled Central Artery/Tunnel Project highlighted the 

need for FHWA to enhance the safety of the Nation’s tunnels. Accordingly, 

FHWA should implement a system to hold states accountable for inspecting and 

reporting on tunnel conditions. To its credit, FHWA has taken initial steps to do 

this. FHWA officials recently informed us that they plan to issue an advance 

notice of proposed rulemaking this fall to seek input on the development of 

national tunnel inspection standards. As we reported in our last two top 

management challenges reports to the Department, it is critical that FHWA 

implement this initiative as soon as possible. 

Repairing, Rehabilitating, or Modernizing Aging Transit Systems 

The Nation’s largest transit systems are becoming increasingly obsolete as demand 

for public transportation is increasing. 17 Many of our transit systems are 

concentrated in large urban areas and are very old and in need of substantial 

16 Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), Pub. L. No.

109-59 (2005). This law expires September 30, 2009. 17 According to the American Public Transportation Association, Americans took almost 88 million more trips on 

public transportation during the first 3 months of 2008 over the same period in 2007. 
United States Department of Transportation 353

33

upgrades or repairs. 18 FTA must work with state and local transit agencies to 

identify ways to repair, rehabilitate, or replace their infrastructure to meet current 

demand, keep up with projected ridership, and prevent any catastrophic failures 

caused by aging or obsolete infrastructure. 

Problems with maintaining the Nation’s major mass transit systems will force 

tough decisions during the next surface transportation authorization. These 

include deciding the overall level of transit funding in relation to highways and 

determining whether to emphasize new transit expansions in growing cities or 

focus more resources on supporting the rehabilitation of older, existing transit 

systems.

Near-Term Focus Areas for the Transition to a New Administration 

Addressing the Nation’s aging surface transportation will require sustained 

attention in both the short and long term. While long-term strategies are being 

developed, the Department needs to focus on the following areas in the near term: 

x Advance a data-driven, risk-based approach to overseeing state bridge 

programs and measuring the impact of Federal funding on improving the safety 

of the Nation’s bridges. 

x Follow through on plans to establish a national tunnel inspection program.

For further information regarding the issues identified in this chapter, please 

contact Joseph Comé, Assistant Inspector General for Highway and Transit 

Audits at (202)-366-5630. The following related reports and testimonies can 

also be found on the OIG website at http://www.oig.dot.gov.

x Federal Highway Administration’s Oversight of Structurally Deficient Bridges 

x FHWA Can Do More in the Short Term To Improve Oversight of Structurally 

Deficient Bridges 

x Report on the Central Artery/Tunnel Project May 2007 Finance Plan Update 

x Initial Assessment of the Central Artery/Tunnel Project Stem to Stern Safety 

Review

x Audit of Oversight of Load Ratings and Postings on Structurally Deficient 

Bridges on the National Highway System 

x DOT’s FY 2008 Top Management Challenges 

x DOT’s FY 2007 Top Management Challenges 

18 Approximately 70 percent of all transit trips in the United States are concentrated in 10 cities: Baltimore; Boston; 

Chicago; Houston; Los Angeles; New York; Philadelphia; San Francisco; Seattle; and Washington, D.C. 
354 FY 2008 Performance & Accountability Report

34

8. improving contract operations and Maintaining procurement 

integrity 

The Department spends approximately $6.8 billion annually, or about 40 percent 

of its discretionary budget, on contracts to obtain goods and services. Our audits 

and investigations continue to find oversight and control weaknesses, fraud and 

abuse, and other ethics issues involving Department officials and contractors. The 

Department has made progress this year in managing its acquisition workforce by 

enhancing an annual ethics training program for acquisition and grants 

management personnel. However, to further enhance its acquisition and contract 

management oversight, the Department must focus on the following areas:

x Developing and maintaining a competent acquisition workforce to support the 

Department’s mission. 

x Improving award-fee contracting processes to better achieve acquisition 

objectives.

x Ensuring that suspended or debarred contractors do not obtain Government 

contracts or assistance agreements. 

x Ensuring the acquisition workforce maintains high ethical standards. 

Developing and Maintaining a Competent Acquisition Workforce To 

Support the Department’s Mission 

The Office of Management and Budget required Federal agencies to develop a 

human capital strategic plan for its acquisition workforce. In September 2007, the 

Department completed a strategic plan that addressed only part of its acquisition 

workforce—contract officers and contract specialists. Although the strategic plan 

included a skills assessment of these positions and a general discussion on 

retention and hiring strategies, it did not include essential workforce statistics such 

as retirement and attrition information, accession planning, and identification of 

long- and short-term needs.

Additionally, the Department continues to face challenges in developing a 

strategic plan for the rest of its acquisition workforce. Department officials stated 

they are having difficulty determining the total number of other key acquisition 

workforce positions, such as contracting officer technical representatives and 

program managers. This is because the Department lacks key information on 

these positions, including workforce size, knowledge and skills, attrition rates, and 

retirement rates. Without these critical data, the Department is unable to identify 

employment trends and assess the current condition of the workforce to determine 

the ideal composition, skill mix, and talent for its future.
United States Department of Transportation 355

35

Improving Award-Fee Contracting Processes To Better Achieve Acquisition 

Objectives

Award-fee contracts are used to motivate contractors to place emphasis on certain 

areas within the contract—such as cost, schedule, and performance. As of 

June 30, 2008, the Department had 47 ongoing cost-plus-award-fee contracts with 

a potential value of approximately $5.5 billion, including about $271.4 million in 

award fees. The Department faces significant challenges in designing and 

justifying the use of such contracts and must provide guidance and training to its 

acquisition workforce to improve the use of these contracts. As part of our 

ongoing, Department-wide audit of cost-plus-award-fee contracts, we issued four 

interim reports that addressed problems in designing and justifying these contracts. 

