FY2009

Performance

& Accountability Report

Ray LaHood

Secretary of Transportation
Message from the Chief Financial Officer

i

Table of Contents

Message from the Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Message from the Chief Financial Officer . . . . . . . . . . . . . . . . . . . . . . . . 9

Management’s Discussion and Analysis

About this Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

How this Report is Organized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

DOT Mission and Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Organizational Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Overview Legislative Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

System, Controls, and Legal Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Federal Managers’ Financial Integrity Act (FMFIA) . . . . . . . . . . . . . . . . 24

FY 2009 FMFIA Assurance Letter to the President . . . . . . . . . . . . . . . . . . 27

Federal Financial Management Improvement Act . . . . . . . . . . . . . . . . 29

Federal Information Security Management Act (FISMA) . . . . . . . . . . . 31

SAS-70 Review on DOT’S Financial Management System . . . . . . . . . . 33

Improper Payments Information Act of 2002 . . . . . . . . . . . . . . . . . . . . . . 35

Other Mgmt Info, Initiatives & Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Inspector General’s FY 2009 Top Management Challenges . . . . . . . . . . . 42

GAO High Risk Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

Performance Report

Performance Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

Performance Summary Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

Strategic and Organizational Goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
ii

Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

Reduced Congestion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

Global Connectivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138

Environmental Stewardship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154

Security, Preparedness and Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168

Organizational Excellence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178

Other Performance Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189

ARRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189

CARS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195

Performance Data Completeness & Reliability . . . . . . . . . . . . . . . . . . . . 197

DOT Program Evaluations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200

Financial Report

Office of Inspector General Quality Control Review . . . . . . . . . . . . . . . . 237

Independent Audit Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243

Principal Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265

Notes to Principal Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272

Required Supplementary Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 319

Required Supplementary Stewardship Information . . . . . . . . . . . . . . . . . 325

Other Accompanying Information

Data Completeness and Reliability Details . . . . . . . . . . . . . . . . . . . . . . . . . 337

Summary of Financial Statement Audit and

Management Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338

Inspector General’s FY 2008 Top Management Challenges . . . . . . . . . 340

Improper Payments Information Act (IPIA) Reporting . . . . . . . . . . . . . . . 404

The Performance Crosswalk – Outcomes, 

Areas and Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405
Message

from the Secretary
Intentionally Left Blank
Message from the Secretary

3

MESSAGE FROM THE SECRETARY

I am pleased to submit my first Performance and 

Accountability Report for Fiscal Year 2009 as Secretary of the U.S. Department of Transportation (DOT). 

As I stated during my confirmation hearing earlier this 

year, improving the economic health of the Nation, 

the livability of our communities, and the sustainability and safety of the Nation’s transportation systems 

are the major priorities of DOT. These priorities have 

guided my first year as Secretary and I will continue to 

pursue these important goals throughout my tenure. 

In addition to our core mission of improving the safety 

and reliability of our Nation’s transportation systems, 

we have successfully implemented the American 

Recovery and Reinvestment Act of 2009 (Recovery 

Act) and the Car Allowance Rebate System (CARS). 

Although our data collection is ongoing and therefore 

necessarily incomplete as of the date of the submission of this report, the information 

available indicates that the Recovery Act and CARS program have contributed to reviving our Nation’s economy during very challenging times. The Recovery Act will continue 

to spur economic recovery into 2010; and the CARS program improved the fuel efficiency 

of our passenger vehicle fleet, and put Americans back to work. I am proud of the efforts 

made by DOT staff to implement these programs.

Recovery Act

The Recovery Act provides $48.1 billion to DOT for infrastructure investment spending. 

The investments in “ready-to-go” projects created jobs almost immediately and will continue to improve the productivity of our transportation systems over the long term. These 

investments will finance needed repairs to our highways, bridges, airports, and seaports; 

enhance transit operations; and fund the largest expansion of passenger rail in United 

States history. Projects funded with Recovery Act dollars range from the $189 million 

spent to widen the I-405 Sepulveda Pass in California to the almost 700 grants awarded by 

the Federal Transit Administration to transit agencies around the country.

As we approach the half-way point of the 18-month Recovery Act initiative, more than 60 

percent of the funds have been obligated. Moreover, the pace of these outlays continues 

to increase. I am particularly proud of the fact that DOT has met or exceeded all of the 
4

Recovery Act deadlines, and that funding has been obligated for more than 9,400 projects, 

of which more than 5,500 are currently under way or completed. Most importantly, each 

month the number of people directly employed with Recovery Act funding continues to 

grow. 

As the country’s aging transportation assets are brought to a state of good repair, and as 

others are expanded or constructed to accommodate multimodal methods of transporting 

passengers and freight, the Recovery Act will provide economic and social benefits that 

will endure for generations. Since the Act’s passage, I have personally visited at least 30 

States and 60 cities and I have seen the positive impact these investments are making in 

our communities across America. 

CARS

The Car Allowance Rebate System (CARS), also known as “Cash for Clunkers,” has been 

wildly successful in achieving program objectives. In the third quarter of 2009, car dealers around the country sold nearly 700,000 vehicles, enabling many of these small businesses that are so vital to their communities to weather the economic downturn. This 10.6 

percent increase in sales generated local and State tax revenues and created a demand 

for additional automobile production that in turn created more jobs. Moreover, the CARS 

program generated a 60 percent improvement in fuel economy between traded-in vehicles and vehicles purchased under the program. 

Safety

Our most important priority at DOT is transportation safety. We have worked diligently to 

reduce fatality rates on highways and in the air, and we are making traveling in America 

safer than in past years by focusing on distracted driving and motorcycle safety, and by 

promoting the use of seatbelts and child safety seats.

Road Safety

Most transportation-related deaths occur on our Nation’s highways. Reducing highway 

fatalities is therefore a top priority at the Department. I am proud to report that seatbelt 

usage rates have increased to 84 percent, thanks to programs such as Click It or Ticket. 

We have lowered the fatality rate for automobiles, while also reducing fatalities related 

to large trucks and buses. 

Recently, we have focused on a new hazard, distracted driving, which we will continue to 

address in the coming fiscal year. Our latest research shows that nearly 6,000 people died 

last year, and more than half a million people were injured, in crashes involving a dis-
Message from the Secretary

5

tracted driver. To this end, President Obama signed an Executive Order directing Federal 

employees not to engage in texting while driving government-owned vehicles or while 

driving privately owned vehicles on official government business. The President’s order 

sends a clear signal to the American public that distracted driving is dangerous and unacceptable and demonstrates that the Federal government is leading by example. In my 

capacity as Secretary of Transportation, I am also calling on State and local governments 

to work with DOT to reduce fatalities and crashes by making distracted driving part of 

their State safety plans, and by passing State and local laws against distracted driving in 

all types of vehicles.

Safety in the Air

DOT is committed to providing the safest air travel in the world. In FY 2009, DOT surpassed its goal for reducing the rate of commercial air carrier fatalities. Importantly, DOT 

also reduced the most serious runway incursions to below our targeted rate by enhancing 

airport surface markings and revising air traffic control procedures. 

Livable Communities

One of my highest priorities is to help make our communities more livable. To achieve this 

goal, in FY 2009 DOT joined with the U.S. Department of Housing and Urban Development 

and the Environmental Protection Agency to create a sustainability partnership, whose 

mandate is to coordinate Federal investments in transportation, housing, air quality, and 

water infrastructure across the country. This collaborative effort is essential if we are 

to provide Americans with more transportation options and affordable housing choices 

near transit, as well as ensuring greater access to jobs, education, health care, and other 

vital services. The DOT will continue to work with its Federal, State, and local partners to 

transform our transportation system into a truly multimodal system with strong alternatives to driving in order to maximize returns on highway capacity, combat traffic congestion, reduce our reliance on oil, and decrease greenhouse gas emissions.

Fuel Economy and Climate Change

This year DOT also successfully partnered with the U.S. Environmental Protection 

Agency (EPA) to establish an historic, coordinated national program that will improve 

fuel economy and reduce greenhouse gases from light duty vehicles built in model years 

2012–2016. The standards, if finalized as proposed, would also conserve billions of barrels 

of oil, save consumers money at the pump, increase fuel economy, and reduce millions 

of tons of greenhouse gas emissions by raising fleet-wide fuel economy standards to an 

average of 35.5 miles per gallon by 2016—all while ensuring that consumers still enjoy 

a full range of vehicle choices. These proposed standards, which were established with 
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unprecedented support from automakers, the United Auto Workers, leaders in the environmental community, governors and State officials, were published in September 2009 

and build upon core principles that President Obama announced in May 2009.

Conclusion

I am committed to doing everything in my power to make our Nation’s transportation 

system safer, stronger, greener, and more accessible to everyone, and I want to express 

my appreciation to the employees and partners of DOT, who not only worked diligently 

during the past year to address the most significant challenges facing our Nation’s transportation system, but also implemented two significant programs to help our Nation begin 

recovering from the greatest downturn in our economy since the Great Depression.

This report contains descriptions of the long-term challenges that lie ahead, as well as 

evidence of the progress that we made in FY 2009. The data and information are reliable 

and supported by verifiable measurement and reporting procedures in place throughout 

the Department.

Ray LaHood

November 16, 2009
Message from the

Chief Financial Officer
Intentionally Left Blank
Message from the Chief Financial Officer

9

MESSAGE FROM THE CHIEF FINANCIAL OFFICER

I am pleased to issue the Department of Transportation’s 

(DOT) Fiscal Year 2009 Performance and Accountability 

Report. This report provides information on the Department’s program performance, the management of the 

financial resources used to support these programs, and 

the steps taken to ensure that the Department’s internal 

controls remain strong. These are top priorities for my 

office, and will continue to be our major focus.

FY 2009 was a year of substantial progress for the DOT. 

We successfully:

•	 Implemented the first phase of the American 

Recovery and Reinvestment Act of 2009 (Recovery Act) ensuring the $48.1 billion provided to 

DOT was put to work rebuilding our transportation network in cities and counties across the 

Nation, and;

•	 Oversaw the overwhelming success of the Car Allowance Rebate System (CARS) 

program, which aided nearly 700,000 vehicle sales in the third quarter of 2009. 

In addition we achieved an unqualified opinion on our financial statements, our eighth in 

the last nine years. By continuing to achieve clean audit opinions with no material weaknesses, we are able to provide a solid foundation for assessing performance and strategic 

investments in transportation safety, and to act as prudent financial stewards of taxpayers’ funding.

On February 13, 2009 Congress passed the Recovery Act. The Recovery Act’s three main 

goals are to: (1) create and save jobs, (2) spur economic activity and invest in long-term 

economic growth, and (3) foster unprecedented levels of accountability and transparency in government spending. The DOT received $48.1 billion in Recovery Act funds to 

rebuild our Nation’s network of roads, tunnels, bridges, rail systems, airports and waterways, which we depend upon to keep the economy moving and growing. As of September 

30, 2009, DOT had obligated more than 60 percent of Recovery Act funding and expended 

almost $4 billion. I am pleased to report that Recovery Act funding has been obligated for 

more than 9,400 projects, of which more than 5,500 projects are currently under way or 

completed. 
10

As the DOT implements the Recovery Act to create jobs and improve transportation, we 

have also been working to ensure that people who travel on our highways are safe. We continue to make progress to reduce fatalities on our highways through our core programs. 

Seatbelt usage is at an all time high of 84 percent. We also are focusing, however, on a 

new hazard—distracted driving—which was at least partially responsible for nearly 6,000 

deaths last year. To highlight the dangers of distracted driving and to lead by example, 

President Obama signed an Executive Order prohibiting Federal employees from engaging in texting while driving government-owned vehicles or while driving privately owned 

vehicles when on official government business. 

In the year to come, we will continue to build on our solid foundation for organizational 

excellence. As I continue my tenure as Chief Financial Officer, I will strive to demonstrate the financial transparency and best practices, and achieve the program results the 

American people expect and deserve. 

Christopher Bertram

Assistant Secretary for Budget and Programs, and Chief Financial Officer
Management’s 

Discussion and Analysis
Intentionally Left Blank
Performance & Accountability Report FY2009

13

About This Report

The Department of Transportation’s (DOT or Department) Performance and Accountability Report (PAR) for Fiscal Year 2009 (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 2009 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 Ave, SE

Washington, DC 20590

You may also view this Report online at http://www.dot.gov
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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 2009; 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.
Performance & Accountability Report FY2009

15

United States

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.
16

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 seaways. 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
Performance & Accountability Report FY2009

17

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 enhance mobility through innovation, leadership, and public service.

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 promote 

the development and maintenance of an adequate, well-balanced U.S. merchant marine 

that is sufficient to carry the Nation’s domestic waterborne commerce and a substantial 

portion of its waterborne foreign commerce, and to serve as a naval and military auxiliary in time of war or national emergency.
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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 Pipeline and Hazardous 

Materials Safety Administration (PHMSA) is dedicated to safety and security by working 

toward the elimination of transportation-related deaths and injuries in hazardous materials and pipeline transportation, and by promoting transportation solutions that enhance 

communities and protect the natural environment.

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.
Performance & Accountability Report FY2009

19

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).

The American Recovery and Reinvestment Act of 2009 (ARRA or the Recovery Act) 

provided the Department an additional $48 billion. In addition to the Recovery Act the 

Department received an additional $3 billion for the Car Allowance Rebate System 

(CARS) program. The funding from these additional programs has caused significant 

fluctuations on certain line items in the financial statements when comparing FY 2009 

to FY 2008.

Overview of Financial Position

Assets

The Consolidated Balance Sheet shows the Department had total assets of $101.5 billion 

at the end of FY 2009. This represents a 65 percent increase over the previous year’s total 

assets of $61.3 billion. The largest increase of $40.6 billion was the Fund Balance with 

Treasury. This increase is consistent with the additional funding from the Recovery Act 

and CARS programs.

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

the following table.
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Assets by Type

Dollars in Thousands 2009 % 2008 %

Fund Balance with Treasury $62,685,783 61.7 $22,074.754 36

Investments 20,684,481 20.4 21,728,238 35.4

General Property, Plant & Equipment 14,439,603 14.2 14,512,568 23.6

Inventory and Related Property, Net 797,310 .8 802,368 1.3

Direct Loans and Guarantees, Net 2,219,298 2.2 1,670,284 2.7

Accounts Receivable 384,754 .4 303,490 0.5

Cash and Other Assets 294,830 .3 276,082 0.5

Total Assets $101,506,059 100.0 $61,367,784 100.0

Liabilities

The Department had total liabilities of $16.9 billion at the end of FY 2009. This represents 

a 14 percent increase from the previous year’s total liabilities of $14.8 billion, which is 

reported on the Consolidated Balance Sheet and summarized in the following table. The 

largest increases were in the Grant Accrual which reflects changes in grantee payment 

patterns and the effects of the Recovery Act, and debt which is attributed to additional 

loans made on the Transportation Infrastructure Finance and Innovation Act (TIFIA) 

program.

Liabilities by Type

Dollars in Thousands 2009 % 2008 %

Grant Accrual $6,769,814 40.0 $5,810,147 39.2

Other Liabilities 4,444,553 26.3 4,628,380 31.2

Accounts Payable 1,732,168 10.2 1,528,335 10.3

Environmental and Disposal Liabilities 1,195,249 7.1 828,757 5.6

Debt 2,478,348 14.6 1,762,985 12.0

Loan Guarantees 310,710 1.8 258,050 1.7

Total Liabilities $16,930,842 100.0 $14,816,654 100.0
Performance & Accountability Report FY2009

21

Net Position

The Department’s Net Position at the end of FY 2009 on the Consolidated Balance Sheet 

and the Consolidated Statement of Changes in Net Position is $84.5 billion, an 82 percent 

increase from the previous fiscal year total net position of $46.5 billion. These increases 

were due to the ARRA and CARS programs. 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 2009 was $75.2 billion.

net costs

Dollars in Thousands 2009 % 2008 %

Surface Transportation $57,597,654 76.4 $50,153,011 75.7

Air Transportation 16,288,922 21.6 15,532,121 23.4

Maritime Transportation 728,687 1.0 215,079 0.30

Costs Not Assigned to Programs 366,041 0.5 386,130 0.60

Less Earned Revenues Not Attributed to Programs 10,708 0.001 39,379 0.05

Cross-Cutting Programs 327,208 0.4 23,501 0.04

Net Cost of Operations $75,297,804 100.00 $66,270,463 100.00

Surface and air costs represent 98 percent of the Department’s net cost of operations. 

Surface transportation program costs represent the largest investment for the Department at 76.4 percent of the Department’s net cost of operations. Air transportation is the 

next largest investment for the Department at 21.6 percent of the Department’s net cost 

of operations. The increases in Net Cost are attributed to the Surface and Air Programs 

and additional Recovery Act and CARS funding.
22

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 2009 fiscal year, the Department had total budgetary resources of 

$175.6 billion, compared to the FY 2008 levels of $133.7 billion.

Resources

Dollars in Thousands 2009 2008 % Change 

Total Budgetary Resources $175,644,291 $133,717,556 31.4

Obligations Incurred $117,386,471 $87,670,373 33.9

Net Outlays $80,881,011 $73,864,953 9.5

Budget Authority of $186.4 billion – which consists of $128 billion of appropriations 

received and $58.4 billion of borrowing and contract authority. The Department incurred 

obligations of $117 billion for FY 2009, a 33.9 percent increase over the $87.6 billion of 

obligations incurred during FY 2008. These changes are due to additional appropriations 

received for the Recovery Act and CARS.

Outlays reflect the actual cash disbursed against the Department’s obligations. For the 

FY 2009, the Department had net outlays of $80.8 billion, compared to the FY 2008 levels 

of $73.8 billion, an increase of 9.5 percent. The increase is due to the Recovery Act and 

CARS programs. Due to the timing of the Recovery Act program, in FY 2010, net outlays 

should increase significantly as the program matures.

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 
Performance & Accountability Report FY2009

23

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.

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.
24

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 has provided the President and Congress an unqualified 

Statement of Assurance for FY 2009. The Department evaluated its management control 

systems and financial management systems for the fiscal year ending September 30, 2009. 

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 2009.

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 
Performance & Accountability Report FY2009

25

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 weaknesses and 

material nonconformances are also reported, citing milestones and/or accomplishments. 

Specific guidance for completing the end of fiscal year 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.
26

Summary of FY 2009 FMFIA Material Weaknesses

Status of Internal Controls (FMFIA Section 2)

The DOT is reporting no material weaknesses for FY 2009.

Status of Financial Management Systems (FMFIA, Section 4)

The DOT is reporting no material weaknesses for FY 2009.