To illustrate, the National Airspace System Implementation Support II contract is 

valued at approximately $234 million with approximately $18.2 million in award 

fees. Yet, the Federal Aviation Administration’s (FAA) performance evaluation 

plan19 did not include clear and measurable award-fee criteria needed to 

adequately evaluate contractor performance. 

In another example, Volpe awarded a contract for information systems and 

information technology support services for approximately $178 million and 

established an award-fee pool of approximately $8.9 million. We found that the 

descriptions defining adjectival ratings (used to compute the amount of award fee), 

such as excellent or satisfactory performance, were vague and inconsistent and did 

not clearly define the basis for assigning such a rating. Evaluation criteria that do 

not include clearly defined metrics or specific adjectival ratings could result in 

inflated contractor performance evaluations and, consequently, inappropriately 

approved award fees. In response to these reports, the Department has agreed to 

take action to improve these contracts. 

We also found that Department procurement offices did not justify the cost 

effectiveness of selecting cost-plus-award-fee-type contracts, which may not 

always be the appropriate choice. Through an evaluation of the administrative 

costs versus the expected benefits, the contracting officer should be able to assess 

whether the benefits the Government gains through a cost-plus-award-fee contract 

will outweigh the additional costs of overseeing and administering the contract.

For example, in response to our report on the National Airway Systems support 

services contract, valued at approximately $316 million, FAA agreed to modify 

the contract to a cost-plus-fixed-fee type because the cost and time required to 

oversee, monitor, and document the award-fee process outweighed the benefits to 

administer the contract.

19 The performance evaluation plan is the basis for determining the amount of award fee and includes the award-fee 

criteria to be considered under each area evaluated; the percentage of award fee, if any, available for each area; and 

the frequency of evaluation periods. 
356 FY 2008 Performance & Accountability Report

36

Ensuring That Suspended or Debarred Contractors Do Not Obtain 

Government Contracts or Assistance Agreements 

Federal regulations prohibit firms and individuals without satisfactory records of 

integrity and business ethics from receiving contracts and assistance agreements. 

The Department revised its policy in June 2005, in part, to improve timely 

decision making of suspension and debarment actions. However, our ongoing 

audit work shows that the Department needs to improve the policy—and its 

implementation—to ensure timelier processing and reporting of suspension and 

debarment actions. 

For example, Operating Administrations do not consistently take suspension and 

debarment actions in a timely manner, even though the new order requires such 

actions be taken within 45 days. Twenty-five of the 45 (56 percent) actions we 

reviewed were not processed within 45 days. For 19 of these actions, the 

Operating Administrations took from 10 days to more than 2 1⁄2 years over the 

45-day standard to render final decisions. The remaining six debarment actions 

are still awaiting a decision from the debarring officials, which currently takes 

from 165 to 945 days. 

Federal and Departmental regulations require the Department to enter suspension 

and debarment actions into the Excluded Parties Listing System20 within 

5 working days of the decision. We sampled 132 actions and found that the 

Department did not adhere to its policy for 63 (48 percent) of those actions—13 of 

which took more than 100 days to be entered.

Ensuring the Greater Acquisition Workforce Maintains High Ethical 

Standards

Last year, we reported that the Department needed to develop and maintain a 

robust ethics program to promote integrity across the myriad of transportation 

programs. To its credit, the Department instituted an enhanced annual ethics 

training program earlier this year for all acquisition and grants management 

personnel across the Department. 

This year presents a two-fold ethics challenge for the Department and its 

Operating Administrations. First, they must follow through to fully implement 

this important annual training requirement. Secondly, the Department and 

Operating Administrations need to increase outreach to recipients of Department 

funding to ensure that they and their contractors have meaningful ethics programs 

and sound internal controls to prevent and detect fraud involving Department 

funding.

20 A web-based system maintained by the General Services Administration contains firms or individuals excluded from 

Federal contracts or other Federal funding such as grants. 
United States Department of Transportation 357

37

Overall, our investigations have consistently demonstrated the need for continual 

reinforcement of ethical standards—with Department employees and funding 

recipients and their contractors—to prevent integrity breaches in the Department’s 

extensive contract, grant, and cooperative agreement programs. This is illustrated 

in the following examples: 

x Two FAA acquisition officials in a regional office released confidential bid 

information to a foreign-owned firm, enabling the company to win a 

$4.3 million airport construction contract. Both officials pled guilty to felony 

Procurement Integrity Act violations and are no longer employed by FAA. 

The firm was fined $1 million and also paid $750,000 in restitution to a 

company victimized by the scheme. 

x An Ohio Department of Transportation bridge inspector accepted bribes from a 

painting contractor to overlook false certifications regarding the quality and 

quantity of work the company performed on bridge contracts valued at nearly 

$8 million. The inspector resigned from state employment and pled guilty to 

violating the Federal highway projects fraud statute (a felony). The inspector 

was later fined and sentenced to probation. 

Near-Term Focus Area for the Transition to a New Administration 

Safeguarding Federal contract dollars for transportation is critical in the uncertain 

financial environment. At this juncture, the Department needs to complete the 

strategic plan for the acquisition workforce to ensure it has the right skill mix to 

oversee multimillion-dollar contracts. 