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 performed in-depth testing of the controls over four focus area business 

processes for each Operating Administration (OA) including Time and Attendance/Human 

Resources; Budget; Inventory Management and Property, Plant and Equipment. 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 Departmentwide financial statements.
Performance & Accountability Report FY2009

27

Management Assurances – OMB Circular A-123
28
Performance & Accountability Report FY2009

29

FFMIA OF 1996 FINANCIAL 

MANAGEMENT SYSTEMS STRATEGY

The Secretary has determined that our financial management systems were in substantial compliance with the Federal Financial Management Improvement Act for FY2009. 

In making this determination, he considered all the information available, including the 

auditor’s opinion on our FY 2009 financial statements, the report on management’s assertion about the effectiveness of internal controls, and the report on compliance with laws 

and regulations. He also considered the results of the management control reviews and 

financial management systems reviews conducted by the agency and its independent 

contractors.

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.

Management conducted its assessment of the effectiveness of internal controls over financial systems and compliance with applicable laws and regulations in accordance with 

FMFIA guidance, OMB Circular A-127, Financial Management Systems, 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. Based on the results of DOT’s internal control assessment, no material weaknesses 

were identified in 2009.

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 (FSIO)-certified, commercial off-the-shelf based financial system. The 

Oracle system provides real time access to accounting information and fund availability. 

The consolidation of accounting activities using one financial system improves internal controls, reduces redundant processes, improves communications, gains efficiencies, as well 

as provides monitoring and control of Federal accounting standards and financial policies. 
30

In FY 2009, DOT implemented enhancements to 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 our customer base to identify, develop, test and coordinate six separate Delphi system release deliverables in FY 2009. All hardware and software releases 

continued to be decoupled so that technical infrastructure and application changes were 

included in separate releases. This release schedule assures more complete testing of 

patches and enhancements and continues to improve our communication and understanding of changes made to the system.

During FY 2008, DOT launched a financial management modernization initiative to upgrade 

its’ current financial management system software from Oracle Release 11i to Oracle 

Release 12. In order to take advantage of the enhanced functionality offered in Release 

12, DOT’s Office of Financial Management, in partnership with the Departmental financial community, has decided to use this opportunity to not only upgrade the system software but to upgrade (re-engineer) the current financial management business processes 

as well. This multiple year, Department-wide program has been established to facilitate 

an efficient and effective financial transformation and Oracle Release 12 implementation. 

This program is called the Financial Management Business Transformation (FMBT). The 

FMBT is led by the DOT’s Office of Financial Management and includes Department-wide 

executive sponsorship. 

In FY2009 DOT implemented the Delphi System Change Request (SCR) process. The 

updated SCR Request document has been modified into a standardized Business Case 

Document that is used by all OAs, ESC and OFM. These changes to the SCR process have 

helped to ensure that all organizations have early visibility of all SCR’s scheduled releases, 

and support the customers prioritization of business cases. In FY2009 OFM and ESC continued to work on further enhancements to the SCR process to further refine the process 

and improve efficiency. Further changes to the overall SCR process will be implemented 

in FY2010.

In FY2009 OFM, ESC and the OST Chief Information Officer’s (OCIO) staff worked 

together to enhance the processes and controls around the budget data call process. The 

enhanced budget call and monitoring processes have strengthened both internal DOT 

management reporting as well as OMB Exhibits 300 and 53 reporting requirements. Initial work has begun on earned value measurements (EVM) to better manage and control 

costs of the FMBT initiative. Final reporting protocols are currently being developed by 

the DOT Office of the Chief Information Office (OCIO) based on final OMB guidance and 

will be fully implemented in early FY2010.
Performance & Accountability Report FY2009

31

FEDERAL INFORMATION SECURITY MANAGEMENT ACT

The Federal Information Security Management Act (FISMA) requires federal agencies 

to identify and provide security protection commensurate with the risk and magnitude of 

potential harm resulting from the loss, misuse of, unauthorized access to, disclosure of, 

disruption to, or modification of information collected, maintained by or on behalf of the 

an agency. FISMA requires that Inspectors General evaluate agency information security 

programs and practices. The DOT FISMA report for FY 2009 will not be finalized until 

November 18, 2009. 

The DOT has 13 Operating Administrations that for Fiscal Year 2009 supported a total 

of more than 400 information systems, of which almost two thirds belong to the Federal 

Aviation Administration (FAA). Systems owned by the Department include national critical infrastructure such as the FAA air traffic control systems, safety-sensitive surface 

transportation systems and financial systems that are used to manage and disburse over 

$50 billion in Federal funds each year, 

Last year, the DOT OIG reported that the DOT’s information security program did not 

meet Federal IT security standards and made 27 specific recommendations to improve 

DOT’s controls. DOT has made improvements this year by issuing security policies that 

addresses all of National Institute of Standards and Technology (NIST) core information 

security control areas. Also, DOT significantly improved its common operating environment’s compliance with Federal Desktop Core Configuration (FDCC) which complies with 

an OMB mandate that requires all federal agencies standardize their desktop and laptop 

computer configuration settings.

DOT operating administrations still need to make progress in other critical areas, including, that all operating and database systems implement approved baseline configurations. 

Also required is the need for better identification and prioritization of security weaknesses. Additionally, DOT system owners need to ensure that all systems and their interfaces have proper certification and accreditation, and system recovery controls in the 

event of a disruption. Completion of protections for sensitive privacy information was 

also identified as a key area for corrective action.

The DOT CIO has initiated efforts to enhance the cybersecurity and privacy program 

and posture of DOT. With the support of the Deputy Secretary, the DOT CIO is developing a cybersecurity and privacy plan for DOT, working to establish sustainable metrics 

to measure performance and improvement across DOT, evaluating alternative training 
32

solutions such as the one used by the Department of State to enhance employee awareness and training, and looking at best practices and solutions from across government and 

the private sector to better manage security and privacy within DOT. Where practicable, 

opportunities to leverage the full capabilities of technologies which DOT already owns, 

and to make rapid enhancements that will not require significant incremental investment 

will be exploited in order to gain early and important improvements to the cybersecurity 

and privacy posture of DOT.

The full FY 2009 FISMA report will be available in early December 2009 and will be available at www.oig.dot.gov.
Performance & Accountability Report FY2009

33

SAS-70 REVIEW ON DOT’S FINANCIAL 

MANAGEMENT SYSTEM

The SAS-70 report summarized 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 fifth 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, OK, under the overall direction of the 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 and 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, MD. Clifton Gunderson concluded that management presented its description of ESC 

controls fairly in all material respects, and that the controls, as described, were suitably 

designed for all stated control objectives. With regard to implementation, Clifton Gunderson found that the tested controls were operating with sufficient effectiveness to provide 

reasonable, but not absolute, assurance that the control objectives specified by management were achieved from October 1, 2008, through June 30, 2009. Clifton Gunderson made 

recommendations to correct these control deficiencies.

Clifton Gunderson made additional recommendations to DOT management for improving controls in service continuity, configuration management, security management, and 

other areas. We agree that implementing these recommendations will further enhance 
34

controls over ESC operations. In accordance with DOT Order 8000.1C, the corrective 

actions taken in response to Clifton Gunderson’s recommendations are subject to audit 

follow-up. Clifton Gunderson performed additional testing and provided a follow-up management letter to OIG on September 30, 2009, reporting no significant changes to the 

control environment between July 1, 2009, and September 30, 2009. Clifton Gunderson’s 

follow-up letter did not include any further corrective actions.
Performance & Accountability Report FY2009

35

Improper Payments Information Act of 2002

In FY 2009, the Department fully implemented the Improper Payments Information Act 

of 2002 (IPIA), which requires that agencies (1) review and identify programs susceptible to significant improper payments, (2) report to Congress the amount, and causes of, 

improper payments, and (3) develop approaches for reducing improper payments. 

As part of the IPIA review, the Department successfully examined the following grant 

programs:

•	 Federal Highway Administration (FHWA) Federal-aid Highway Program

•	 Federal Aviation Administration (FAA) Airport Improvement Program

•	 Federal Transit Administration (FTA) Formula Grants Program

•	 Federal Transit Administration Capital Investment Grants Program 

In an effort to adhere to IPIA requirements, the Department re-engaged AOC Solutions, 

Inc. to develop a nationwide sampling plan, test sampled invoice line items for improprieties, and extrapolated a nationwide estimate of improper payments for FAA’s Airport 

Improvement Program. Separately, the Department awarded a new contract to Deloitte 

& Touche, LLP to likewise sample line items, test transactions, and extrapolate improper 

payment estimates for both FHWA and FTA’s major grant programs. 

Relative to FY 2008, and in direct response to the Office of the Inspector General’s (OIG) 

recommendations, the Department increased the number of tested line items by a margin 

exceeding 120%. Additionally, to ensure both sample validity and the accuracy of extrapolated programmatic improper payment estimates, the Department collaborated closely 

with OIG’s Statistical Advisor to develop a sampling methodology mutually agreed upon 

by both parties. 

Regarding transaction testing, the Department designed all test plans, specific to each 

Operating Administration, to scrutinize a range of administrative and contractual elements related to each invoice line item. Testing of administrative elements includes 

determining whether grantees properly approved payments, billed at the correct Federal 

participation rate, and determining whether billings and payments are mathematically 

accurate. Testing of contractual elements includes determining whether payments are in 

accordance with contract rates/prices for specified materials and whether material quality tests indicate materials’ compliance with contractual requirements.
36

Samples for all reviewed grant programs are of sufficient size to yield an estimate with 

a minimum 90 percent confidence interval within 2.5 percentage points above and below 

the estimated percentage of erroneous payments, as prescribed by OMB. The following 

sections discuss the results of these efforts.

FHWA Federal-aid Highway Program

The Department developed and executed a sampling methodology and test plan to review 

project payments and estimate the dollar amount of the Federal-aid Highway Program’s 

improper payments. FHWA executed the nationwide testing program using FHWA division 

office personnel. The sample of tested line items originated from Federal disbursements to 

grantees within the thirteen-month period March 1, 2008 through March 31, 2009.

The IPIA sampling methodology involved a multi-staged statistical approach that included 

the selection of 160 Federal disbursements totaling $553,887,169, and 320 line items, from 

supporting invoices, totaling $220,709,656. As in FY 2008, the Department designed the FY 

2009 sample to extrapolate a nationwide estimate of improper payments and this sample 

does not support an estimate for individual states or territory grantees. FHWA normally 

subjects states and territories not selected as part of the IPIA sample to a similar sampling and testing process under FHWA’s annual Financial Integrity Review and Evaluation (FIRE) program but due to the short 2009 test period this was not done. FHWA plans 

to resume FIRE IPIA testing in FY 2010.

After accounting for duplicate line items, improper payments totaling $16,317,015 were 

found in the sample of 286 unique tested items. The projection of known improper payments to the population of program payments for the thirteen-month period results in an 

improper payment estimate of $1,415.8 million 1/2 $72.7 million. The estimated improper 

payment rate is 3.5% 1/2 0.2%. This projection meets OMB’s definition of significant 

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

Reported improper payments result primarily from a lack of supporting documentation 

at the time of the review, including documentation supporting compliance with “Buy 

America” provisions. 

FHWA, in coordination with DOT’s Office of Financial Management, will develop and 

distribute a Best Practices Guide for grantees in an effort to work towards a reduced 

programmatic improper payment rate. Furthermore, FHWA will continue to review for 

improper payments within its FIRE Program which ensures all grantees, including grantees not included as part of the Improper Payments Information Act of 2002 sample, test 

for improper payments annually. Additionally, FHWA will advise grantees regarding the 

importance of proper documentation maintenance for programmatic reviews and audits. 
Performance & Accountability Report FY2009

37

FTA Formula Grants Program

FTA executed the nationwide testing program using contractor personnel. The sample of 

tested line items originated from Federal disbursements to grantees within the thirteenmonth period March 1, 2008 through March 31, 2009.

The IPIA sampling methodology involved a multi-staged statistical approach that included 

the selection of 55 Federal disbursements totaling $288,594,074, and 110 line items, from 

supporting invoices, totaling $35,514,957. As in FY 2008, the Department designed the FY 

2009 sample to extrapolate a nationwide estimate of improper payments and this sample 

does not support an estimate for individual states or territory grantees. 

After accounting for duplicate line items, improper payments totaling $269,616 were 

found in the sample of 103 unique tested items. The projection of known improper payments to the population of program payments for the thirteen-month period results in an 

improper payment estimate of $3.6 million 1/2 $9.7 million. The estimated improper payment rate is 0.2% 1/2 0.5%. This projection does not meet OMB’s definition of significant 

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

Reported improper payments result primarily from a lack of supporting documentation 

at the time of the review, including documentation supporting compliance with “Buy 

America” provisions. 

FTA, in coordination with DOT’s Office of Financial Management, will develop and distribute a Best Practices Guide for grantees in an effort to work towards a reduced programmatic improper payment rate. Furthermore, FTA will advise grantees regarding the 

importance of proper documentation maintenance for programmatic reviews and audits. 

FTA Capital Investment Grants Program

FTA executed the nationwide testing program using contractor personnel. The sample of 

tested line items originated from Federal disbursements to grantees within the thirteenmonth period March 1, 2008 through March 31, 2009.

The IPIA sampling methodology involved a multi-staged statistical approach that included 

the selection of 55 Federal disbursements totaling $316,851,880, and 110 line items, from 

supporting invoices, totaling $230,072,534. As in FY 2008, the Department designed the FY 

2009 sample to extrapolate a nationwide estimate of improper payments and this sample 

does not support an estimate for individual states or territory grantees. 
38

After accounting for duplicate line items, improper payments totaling $1,879,124 were 

found in the sample of 90 unique tested items. The projection of known improper payments to the population of program payments for the thirteen-month period results in an 

improper payment estimate of $17.4 million 1/2 $26.7 million. The estimated improper 

payment rate is 0.9% 1/2 1.4%. This projection does not meets OMB’s definition of significant improper payments ($10 million and 2.5 percent of total program payments).

Reported improper payments result primarily from a lack of supporting documentation 

at the time of the review, including documentation supporting compliance with “Buy 

America” provisions. 

FTA, in coordination with DOT’s Office of Financial Management, will develop and distribute a Best Practices Guide for grantees in an effort to work towards a reduced programmatic improper payment rate. Furthermore, FTA will advise grantees regarding the 

importance of proper documentation maintenance for programmatic reviews and audits. 

FAA Airport Improvement Program (AIP)

FAA executed the nationwide testing program using contractor personnel. The sample of 

tested line items originated from Federal disbursements to grantees within the fifteenmonth period March 1, 2008 through May 31, 2009.

The IPIA sampling methodology involved a multi-staged statistical approach that included 

the selection of 225 Federal disbursements totaling $531,342,399, and 431 testable line 

items, from supporting invoices, totaling $177,123,002. As in FY 2008, the Department 

designed the FY 2009 sample to extrapolate a nationwide estimate of improper payments 

and this sample does not support an estimate for individual states or territory grantees. 

Improper payments totaling $2,152,202 were found in the sample of 431 tested items. The 

projection of known improper payments to the population of program payments for the 

fifteen-month period results in an improper payment estimate of $37.8 million 1/2 $31.1 

million. The estimated improper payment rate is 0.8% 1/2 0.7%. This projection does not 

meet OMB’s definition of significant improper payments ($10 million and 2.5 percent of 

total program payments).

Reported improper payments result primarily from a lack of supporting documentation, 

including documentation supporting compliance with “Buy America” provisions. 
Performance & Accountability Report FY2009

39

FAA, in coordination with DOT’s Office of Financial Management, will develop and distribute a Best Practices Guide for grantees in an effort to work towards a reduced programmatic improper payment rate. Notwithstanding OMB’s definition of significant improper 

payments, FAA believes a corrective action plan is essential to improved AIP program 

management, as well as the prevention, detection, and reduction of improper payments 

within the AIP program.

Program

PY 

Outlays 

(M)

PY% PY$ 

(M)

CY 

Outlays 

(M)

CY 

IP%

CY IP$ 

(M)

CY+1 

Est. 

Outlays 

(M)

CY+1 

IP%

CY+1 

IP$ 

(M)

CY+2 

Est. 

Outlays 

(M)

CY+2 

IP%

CY+2 

IP$ 

(M)

CY+3 

Est. 

Outlays 

(M)

CY+3 

IP%

CY+3 

IP$ 

(M)

FAA Airport 

Improvement 

Program

N/A N/A N/A $4725 0.8% $37.8 $3496 0.8% $28.0 $4498 0.8% $28.0 $3310 0.8% $26.5

FHWA 

Highway 

Planning / 

Construction

N/A N/A N/A $40442 3.5% $1415.8 $40351 2.4% $968.4 $41485 2.0% $829.7 $42109 1.5% $631.6

FTA Capital 

Investment 

Grants 

Program

N/A N/A N/A $1933 0.9% $17.4 $2505 0.9% $22.5 $2361 0.9% $21.2 $2290 0.9% $20.6

FTA 

Formula 

Grants 

Program

N/A N/A N/A $1880 0.2% $3.6 $582 0.2% $1.2 $317 0.2% $0.6 $152 0.2% $0.3

Recovery Audit

DOT’s Recovery Auditor, Horn and Associates, worked to both recover identified departmental overpayments, and identify departmental payment process weaknesses. DOT 

granted Horn and Associates full access to the Department’s financial system in order for 

Horn and Associates to efficiently and effectively review payment records.

The Recovery Auditor did not uncover or identify any departmental systemic payment 

process weaknesses as overpayments resulted from individual cases of duplicate payments, prompt payment interest payment errors, sales tax on utility billings, and open 

credits on statements. 

Agency 

Component

Amount Subject 

to Review for 

CY Reporting

Amounts 

Identified 

for Possible 

Recovery

Amounts 

Identified For 

Recovery

Amounts 

Recovered CY

Amounts 

Recovered PY

TOTAL 30,548,345,802 252,534,549 1,067,271 533,098 172,959
40

DOT’S FINANCIAL MANAGEMENT BUSINESS

TRANSFORMATION INITIATIVE

The Department is fully committed to enhancing and integrating our budget, performance, 

and financial management programs during FY 2009, FY 2010, and beyond. The Financial 

Management Business Transformation (FMBT) is a multi year initiative, sponsored by 

the Office of Financial Management, that is chartered with achieving our vision:

“To be the government leader in Financial Management utilizing quality people, processes, 

and technology in delivering a single integrated solution to support DOT’s mission by using 

streamlined business processes while ensuring financial integrity.”