For further information regarding the issues identified in this chapter, please 

contact Mark Zabarsky, Assistant Inspector General for Acquisition and 

Procurement Audits at (202)-366-5225. The following related reports and 

testimonies can also be found on the OIG website at http://www.oig.dot.gov.

x Interim Report on Award-Fee Criteria for the National Airspace System 

Implementation Support II Contract and Bridge Contract

x Interim Report on Award-Fee Criteria for the National Airway Systems 

Contract

x Interim Report on Award-Fee Criteria for the Transportation Information 

Project Support Contract

x Interim Report on Award-Fee Criteria for the System Engineering and 

Technical Assistance II Contract
358 FY 2008 Performance & Accountability Report

38

9. enhancing and Deploying programs for reducing the serious 

consequences of surface transportation crashes 

Surface transportation fatalities and injuries 21 create significant public health and 

economic consequences. Motor vehicle traffic crashes cause more than 

40,000 deaths and 2 million injuries annually in the United States (see figure 9-1) 

and are among the 10 leading causes of deaths in the United States. Total 

economic costs, including medical care, property damage, and lost productivity 

surpassed $230 billion in 2000—equal to more than 2 percent of the United States 

gross domestic product that year. 22

Figure 9-1. U.S. Highway Fatalities and Injuries, 2001 through 2007

42,196

43,005 42,884 42,836

43,443

42,708

41,059

3.03

2.93 2.89

2.79

2.70

2.58

2.49

40,000

41,000

42,000

43,000

44,000

2001 2002 2003 2004 2005 2006 2007 

2.40

2.60

2.80

3.00

3.20

Injuries

Fatalities

(millions)

Calendar Year

Source: Data from the National Highway Traffic Safety Administration 

Department safety improvement programs, such as Federal motor vehicle safety 

standards for new cars, have contributed to major improvements in surface safety. 

The fatality rate in 2007 reached a historic low of 1.37 deaths per 100 million 

vehicle miles traveled, and the injury rate also fell. The preliminary estimate of 

injuries in 2007 was, for the first time, below 2.5 million, representing a decline 

for the eighth consecutive year and a 3.3-percent decline compared to 2006. 

However, the fatality rate will need to drop to 1.0 by 2011 to meet the 

Department’s stated goal. For fiscal year 2009, the Department requested nearly 

$11 billion for surface safety improvement programs, 16 percent of its total budget 

request.

21 Fatalities and injuries associated with passenger cars and trucks, motorcycles, school buses, commercial vehicles 

(i.e., trucks, trailers, buses, and motor coaches), highway-railroad crossings, and trains. 22 Latest calculation available, NHTSA, The Economic Impact of Motor Vehicle Crashes, 2000, DOT HS 809 446, 

May 2002. 
United States Department of Transportation 359

39

A substantial challenge for the Department is further reducing the number and rate 

of surface transportation fatalities. Accomplishing this is especially difficult since 

the Department does not directly control some of the most effective tools. States 

and localities have jurisdiction for critical safety activities, such as enacting and 

enforcing laws for seat belt and helmet usage, alcohol-impaired driving, vehicle 

inspection, and speed limits.

To successfully meet this challenge, the Department must establish clear Federal 

standards, provide analytical and empirical evidence about safety program 

performance, and disseminate information effectively. The Department must also 

demonstrate strong leadership by coordinating state and local efforts across the 

country and working with private sector partners, such as motor carriers, rail 

carriers, and motor vehicle manufacturers. Our recent work demonstrates that the 

Department can better meet this challenge by enhancing and deploying the 

following proven safety improvements: 

x Promoting consistent state highway safety performance indicators to 

measure progress. 

x Targeting unsafe motor carriers and commercial motor vehicle drivers 

for enforcement. 

x Enhancing the Commercial Driver’s License program by enforcing 

existing standards and adopting new standards. 

x Identifying high-risk highway-rail grade crossings for safety 

improvements to further reduce collisions and fatalities. 

Promoting Consistent State Highway Safety Performance Indicators To 

Measure Progress 

The National Highway Traffic Safety Administration (NHTSA) is the lead Federal 

agency for establishing motor vehicle safety standards and reducing highway 

fatalities and injuries caused by driver and passenger behaviors. Each year, 

NHTSA distributes about $600 million in Federal formula and incentive grants for 

state and local programs, such as those promoting seat belt usage and reducing 

alcohol-impaired driving. In 2007, more than half of all vehicle fatalities were 

associated with not using a seatbelt, and about one-third of all crash fatalities were 

alcohol-related. NHTSA must balance its safety law promotion and Federal 

oversight responsibilities with the need for Federal, state, local, and private sector 

partnerships to implement safety programs. 

Our audit work has shown that NHTSA can improve its ability to measure the 

effectiveness of Federal resources and state strategies by requiring states to use 

more meaningful performance indicators linked to proven strategies such as yearround sustained enforcement of alcohol-impaired driving laws. Performance 
360 FY 2008 Performance & Accountability Report

40

indicators would also provide states with better tools to judge their progress, allow 

NHTSA to compare success among states, and enhance public accountability. 

Responding to our audit work, NHTSA and the Governors Highway Safety 

Association agreed on a minimum set of 14 performance measures for states to use 

for measuring their performance in priority program areas. NHTSA committed to 

work with the states to develop uniform definitions, protocols, and reporting 

requirements for each measure, especially those measures for which states do not 

presently collect data. NHTSA must ensure that states establish measurable goals 

and report progress for the measures, beginning with their fiscal year 2010 

highway safety plans and annual reports. 

Targeting Unsafe Motor Carriers and Commercial Motor Vehicle Drivers for 

Enforcement

The Federal Motor Carrier Safety Administration (FMCSA) is the lead agency for 

establishing and enforcing motor carrier and commercial motor vehicle driver 

safety requirements and standards. An ongoing challenge for FMCSA is to ensure 

that motor carriers and drivers operate safely on the Nation’s highways. In 2007, 

large truck crashes killed about 4,800 people—a 4-percent reduction compared to 

2006—and the fatality rate was 2.12 per 100 million vehicle miles traveled, down 

from 4.12 in 1988.23 However, the most recent rate is almost 50 percent higher 

than the overall traffic fatality rate. Like NHTSA, however, FMCSA does not 

directly implement some critical safety activities but relies on state, local, and 

private sector partners. 

FMCSA can reduce the number of large truck crash fatalities by taking stringent 

enforcement actions against carriers that repeatedly violate safety regulations. Our 

audit work found that hundreds of motor carriers repeatedly violated the safety 

regulations without incurring the maximum fines required by statute. Motor 

carriers are less likely to improve their safety performances and more likely to 

view fines as a cost of doing business if repeat violators are not assessed 

maximum fines. 

In response to our audit recommendations, FMCSA agreed to enhance its controls 

to assess maximum fines for patterns of dangerous violations and began 

developing procedures to identify and notify such carriers. FMCSA initially told 

us it would revise its policy by May 2007, but it then delayed it to incorporate the 

Government Accountability Office’s similar recommendations made in August 

2007. FMCSA now plans to issue the revised policy by December 31, 2008. 

FMCSA must take action to follow through on this important commitment. 

23 Based on 2006 data, the latest available. 
United States Department of Transportation 361

41

However, enforcement actions alone will not ensure compliance with Federal 

safety regulations because some individuals avoid sanctions by creating new 

motor carrier identities. A recent fatal crash illustrates how a carrier can 

circumvent an enforcement action. On June 23, 2008, FMCSA ordered a tour bus 

company out of service for several safety violations. On June 26, 2008, a new 

company with the same owners and address as the out-of-service company applied 

to the Department for operating authority.

On August 8, 2008—before the Department authorized the company to operate—a 

bus operating under the new company name crashed in Sherman, Texas, killing 

17 passengers and injuring 36 others. FMCSA must improve its processes for 

identifying individuals who create new carrier identities after enforcement actions 

and prevent these “chameleon carriers” from operating on the Nation’s highways. 

Finally, as more foreign-owned commercial vehicles operate in the United States, 

FMCSA needs to ensure that Mexico-domiciled carriers, their trucks, and their 

drivers comply with all U.S. safety regulations. FMCSA is conducting a highly 

scrutinized demonstration project to evaluate the safety performance of Mexicodomiciled motor carriers that are granted long-haul authority to operate throughout 

the United States.

On August 4, 2008, the Department announced a 2-year extension of the 

demonstration project. FMCSA must work with U.S. Customs and Border 

Protection to implement effective quality controls to check every participating 

Mexico-domiciled truck and driver. FMCSA must also ensure that participation 

levels in the project are sufficient to provide meaningful results and take effective 

enforcement action against participants that violate safety laws and regulations. 

Enhancing the Commercial Driver’s License Program by Enforcing Existing 

Standards and Adopting New Standards 

FMCSA must enhance the Commercial Driver’s License (CDL) program by 

rigorously enforcing existing standards in cooperation with state and local law 

enforcement agencies and an industry facing record-high fuel prices and 

decreasing demand. Enacted in 1986 and required since 1992, the CDL program’s 

purpose is to improve highway safety by ensuring that drivers of large trucks and 

buses are qualified to operate those vehicles and to remove unsafe and unqualified 

drivers from the highways. 

Although FMCSA has improved the CDL program, it must continue rigorous 

enforcement of existing CDL standards. In the past 5 years, our investigations, 

conducted with other law enforcement agencies and FMCSA, led to the 

prosecution of CDL fraud schemes in 15 states. These investigations exposed 

schemes involving the fraudulent issuance of CDLs to individuals who obtained 

them through corrupt means, such as bribery of state examiners and state-
362 FY 2008 Performance & Accountability Report

42

sponsored, third-party testers. As of August 2008, these investigations had 

generated 137 indictments and 106 convictions. 

In addition to enforcing existing standards, FMCSA must strengthen the CDL 

program by adopting and implementing new standards. After years of discussion, 

FMCSA has proposed new, stronger CDL standards that will reduce the possibility 

that unqualified individuals can obtain CDLs. FMCSA will have to work with 

states to ensure sustained cooperation in implementing these new standards, 

because some changes may need additional state resources.

FMCSA must also work to modernize the Commercial Driver’s License 

Information System (CDLIS), which holds records for more than 13 million 

drivers.24 CDLIS is the key system for ensuring that CDL drivers cannot escape a 

poor driving record by moving to another state. We recommended improvements 

for using the income derived from the system, but FMCSA will need to require 

new financial reports and review the results to ensure successful implementation. 