The FMBT is a collaborative endeavor supported by and involving all DOT Operating 

Administrations that seeks to accomplish significant improvement in the standardization 

of processes, reports, policies, and systems. The following key objectives were identified 

for our joint FMBT project:

•	 Alignment of resources to conduct business process reengineering and system 

modernization into a unified, focused strategy.

•	 Elimination of redundancies in business processes, systems and overhead 

costs.

•	 Renewed focus on customer centric solutions with improved collaboration and 

communication.

•	 Improved efficiency to provide greater value for agencies’ limited resources.

•	 Continued compliance to Financial Systems Integration Office (FSIO) mandates 

to upgrade systems to the most recent FSIO certified software.

•	 Meet the business process, data element and system standardization requirements set forth by the Office of Management and Budget (OMB) and Treasury

To accomplish these key objectives FMBT leadership established teams, refined in 

FY 2009, to include the Project Management Team, Change Management and Learning 

Team, Information Management Team, Systems Team, and Business Process Transformation Team. The Project Management Office was established in FY 2009 to improve this 

project’s organizational structure and worked diligently throughout the year to develop 

and implement a comprehensive project plan and schedule for FY 2009 and FY 2010 and 

track progress against defined transformation tasks, activities, and milestones.
Performance & Accountability Report FY2009

41

The Department is entering a critical phase of the Business Transformation initiative as 

FY 2010 begins. Each team has identified and is securing the necessary resources to continue to proceed on key activities. Core teams have been established, Operating Administration resources are engaged, and work proceeds towards standardization, process 

improvement, and systems planning for the transition to a FSIO-compliant financial management system.
42

InspectoR geneRAL’s fy 2009 top 

MAnAgeMent chALLenges
Performance & Accountability Report FY2009

43

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.
44

PAR 2009 Management Challenges

1.  Enhancing Aviation Safety and Maintaining Confidence in FAA’s Ability to 

Provide Effective Oversight of a Rapidly Changing Industry

Issue: Maintaining Confidence in FAA’s Oversight of Air Carriers and Certification and 

Production of New Technology and Aircraft in the Aviation Industry

I. Why is this an issue?

Airline consolidation and downsizing, as well as the introduction of new aircraft and technologies continue to dramatically change the aerospace industry. In addition, FAA must 

continually adapt its oversight to further enhance safety. Key 

challenges involve maintaining confidence in FAA’s oversight 

of air carriers. FAA has regulatory and statutory authority to 

provide oversight on air carriers’ safety standards. The goal of FAA’s oversight responsibility is to reflect “one level of safety”, requiring all air carriers to operate under the 

same rules and at the same level of safety.

II. Actions taken to date

Enhancing Oversight of Air Carrier Operations. The FAA has actively pursued safety 

program enhancements to ensure relationships with airlines are appropriate and professional and that non-compliant airlines are not avoiding penalties by using voluntary disclosure programs without addressing the underlying safety problems. Specifically, FAA 

has committed to enhancing the current Air Carrier Evaluation Program (ACEP) to perform periodic reviews to evaluate air carrier regulatory compliance, perform comparative analysis of ACEP data to review the effectiveness of Air Transportation Oversight 

System (ATOS) design and performance, and to periodically review field office compliance with ATOS policy and procedures.

•	 In December 2008 FAA issued Notice N 1100.322 which established the Audit 

and Evaluation Office under the Office of the Chief Counsel. The agency is also 

closely monitoring ATOS inspections that exceed frequencies for inspection and 

providing semi-annual reports to Congress.

•	 In FY 2009, FAA focused attention on the development of Flight Standard Evaluation Program (FSEP) processes and checklists to periodically assess field office 

compliance with ATOS policy and procedures. The FAA also developed a riskbased process to target ACEP teams to perform periodic reviews of air carrier compliance. In support of this effort, the agency developed and validated a 

moderate 

progress significant

progress

complete no

progress

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progress

PROGRESS METER
Performance & Accountability Report FY2009

45

risk-based scheduling process that includes a scoring system and thresholds for 

mandating evaluations.

•	 FAA created FSEP job aids to assess the relationship between the certificate 

holding district office and the operator to assure field office compliance with 

agency policy.

Improving Certification and Production Oversight of New Technology and Aircraft in the 

Aviation Industry. Introduction of Very Light Jets (VLJ) into the National Airspace System is a key change occurring in the industry and has inherent risks. These aircraft use 

advanced avionics and turbine engine technology typical of large transport aircraft and 

are combined with the light weight of smaller, private aircraft. Therefore, they do not 

easily fit into FAA’s existing certification framework and make the current general aviation certification requirements inadequate to address the advanced concepts introduced 

on the aircraft.

•	 In FY 2009, FAA published a Notice of Proposed Rulemaking that addresses 

updated certification regulations for general aviation small aircraft. 

•	 FAA also published a revision to an Advisory Circular (AC) that addresses the 

emergence of turbine engine powered general aviation small aircraft.

•	 Additionally, FAA established a rulemaking schedule to address function and reliability testing for general aviation turbojets that weigh less than 6,000 pounds.

•	 In 2009, the issuance of a new Advisory Circular and coordination process provided greater standardization and improved communications between the aircraft certification service and flight standards service.

III. Actions remaining and expected completion date

FAA will pursue several activities in the next two years to address this issue.

•	 In early 2010 the Flight Standards Evaluation Program processes and procedures will be completed and ready for implementation shortly thereafter.

•	 In early FY 2010, a proposal that includes the risk-based scheduling process and 

recommendations for personnel and resource requirements will be presented 

for Flight Standards Service approval.

•	 In 2010, FAA will complete the internal coordination process for the general 

aviation turbojet certification regulations Notice of Proposed Rule Making and 

associated policy.

•	 In 2011, FAA expects completion of these regulations and implementation of the 

remaining policy will further this standardization and communication.
46

IV. Results or expected results

Although FAA has made progress over the past several years in increasing the system’s 

safety and efficiency, FAA’s goal is to actively identify and implement further safety 

improvements and to increase accountability for the efficient use of resources to meet 

oversight requirements.

Issue: Following Through on Longstanding Commitments To Improve Oversight of External Repair Facilities.

I. Why is this an issue?

FAA provides safety oversight to both air carriers and repair 

stations to ensure that they comply with their regulatory 

responsibilities. Over the last few years, air carriers have been 

contracting a larger percentage of their maintenance work to 

repair stations rather than maintaining their own facilities. In 

addition, U.S. certificated repair stations are frequently contracting with other vendors, both foreign and domestic, to perform maintenance functions. These factors add layers of complexity and risk to the air carriers’ responsibility 

to oversee all maintenance done on their aircraft, by any maintenance provider. The air 

carrier must ensure that the repair station performs the work in accordance with the air 

carriers’ manuals. Further, any U.S. certificated repair station, in the United States or 

outside, has to meet the same safety standards. If a certificated repair station contracts 

with another vendor to perform a function, then the repair station must make sure that 

the work has been satisfactorily performed.

II. Actions taken to date

FAA has strengthened air carrier maintenance policy and procedures to provide more 

enhanced oversight. FAA has bolstered its programs to reflect dynamic changes in the 

aviation industry in three specific areas of identified risk, 1) air carrier’s increased use 

of maintenance providers or certificated repair stations; 2) need to refine and narrow the 

definition of “substantial” or “critical” maintenance; and 3) focus on the air carrier’s Continuing Analysis and Surveillance System (CASS).

•	 In FY 2009, FAA began work on a major policy change that uses the term “air carrier maintenance provider” to mean anyone used by an air carrier for work on 

its aircraft or components. Thus, there can be no difference between the maintenance performed by an air carrier at its own facility, using its own employees, 

and work performed at a repair station by other persons.

moderate 

progress significant

progress

complete no

progress

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progress

PROGRESS METER
Performance & Accountability Report FY2009

47

•	 In FY 2009 FAA developed a new single definition of “essential maintenance” to 

replace terms used in the past such as: substantial maintenance, critical maintenance, and critical parts. FAA has defined essential maintenance and listed 

those particular maintenance functions in a notice due for publication in the first 

quarter of FY 2010.

•	 Air carriers will be required to list their essential maintenance providers on 

their operations specifications. Operations specifications are a contract that an 

air carrier and FAA agree upon to show how the air carrier will comply with 

regulations which pertain to its business.

•	 To improve FAA’s safety oversight of certificated repair stations and/or maintenance providers, the agency instituted a risk-based oversight system. The system 

provides FAA safety inspectors with the tools to ensure air carrier maintenance 

providers are following proper procedures. New guidance to safety inspectors 

will include a requirement to conduct initial audit within a predetermined timeframe and follow-up on-site inspections of air carriers’ essential maintenance 

providers at intervals not to exceed three calendar years. These inspections will 

assess whether, and to what extent, the maintenance providers comply with the 

air carriers’ specified procedures, and if the maintenance providers are using the 

appropriate equipment, tools, facilities and personnel to accomplish the work. 

The air carrier will be responsible for correcting any identified deficiencies.

III. Actions remaining and expected completion date

The agency is also revising a training course for FAA safety inspectors on the Continuing Analysis and Surveillance System and its requirements. The revised course material 

emphasizes the primary responsibility of an air carrier for the performance of any maintenance on its aircraft and includes detailed information on the concepts and methodology 

of risk assessment and risk management. FAA expects to deliver the revised course to the 

safety inspector workforce during FY 2010. In addition, FAA will continue to respond to 

its internal analysis, air carrier input, and new industry and technology trends and will 

strengthen air carrier maintenance policy and guidance as needs emerge.

IV. Results or expected results

FAA published changes to the repair station regulations, strengthening the requirements 

for repair stations to possess and maintain a quality control system when contracting 

maintenance. The improved regulatory requirements, along with our enhanced repair 

station oversight process, provide FAA with increased visibility of surveillance data to 

ensure repair station outsource maintenance activities are properly controlled by the 

repair stations with effective oversight by FAA.
48

Issue: Improving Runway Safety By Implementing New Technologies, Making AirportSpecific Changes, and Reinvigorating FAA Initiatives.

I. Why is this an issue?

Although runway incursions are down 53 percent since FY 

2001, the runway environment remains one of the highest risk 

areas in our national airspace system. Runway incidents continue to be a substantial threat to safety and reducing the risk 

of potential runway incursions is one of FAA’s top safety priorities. Implementing new technology holds the promise of 

reducing runway incursions well below current levels.

II. Actions taken to date

FAA’s “Call to Action”, established in FY 2007 to mitigate the continuing risk of runway 

incursions, has made significant progress by focusing on outreach and awareness, and 

improving technology and infrastructure. FAA has completed almost all of the identified 

short-term initiatives and exceeded the FY 2009 goal of reducing incursions by 1 percent, 

due in large part to the air carriers’ and airport authorities’ proactive role.

The majority of runway incursions (approximately 65 percent) occur when a pilot violates a regulation or fails to adhere to air traffic controller’s instructions. FAA enhanced 

its training and education by publishing a collection of Runway Safety Videos and other 

promotional products to increase situational awareness in FY 2009. The runway Safety 

videos explore risk and prevention strategies while operating in the terminal airspace 

and on the surface of airports.

FAA continues to deploy new technologies to enhance runway safety. The Airport Surface 

Detection Equipment – Model X (ASDE-X) is a surface surveillance detection system that 

integrates data from a variety of sources. It provides controllers with a more reliable 

view of airport operations that improves situational awareness resulting in a reduction 

of surface deviations, the number of runway incursions, and the number of incidents or 

accidents. FAA has delivered twenty-eight of the thirty-five planned systems.

Runway Status Lights (RWSL), a series of runway lights that illuminate red, alert pilots 

when it is unsafe to enter, cross, or begin takeoff on a runway. RWLS assess any possible 

conflicts with surface traffic and reduce the likelihood of runway incursions. In FY 2009, 

RWLS are currently installed at San Diego, Dallas/Ft. Worth, and Los Angeles.

Capstone 3, launched in 2008, is a program that subsidizes air carriers for the installation of Surface Moving Map (SMM) displays on electronic flight bags in the cockpit. With 

moderate 

progress significant

progress

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progress

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progress

PROGRESS METER
Performance & Accountability Report FY2009

49

Moving Map Displays and Own-Ship Position, pilots will see exactly where their aircraft 

is on the airfield, thus reducing the chances of losing situational awareness and being in 

the wrong place. In FY 2009, FAA reached agreements with seven U.S. airlines to fund 

in-cockpit runway safety systems in exchange for critical operational data. The data will 

help FAA evaluate the safety impact of the technology and is expected to accelerate key 

safety capabilities necessary for the transition to NextGen.

The Low Cost Ground Surveillance is a low-cost, commercially available radar surveillance system that would reduce the risk of runway incursions, especially during periods of low visibility, at certain small and medium-sized airports. FAA will install these 

systems at airports that do not have Airport Surface Detection Equipment. In FY 2009, 

FAA completed the pilot program at Spokane International Airport, Washington and the 

results show the system is suitable and cost-effective. Contracts have been awarded to 

install LCGS at Manchester Boston Regional, San Jose International, Reno/Tahoe International, and Long Beach International.

III. Actions remaining and expected completion date

In September 2010, FAA will conduct Field Operational Evaluation of Runway Status 

Lights/Runway Intersection Lights function at Boston Logan Airport. FAA will establish new test beds at Los Angeles and Boston Logan Airports during the FY 2009 - 2010 

timeframe.

Final Approach Runway Occupancy Signal (FAROS) is an automated safety system 

designed to notify pilots on approach to land that the runway is occupied or otherwise 

unsafe for landing. This pilot notification system addresses the high priority safety hazards of runway incursions and is undergoing long-term testing at the Long Beach, California airport. An enhanced version of FAROS (eFAROS) was installed at Dallas-Ft. Worth 

airport and the short-term operational evaluation indicates the system is effective.

FAA will procure and install a Low Cost Ground Surveillance system at one airport in May 

2010 with two more installations scheduled for September 2010.

IV. Results or expected results

Based on the continued emphasis on runway safety, FY 2009 is expected to eclipse FY 

2008 as the safest year on record regarding serious runway incursions. Further, total 

numbers of runway incursions that have been increasing annually, and in the last two fiscal years by 13 to 14 percent, will be reduced below a baseline established in FY 2008. As 

the advanced technology systems are implemented, their expected cumulative effect is to 

further diminish the number of incursions and their severity.
50

2.  Enhancing Mobility and Reducing Congestion in America’s Transportation System

Issue: Reducing Delays and Improving Customer Service as the Airlines Struggle with 

Higher Fuel Costs

I. Why is this an issue?

Aviation system delays occur when the demand for air transport services exceed the capacity of the system. Congestion 

and delays cost the traveling public and aviation industry billions of dollars each year in added expense and lost productivity. One of the largest expenses for the aviation industry is the 

cost of jet fuel. When airlines incur taxi-delays or airborne 

delays, they use even more fuel, thereby increasing their costs. While fuel costs are currently at around $2.00 per gallon, most analysts believe the cost of jet fuel will increase 

again after the economy recovers.

II. Actions taken to date

While the implementation of NextGen is the long-term solution to reducing congestion and 

increasing capacity of the NAS, FAA continues to work aggressively at reducing delays 

and meeting the anticipated demand for air travel. To temporarily ease congestion and 

reduce delays, FAA and DOT have implemented several short-term initiatives to improve 

the accountability, enforcement, and protection afforded air travelers:

Congestion Management at LaGuardia, JFK and Newark Airports. FAA issued final congestion management rules in October 2008 to address continued delay problems at New 

York’s LaGuardia, JFK and Newark airports. In May 2009, FAA issued proposals to rescind 

the New York rules. Despite the decision to rescind the rules, FAA believes some form 

of congestion management is necessary at these airports on a long-term basis. In FAA’s 

ongoing efforts to reduce delays, FAA continues to keep the limits on scheduled operations in place at LaGuardia, JFK, and Newark while the Administration considers its next 

steps with regard to a long-term congestion management solution for the New York area 

airports.

New York Area Operational Improvements. FAA is working to implement several operational initiatives that will increase efficiency and reduce delays at the Port Authority 

of New York and New Jersey run airports. In addition, the Port Authority is making 

improvements and conducting maintenance on the airfield at JFK airport. These include 

widening of runways, strengthening of taxiways, new high speed turnoffs, and runway 

rehabilitation.

moderate 

progress significant

progress

complete no

progress

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progress

PROGRESS METER
Performance & Accountability Report FY2009

51

Other initiatives to explore operational improvements include New York, New Jersey, 

and Philadelphia Airspace Redesign and continued work on the New York Aviation Committee’s list of 77 recommended fixes for reducing delays.

O’Hare International Airport. FAA requires U.S. and foreign air carriers to report their 

proposed scheduled operations at O’Hare in advance. The agency then uses the information to anticipate and take action to prevent excessive scheduling and delays.

III. Actions remaining and expected completion date

In 2010, FAA will re-evaluate policy alternatives and initiate new congestion management 

rulemaking for LaGuardia, JFK, and Newark airports.

FAA is working with the Department of Defense for release of restricted east coast air 

space over the winter holidays to civilian operations.

The Chicago Airspace Project (CAP) is two-thirds complete. Design for the final components is currently ongoing, and will continue into FY 2010. Implementation of the remaining components will begin in late 2012 and is expected to be complete, along with the 

O’Hare Modernization Project (OMP), in late 2014. Benefits from the OMP include reduced 

delay and increased capacity.

IV. Results or Expected Results

FAA expects to continue bringing operational improvements on-line that will provide for 

increased efficiencies and reduce delays in the New York metro area and nationwide, this 

year and in the future. In addition, FAA’s congestion management efforts at LaGuardia, 

JFK and Newark airports are expected to prevent excessive congestion and delays, as 

were experienced in the summer of 2007. Other objectives of the congestion management 

initiatives are to ensure efficient utilization of the scare resources as well as to foster 

increased competition.

Issue: Keeping Airport Infrastructure and Airspace Projects On Schedule

I. Why is this an issue?

While the long-term solution to increasing capacity and reducing delays depends largely on expanding capacity through the 

Next Generation Air Transportation System (NextGen), the 

new system will not be fully operational until 2025. Until the 

full benefits of NextGen are realized, several near-term initiatives – building new runways and redesigning airspace - have 

potential for relieving congestion.

moderate 

progress significant

progress

complete no

progress

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PROGRESS METER
52

II. Actions taken to date

In FY 2009, FAA’s ongoing effort to meet the needs of today’s air traveling public by 

reducing congestion and subsequent delays, culminated with the unprecedented opening 

of three new runways at three of the Nation’s busiest airports – on the same day.