Identifying High-Risk Highway-Rail Grade Crossings for Safety 

Improvements To Further Reduce Collisions and Fatalities 

Over the last 5 years, collisions and fatalities at highway-rail grade crossings 

(grade crossings) have declined. From 2003 through 2007, grade crossing 

collisions decreased from 3,077 to 2,749 (11 percent) and fatalities decreased from 

357 to 338 (5 percent). During this period, the Federal Railroad Administration 

(FRA) took several actions to strengthen its Highway-Rail Grade Crossing Safety 

Program. For example, FRA worked with several states to develop state-specific 

safety action plans with initiatives for reducing collisions and fatalities. FRA also 

implemented procedures to improve the completeness of its grade crossing 

collision reporting system by conducting periodic reviews of railroads’ grade 

crossing collision reports.

FRA can do more to further reduce grade crossing collisions and fatalities by 

effectively implementing the safety mandates in the Rail Safety Improvement Act 

of 2008,25 which was signed by the President on October 16, 2008. This law 

gives FRA the authority to establish mandatory state and railroad reporting of 

national grade crossing inventory data that would better assist the Department in 

identifying high-risk dangerous grade crossings and developing risk mitigation 

strategies. The law also directs FRA to develop and make available to states 

model legislation to address sight obstructions at grade crossings with passive 

warning signs to improve motorists’ ability to see approaching trains. 

24 As of February 2008. 

25 H.R. 2095 (2008). 
United States Department of Transportation 363

43

Near-Term Focus Area for the Transition to a New Administration 

The safety of travelers is the Department’s overarching goal and number one 

priority. There has been progress, but additional efforts are needed to complete 

long-overdue revisions of policies governing repeat violators of the motor carrier 

safety regulations and adopt new CDL standards. 

For further information regarding the issues identified in this chapter, please 

contact Joseph Comé, Assistant Inspector General for Highway and Transit 

Audits at (202)-366-5630. The following related reports and testimonies can 

also be found on the OIG website at http://www.oig.dot.gov.

x Best Practices for Improving Oversight of State Highway Safety Programs 

x Effectiveness of Federal Drunk Driving Programs 

x Audit of the National Highway Traffic Safety Administration’s AlcoholImpaired Driving Traffic Safety Program 

x Cross-Border Trucking Demonstration Project 

x Interim Report on NAFTA Cross-Border Trucking Demonstration Project 

x Issues Pertaining to the Proposed NAFTA Cross-Border Trucking 

Demonstration Project 

x Follow-Up Audit of the Implementation of the North American Free Trade 

Agreement’s (NAFTA) Cross-Border Trucking Provisions 

x Motor Carrier Safety: Oversight of High Risk Trucking Companies 

x Status of Safety Requirements for Cross-Border Trucking with Mexico Under 

NAFTA 

x Significant Improvements in Motor Carrier Safety Program Since 1999 Act, 

But Loopholes for Repeat Violators Needs Closing 

x Oversight of the Commercial Driver’s License Program 

x The Federal Railroad Administration Can Improve Highway-Railroad Grade 

Crossing Safety by Ensuring Compliance with Accident Reporting 

Requirements and Addressing Sight Obstructions 
364 FY 2008 Performance & Accountability Report

44

eXhiBit. coMparison of fy 2009 anD fy 2008 top 

ManageMent challenges 

Items in FY 2009 Report Items in FY 2008 Report 

x Enhancing Aviation Safety and Maintaining 

Confidence in FAA’s Ability To Provide 

Effective Oversight of a Rapidly Changing 

Industry 

x Continuing To Make a Safe Aviation 

System Safer 

x Enhancing Mobility and Reducing 

Congestion in America’s Transportation 

System 

x Reducing Congestion in America’s 

Transportation System 

x Reforming Intercity Passenger Rail 

x Developing a Plan to Address Projected 

Highway and Transit Funding Shortfalls 

x Developing a Plan To Address the Highway 

and Transit Funding Issues in the Next 

Reauthorization 

x Maximizing the Return on Current Highway 

and Transit Infrastructure Investments 

x Continuing To Enhance Oversight To 

Ensure the Safety of an Aging Surface 

Transportation Infrastructure and To 

Maximize the Return on Investments in 

Highway and Transit Infrastructure Projects 

x Operating the National Airspace System 

While Developing and Transitioning to the 

Next Generation Air Transportation System 

x Addressing Long- and Short-Term 

Challenges for Operating, Maintaining, and 

Modernizing the National Airspace System 

x Protecting Against Increasing Cyber Security 

Risks and Enhancing the Protection of 

Personally Identifiable Information 

x Strengthening the Protection of Information 

Technology Resources, Including the 

Critical Air Traffic Control System 

x Preventing Catastrophic Failures and 

Obsolescence in the Nation’s Aging Surface 

Transportation Infrastructure 

x Continuing To Enhance Oversight to Ensure 

the Safety of an Aging Surface 

Transportation Infrastructure and To 

Maximize the Return on Investments in 

Highway and Transit Infrastructure Projects 

x Improving Contract Operations and 

Maintaining Procurement Integrity 

x Managing Acquisition and Contract 

Operations More Effectively To Obtain 

Quality Goods and Services at Reasonable 

Prices

x Enhancing and Deploying Programs for 

Reducing the Serious Consequences of 

Surface Transportation Crashes 

x Improving Oversight and Strengthening 

Enforcement of Surface Safety Programs 

exhibit. comparison of fy 2009 and fy 2008 top Management challenges 
United States Department of Transportation 365