•	 At Washington Dulles, the new runway will significantly enhance capacity by 

accommodating additional 100,000 aircraft operations annually while decreasing the delay per operation by an average 2.5 minutes. Additionally, this new 

runway allowed the airport to perform much-needed reconstruction on its center runway during the summer of 2009 without experiencing associated delays.

•	 Seattle-Tacoma Airport’s new runway is critical to capacity, given that the two 

existing runways were closely spaced, impeding efficiency during periods of low 

clouds that occur 44 percent of the time. With this new runway, Seattle-Tacoma 

will accommodate as many as eight additional on-time arrivals per hour, even in 

poor weather, which often creates a slow down in the rate of arrivals.

•	 The new Chicago O’Hare runway represented a major and necessary milestone 

in the airport’s Modernization Program, offering new final approach fixes and 

taxiway systems. This runway will enable the airport to accommodate more than 

52,000 additional annual operations while reducing average annual delays.

The FAA’s ongoing campaign to increase efficiencies had several additional notable successes in FY 2009.

•	 On December 4, 2008, Dallas-Ft. Worth opened a new Southeast “End Around 

Taxiway.” End around taxiways increase operational capacity and runway safety 

by allowing aircraft to taxi around the end of the runway.

•	 In August 2009, a new taxiway opened ahead of schedule at Boston Logan Airport, and will reduce ground delays by as much as 22 percent.

•	 In February 2009, Philadelphia International Airport opened a 1,040 foot extension to runway 17-35. This was accomplished a month ahead of schedule. This 

runway extension alone is projected to save airlines $20 million a year in aircraft direct operating costs and generate a net savings in passenger time, valued 

at $29 million annually.

III. Actions remaining and expected completion date

None. All planned actions were accomplished.
Performance & Accountability Report FY2009

53

IV. Results or expected results

Collectively, the FY 2009 runway and taxiway projects at some of our nation’s busiest 

major hub airports yielded efficiencies and provided for 327,000 more annual operations 

in fiscal year 2009.

These achievements represent the successful culmination of FAA efforts to cultivate 

partnerships and to work in tandem with local governments and communities to achieve 

lasting benefits. Delays were reduced for millions of passengers annually, while saving 

hundreds of millions of dollars per year to travelers and to the airline industry.

Issue: Improving Intercity Passenger Rail’s Efficiency and Viability as a Transportation 

Alternative

I. Why is this an issue?

With growing highway and aviation congestion and volatile 

fuel prices, intercity passenger rail is increasing its role in 

America’s transportation system and is a priority of the Obama 

Administration. However, Amtrak’s poor on time performance 

detracts from its revenue base by discouraging ridership, and 

adds significantly and unnecessarily to its costs by slashing 

equipment utilization and elongating crew tours of duty.

II. Actions taken to date

To date, FRA has drafted performance measures to comply with section 207 of the Passenger Rail Investment and Improvement Act of 2008, which include on-time performance 

measures and standards for intercity passenger rail service. FRA has also approved 

projects worth $1.14 billion under the American Recovery and Reinvestment Act and 

has begun the application review process for the High-Speed/Intercity Passenger Rail 

(HSIPR) grant program. Both of these efforts will lead to incremental improvements to 

rail infrastructure and capacity within the Amtrak system, which inherently benefits on 

time performance. Moreover, Amtrak is continuing to advance performance improvement plans with freight host railroads on select routes across the Amtrak system.

FRA is working through Amtrak, the new on-time performance measures, and passenger 

rail investment programs to effect improvements in the rail system. Other than those 

aspects of rail operations and maintenance covered by the railroad safety regulations, 

the FRA has no authority over the private railroads’ train dispatching practices, rail line 

capacity, and track maintenance, which affect the quality of passenger rail service.

moderate 

progress significant

progress

complete no

progress

slight

progress

PROGRESS METER
54

Actions remaining and expected completion date

By the end of calendar year 2009, FRA expects the metrics and standards to be finalized 

and will have made further progress in evaluating the HSIPR applications. Ongoing work 

with Amtrak’s performance improvement plans is also expected.

To specifically address the causes of Amtrak delays, Amtrak and FRA have incorporated 

train delay measures into the metrics and standards, which will help identify the source 

and causes of delays affecting Amtrak’s operations. Amtrak will track delays in two broad 

categories: those caused by the host railroads and those caused by Amtrak. To provide 

additional insight, Amtrak will divide delays caused by the host railroad into three categories: slow orders, freight train interference, and other host responsible delays.

DOT’s OIG has noted that host railroad dispatching and infrastructure maintenance practices have negatively impacted Amtrak’s operations, especially in recent years. Freight 

train inference delays are largely tied to host dispatching practices while slow order 

delays are tied to host maintenance practices. By reporting on these two host railroad 

delay categories on a quarterly basis to Congress, by route, by host, the FRA will bring 

greater attention to the cause of Amtrak delays, which is expected to help Amtrak and 

host railroads initiate their development of performance improvement plans that identify operational and incremental infrastructure improvements that reduce delays and 

improve OTP.

FRA is also working with Amtrak to establish an allowable threshold for delay minutes 

per 10,000 train-miles, which when exceeded on an Amtrak route for two consecutive 

quarters, can lead to a Surface Transportation Board investigation that ultimately results 

in host railroads being fined for any inattentiveness that they may display toward Amtrak 

and the convenience and necessity of the train-riding public.

III. Results or Expected Results

For the first eleven months of FY 2009, the on-time performance across the entire Amtrak 

system through August was 80 percent, an increase of 9.2 percentage points over the previous year. During that period, three-fourths of Amtrak’s routes (30) had improvements 

in OTP, and of these, nine corridor-type and ten long-distance trains are meeting or are 

surpassing their FRA-defined OTP target for FY 2009. This progress is expected to continue in the future due to a combination of factors, including further cooperation between 

Amtrak and the freight railroads; noteworthy State-sponsored investments under FRA’s 

ongoing High-Speed Intercity Passenger Rail (HSIPR) program; Amtrak’s Recovery Actenhanced capital programs, enabling Amtrak to expedite replacements and additions of 

rolling stock and infrastructure; and the implementation of the Metrics and Standards, 
Performance & Accountability Report FY2009

55

which will improve the accountability of host railroads, thus encouraging the required 

priority dispatching of Amtrak trains and accelerating the implementation of action items 

identified by Amtrak-host railroad performance improvement plans.

3. Developing a Plan to Address Projected Highway and Transit Funding Shortfalls 

Issue: Ensuring the highway trust fund remains solvent and developing a comprehensive 

highway funding framework for the future.

I. Why is this an issue?

The Highway Account within the Highway Trust Fund is the 

primary mechanism for funding federal highway programs. 

The account channels about $33 billion in highway user excise 

taxes annually to states for highway projects. The upcoming 

Congressional authorization process for surface transportation programs provides an opportunity to address long-term 

funding for the Highway Trust Fund.

II. Actions taken to date

Since the shortfall in 2008, DOT has monitored the cash balance in the Highway Account 

on a weekly basis, and continues to track receipt and outlay levels relative to historical 

data. In June 2009, DOT began providing Congress weekly projections of the cash balance 

in the Highway Account.

DOT now provides monthly data for the Highway Account of the Highway Trust Fund on 

the Federal Highway Administration (FHWA) website to ensure that the latest information is available to stakeholders. The website lists the most recent cash balance, receipts, 

and outlays, along with trend data, comparing the current status to the prior three fiscal 

years. This is an unprecedented level of transparency for the status of the trust fund.

DOT has also established procedures to increase the frequency of communication with 

Congress and stakeholders as the balance in the Highway Trust Fund is drawn down. On 

June 24, 2009, the Deputy Secretary of Transportation formally notified states that the 

highway account would experience a cash shortfall later in the summer. The notification 

letter explained that as the cash balance in the Highway Account drops, FHWA could 

need to begin making payments to States on a weekly or bi-weekly basis, rather than daily, 

beginning in early August. On August 7, 2009, the President signed legislation providing an additional $7 billion to the Highway Account, which will keep the account solvent 

through Fiscal Year 2009 and into Fiscal Year 2010.

moderate 

progress significant

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progress

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PROGRESS METER
56

III. Actions remaining and expected completion date

DOT will work with Congress to explore appropriate solvency mechanisms as part of the 

surface transportation reauthorization process.

IV. Results or expected results

A comprehensive highway funding framework will support a transportation system that 

will enhance the Nation’s economic competitiveness and improve transportation safety.

4. Maximizing the Return on Current Highway and Transit Infrastructure Investments 

Issue: Strengthening stewardship over the Federal Government’s highway investment

I. Why is this an issue?

To maximize the return on Federal highway funding provided 

to states (over $41 billion in FY 2009), FHWA must continue 

to provide strong stewardship of major highway projects. 

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 Highway Trust Fund (HTF) revenues are falling 

short of meeting an overwhelming demand for highway infrastructure funding.

II. Action(s) taken to date

SAFETEA-LU lowered the threshold for projects requiring major project reviews from 

$1 billion to $500 million, and added a requirement for major highway projects to have 

project management plans and finance plans. FHWA coordinates these reviews, which 

increased in FY 2009 from the previous year. FHWA performed 40 major project cost 

estimate reviews, compared to 29 reviews in FY 2008; reviewed 30 project financial plans 

in FY 2009, compared to 27 in FY 2008; and reviewed 15 project finance plans in FY 2009, 

the first year for which data was collected. Also, FHWA sponsored certificated project 

management training for headquarters and field personnel.

III. Actions remaining and expected completion date

As FHWA expects a constant pipeline of major projects seeking Federal funds, so does it 

expect to maintain its level of effort in providing oversight. FHWA expects that the numbers and activity reflected in this FY 09 report will continue for each future year.

moderate 

progress significant

progress

complete no

progress

slight

progress

PROGRESS METER
Performance & Accountability Report FY2009

57

IV. Results or Expected Results

FHWA intends to cap the cost growth of its major projects to 2% per year and work 

with gratees to improve performance under this measure. FHWA expects to see gradual 

improvements in this performance record.

Issue: Providing strong oversight of major transit projects to maximize limited funding

I. Why is this issue?

Strong oversight of major transit projects is key to efforts 

to maximize limited Federal transit funding. The Federal 

Transit Administration FTA has 15 New Starts Projects with 

approved full funding grant agreements totaling $9.2 Billion 

dollars (federal share) in various stages of design or construction across the country. FTA’s early and continuous oversight 

of grantees’ project and financial management practices is key to controlling cost and 

schedule; avoiding construction quality problems; and preventing and detecting fraud, 

waste, and abuse.

II. Action(s) taken to date

More detailed cost and risk reviews are being performed earlier in project development, 

prior to a project’s approval into preliminary engineering. These detailed reviews were 

previously only performed prior to approval into final design. More detailed reviews were 

first performed on the Salt Lake City Mid Jordan Project and the Access to Region’s Core 

project in New Jersey before entry to Preliminary Engineering.

FTA generated an Advanced Notice of Proposed Rule Making on Project Management 

Oversight. It is also developing risk management training materials in collaboration 

with the National Transit Institute (NTI) to help grantees more effectively manage their 

projects.

Representatives from the Office of the Inspector General were invited, and made presentations on Waste, Fraud, and Abuse at FTA Oversight conference in Washington, DC and 

Engineers’ Meeting in Chicago, Illinois.

III. Actions remaining and expected completion date.

The improvement of management of major capital projects is an ongoing effort. Project 

Management trainings and Risk Management trainings will be provided to grantees at 

various locations in the country.

moderate 

progress significant

progress

complete no

progress

slight

progress

PROGRESS METER
58

IV. Results or Expected Results

To maintain a rigorous New Starts evaluation, more detailed cost and risk reviews are 

performed earlier in project development, prior to a projects approval into preliminary 

engineering. Training is offered to grantees to help them manage risk. Also, there is an 

increase in the dissemination of information and outreach efforts to educate and increase 

the grantees awareness of potentials for fraud, waste and abuse.

5.  Operating the National Airspace System While Developing and Transitioning to 

the Next Generation Air Transportation System 

Issue: Hiring and Training 17,000 New Controllers Through 2018

I. Why is this an issue?

The FAA’s’ highly trained Air Traffic Controllers (ATC) play 

a critical role in achieving the outstanding level of aviation 

safety we enjoy in the United States. 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. Deploying a well-trained ATC workforce plays 

an essential role in ensuring the tens of thousands of aircraft are moved safely and 

expeditiously through the National Air Space to their destinations.

II. Actions taken to date

FAA took several steps in FY 2009 to address the challenges of hiring 17,000 new air traffic controllers.

•	 FAA conducted interviews and performed required medical and security screenings for large numbers of qualified applicants at seven Pre-Employment Processing Centers. This process allows FAA to hire and train applicants at a faster 

pace.

•	 In 2009, FAA selected five new colleges and universities to be part of the Air 

Traffic – Collegiate Training Initiative training program, increasing the total 

number of schools to 36. In the past five years, AT-CTI schools across 21 states 

and Puerto Rico graduated more than 4,000 students from their aviation programs, 3,000 of whom were hired by FAA.

moderate 

progress significant

progress

complete no

progress

slight

progress

PROGRESS METER
Performance & Accountability Report FY2009

59

•	 The agency convened a workgroup to identify a percentage range or percentage target for the number of developmental controllers compared to experienced controllers at an FAA facility. This workgroup concluded that there is no 

single factor that should be used to determine what a facility can realistically 

accommodate while accomplishing facility training and daily operations. Since 

the current average trainee percentage of 27% is still well below the historical 

35% guideline, FAA decided to keep the historical guideline at 35%.

•	 During this past year, FAA continued to increase the terminal simulation capacity at the training Academy by installing six new high-fidelity tower cab simulators, providing a realistic tower environment in which to teach trainees. Also 

installed were state-of-the-art en route training labs that simulate the air traffic 

control technology currently in use in en route facilities. By improving training 

techniques and using high-fidelity simulators, the agency has reduced the training period from an average of three to five years down to two and three years.

•	 FAA has rehired retired FAA air traffic controllers as contract instructors to 

train the new workforce. By harnessing their valuable air traffic expertise, these 

experts can focus solely on training the next generation of controllers, rather 

than moving back and forth between working traffic and on-the-job training.

III. Actions remaining to be taken

In FY 2010, FAA will continue to be proactive in its hiring and training programs to bring 

the controller workforce to 15,692. The agency will take action at the facility level should 

adjustments become necessary due to changes in traffic volume, unanticipated retirements or other attrition. The Air Traffic Control Workforce 10-Year Strategy will be 

updated to continually revise hiring targets for the fiscal year. In conjunction with hiring 

and staffing, FAA plans to modify four old simulators at the Academy and four old simulators in the field to match the configuration of the new simulators in FY 2010. Additionally 

in FY 2010, the Air Traffic Control Optimum Training Solution will provide training to all 

315 FAA facilities.

IV. Results or Expected Results

FAA’s goal is to ensure that the agency has the flexibility to match the number of controllers at each facility with traffic volume and workload. The current hiring plan has been 

designed to phase-in new hires as needed. This will avoid another major spike in retirement eligibility like the current one experienced as a result of the 1981 controller strike. 

FAA is dedicated to maintaining and improving the levels of safety achieved thus far while 

continuing to improve working conditions and expand the diversity of the workforce.
60

Issue: Keeping Existing Projects on Track and Reducing Risks with NextGen

I. Why is this an issue?

FAA faces a number of challenges associated with the implementation of NextGen – an enormously complicated undertaking due to the technological complexities, numerous stakeholders, and broad scope of the effort. As FAA moves forward 

with NextGen, it must continue to establish a framework for 

improving system management capabilities, address weaknesses on selected air traffic control systems, implement a cost accounting system, establish a cost estimating methodology, and make progress in establishing an organizational 

culture that supports sound acquisitions.

II. Actions taken to date

FAA leveraged the National Airspace System (NAS) Enterprise Architecture to identify 

critical decision points and strategically align our investment strategy for NextGen in concert with ongoing investments. These decision points guide key NextGen pre-implementation activities in the context of other ongoing FAA activities and programs. A key effort 

in this alignment was an internal gap analysis that includes requirements for addressing 

identified shortfalls between the current NAS and the NextGen mid-term NAS Enterprise 

Architecture.

In January 2009, FAA released an update to its NextGen Implementation Plan (NGIP). 

The NGIP identifies a set of implementation commitments that describe how a core set of 

avionics will support NextGen operational capabilities by 2018. Measuring the progress 

of these commitments and of key activities is critically important to the successful implementation of NextGen. The NGIP provides deployment schedules and includes interim 

milestones to reach these commitments. Implementation is considered complete when all 

relevant training, policies, and procedures are in place.

Also in 2009, the GAO determined that FAA’s air traffic control modernization warranted 

removal from the high-risk list. GAO found that FAA executives, managers, and staff 

demonstrated a strong commitment to—and a capacity for—resolving risks. Agency executives worked with OMB to refine corrective action plans to address weaknesses, instituted programs to monitor and evaluate the effectiveness of corrective measures, and 

demonstrated progress in implementing these corrective measures. Specifically, FAA:

•	 Improved management capabilities on major projects and is working to extend 

these improvements to new projects;

moderate 

progress significant

progress

complete no

progress

slight

progress

PROGRESS METER
Performance & Accountability Report FY2009

61

•	 Continued to develop an enterprise architecture—a blueprint of the agency’s 

current and target operations and infrastructure—and is refining it as FAA’s 

next-generation system becomes better defined;

•	 Implemented a cost estimating methodology and a cost accounting system;

•	 Implemented a comprehensive investment management process; and

•	 Assessed its human capital challenges and is now identifying plans to address 

critical staff shortages in areas such as program and financial management, systems engineering, contracting, and aviation research.

FAA has successfully put multiple new systems into operation throughout the country, 

including new air traffic displays, runway safety systems, and weather processing systems. In addition, while FAA has reduced the scope of several key programs, its acquisitions have experienced fewer cost overruns and schedule delays. FAA also developed an 

updated corrective action plan for 2009 to sustain its improvement efforts and enhance 

its ability to address risks.

NextGen’s success also depends on the participation of a highly-trained workforce. FAA 

contracted with the National Academy of Public Administration (NAPA) to identify the 

skill sets required to integrate and implement FAA’s NextGen initiative. The FAA is now 

working across organizational lines to address the NAPA recommendations, including 

continual evaluation of staffing needs versus NextGen demands, streamlining its hiring 

processes, and aggressively pursuing enhanced training and retention programs.

III. Steps remaining to be taken

Notwithstanding FAA’s progress, NextGen is still technically complex and costly, and 

FAA continues to place a high priority on efficient and effective management. The FAA 

faces challenges in undertaking needed research and development to better define new 

technologies, transitioning legacy systems to next-generation technologies, addressing 

aging facilities, and obtaining a highly trained workforce with the knowledge and skills 

to manage the program.

Further, NextGen will be built on key elements from existing programs and technology, 

and on new systems under development now. The plan is to make the most of modern 

aircraft capabilities and apply these to elements of the system that can take advantage of 

them. Then, over the next decade, FAA will continue a series of coordinated upgrades to 

the current ground infrastructure and aircraft systems.

With NextGen, FAA also will have the potential to establish seamless operations beyond 

our borders. To do so, FAA will work with international partners to harmonize standards, 

procedures, and air and space transportation policies worldwide.
62

IV. Results or expected results

NextGen will introduce superior technology and new procedures to enhance operational 

capabilities and provide numerous efficiencies to the system. The resulting system will 

be scalable, networked, and fully digital.

With NextGen, FAA will continue to advance our already exemplary safety record by 

introducing new analytic tools that more proactively detect adverse trends and identify precursors. These tools will allow us to act on potential problems before they take 

shape.

In addition, airports will benefit from increased safety, better use of existing capacity, 

greater design flexibility, and reduced environmental impacts. NextGen will also foster 

operational improvements, advances in technology, and the development of sustainable 

alternative fuels that will allow us to reduce aviation’s environmental footprint even as 

our transportation system grows.

Issue: Sustaining FAA’s Extensive Network of Aging Facilities

I. Why is this an issue?

FAA has responsibility for over 500 air traffic control facilities 

around the country and in U.S. territorial possessions. Many of 

these have exceeded the average useful life of 30 years and are 

in need of repair or modernization. Because 59 percent of FAA 

facilities are over 30 years old, key decisions regarding facility 

consolidations and infrastructure needs, especially in light of 

transitioning to NextGen, are currently under consideration.

In addition to updating facilities, FAA is replacing outdated automation equipment at air 

traffic control towers and terminal facilities with more current systems. Automation systems process data and display the information for air traffic controllers. The older equipment is limited in its capacity and is not immediately compatible with essential parts that 

will be put in place when the agency transitions to NextGen.

II. Actions taken to date

In FY 2009, FAA’s Air Traffic Organization tracked sustainment needs submitted via the 

Needs Assessment Program (NAP) tool and managed execution of the requirements via a 

Corporate Work Plan tool set. Major accomplishments included over 150 Unstaffed Infrastructure Sustainment projects, which involved 30 shelter replacements, 30 steel tower 

inspections, 30 HVAC/air conditioning replacements, 30 roof repairs, and 30 access road 

moderate 

progress significant

progress

complete no

progress

slight

progress

PROGRESS METER
Performance & Accountability Report FY2009

63

repairs. In addition, FAA completed 140 power system sustainment projects to include 

replacement of 70 engine generators, 5 uninterruptible power systems, and 65 battery 

systems.

The Air Traffic Organization’s Technical Operations Unit developed a Service Life Replacement Model to assist in tracking facilities replacement funding needs for NextGen. This 

analysis details facility requirements and operational concepts.

FAA continues to review future needs of legacy systems in an effort to consolidate remaining legacy equipment and dispose of excess property. FAA completed the Concept of Use 

and Preliminary Facility requirements planning document in September 2009. This inventory of legacy air traffic control equipment and commensurate sustainment requirements 

allows for the decrease in equipment need as it is overtaken by the NextGen system.

In FY 2009, FAA received Facilities and Equipment funding from the American Recovery and Reinvestment Act (Recovery Act). The Recovery Act funds will be used during 

the remainder of FY 2009 and in FY 2010 to upgrade en route air traffic control centers, 

power systems, air traffic control tower and terminal radar approach facilities, and navigation and landing equipment.

III. Actions remaining to be taken

FAA has several programs designed to address the condition of its aging facilities and 

equipment. Here are some of the activities planned activities in the near-term:

•	 The en route traffic control center program consists of 25 construction projects 

that will contribute to refurbishing 18 centers that are 40+ years of age.

•	 The power systems program will implement replacement and upgrade construction projects at over 90 locations nationwide.

•	 The air traffic control tower and terminal radar approach control facility program will construct 3 new tower facilities and modernize 3 tower facilities.

•	 The navigation and landing program will construct and install 4 airport lighting 

systems and 3 airport instrument landing systems, and will install replacement 

lamp monitoring systems at 10 runway sites.

In FY 2010, FAA plans major construction and renovation projects at key locations such 

as Boston, Los Angeles, Atlanta, Chicago, Minneapolis, and Seattle. Other mission critical 

and minor projects are also anticipated at 21 Air Route Traffic Control Centers, as well as 

Center Radar Approach Control facilities in the near future.
64

IV. Results or expected results

The Facility industry metric used to assess backlog and relative state of building infrastructure is the Condition Index (CI). Since 2004, FAA’s CI has improved by an average of 

0.6 percent per year due to targeted backlog reduction efforts.

However, in FY 2010 and FY 2011, FAA expects to see an 8–9% increase in backlog. Conditions within en route centers are projected to worsen as equipment installed in 1980s 

reaches lifecycle limits. There is currently over $100 million needed to modify general 

unstaffed towers, repair roofs and roads alone.

6.  Protecting Against Increasing Cyber Security Risks and Enhancing the Protection 

of Personally Identifiable Information

Issue: Implementing a Robust Information Security Program To Protect the Department’s 

Data and Operations

I. Why is this issue?

By law, Presidential directive, and OMB mandate, DOT must 

secure its cyber infrastructure and manage risk commensurate with the requirements for confidentiality, integrity, and 

availability of information stored, processed, and transmitted by DOT information systems. The threats against the very 

complex DOT cyber infrastructure are constant and increasing, requiring significant resources to manage the risks, address vulnerabilities, and to 

identify, plan for, and implement new protections. A compromise or attack against this 

infrastructure exposes National Critical Infrastructure and DOT business and mission 

functions to failures that have both Departmental and national economic, financial, and 

operational consequences, including undermining public trust in the United States Government and significant Departmental embarrassment.

II. Actions Taken to Date

The DOT Chief Information Office executed upon its FISMA 2008 corrective action plan: 

providing annual security training to DOT personnel; reviewing and updating relevant 

cyber security policy; addressing system weaknesses, ensuring certification and accreditation and testing of systems; implementing an alternative data center for the purpose of 

disaster recovery and continuity of operations; establishing standardized configuration 

requirements for DOT information systems; and assessing DOT systems to determine the 

required authentication requirements.

moderate 

progress significant

progress

complete no

progress

slight

progress

PROGRESS METER
Performance & Accountability Report FY2009

65

III. Actions Remaining and Expected Completion Date

The Department continues to make progress on critical national initiatives and expects to 

complete the reduction and consolidation of connections between DOT networks and the 

Internet by the end of calendar 2011, deployment of intrusion detection devices (Einstein 

2) by the end of March 2010, and assessment of compliance with federal configuration 

standards (FDCC) for DOT Headquarters by the end of December 2009. DOT will submit 

an implementation plan that submits the President’s identity management strategy for 

using federal standard ID cards for access to buildings and IT systems and networks by 

the end of calendar year 2009. Investments addressing Federal requirements for use of 

Personal Identification and Verification cards for physical and logical access, improve 

vulnerability and configuration management, and to enhance validation of technology are 

planned for FY2011.

IV. Results or Expected Results

Assessment of compliance with basic Federal security requirements will improve, reporting of incidents will improve as a result of training, and the rate of inadvertent compromise of DOT systems by DOT personnel will be reduced through increased awareness and 

training. Incidents associated with technical vulnerabilities and weaknesses will continue 

to be a challenge and concern, as will progress and compliance on Federal initiatives, and 

training and enhancement of the DOT cyber security workforce.

Issue: Enhancing security protection of the Air Traffic Control System as a Critical 

National Infrastructure

I. Why is this an issue?

Commercial aviation plays an important role in fostering and 

sustaining the national economy and ensuring citizen’s safety 

and mobility. Because of this, the Homeland Security Presidential directive (HSPD-7) designated air traffic control systems as part of the nation’s critical infrastructure.

II. Actions taken to date

In FY 2009, FAA completed numerous milestones that support new standards in safeguarding and preserving our critical national infrastructure.

•	 In April 2009, the Information Systems Security (ISS) completed its ambitious 

Audit and Compliance Program Plan. Regular audits ensure full compliance with 

multi-tiered security controls, and with security policies and procedures issued 

moderate 

progress significant

progress

complete no

progress

slight

progress

PROGRESS METER
66

by the Department of Transportation, the Office of Inspector General, the Government Accountability Office, and the ISS.

•	 During FY 2009, ISS’ ongoing regimen of NAS logical access studies were performed and successfully completed during site visits to the following installations: Oakland Air Route Traffic Control Center; Southern California Terminal 

Radar Approach Control; New York Air Route Traffic Control Center; and Chicago O’Hare International Airport.

•	 FAA has completed two-thirds of the certification & accreditation packages 

required by the National Institutes of Standards and Technology for successful 

risk management.

FAA has developed a Business Continuity Plan (BCP) to ensure consistent and constant 

operations. Numerous logistical, fiscal, and technical hurdles have been resolved to prepare a recovery site capable of assuming the responsibilities of an inoperable Air Route 

Traffic Control Center. FAA’s William J Hughes Technical Center is the designated recovery site. It has successfully used live data from the Memphis air traffic control facility to 

demonstrate that operations could be shifted to an alternate location.

III. Actions remaining to be taken

In accordance with the established plan, ATO is on track to achieve 100 percent organizational compliance with security policies, procedures, and multi-tiered security controls 

by September 30, 2010.

IV. Results or expected results

It is crucial that National Airspace System (NAS) protection remains an increasing, shared, 

and visible priority. The FAA seeks not only to protect systems that protect travelers, but 

to instill a full and justified confidence in customers and airlines, and to pave the way for 

a secure and successful implementation of NextGen.

Issue: Enhancing the Protection of Personally Identifiable Information

I. Why is this issue?

The Department is required by law and OMB directive to protect Personally Identifiable Information (PII) collected by the 

Department. The exposure of this information exposes citizens 

to the risk of identity theft, exposes businesses to economic 

damage resulting from fraudulent transactions, undermines 

public trust in the United States Government, and exposes 

moderate 

progress significant

progress

complete no

progress

slight

progress

PROGRESS METER
Performance & Accountability Report FY2009

67

the Department to both embarrassment, and potentially significant, unplanned financial 

impacts resulting from actions required to respond to privacy incidents. The risk of exposure is increasing as more PII information is collected, as malicious entities are becoming 

more sophisticated in their efforts to obtain unauthorized access to this information.

II. Actions Taken to Date

Annual privacy training has been provided to DOT personnel to raise awareness of the 

issues, and to provide direction and guidance on protecting privacy information. Significant efforts were made this year to ensure that the Department’s assessment and inventory of privacy systems was accurate, and that all systems had the requisite documentation, including Privacy Threshold Analyses (PTA),which are a series of questions to 

determine if an IT system collects any Personally Identifiable Information (PII), Privacy 

Impact Assessments (PIAs), which tell the public why PII is being collected and how is it 

protected, and System of Records Notices (SORNs), which are published in Federal Register to let the general public know about creation of system which will collect personal 

information. The publication explains the right of each individual to request information 

about himself/herself in the system. The publication also requests comments from the 

general public. To ensure the appropriate reporting and response to breaches of privacy 

information, policy and guidance were updated to ensure that DOT personnel know how 

to report a privacy breach, and to establish a Departmental policy and process on breach 

notification.

III. Actions Remaining and Expected Completion Date

The DOT Privacy Officer is in the process of obtaining information from Privacy Officers in the DOT agencies on their individual system plans for reducing the unnecessary 

use of Social Security Numbers, which will be aggregated into a DOT plan by the end of 

December 2009. Additionally, the DOT Privacy Officer and Chief Information Security 

Officer are working to complete implementation of technology to detect the unauthorized 

transmission of sensitive and PII information on the DOT headquarters network by the 

end of March 2010.

IV. Results or Expected Results

DOT expects to reduce the inadvertent exposure of personally identifiable information 

through increased awareness and training and to reduce the unnecessary use of personal 

data.
68

7.  Preventing Catastrophic Failures and Obsolescence in the Nation’s Aging 

Surface Transportation Infrastructure

Issue: The Federal Highway Administration must strengthen its efforts to ensure safety 

for bridges and tunnels and hold states accountable for Federal funds

I. Why is this an issue?

According to the American Association of State Highway and 

Transportation Officials, the average bridge in the United States 

is 43 years old, and nearly one in four bridges is either structurally deficient and in need of repair or functionally obsolete 

or too narrow for today’s traffic volumes. Fatal infrastructure 

failures in recent years have focused attention on obsolescence 

in the nation’s aging surface transportation infrastructure.

II. Action taken to date

An internal team is developing a uniform definition of compliance with the National Bridge 

Inspection Standards Board. The team is identifying data-driven, risk-based thresholds to 

systematically assess compliance and encourage States to adopt bridge management systems. The team has drafted proposed definitions, metrics, and processes, and is currently 

addressing input from FHWA division offices. Another internal team is examining current National Bridge Inspection Program oversight practices by FHWA division offices 

and developing enhancements to ensure that oversight is data-driven and risk-based.

The FHWA Program Management Improvement team is reviewing the current agency 

wide approach to risk management to identify opportunities for improvement. The agency 

initiated national and agency-wide webinars on areas where a need existed to share information and experiences broadly.

FHWA also prepared a draft Notice of Proposed Rule Making for National Tunnel Inspection Standards.

III. Actions remaining and expected completion date

The ultimate goal is to have the documents and processes developed by the team ready 

for implementation beginning with the 2011 annual reviews.

The two team initiatives discussed above need to be completed before a comprehensive 

risk-management plan can be put in place. In the interim, FHWA continues to monitor 

the annual compliance review results and target resources toward the areas of greatest 

risk. 

moderate 

progress significant

progress

complete no

progress

slight

progress

PROGRESS METER
Performance & Accountability Report FY2009

69

FHWA plans to publish the National Tunnel Inspection Standards in 2010 and develop 

guidelines for maintenance, inspection and operation of road tunnels by 2013.

IV. Results or Expected Results

When all the initiatives above are implemented, states will routinely and consistently 

inspect tunnels and bridges using a risk based approach and provide the information to 

FHWA; thereby, reducing the risk of structural failure and related accidents.

FHWA will develop and implement guidelines for design, construction, maintenance, 

inspection, and operations and use a risk-based, data driven oversight system.

Issue: The Federal Transit Administration must work with state and local transit agencies 

to identify ways to repair, rehabilitate or replace aging transit systems

I. Why is this an issue?

In 2004, the value of the transit infrastructure in the United 

States was estimated at $402.7 billion, not including the value 

of assets that belong to rural and special service operators. 

DOT in its 2006 Conditions and Performance Report to Congress found that 15% of bus vehicles and 34% of the rail fleet 

in urban areas exceeded their useful life, 31% of urban bus 

maintenance facilities and 8% of rail maintenance facilities were in substandard or poor 

condition, and 51% of urban rail passenger stations were in substandard or poor condition. 

FTA must work with state and local transit agencies to identity 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.

II. Actions taken to date

FTA has formed a State of Good Repair (SGR) work group consisting of transit agency 

professionals from several transit properties across the nation to discuss how to maintain 

transit system assets in a “state of good repair” and how to address the backlog of transit 

assets in substandard condition. This group formulated SGR related issues and state of 

the art practices that will be discussed at smaller round table meetings. The first State of 

Good Repair Roundtable meeting was held in July 2009, bringing together transit agencies to share ideas. Working with the National Transit Institute, FTA is developing a training course on Asset Management for transit grantees.

moderate 

progress significant

progress

complete no

progress

slight

progress

PROGRESS METER
70

III. Actions remaining and expected completion date.

Beginning in 2010, four training courses per year will be provided to transit grantees on 

Asset Management. The State of Good Report workgroup, made up of 30 members, will 

continue to meet to develop ideas to advance the State of Good Repair needs of the transit 

industry. Smaller roundtable meetings will continue to be held periodically.

IV. Results or Expected Results

Information on best practices and tools to help transit agencies manage their assets to 

bring them and keep them in a state of good repair.

8. Improving Contract Operations and Maintaining Procurement Integrity

Issues: Developing and maintaining a competent acquisition workforce to support the 

Department’s mission, improving award-fee contracting processes to better achieve 

acquisition objectives, ensuring that suspended or debarred contractors do not obtain 

Government contracts or assistance agreements, and ensuring the acquisition workforce 

maintains high ethical standards

I. Why are these issues?

DOT spends approximately $6.8 billion annually, or about 40 

percent of its discretionary budget, on contracts to obtain 

goods and services. Inspector General audits and investigations continue to find oversight and control weaknesses, fraud 

and abuse, and other ethics issues involving Department officials and contractors.

II. Actions taken to date

Developed a Strategic Acquisition Workforce Succession Plan. In February 2009, DOT 

developed the Strategic Acquisition Workforce Succession Plan to address the challenges 

the Department is facing in the acquisition workforce. At DOT, almost half of the workforce is eligible to retire by 2012 (GAO-08-630T). The competition for talented acquisition 

professions to replace these individuals is fierce and the workload is increasingly complex. The DOT Strategic Acquisition Workforce Succession Plan was developed to meet 

the requirements for improvements in the federal acquisition workforce as directed by 

section 855 (Federal Acquisition Workforce Improvements) of Public Law 110-181.

In FAA, the demands of deploying NextGen are expected to have a substantial effect on 

the acquisition workforce. In September 2009, FAA formed a cross-organization, executive-level Acquisition Workforce Council that provides strategic direction and oversight 

to ensure the agency has the acquisition workforce talent it needs. The Council led the 

moderate 

progress significant

progress

complete no

progress

slight

progress

PROGRESS METER
Performance & Accountability Report FY2009

71

development of a multi-year Acquisition Workforce Plan. This plan contains a profile of 

FAA’s acquisition workforce, internal and external drivers in regard to the challenges the 

agency faces, the workforce planning process, competency requirements, future demand, 

strategies to address workforce requirements, and metrics to track progress.

Along with the Council, a Strategy Steering Group and strategy working groups are 

focused on implementing strategies and monitoring progress against the plan. FAA is 

also expanding on its acquisition training and certification programs and implementing 

an integrated Acquisition Career Development Program to define career paths and implement a structured career development program. This program highlights not only training and learning opportunities, but also developmental opportunities for advancement 

and sets the framework to target recruitment of acquisition professionals in entry-, midand senior-level career tracks.