45

appenDiX. DepartMent response 

U.S. Department of

Memorandum

Transportation

Office of the Secretary 

of Transportation 

Subject: ACTION: Departmental Comments on the OIG Draft 

Report – Top Management Challenges, Department of 

Transportation

Date: November 6, 2008 

From: Phyllis F. Scheinberg

Assistant Secretary for Budget and

 Programs/Chief Financial Officer 

To: Calvin L. Scovel III 

Inspector General

The Office of Inspector General’s Top Management Challenges identifies many of the 

key challenges facing the Nation’s transportation systems. The United States is 

privileged to have a first-class transportation system in terms of both connectivity and 

safety. However, the Department of Transportation (DOT) now faces enormous 

challenges that require new and effective solutions. Many of the challenges facing the 

DOT, such as aging infrastructure, resource availability and funding sustainability, and 

increasing cyber security risks, are not unique to the DOT. We would like to offer 

additional perspectives on the challenges we face in the following areas: 1) safety; 2) 

aviation congestion; 3) market-based, data-driven, performance-oriented solutions; 4) 

reform of surface transportation programs; 5) financial management; 6) cash shortfall 

management; and 7) procurement. 

Progress Achieved Improving Safety 

Safety is the Department’s number one priority and our progress in this area is evidence 

of our sustained focus on using a data-driven, risk-based approach to Federal programs 

and regulations. Highway safety has continued to improve as the fatality rate in 2007, the 

most recent year for which data are available, fell to 1.37 per 100 million vehicle miles 

traveled, which is the lowest rate ever recorded and the largest drop in crash-related 

fatalities in more than 15 years. Preliminary data show promising signs of further 

reductions in 2008. Continued improvements in this area are due to many factors, 

including the increased use of safety belts, more effective child restraint systems, 

increased enforcement of laws targeting alcohol-impaired driving, and continued 

appendix. Department response 
366 FY 2008 Performance & Accountability Report

46

investment in safety oriented highway infrastructure improvements. With further 

progress in these areas, along with increased market penetration of crash-avoidance 

technologies such as electronic stability control, we can expect further improvement in 

the future. 

The Department is also focusing its efforts on challenges in particular need of 

improvement, such as motorcycle safety, older drivers, and safety on rural roads. For 

example, motorcycle fatalities continued their nine-year upward trend, increasing another 

five percent in 2006. During 2008, we initiated a new Action Plan to Reduce Motorcycle 

Fatalities, which includes a comprehensive range of initiatives such as increasing rider 

and law enforcement education, better road designs, and tougher standards for labeling 

helmets. DOT also submitted legislation to the Congress that would enable us to better 

promote motorcycle helmet use. In addition, the Department recognized the 

demographic trend of an increasing number of older drivers and has proactively launched 

initiatives to address their special needs. Under the Department’s rural safety initiative, 

we are helping States and communities develop ways to eliminate the risks drivers face 

on rural roads. 

Strong progress also continues with aviation safety. Commercial airlines in the U.S. 

carry more than 750 million passengers a year and yet commercial airline crashes are rare 

events. The last passenger fatality to result from scheduled operations of a major U.S. 

carrier occurred in August 2006. Since then the U.S. air carrier system has moved 1.5 

billion people with no on-board fatalities. Even with the accident rate at historic lows, 

the Department continued to take aggressive actions to reduce system risks. In 2008, the 

Federal Aviation Administration (FAA) published a major rule requiring inerting of 

aircraft center fuel tanks to reduce ignition risk from combustible vapors. In response to 

violations of airworthiness directives by a major carrier, the Secretary convened an 

independent review team (IRT) of safety experts to review the FAA’s approach to 

managing risks in civil aviation, including its safety culture and implementation of safety 

management. Although the IRT concluded the FAA was unambiguously committed to 

its safety mission, the team made major recommendations to improve agency programs 

and safety management systems. The IRT’s recommendations are now being 

implemented by the FAA. 

Reducing the risk of runway incursions is one of the FAA’s top priorities. Each year, 

FAA handles a massive number of air traffic operations, including over 61 million 

takeoffs and landings last year at airports with air traffic control towers. These 

operations took place at more than 500 airports and involved over 600,000 pilots and 

14,000 air traffic controllers. There is no single way to reduce runway incursions given 

the sheer number of flights, people, and vehicles moving across airport runways and 

taxiways. Runway safety is a shared responsibility among pilots, controllers, and vehicle 

drivers. An aggressive runway safety program continues to reduce the number of serious 

runway incursions, and we are implementing new technologies that should bring about 

further improvement, particularly as we begin implementing runway status lights. 

Automated warning systems enhance runway safety, but education and situational 

awareness are the keys to preventing incursions. As a result of these combined efforts, 

the number of serious runway incursions dropped by more than 55 percent from fiscal 

appendix. Department response 
United States Department of Transportation 367

47

year 2001 through fiscal year 2007. The 24 serious incursions in fiscal year 2007 made it 

the safest year on record.

Action Initiated to Reduce Aviation Congestion

The Next Generation Air Transportation System (NextGen) is the FAA’s plan to 

modernize the National Airspace System (NAS) through 2025. NextGen technologies 

will give pilots and air traffic controllers more detailed information and enable more 

direct flight routes, all while providing the highest levels of safety. Through NextGen, 

the FAA is planning to accommodate air traffic growth by increasing NAS capacity and 

efficiency while simultaneously improving safety and reducing environmental impacts. 

The FAA is implementing new routes and procedures that leverage emerging aircraft 

navigation technologies, including Performance-Based Navigation, which is helping FAA 

to achieve its NextGen goals. 