Updated DOT Suspension and Debarment Order 4200.5D. This order prescribes standards 

for implementing debarment, suspension, and ineligibility procedures and ensures that 

the Department has a vigorous department-wide debarment and suspension program. 

Official release of the order is expected by end of December 2009.

Establish Individual Development Plans (IDPs). IDPs were established during the 4th 

quarter of FY 2009. IDPs will help build a highly competent workforce that can excel in 

a complex, rapidly changing environment. IDPs will be used to: (1) identify and assess 

future developmental needs in required competency areas; (2) provide structured learning experiences linked to organizational needs, goals, and job requirements; and (3) establish an agreed-upon set of learning objectives and developmental activities as part of a 

formal career development program

III. Actions remaining and expected completion date

Establish policy to reemphasize and elaborate on DOT’s award fee policy. The Office of 

the Senior Procurement Executive (OSPE) will establish policy, providing examples when 

available, and dealing with practical concerns that could not be addressed in DOT acquisition regulations. This policy should be issued by end of the March 2010

Develop an improved reporting system/database. The current suspension and debarment 

management reporting system was developed in 2003. It is now being migrated into a 

robust internal web site that will provide real time reporting and serve as a valuable tool 

for senior management. The site will be available for DOT Operating Administrations to 

provide status of suspension and debarment (S&D) actions from initiation/completion to 

the final posting into the Excluded Parties Listing System (EPLS). The site will provide 

alerts/reminders to ensure S&D actions are being aggressively worked and completed in 
72

a timely manner. The development of the site is expected to be completed and available 

during the 2nd quarter of FY 2010. 

Institute the annual training program for the acquisition workforce and financial assistance/grants management personnel. The training will provide continuing reinforcement 

of ethics and contracting standards that promote the integrity of acquisition and grants 

management processes throughout DOT and supplements required annual ethics training. Sessions are scheduled to begin during the 4th quarter of FY09 through the 2nd quarter of FY10.

IV. Results or Expected Results

Overall expected results include improved acquisition practices Department-wide; a 

highly capable and accountable acquisition workforce; increased use of sound contracting 

arrangements with appropriate incentives and effective oversight; increased use of technology to improve contract and financial assistance (grants) management, and reduced 

incidences of fraud, waste, and abuse among DOT officials and contractors.

9.  Enhancing and Deploying Programs for Reducing the Serious Consequences of 

Surface Transportation Crashes

Issue: Promoting consistent state highway safety performance indicators to measure 

progress.

I. Why is this an issue?

States and the Federal government spend large sums of 

money on highway safety programs and activities. As a data 

driven organization, NHTSA needs to make sure that States 

spend money wisely, with a focus on key issues and a positive 

impact on reducing the number and severity of crashes. In 

order to do this, NHTSA needs reliable, consistent, multi-year 

data on highway safety performance. While some states collect, analyze and report performance data now, others do not.

II. Actions taken to date

All states have included the core performance measures in their 2010 Highway Safety 

Plans, which outline programs they will implement and show how they will spend Federal 

funds. NHTSA has developed additional attitude and awareness performance measures. 

Additionally, in July 2009, NHTSA’s National Center for Statistics and Analysis made fatal 

crash maps available to the public; these maps use 2006-2008 FARS data to show fatal 

crash locations within a state via a Google Earth Plug-In download. The crash-location 

moderate 

progress significant

progress

complete no

progress

slight

progress

PROGRESS METER
Performance & Accountability Report FY2009

73

maps serve as an extension to the county maps that the State Traffic Safety Information 

website already delivers.

III. Actions remaining and expected completion date

NHTSA will review the Highway Safety Plans to assure that they include the requisite 

performance measures, and continue to work with the Governors Highway Safety Association on developing guidelines and implementation material for the measures. NHTSA 

is working on drafting additional developmental measures for enforcement activities. In 

FY 2010, the agency will convene a workgroup to develop speed-monitoring performance 

measures, which it expects to complete by December 2011.

IV. Results or Expected Results

During FY 2009, states began to use core performance measures in designing their FY 

2010 safety programs. NHTSA will use these data, collected during FY 2010 and the following years, to measure the impact of their safety programs, to evaluate safety problems, and to make appropriate modifications to their programs. In future years, states will 

collect improved speed and injury data, as well as new performance measures (including 

law enforcement measures, and attitude and awareness surveys). As more years of data 

become available, states will be able to evaluate the long-term impact of their programs, 

determine changes in the magnitude of specific safety problems, and adapt their programs to address the most significant issues with programs that are determined to have 

an impact. Furthermore, as states measure and report on performance measures, NHTSA 

will work collaboratively with them to ensure that states meet or exceed their targets. 

This will include using demonstration projects, technical assistance, and sharing best 

practices.

Issue: Targeting unsafe motor carriers and commercial motor vehicle drivers for 

enforcement.

I. Why is this an issue?

The Federal Motor Carrier Safety Administration (FMCSA) 

needs to improve its processes for “Targeting Unsafe Motor 

Carriers and Commercial Motor Vehicle Drivers for Enforcement” by (1) taking stronger enforcement action against carriers with repeat safety violations and assessing maximum 

fines against repeat offenders, (2) improving processes to 

identify “chameleon carriers” and (3) closely monitoring Mexican motor carriers operating throughout the United States under the demonstration project.

moderate 

progress significant

progress

complete no

progress

slight

progress

PROGRESS METER
74

II. Actions to date

Effective April 1, 2009, the Agency established a formal policy regarding the assessment 

of maximum fines under section 222 of the Motor Carrier Safety Improvement Act of 1999 

(MCSIA). Section 222 requires the Agency to assess maximum statutory penalties if a 

person is found to have committed a pattern of violations of critical or acute regulations, 

or previously committed the same or a related violation of critical or acute regulations.

The FMCSA and its state partners scrutinize passenger carrier requests for new operating authority using a New Applicant Screening process which includes an Evasion Detection Algorithm (EDA). The New Applicant Screening Process identifies carriers that may 

be attempting to reincarnate themselves by comparing critical data on new applicants 

for operating authority with data in FMCSA’s safety and registration records for other 

companies. This comparison will automatically and electronically yield matches of data 

between applicants and other companies that will allow the agency to identify possible 

reincarnated carriers with greater efficiency. FMCSA implemented the New Applicant 

Screening Process for passenger carriers in August 2008 and household goods carriers in 

April 2009. Since that time, 120 applicants were dismissed or voluntarily withdrew from 

the process. Each application identified through the use of the Evasion Detection Algorithm receives a follow-up investigation. Identified applicants must provide compelling 

evidence explaining certain similarities between their new business and an existing carrier in the FMCSA’s census database or risk having their application denied.

In response to a recent Congressional mandate, FMCSA has discontinued the cross-border demonstration project with Mexican-domiciled motor carriers operating beyond the 

United States and Mexico border. The President has now tasked DOT to work with the 

U.S. Trade Representative, the Department of State, leaders in Congress, and Mexican 

officials to propose legislation creating a new trucking project that will meet the safety 

concerns of Congress and enable the Nation to fulfill its NAFTA commitments. Prior to 

cancellation, FMCSA developed site-specific plans for checking trucks and drivers participating in the Mexican motor carrier demonstration project by coordinating inspections 

and driver checks with State partners and U.S. Customs and Border Protection (CPB). 

FMCSA updated its quality control plan to reflect current practices. FMCSA performed 

over 140,000 southern border inspections, analyzed 100 percent of its portion of the CBP 

data and checked nearly 100 percent of all Mexican drivers crossing the border for the 

proper credentials and licenses.
Performance & Accountability Report FY2009

75

III. Actions remaining and expected completion date

The Agency will monitor the impact that the enforcement improvements stated above will 

have on the safety performance of at risk carriers and drivers. FMCSA plans to expand the 

NAS process to all carriers, contingent upon the availability of appropriate resources.

IV. Results or expected results

FMCSA expects targeting unsafe motor carriers and their drivers will reduce the risk 

of CMV-related crashes as unsafe carriers are prevented from reincarnating. The New 

Applicant Screening process is in its infancy but about 12 percent of carriers who have 

gone through the process have either been dismissed or have decided not to follow-through 

with their applications when asked to provide more information.

Issue: Enhancing the Commercial Driver’s License program by enforcing existing standards and adopting new standards.

I. Why is this an issue?

In the past 5 years, investigations by law enforcement agencies and FMCSA have led to the prosecution of commercial 

driver’s license fraud schemes in 15 states. These investigations exposed schemes involving the fraudulent issuance of 

licenses to individuals who obtained them through corrupt 

means, such as bribery of state examiners and state-sponsored, third-party testers. As of August 2008, these investigations had generated 137 indictments and 106 convictions.

II. Actions to date

A final rule entitled “Amendments To Implement Certain Provisions of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU);” 

published July 5, 2007, increased civil penalties for drivers and carriers who violate out 

of service orders and specifies the circumstances by which noncompliant States which 

issue commercial drivers license (CDLs) may lose Federal funds. The agency reviews 

annually one-third of state CDL programs so that every program is reviewed every three 

years. These reviews include overt and covert monitoring of State third party testers 

to ensure training is taking place and to detect possible fraud. FMCSA reviews of state 

operations produce recommendations for state improvements, including developing and 

implementing action plans. On March 24, 2008, the agency published a Notice of Proposed Rulemaking (NPRM) entitled “Minimum Training Requirements for Entry-Level 

moderate 

progress significant

progress

complete no

progress

slight

progress

PROGRESS METER
76

Commercial Motor Vehicle (CMV) Operators” which revises the standards for mandatory training requirements for entry-level operators of commercial motor vehicles in 

interstate operations who are required to possess a commercial driver’s license. Persons 

applying for new or upgraded CDLs would be required to successfully complete specified minimum classroom and behind-the-wheel training from an accredited institution or 

program.

The agency published a Notice of Proposed Rule Making on April 9, 2008, entitled “Commercial Driver’s License Testing and Commercial Learner’s Permit (CLP) Standards,” 

which proposes that a CLP holder be subject to the same driver disqualifying offenses as 

currently apply to a CDL holder. The agency is reviewing the rule, and anticipates publication of the final rule in 2010. FMCSA published a final rule on December 1, 2008, entitled 

“Medical Certification Requirements as part of the CDL.” The rule requires a medical 

fitness certification be provided to state officials prior to issuing, renewing or upgrading 

a CDL. The medical certificate would be included on the driving record and states must 

downgrade the CDL if the certificate expires.

The Commercial Drivers License Information System (CDLIS) is the national clearinghouse of commercial driver records, and in June 2008, the agency established a cooperative agreement with the American Association of Motor Vehicle Administrators (AAMVA) 

to ensure income collected from CDLIS fees were used for CDLIS operations. FMCSA 

also awarded a grant to AAMVA to operate a Fraud Early Warning System, which communicates potential fraud occurrences among the states and provides “Fraudulent Document Recognition” training to state partners.

III. Actions remaining and expected completion date

The agency will monitor the impact the CDL rule changes will have on the safety performance of carriers and drivers. FMCSA anticipates publication of the Commercial Learners Permit final rule by February 2010. States will be required to comply with the medical 

certification requirements no later than January 30, 2012.

IV. Results or expected results

The number of drivers whose credentials will be revoked and are subsequently disqualified from operating on the highways will increase. The number of entities providing inadequate third-party training will decline. The likelihood of crashes and fatalities involving 

CMVs will improve. The new rules, once enforced, will strengthen the Agency’s CDL 

requirements, support fraud detection, and enhance CMV safety.
Performance & Accountability Report FY2009

77

Issue: Identifying high-risk highway-rail grade crossings for safety improvements to further reduce collisions and fatalities.

I. Why is this an issue?

Over the past six years, grade crossing incidents have 

decreased almost 20 percent, from 2,977 in year 2003, to 2,397 

in 2008. Casualties have likewise declined, with fatalities and 

injuries at crossings down 14 percent and 9 percent, respectively. While these are encouraging trends, the number of 

accidents and casualties remains a concern for FRA.

II. Actions taken to date

FRA has internally identified the 10 States with the worst rail crossing safety records 

and published a direct final rule (9/2/09). Louisiana and Illinois have voluntarily provided 

action plans and Texas is in the process of developing one.

The agency has prepared draft model legislation, which is under review by an advisory 

group. Copies of the draft model legislation were distributed for comment at the annual 

meeting of the National Conference of State Legislatures in July 2009.

FRA created a web-based tool to assist States and railroads identify previously unreported crossings to the Mandatory Rail Crossing Inventory.

III. Actions remaining and expected completion date

In October 2009 FRA will formally notify the 10 States with the worst rail crossing safety 

records that they are required to submit action plans. The agency will help states develop 

actions through FY 2010. FRA will review the submitted plans through FY 2010 and early 

FY 2011 and will either approve or return them for correction.

FRA will issue the draft Sight Distance Model Law and make it available to the States no 

later than April 16, 2010.

By December 31, 2010, FRA will have studied the impact of the mandatory updating 

requirements on the Mandatory Inventory database system and determined ways to 

improve how the Inventory is updated. The agency will publish a Final Rule implementing the requirements of the Rail Safety Improvement Act and by June 30, 2011.

IV. Results or Expected Results

FRA expects that the State Action Plans will enable states to target crossings that have 

had multiple collisions and implement solutions that will reduce the number of collisions. 

moderate 

progress significant

progress

complete no

progress

slight

progress

PROGRESS METER
78

The Sight Distance Model Law can be used by the States to enact laws that will enable 

motorists to better detect the presence of approaching trains so that they can take appropriate actions to avoid a collision. The mandatory updating of the Inventory will provide current and accurate information about the physical and operating characteristics 

at crossings at the local, state, and national levels. States will be better able to identify 

crossings for improvements. Policy makers and academics will have better information 

to develop appropriate strategies to reduce the number of crossing collisions.
Performance & Accountability Report FY2009

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 broad-based transformations to address major economy, efficiency, or effectiveness challenges.

In January 2009, GAO presented a new high risk list to Congress, which included concerns 

about the Highway Trust Fund (HTF). According to GAO, the HTF channels about $33 billion in highway user excise taxes annually to states for highway and related spending. Estimated outlays have exceeded estimated receipts throughout the authorization period for 

SAFETEA-LU – fiscal years 2005 through 2009. Furthermore, actual account receipts were 

lower than had been estimated and the account balance dropped more rapidly than anticipated, approaching zero in August, 2008. Congress subsequently approved legislation in 

September 2008 to appropriate $8 billion from the General Fund of the Treasury to replenish the account. Agency officials previously anticipated the account would reach a critical stage again before the end of fiscal year 2009, and estimated that additional resources 

would be needed to ensure account solvency through the end of fiscal year 2010.

GAO recommended a surface transportation policy based on the following principles: (1) 

ensuring goals are well-defined and focused on the federal interest, (2) ensuring the federal roles in achieving each goal is clearly defined, (3) ensuring accountability for results 

by entities receiving federal funds, (4) using the best tools and approaches to emphasize 

return on targeted federal investment, and (5) ensuring fiscal sustainability.

DOT’S ACTION PLAN FOR ENSURING HIGHWAY TRUST

FUND SOLVENCY

The financing methods that fund the highway and aviation trust funds are established by 

statute. It has become increasingly clear that the existing statutory approaches to financing the trust funds are not sustainable and will need to be addressed during the reauthorization processes. The Department is working with the Congress to identify the implications of alternative actions to address the long term funding needs for its aviation and 

surface programs as part of the reauthorization processes. To facilitate these future discussions, the Department is closely monitoring the balances in the Highway Trust Fund 

and is sharing this information on a regular basis with Office of Management and Budget 

(OMB) and the Congress.
Intentionally Left Blank
Performance Report
Intentionally Left Blank
Performance & Accountability Report FY2009

83

PERFORMANCE FRAMEWORK

Introduction

The U.S. Department of Transportation’s (DOT) 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.

The 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. The DOT’s 2006 – 

2011 Strategic Plan outlines five strategic objectives in the areas of safety, 

reduced congestion, global connectivity, security and the environment 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 2009 performance results.
84

•	 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.

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 Department-wide performance targets; results of 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 in to 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: 

DOT Strategic Objectives

DOT Department-wide Performance

Goals & Measures

Supplementary Operating Administration

Goals & Measures

Organizational Accountability Contracts

Organizational Performance Assessments

Employee Performance Plans
Performance & Accountability Report FY2009

85

How DOT Works to Achieve Its Strategic

Objectives 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 St. 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-to-peer 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.

•	 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. 
86

*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 2003 2004 2005 2006 2007 2008 

2009

Actual

2009 

Target

Met/ 

Not Met 

Passenger vehicle occupant 

highway fatality rate per 100 

million passenger vehiclemiles traveled (VMT).

1.21 1.17 1.15 

(r)

1.10 

(r)

1.04 

(r)

1.03 0.98 – 1.04# 1.02 ✓

Large truck and bus fatality 

rate per 100 million total 

VMT.

N/A N/A 0.185 0.177 

(r)

0.169 

(r)

0.155 # 0.140 – 

0.154#*

0.167 ✓

Motorcyclist fatality rate 

per 100,000 motorcycle 

registrations.