Technology is only part of the solution for the FAA. The FAA has also taken extensive 

action to ensure that a sufficient number of fully trained and qualified air traffic 

controllers are available to accommodate expected retirements and industry growth. The 

FAA is on schedule in its plan to hire and train nearly 17,000 air traffic controllers over 

the next decade. Most recently, the FAA hired over 1,800 controllers in 2007 and over 

2,100 in 2008.

The Department is also working to offer market-based solutions to reduce airport 

congestion, increase competition, and ultimately reduce fares to consumers. DOT 

recently finalized a rulemaking that would auction a small percentage of slots at New 

York’s three most crowded airports. Given, the disproportionate impact that New York 

has on the rest of the nation’s airspace, a successful implementation of this proposal will 

yield nationwide benefits. In addition, the Department continues to implement a redesign 

of New York’s airspace to improve efficiency, as well as completing a range of other 

operational improvements in the New York region. 

Focus on Market-Based, Data-Driven, Performance-Oriented Solutions 

This Administration has changed the transportation financing debate to include marketbased, data-driven, performance-oriented solutions. We have called attention to and 

proposed policy and programmatic reforms to address the fundamental mispricing of 

highways, airports and the air traffic control system. Central to those reforms is a call to 

use market-based pricing mechanisms to allocate existing transportation resources more 

efficiently, generate revenues for re-capitalization and capacity expansion, reduce 

wasteful spending, and mitigate adverse environmental impacts. 

In addition to using market-based pricing mechanisms, utilizing private sector 

infrastructure markets more robustly should also play a major role in modernizing 

America’s transportation infrastructure – from our roads and bridges, to our subways and 

seaports, and to our air traffic control system. Public Private Partnerships are an essential 

part of modern transportation financing. These partnerships can reduce project costs, 

accelerate project delivery, and allow States and municipalities to greatly leverage 

appendix. Department response 
368 FY 2008 Performance & Accountability Report

48

available public resources. Among the Administration’s most important transportation 

legacies will be the unprecedented innovation we have sparked in the very way 

transportation in America is financed, built, maintained and operated. The challenge we 

face moving forward is translating these initial innovations into a coherent national policy 

that will deliver fewer traffic bottlenecks in the air and on the ground, better transit 

services, a stronger economy, and a cleaner environment. 

There is a clear role for the Federal government in helping to gain widespread acceptance 

of innovative and effective financing solutions across the country. This Administration 

believes that the Federal government should prioritize its investment resources on 

nationally significant projects that generate high returns for the taxpayer and focus less 

on process micromanagement. In addition, Federal policy should provide incentives to 

non-Federal officials exploring different procurement approaches that transfer more risks 

to non-governmental entities. Properly crafted public-private agreements can 

substantially reduce taxpayer exposure to cost overruns, project delays, deteriorating 

infrastructure quality and accountability to system users, among other protections. 

The Department has led the way with innovative data-driven, performance-oriented 

solutions to congestion on our Nation’s roads. During the last year, DOT launched major 

congestion reduction initiatives across all modes of transportation, for the first time 

seeking to coordinate discretionary grant awards on a multimodal basis within the context 

of a performance-based approach to reducing congestion. Federal grants awarded to 

innovative State and local leaders willing to pursue new congestion relief strategies hold 

enormous promise to reverse the precipitous decline in surface transportation 

performance in our major metropolitan areas. 

DOT Proposes A Programmatic and Regulatory Overhaul to Federal Surface 

Transportation Spending 

The Administration’s proposal to refocus, reform, and renew our fundamental approach 

to the Nation’s highways and transit systems will create a more effective and sustainable 

way to finance, operate, and maintain highways and transit systems. It also will make our 

highways safer and give Americans new confidence that the money they invest in 

transportation will actually deliver economic results instead of providing a reward for 

special interest constituencies. The proposal seeks to replace 102 stove-piped programs 

with eight consolidated, multimodal infrastructure and safety programs. This new 

approach to working with our State and local partners would empower those closest to 

the transportation issues to identify and address priorities of greatest local and regional 

importance. This flexible, mode-neutral approach to transportation problem solving 

offers new tools to address urban congestion, redoubles the Department’s emphasis on 

safety, and focuses on making the best possible use of taxpayers’ money. In addition, the 

proposal seeks to introduce cost-benefit analysis and a performance focus for the first 

time into most Federal transportation programs. We offer this visionary approach to 

making transportation infrastructure investments with the hope that the next 

Administration and the 111th Congress will give serious consideration to these ideas and 

approaches for congestion relief to keep America moving. 

appendix. Department response 
United States Department of Transportation 369

49

Financial Management 

The Department continues to be a leader in budget, performance and financial 

management. DOT’s emphasis on financial management has resulted in a renewed clean 

audit opinion this year with no material weaknesses, our seventh clean audit in the last 

eight years. The clean audit opinion is the result of countless hours of hard work by our 

financial managers. We are proud of the Department’s exemplary efforts in this area to 

demonstrate the financial and program results the American people expect and deserve. 

Effective Action Taken to Address Anticipated Funding Shortfall 

Transportation funding is an area desperately in need of reform. The success of any 

programmatic reforms depends on having a coherent, effective and sustainable funding 

approach. This was driven home clearly by this past summer’s severe cash shortage in 

the Highway Trust Fund (HTF). The Department had been very public with its warnings 

for over two years about the potential cash shortage in the HTF. The cash shortage 

became a reality at the end of fiscal year 2008 when increases in gasoline prices resulted 

in motorists driving fewer miles and consuming less fuel. Less fuel consumed resulted in 

lower receipts going into the HTF during the summer months when States are engaged in 

a majority of the year’s highway construction program. As the States submitted requests 

for reimbursement, the cash balances in the HTF dropped precipitously.