69.16 69.83 73.48 72.42 

(r)

72.48 

(r)

71.30 73.75 – 

74.96# 

77 ✓

Non-occupant fatality rate 

per 100 million VMT

0.19 0.19 0.20 0.19 0.18 0.18 (r) 0.18 – 0.19# 0.19 ✓

Number of commercial air 

carrier fatalities per 100 

million persons onboard

N/A N/A N/A N/A N/A 0.4 * 6.8* 8.4 ✓

Fatal Accidents per 100,000 

Flight Hours in General 

Aviation

1.28 1.20 1.23 1.14 1.08 1.10 1.15* 1.11 ✘

Rail-related accidents and 

incidents per million trainmiles

19.40 19.02 18.03 

(r)

17.51 

(r)

17.20 

(r)

16.53 

(r)

15.81 17.00 ✓

Transit fatalities per 100 

million passenger-miles 

traveled

0.461 0.467 0.428 0.389 0.437 0.332 

(r)

0.243* .463 ✓

Number of serious incidents 

for natural gas and 

hazardous liquid pipelines

61 48 41 36 (r) 47 42 * (r) 53*# 38 ✘

Number of serious hazardous 

materials transportation 

incidents

472 492 528 495 490 

(r)

427 (r) 427*# 458 ✓

(r) Revised; * Preliminary estimate # Projection from trends; ✓ Met; ✘ Not Met
Performance & Accountability Report FY2009

87

REDUCED CONGESTION summary

Performance Measure 2003 2004 2005 2006 2007 2008 

2009

Actual

2009 

Target

Met/ 

Not Met

Percentage of travel on the National 

Highway System (NHS) meeting 

pavement performance standards 

for “good” rated ride

50 52 52 54 57 56 57 57 ✓

Percentage of deck area on National 

Highway System (NHS) bridges 

rated as deficient, adjusted for 

average daily traffic

29.8 32.0 29.9 29.2 29.7 29.5 29.2 29.0(r) ✘

Percentage of total annual urbanarea travel occurring in congested 

conditions

28.5 28.6 28.6 28.4 27.8 27.3# 26.3# 27.4(r) ✓

Average percent change in transit 

boardings per transit market (150 

largest transit agencies)

0.7 0.7 1.9 2.1 2.5 4.3 2.2 1.9 ✓

Percent of bus fleets compliant with 

the Americans with Disabilities Act 

(ADA)

93 96 96 97(r) 98 98 98 98 ✓

Percent of key rail stations compliant 

with the ADA

82 82 91 92 93(r) 95 * 95* 94 ✓

Percent of all flights arriving within 

15 minutes of schedule at the 35 

Operational Evolution Plan airports 

due to National Airspace System 

related delays

82.3 79.07 88.10 88.36 86.96 87.29 88.58* 88.00 ✓

(r) Revised; * Preliminary estimate # Projection from trends; ✓ Met; ✘ Not Met
88

Global Connectivity Performance Summary

Performance Measure 2003 2004 2005 2006 2007 2008 

2009

Actual

2009 

Target

Met/ 

Not Met

Percent of days in the shipping 

season that the U.S. portion of the St. 

Lawrence Seaway system is available

98.9 99.1 99.7 99.0 99.4 98.8 99.4 99.0 ✓

Number of freight corridors with an 

annual decrease in the average buffer 

index rating

N/A N/A N/A 3 5 21 19 13 ✓

Number of National Highway System 

border crossings with a decrease in 

unexpected delay

N/A N/A N/A N/A 4 3 3 5 ✘

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 

1.48 1.72 2.97 3.01 3.83 3.94 4.83 3.90 ✓

Percent share of the total dollar value 

of DOT direct contracts that are 

awarded to women-owned businesses

4.2 3.8 6.6 8.4 10.4 7.0 9.0# 5.0(r) ✓

Percent share of the total dollar 

value of DOT direct contracts that 

are awarded to small disadvantaged 

businesses

15.8 15.6 12.7 16.2 18 16 * 15.5# 14.6 ✓

(r) Revised; * Preliminary estimate # Projection from trends; ✓ Met; ✘ Not Met
Performance & Accountability Report FY2009

89

Environmental Stewardship Performance Summary

Performance Measure 2003 2004 2005 2006 2007 2008 

2009 

Actual

2009 

Target

Met/ 

Not Met

Number of areas in conformity lapse 6.0 6.3 5.8 1.3 0.0 0.0 0.0 6.0 ✓

Number of hazardous liquid pipeline 

spills in high consequence areas

54(r) 49 55 47 (r) 51 (r) 68 (r) 57* 49 ✘

Percent DOT facilities characterized as 

No Further Remedial Action Planned 

under the Superfund Amendments and 

Reauthorization Act

94 93 92 92 93 94 94 93 ✓

Number of Exemplary Human 

Environmental Initiatives undertaken

N/A N/A N/A N/A N/A 11 16 15 ✓

Median time in months to complete 

environmental impact statements for 

DOT funded infrastructure projects

N/A N/A 56 57 67 63.5 79.3 54 ✘

(r) Revised; * Preliminary estimate # Projection from trends; ✓ Met; ✘ Not Met
90

Security Performance Summary

Performance Measure 2003 2004 2005 2006 2007 2008 

2009 

Actual

2009 

Target

Met/ 

Not Met

Percentage of DoD-required shipping 

capacity complete with crews 

available within mobilization timelines

96 94 95 93 97 97 96* 94 ✓

Percentage of DoD-designated 

commercial ports available for military 

use within DoD established readiness 

timelines

86 93 87 100 100 100 100* 93 ✓

Percent of DOT personnel 

with emergency management 

responsibilities who are prepared 

to respond to disasters and 

emergencies

N/A N/A N/A N/A N/A N/A 100 Baseline N/A

Percent of DOT agencies meeting 

annual response requirements

N/A N/A N/A N/A N/A N/A 96 Baseline N/A

(r) Revised; * Preliminary estimate # Projection from trends; ✓ Met; ✘ Not Met
Performance & Accountability Report FY2009

91

Organizational Excellence Performance Summary

Performance Measure 2003 2004 2005 2006 2007 2008 

2009

Actual

2009 

Target

Met/

Not Met

Percent of major federally funded 

transportation infrastructure projects 

with less than 2 percent annual growth 

in the project completion milestone as 

reported in the finance plan 

N/A 73 89 89 89 79 78.37 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 75 81 84 83 82 83.78 90 ✘

For major DOT aviation systems, 

percentage of cost goals established 

in the acquisition project baselines 

that are met

88 100 97 100 100 96.08 100 90 ✓

For major DOT aviation systems, 

percentage of scheduled milestones 

established in acquisition project 

baselines that are met

77 91.5 92 97.4 97 93.88 93.75 90 ✓

(r) Revised; * Preliminary estimate # Projection from trends; ✓ Met; ✘ Not Met
92

STRATEGIC AND ORGANIZATIONAL 

GOALS

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 $22,250 million to promote safety in our 

nation’s transportation system.

Rail Safety $343

Transit Safety $225

FY 2009 Enacted Funding by SAFETY Strategic Objectives

(Dollars in Millions)

Aviation Safety $10,190

Highway Safety

$11,244

Total FY 2009 Funding: $22,250 Million

Hazardous Materials Safety $177

Pipeline Safety $65

Other Safety Strategic Objectives

Total FY 2009 Funding: $22,250 Million
Performance & Accountability Report FY2009

93

Key Performance Areas

Strategic outcomes from the DOT Strategic Plan are indicated in blue and FY 2009 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

✓✓ Rate of passenger vehicle occupant 

highway fatalities per 100 million 

passenger vehicle-miles (VMT) 

Rail Safety

✓✓ Rail-related accidents and incidents 

per million train-miles. 

traveled.

✓✓ Rate of large truck and bus fatalities 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). 

✓✓

Transit Safety

 Transit fatalities per 100 

passenger-miles traveled. 

million 

Aviation Safety

✓✓ Rate of commercial air carrier 

fatalities per 100 million persons 

onboard. 

✘✓ Rate 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.
94

2009 Performance Highlights

In FY 2009, highway travel was safer for motorcyclists and occupants of passenger vehicles, 

large trucks and buses. Motorcycle fatalities, however, remain a concern for DOT because 

they have increased over the last 11 years while other highway fatalities have declined.

In aviation commercial air carriers reported fewer fatalities than the targeted limit, but 

general aviation exceeded its performance limit. While only 3.5% of general aviation flying hours are logged by pilots in amateur-built aircraft, those aircraft account for 25% of 

general aviation fatal accidents.

DOT projects there will be 53 pipeline incidents by the end of calendar year 2009, which 

is the largest number since 2003. Preliminary data indicates that a large number of these 

incidents are in gas distribution systems. DOT expects these incidents will decline as gas 

system operators implement integrity management systems.

Safety

Highway Safety

FY 2009 Enacted Funds: $11.2 Billion 

Strategic Goal: Safety

Reduce transportation-related deaths and injuries.

Operating Administration: National Highway Traffic Safety Administration (NHTSA), 

with Federal Highway Administration (FHWA) and Federal Motor Carrier Safety 

Administration FMCSA).

Performance Measure: Rate of passenger vehicle occupant traffic fatalities per 100 

million passenger vehicle VMT.

Safety
Performance & Accountability Report FY2009

95

Why do we measure this? DOT measures this to assess the effectiveness of programs to reduce the number and severity of passenger vehicle occupant injuries and 

fatalities.

2009 Target: 1.02

2009 Projection: 0.98 – 1.04*

2011 Strategic Target: 0.96

How do we set targets? NHTSA, with FHWA and FMCSA, establishes measurable performance metrics for its priority programs and analyzes yearly data to gauge success 

toward its goals. The agency uses historical data trends to evaluate program effectiveness, and collects and compiles data to either revise existing measurements or establish new, more meaningful measures.

Public Benefit: NHTSA works with partners to promote highway safety by preventing motor vehicle crashes and reducing their associated economic costs through the 

development and implementation of data-driven, workable, and self-sustaining highway safety programs. In addition to lives saved and reduced injuries, the public also 

benefits from reduced damage to property and reduced loss of business and personal 

revenue.

External factors affecting performance: The combined effects of fluctuating gas 

prices, the economic downturn, and the change in both the mix of vehicles − towards 

increased use of smaller cars and motorcycles − and the means of transportation − 

towards walking and bicycling, as well as mass transit − indicate fundamental changes 

in our transportation system. While based on historical data, fatality rate projections 

and actual data may differ. Highway fatality rates are affected by the number of 

people using occupant protection (i.e. seat belts, child safety seats, air bags, etc.), the 

number of impaired drivers on the road, speeding, and driver distraction. 

Partners: FHWA works with States to reduce the severity of crashes through roadway infrastructure and operational improvements. The FMCSA works to reduce the 

occurrence of crashes involving large trucks and buses, through education and outreach to truck drivers, bus drivers and motor carrier companies. States develop and 

implement public information and activities. National safety organizations, with the 

driving public, promote safer driver and passenger behavior 

* Projection based on 5-year trend data; actual calendar year 2009 data available December 2010.
96

Motor vehicle manufacturers and suppliers promote safer cars and best vehicle 

safety practices. 

Associated Funding: 

FY 2009: $420,785,000 (projected)

2009 Projected Results: 0.98 – 1.04 *

Description of Results: The range for the projected fatality rate for calendar year 2009 

is 0.98 – 1.04. Passenger vehicles include passenger cars, light trucks, vans and SUVs. 

The passenger vehicle occupant fatality rate continues to fall, reaching a historic 

low of 1.04 in 2007. The number of passenger vehicle occupant fatalities decreased 

13 percent, to 25,351 in 2008. Passenger car occupant fatalities substantially declined 

to 14,587 in 2008, a 12 percent drop, reaching the lowest level since DOT began keeping records in 1975. Light truck occupant fatalities fell for the third straight year, to 

10,764 in 2008, a 14 percent drop and their lowest level since 1998. 

Target Achievement: Expected to meet

Target Assessment: The total number of alcohol-impaired driving fatalities fell by 

10 percent, to 11,773 in 2008. Four States passed and began enforcing primary seat 

belt laws in 2009. Also, 10,000 local law enforcement agencies participated in each 

of NHTSA’s high visibility enforcement campaigns to enforce seat belt and impaired 

driving laws. Because new regulations give manufacturers lead time before requiring compliance, there is a time lag between new Federal Standards and their affect 

on fatality data. More vehicles are on the road in 2009 with the new technologies 

required by earlier years’ regulations (such as side impact air bags, tire pressure 

monitoring systems, and the early introduction of electronic stability control) helped 

reduce traffic deaths and injuries. 

Outlook and Actions: In FY 2009, NHTSA began educating consumers about improvements to the New Car Assessment Program and the new crash avoidance program for 

vehicles beginning with Model Year 2011. The agency continued researching newly 

emerging technologies, such as back-up warning systems and rear-visibility technologies, lane departure/keeping systems, and pre-crash imminent braking systems. 

* Projections are based on 5-year trend data and developed using a number of statistical models, each of which 

provides a point estimate, resulting in a range of possible values. Providing a range underscores the uncertainty 

in attempting to predict a single value for 2009 at this time. Actual calendar year (CY) 2009 data will be available 

December 2010.

Safety
Performance & Accountability Report FY2009

97

NHTSA also updated requirements for roof strength (to reduce deaths and injuries 

during rollovers), and issued preliminary performance recommendations to reduce 

ejections from a vehicle. 

Timeline for affecting future performance: 

FY 2010: 

•	 Implement the Final Rule to reduce vehicle ejections. 

•	 Complete research on newly emerging crash avoidance technologies and 

data collection to test vehicle safety systems, and estimate benefits of vehicle-to-vehicle and vehicle-to-infrastructure communication systems. 

•	 Continue driver distraction research. 

FY 2011: 

•	 Develop performance criteria and objective tests to avoid crashes and 

reduce the effects of crashes that do occur (such as back-up warning systems and rear-visibility technologies, lane departure/keeping systems, and 

pre-crash imminent braking systems).

•	 Improve child restraint systems.

•	 Direct special emphasis on teen driving safety. 

Strategic Goal: Safety

Reduce transportation-related deaths and injuries

Operating Administration: Federal Motor Carrier Safety Administration (FMCSA) 

with Federal Highway Administration (FHWA) and Federal Motor Carrier Safety 

Administration (FMCSA)

Performance Measure: Rate of Large Truck and Bus Fatalities Per 100 Million Total 

Vehicle Miles Traveled (VMT) (Calendar Year)

Why do we measure this? The DOT measures vehicle fatalities to assess the effectiveness of programs to reduce the number and severity of large truck and bus injuries and fatalities. 
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Target (calendar year 2009): 0.167

2009 Projection*: 0.140–0.154

Strategic Target (calendar year 2011): 0.160

How do we set targets? FMCSA, with NHTSA and FHWA, establishes measurable 

performance metrics for its priority programs and analyzes yearly data to gauge success toward its goals. 

Public Benefit: FMCSA’s initiatives significantly improved safety on our Nation’s highways in CY 2009. These initiatives are responsible for over 1,300 lives saved annually 

and over 10,000 lives saved since CY 2000, when the agency was founded. The public 

also benefits from reduced injuries, reduced damages to property and reduced loss of 

business and personal revenue. 

External Factors Affecting Performance: Commercial vehicle fatality rates are 

impacted by many external factors, such as the total VMT by vehicles. The calendar 

year 2009 target was based on the assumption that the total VMT would rise four 

percent each year. Instead of rising, however, total mileage decreased by 3.4 percent 

from calendar year 2007 to calendar year 2008, and preliminary data suggests total 

VMT will drop further in calendar year 2009. FMCSA and its State partners continue 

to make steady progress in reducing the number of fatalities. In calendar year 2009, 

the total number of fatalities is expected to decrease between 2.3 and 11.2 percent 

resulting in a significantly improved projected fatality rate range of 0.140 to 0.154. If 

the VMT had risen by the expected 4 percent in calendar year 2008, then the calendar 

year 2008 fatality rate would have been 0.144 or 30 percent better than the fatality 

rate realized in the agency’s first year (calendar year 2000). External factors such as 

fluctuating gas prices and the demographics of the drivers (age, driving experience) 

may have contributed to the agency exceeding its 2009 calendar year target. 

Partners: National Highway Traffic Safety Administration (NHTSA) develops, sets, 

and enforces vehicle safety standards related to new trucks and buses, and determines safety related defects prompting recalls. In addition, FMCSA, and along with 

NHTSA, analyzes the causes of commercial motor vehicle crashes. The Federal Highway Administration (FHWA) works to reduce the severity of crashes through roadway infrastructure and operational improvements. States develop and implement and 

* The calendar year (CY) range for large truck and bus fatalities per 100 million VMT is a projected set of values 

and the actual result will not be available until December 2010. Range projection was based on analysis of partial 

data for CY 2009.

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public information and education materials and activities. National safety organizations and motor vehicle manufacturers and suppliers promote best behavioral and 

vehicle safety practices.

Associated Funding: 

FY 2009 $483,074,000

2009 Projected Results: 0.140 to 0.154 bus and truck fatalities per 100 million VMT.

Description of Results: This result can be attributed to the implementation and maturation of several safety programs, either implemented or augmented from the 2005 

Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy For Users 

(SAFETEA-LU). SAFETEA-LU authorized activities in outreach, education, enforcement, roadside inspections, and authorized financial assistance to fund partner support. 

In 2009, the agency performed approximately 17,000 compliance reviews, 37,000 new 

entrant audits, 3.3 million large truck inspections on the roadside, and over 100,000 

roadside inspections of passenger carriers. These initiatives contributed greatly to 

achieving the lowest recorded fatality rate in the agency’s history, which also exceeds 

the CY 2011 goal of no more than 0.160 fatalities per 100 million VMT.

Target Achievement: Exceeded

Target Assessment: As of CY 2009 the fatality rate from crashes involving large trucks 

and buses are expected to fall to no more than 0.154 fatalities per 100 million VMT. 

This represents a 24.9 percent improvement over calendar year CY 2000, the year the 

agency was established. FMCSA also exceeded its CY 2011 strategic goal of reducing 

fatalities involving commercial motor vehicles (CMVs) to no more than 0.160 fatalities per 100 million VMT, three years early in CY 2008. Much of the success may be 

attributed to safety-related activities performed by FMCSA and its state partners. 

The agency and state partners performed over 3.3 million roadside inspections, over 

17,000 compliance reviews, over 3,000 hazardous material reviews, and over 37,500 

new entrant safety audits.

Outlook and Actions: FMCSA's success is impacted by the level of safety maintained 

by the growing CMV industry. The performance outlook for this measure is expected 

to improve following the anticipated issuance in calendar year 2010 of the following 

final rule entitled “ Minimum Training Requirements for Entry Level Commercial 

Motor Vehicle Operations”; a final rule entitled “Commercial Driver’s License Testing 

and Commercial Learner’s Permit Standards”; a final rule entitled “National Registry 
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of Certified Medical Examiners”; a final rule entitled “Electronic On-Board Recorders for Hours-of-Service Compliance,” and a notice of proposed rulemaking entitled 

“CMV Driver Positive Controlled Substances and Alcohol Test Results Database.”

Timeline for Affecting Future Performance: The FMCSA expects performance to 

continue to improve based on FMCSA plans: 

•	 Focus more resources on the enforcement of carrier and driver noncompliance concerning drugs and alcohol.

•	 Implement a Medical Examination Reporting System

•	 Fully implement its Comprehensive Safety Analysis 2010 to “touch” more 

regulated entities through nine interventions: (1) warning letter, (2) targeted roadside inspection, (3) off-site investigation, (4) on-site investigationfocused, (5) cooperative safety plan, (6) notice of violation, (7) on-site comprehensive investigation, (8) notice of claim, and (9) suspension.

Strategic Goal: Safety

Reduce transportation-related deaths and injuries.

Operating Administration: National Highway Traffic Safety Administration (NHTSA) 

with Federal Highway Administration (FHWA) and Federal Motor Carrier Safety 

Administration (FMCSA).