In preparation for a potential shortfall, DOT had prepared a legal, policy, and 

programmatic framework for action. As a result, the Department swiftly implemented its 

action plan to ensure that States and other involved parties were informed and continued 

to receive reimbursement. In response to the crisis, Congress passed legislation, which 

the President subsequently signed, providing the HTF with a one-time payment of $8 

billion from the General Fund. 

While the recent crisis has been resolved for the time being, DOT remains concerned that 

we could experience another shortfall in the near future. To ensure that the Department is 

able to respond proactively in the event of a reoccurrence, a multimodal working group 

was established to create an implementation plan. The working group is: documenting 

lessons learned, evaluating cash management strategies, coordinating with OMB and 

Treasury to prepare for the next cash shortfall, conducting an in-depth analysis of outlays 

and earmarks to better estimate cash flow, and working to establish meaningful indicators 

that will help the Department determine when to implement these cash management 

procedures.

DOT Launches Strategic Procurement Initiatives 

The Department also is working to strengthen its procurement systems. For example, the 

Senior Procurement Executive (SPE) initiated a three-pronged approach to make 

acquisition more strategic throughout DOT. First, the SPE is clarifying and formalizing 

procurement authority throughout DOT to effect the changes necessary to more fully 

appendix. Department response 
370 FY 2008 Performance & Accountability Report

50

manage acquisition risk. We are also detailing the approval process for major 

acquisitions and strengthening organizational outreach. The SPE led the implementation 

of One DOT PRISM, a contract-writing system that will enhance business process 

reengineering, standardization and efficiencies throughout DOT. Federal Acquisition 

Certifications for contract specialists, contracting officers, technical representatives, and 

program/project managers have been implemented throughout DOT. These certifications 

will ensure appropriate training for key acquisition workforce members. Annual ethics 

training has been instituted for employees involved in procurement and grant 

management. Finally, DOT’s Procurement Management Council has been reformed into 

the Strategic Acquisition Council, with the goal of making acquisition more strategic 

through the Department. 

Thank you for the opportunity to provide additional insight on the Department’s Top 

Management Challenges. We value the constructive comments of the Office of the 

Inspector General to improve the performance of the Department and its many programs. 

appendix. Department response 
United States Department of Transportation 371

U.S. DEPARTMENT OF TRANSPORTATION

SCHEDULE OF NET COST BY STRATEGIC GOAL

For the Year Ended September 30, 2008

Dollars in Thousands

The Schedule of Net Cost by Strategic Goal reports the DOT operational net cost to reflect the net cost of 

operations by each of the Department’s six goals in its FY 2008-2012 Strategic Plan to provide the linkage 

between cost and performance as related to each goal. DOT programs are generally complex and incorporate 

significant projects within multiple Operating Administrations (OA) and organizations within the OAs. These 

projects are linked to multiple organizational and department–wide strategic goals. This complexity makes it 

difficult to track the costs related to the department-wide strategic goals. Additionally, in order to determine the 

costs by strategic goals, OAs would need to analyze each project and determine allocation of costs to appropriate 

strategic goals. Because of the complexity related to the allocations, DOT has presented their Net Cost by 

Strategic Goal as allocated in the 2008 Budget.

Safety

Reduced 

Congestion

Global 

Connectivity

Environmental

Stewardship

Emergency

Preparedness

and Response

Organizational

Excellence Total

Surface Transportation

Federal Highway Administration $ 8,885,221 $ 20,773,101 $ 1,113,891 $ 5,549,534 $ 369,686 $ 375,851 $ $37,067,284 

Federal Transit Administration 5,167 9,757,091 - 302,266 41,727 19,698 10,125,949 

Federal Railroad Administration 241,915 1,254,066 - 1,390 1,390 4,171 1,502,932 

Federal Motor Carrier Safety 

Administration

481,883 3,942 - - 6,898 27,592 520,315 

National Highway Safety 

Administration

748,784 - - 2,706 - - 751,490 

Pipeline and Hazardous Materials 

Safety Administration

101,879 1,803 - 19,835 6,311 3,606 133,434 

Research and Innovative 

Technology Administration

- 9,079 - - - 12,711 21,790 

Surface Transportation Board - 14,261 - - - 15,557 29,818 

Subtotal 10,464,849 31,822,423 1,113,891 5,875,731 426,012 471,896 50,153,011 

Air Transportation

Federal Aviation Administration 10,362,839 3,997,505 86,063 390,593 271,429 423,694 15,532,121 

Subtotal 10,362,839 3,997,505 86,063 390,593 271,429 423,694 15,532,121 

Maritime Transportation

Maritime Administration 4,374 8,020 9,478 16,040 176,438 729 215,079 

Subtotal 4,374 8,020 9,478 16,040 176,438 729 215,079 

Other Programs

Office of the Secretary 5,247 103,200 27,986 3,498 20,990 132,936 293,857 

Volpe National Transportation 

System Center

- 1,029 - - - 1,441 2,470 

Office of Inspector General - - - - - 73,925 73,925 

Subtotal 5,247 104,229 27,986 3,498 20,990 208,302 370,252 

Total Net Cost $ 20,837,309 $ 35,923,097 $ 1,237,418 $ 6,285,862 $ 894,869 $ 1,091,912 $ 66,270,463