Performance Measure: Reduce the rate of motorcyclist highway fatalities per 100,000 

motorcycle registrations.

Why do we measure this? The DOT measures this to assess the effectiveness of programs to reduce the number and severity of motorcyclist injuries and fatalities. Additionally, motorcyclists fatalities have been increasing for the past 11 years, offsetting 

the declining numbers among other road users (i.e. passenger vehicles, large trucks 

and buses and non-occupants).

2009 Target: 77

2009 Projection: 73.75 – 74.96 *

2011 Strategic Target: 79

* Projection based on 5-year trend data; actual calendar year 2009 data available December 2010.

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How do we set targets? The NHTSA, with FHWA and FMCSA, establishes measurable performance metrics for its priority programs and analyzes yearly data to gauge 

success toward its goals. The agency uses historical data trends to evaluate program 

effectiveness, and collects and compiles data to either revise existing measurements 

or establish new, more meaningful measures. 

Public Benefit: NHTSA works with partners to promote highway safety to prevent 

motor vehicle crashes and reduce their associated economic costs through the development and implementation of data-driven, workable, and self-sustaining highway 

safety programs. In addition to lives saved and reduced injuries, the public also benefits from reduced damages to property and reduced loss of business and personal 

revenue.

External factors affecting performance: The combined effects of fluctuating gas 

prices, the economic downturn, and the change in both the mix of vehicles − towards 

increased use of smaller cars and motorcycles—and the means of transportation—towards walking and bicycling, as well as mass transit—indicate fundamental changes 

in our transportation system. While based on historical data, NHTSA’s projections of 

highway fatalities for a given year and actual fatality numbers, which are finalized a 

year after projections are made, may differ. Highway fatality rates are affected by 

the number of people using occupant protection, (i.e. motorcycle helmets, etc.), the 

number of impaired drivers on the road, speeding, driver distraction and other traffic 

safety issues.

Partners: FHWA works to reduce the severity of crashes through roadway infrastructure and operational improvements. The FMCSA works to reduce the occurrence of 

crashes involving large trucks and buses, through education and outreach to truck 

drivers, bus drivers and motor carrier companies, as well as through targeted roadside enforcement and safety reviews of carrier operations. States develop and implement enforcement programs and public information and education materials and 

activities. National safety organizations and motor vehicle manufacturers and suppliers promote behavioral and vehicle safety practices. 

Associated Funding: 

FY 2009: $11,006 (projected)
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2009 Projected Results: 73.75 – 74.96 *

Description of Results: The range for the projected fatality rate for calendar year 

2009 is 73.75 – 74.96. Data from 2008 show that motorcyclist fatalities increased for 

every age group. A 10-year trend (1998 to 2008) of motorcyclist fatalities by age group 

shows that there has been a 75 percent increase in fatalities in the under-30 age group, 

a 61 percent increase in the 30-39 age group, and a 254 percent increase in the 40+ 

age group. In addition, higher speed crashes result in more severe injuries. In 2008, 

the percentage of motorcycle riders involved in fatal crashes with .08+ BAC levels 

(29%) was higher than for any other type of motor vehicle driver, and one-fourth of 

all motorcycle riders killed did not have a motorcycle endorsement at the time of the 

collision.

Target Achievement: Expected to exceed

Target Assessment: A less optimistic forecast for motorcycle sales, in conjunction 

with increased enforcement of impaired riding laws and the absence of additional 

repeals of State universal helmet laws, should allow the agency to achieve the motorcycle safety target.

Outlook and Actions: During FY 2009, NHTSA completed a study on ways to make 

motorcyclists more visible to other motorists. The NHTSA also studied how motorcycle riders use their brakes in various emergency stopping and maneuvering situations 

as part of the agency’s research on anti-lock braking and combined braking systems. 

Additionally, the agency continued the development of national standards for motorcycle rider training, and released the Guidelines for Motorcycle Operator Licensing 

and the Riders Helping Riders instructional program to help reduce impaired riding. 

Timeline for affecting future performance: 

FY 2010: 

•	 Evaluate the usability and crash mitigation features of motorcycle helmets.

•	 Develop objective tests for motorcycle combined braking systems.

•	 Determine the potential of enhanced lighting to make motorcyclists more 

visible to other drivers during the day.

* Projections are based on 5-year trend data and developed using a number of statistical models, each of which 

provides a point estimate, resulting in a range of possible values. Providing a range underscores the uncertainty 

in attempting to predict a single value for 2009 at this time. Actual calendar year (CY) 2009 data will be available 

December 2010.

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•	 Select the most promising non-intrusive alcohol detection technologies for 

development into a testable prototype.

•	 Begin work on Motorcycle Crash Causation project, which will provide 

detailed information on a large sample of serious motorcycle crashes.

•	 Complete national standards for motorcycle rider training, and assist States 

incorporating these standards and best practices into their novice driver 

testing and driver improvement programs. 

•	 Require states to report on their highway safety performance measures.

FY 2011: 

•	 Issue a Notice of Proposed Rulemaking to require Antilock Braking 

Systems.

•	 Increase testing and enforcement of compliance of imported goods.

Strategic Goal: Safety

Reduce transportation-related deaths and injuries.

Operating Administration: National Highway Traffic Safety Administration (NHTSA) 

with Federal Highway Administration (FHWA) and Federal Motor Carrier Safety 

Administration (FMCSA).

Performance Measure: Rate of non-occupant fatalities per 100 million vehicle miles 

traveled (VMT).

Why do we measure this? DOT measures this to assess the effectiveness of programs 

to reduce the number and severity of non-occupant (i.e. pedestrians, pedalcyclists, 

etc.) injuries and fatalities.

2009 Target: 0.19

2009 Projection: 0.18 – 0.19*

2011 Strategic Target: 0.18

* Projection based on 5-year trend data; actual calendar year 2009 data available December 2010.
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How do we set targets? NHTSA with FHWA and FMCSA, establishes measurable performance metrics for its priority programs that are measurable and analyzes yearly 

data to gauge success toward achieving its goals. The agency uses historical data 

trends to evaluate program effectiveness, and collects and compiles data to either 

revise existing measurements or establish new, more meaningful measures.

Public Benefit: NHTSA works with partners to promote highway safety to prevent 

motor vehicle crashes and reduce their associated economic costs through the development and implementation of data-driven, workable, and self-sustaining highway 

safety programs towards achieving a reduction in highway safety fatalities. In addition to lives saved and reduced injuries, the public also benefits from reduced damages to property and reduced loss of business and personal revenue.

External factors affecting performance: The combined effects of fluctuating gas 

prices, the economic downturn, and the change in both the mix of vehicles − towards 

increased use of smaller cars and motorcycles—and the means of transportation—towards walking and bicycling, as well as mass transit—indicate fundamental changes 

in our transportation system. While based on historical data, fatality rate projections 

and actual data may differ. Highway fatality rates are affected by the number of 

people using occupant protection (i.e. seat belts, child safety seats, bicycle helmets, 

etc.), the number of impaired drivers and non-occupants on the road, speeding, driver 

distraction, and education and enforcement strategies to reduce crashes involving 

non-occupants.

Partners: The Federal Highway Administration (FHWA) works to reduce the severity 

of crashes through roadway infrastructure and operational improvements. The Federal Motor Carrier Safety Administration (FMCSA) works to reduce the occurrence 

of crashes involving large trucks and buses, through enforcement, education, and 

outreach to truck drivers, bus drivers and motor carrier companies. States develop 

and implement enforcement programs and public information and education materials and activities. National safety organizations (such as the National Center for Bicycling and Walking (NCBW), the Pedestrian and Bicyclist Information Center (PBIC), 

and the National Safe Routes to School Partnership) promote best non-occupant safety 

practices. 

Associated Funding: 

FY 2009: $204,403,000 (projected)

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2009 Projected Results: Projection: 0.18 – 0.19 *

Description of Results: The projected fatality rate range for calendar year 2009 is 0.18 

– 0.19. The number of non-occupants (such as pedestrians and pedalcyclists) killed in 

motor vehicle crashes decreased by 5 percent, to 5,282 in 2008. The number of pedestrian fatalities decreased to 4,378 in 2008, a 7 percent decrease, whereas the number 

of pedalcyclists killed increased by 2 percent to 716 in 2008. The non-occupant fatality rate uses overall VMT because pedestrian, pedalcyclist, and other non-occupant 

miles traveled are not available. 

Target Achievement: Expected to meet

Target Assessment: Road users are becoming more aware of pedestrians and pedalcyclists with the increase in walking and bicycling for recreation and transportation. The increase in awareness, in the number and improved quality of travel facilities, and in educational and enforcement programs, should enable DOT to achieve the 

target.

Outlook and Actions: In FY 2009, NHTSA issued a Notice of Proposed Rulemaking 

(NPRM) proposing a global regulation on pedestrian safety. The agency initiated 

demonstration projects in States and cities with high numbers of pedestrian crashes 

to support enforcement and educational plans to reduce pedestrian fatalities. NHTSA 

developed a training program for law enforcement officers and an English for Speakers of Other Languages (ESOL) pedestrian/bicycle safety course curriculum. 

Timeline for affecting future performance: 

FY 2010: 

•	 Issue NPRM to increase driver ability to see behind the rear of the vehicle 

to support the Kids Transportation Safety Act.

•	 Develop, test and market education and enforcement programs to reduce the 

incidence of crashes involving pedestrians and bicyclists who are impaired, 

older, or non-English speakers.

•	 Require states to report on their highway safety performance measures.

* Projections are based on 5-year trend data and developed using a number of statistical models, each of which 

provides a point estimate, resulting in a range of possible values. Providing a range underscores the uncertainty 

in attempting to predict a single value for 2009 at this time. Actual calendar year (CY) 2009 data will be available 

December 2010.
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FY 2011: 

•	 Finalize regulations and provide consumers with up-to-date information 

about traffic hazards to children (injuries and deaths because of hyperthermia, power windows, getting stuck by seatbelts or in trunks, or vehicles 

backing up).

•	 Release the results of a study of pedestrian hit and run crashes. 

•	 Complete and promote a bicycle safety curricula for middle and high school 

youth.

•	 Require states to report on their highway safety performance measures.

Aviation Safety

FY 2009 Enacted Funds: $10.2 Billion 

Strategic Goal: Safety

Reduce transportation-related deaths and injuries

Operating Administration: FAA

Performance Measure: Rate of fatalities per 100 million persons on board commercial air carriers in half by 2025.

Why do we measure this? FAA chose this measure because it communicates the individual risk to the flying public in an understandable way.

Target: 8.4 fatalities per 100 million people on board 

Actual: 6.8 (preliminary)

Strategic Target: Cut the rate of fatalities per 100 million persons on board in half by 2025.

How do we set targets? The FAA chose the FY 2009 target to reflect a linear reduction 

based on the strategic target to reduce fatalities per 100 million persons on board to 

4.4% by the year 2025. The baseline, 8.88%, is based on data collected between 1997 

and 2006. 

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Public Benefit: As fatal air carrier accidents have declined in terms of average fatalities per accident, this measure will sharpen FAA’s focus on helping air travel become 

even safer.

External factors affecting performance: Approximately 80% of fatal accidents are 

directly related to some form or combination of human factors. To address some of 

these risks, FAA will continue to work with aviation industry stakeholders to establish Safety Management System (SMS) in their own organizations to identify potential risk areas.

Partners: Bureau of Transportation Statistics (BTS), Congress, National Transportation Safety Board, manufacturers, air carriers, unions, associations, International 

Civil Aviation Organization (ICAO), Civil Airworthiness Authority (CAA).

Associated Funding

FY 2009: $ 8,654,532,000

2009 Actual Results: 6.8 (preliminary) fatalities per 100 million people on board 

Description of Results: In FY 2009, there were two commercial fatal accidents with 

52 fatalities. Despite these tragedies, however, FAA was able to maintain the commercial air carrier rate below 8.4 fatalities per 100 million people on board. During the 

year FAA implemented many safety critical initiatives that helped to keep this rate 

below its target.

The FAA uses two additional measures to support the Commercial Air Carrier Fatality Rate. These measures are: 

•	 Total Runway Incursions - measures the total number of times an aircraft, vehicle or person is in the path of an aircraft cleared for landing or 

takeoff. 

•	 Operational Errors - measures the number of times aircraft failed to maintain a safe distance from other aircraft, terrain, obstructions, and restricted 

airspace. 

During FY 2009, FAA successfully maintained the number of runway incursions below 

our ceiling of 1009 by enhancing airport surface markings, increasing emphasis on 

education and awareness, revising FAA air traffic control procedures, and forming 

the Runway Safety Council to review opportunities for improvement.
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However, FY 2009 was a difficult year for FAA in the area of Operational Errors. 

The FAA ended slightly over the target of 2.10 serious Operational Errors per million activities. The agency is reviewing these incidents to identify causal factors and 

develop mitigation plans for FY 2010 and 2011.

Target Achievement: Exceeded 

Target Assessment: Safety critical initiatives implemented in FY 2009 were instrumental in mitigating other potential risks. These were among the most crucial: 

•	 Worked with industry to implement the roadmap for Performance-Based 

Navigation, allowing aircraft to fly closer together, increasing overall capacity, and safely fly a more direct route from Point A to Point B, thereby improving efficiency.

•	 Continued to provide pilots, flight attendants, and dispatchers best practices, 

policies, procedures and training used to mitigate human error risk. 

•	 Developed guidance for third party sources to develop Public Required Navigation Performance Special Aircraft and Aircrew Authorization Required 

approach procedures. This guidance will result in increased navigational 

precision by aircraft and can reduce spacing—and thus increase airspace 

capacity—without compromising safety. 

•	 Developed a strategic plan to address Inspector General recommendations.

Outlook and Actions: FAA’s safety record indicates that it has mitigated predictable

risk factors that result in accidents or incidents. The challenge now is to identify 

any remaining risks and eliminate, minimize, or manage them. FAA is working with 

aviation industry stakeholders to establish SMS within their operations. With these 

systems in place, FAA and the aviation industry will work together to address these 

risks. The following action plan addresses some additional initiatives that will help to 

mitigate risk in the future.

Timeline for affecting future performance: 

FY 2010

•	 Address the safety issues the National Transportation Safety Board has 

identified. 

•	 Initiate integration of initial data set into the Aviation Safety Information 

Analysis Sharing program. This initial data set will leverage internal FAA 

datasets, airline safety data, publicly available data and other aviation industry and government data sources, such as radar and track data, weather 

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data, airport and airspace information, and a vast amount of ATM operational data, providing capabilities to track safety trends, not only in terms 

of what the risks are, but also the reasons for the risks, helping to formulate 

risk mitigation strategies. 

•	 Develop, test and deploy web-based Voluntary Disclosure Reporting Program (VDRP). The VDRP is intended to provide a venue for certificated 

companies (e.g. airlines and repair stations) to voluntarily disclose their 

own violations to the FAA. The web-based system is subject to a phased 

implementation plan. Presently the system is fully operational for airlines. 

In FY2010, system implementation will expand to include repair stations. 

FY 2011

•	 Deliver dependent surveillance to key sites. The global satellite network 

will improve situational awareness, meaning pilots will be able to fly at safe 

distances from one another with less assistance from air traffic controllers.

•	 Develop and publish Wide Area Augmentation System (WAAS) approaches. 

The WAAS corrects for the GPS satellite position errors, ionosphere delays, 

and other disturbances in the GPS signals, improving the accuracy and reliability of the users’ position solution. More importantly, WAAS warns the 

pilot when the satellites are not functioning correctly and should not be used 

for navigation.

•	 Modernize and maintain the Notices to Airmen System (NOTAMS).

•	 Implement SMS and a voluntary reporting system of safety related events.

Strategic Goal: Safety

Reduce transportation-related deaths and injuries

Operating Administration: Federal Aviation Administration (FAA)

Performance Measure: Limit the general aviation fatal accident rate to no more than 

1.11 fatal accidents per 100,000 flight hours.

Why do we measure this? The FAA shifted to a rate based measure in FY 2009 because 

it tracks the fleet activity levels and their relationship to the number of fatal accidents. This 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).
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Target: Limit the general aviation fatal accident rate to no more than 1.11 fatal accidents per 100,000 flight hours.

Actual: 1.15 (preliminary)

Fatal accidents per 100,000 flight hours.

Strategic Target: Reduce the fatal accident rate per 100,000 flight hours by 10 percent 

over a 10 year period. (2009–2018)

How do we set targets? The baseline used to develop the target for this measure was based 

on data collected from June 2006 through May 2008. Government and industry consensus 

was to work toward a 10% reduction in 10 years from this baseline. Each year’s annual 

target is a linear reduction to achieve the overall 10% reduction in 10 years.

Public Benefit: By tracking the rate of fatal accidents per flight hours, FAA can more 

accurately pinpoint safety concerns or trends indicating potential safety concerns.

External factors affecting performance: Approximately 80% of general aviation fatal 

accidents are directly related to some form or combination of human factors. These 

human factor influences are occurring in a broad spectrum of general aviation activities from more highly regulated on-demand air taxi service in sophisticated aircraft, 

to more loosely regulated recreational flying in homebuilt aircraft.

Partners: National Transportation Safety Board and General Aviation Joint Steering 

Committee, Congress, manufacturers, training schools, associations, Civil Airworthiness Authority 

Associated Funding

FY 2009: $1,520,800,000

Actual results: 1.15 (preliminary) general aviation fatal accidents per 100,000 flight 

hours.

Description of Results: In FY 2009, FAA introduced a new safety performance metric 

for general aviation. The metric is a true rate-based metric and tracks changes in the 

fatal accident rate for a fixed volume of flight hours (per 100,000). The previous measure was not rate-based and did not reflect fleet activity levels and its relationship to 

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the number of fatal accidents. The new measure’s target is a 10% reduction in fatalities in a 10 year period or by 2018. 

The FAA did not meet the target this year for reducing the General Aviation Fatal 

accident rate per 100,000 flight hours. We anticipate a rate of 1.15 fatal accidents per 

100,000 flight hours. 

While FAA did not meet the target for FY 2009, it put in place several initiatives to 

focus on its shortfalls. FAA has a strong commitment to initiatives that will continue 

to help mitigate the risks of General Aviation in Alaska while reducing General Aviation accidents involving experimental amateur built aircraft. In Alaska, we intend to 

use PA-18 training devices (Piper Super Cub Simulators) for biennial flight reviews, 

tail-wheel endorsements, training, and FAA 44709s. FAA 44709s are orders suspending or revoking an aviation certificate if FAA determines that safety in air commerce 

or air transportation and the public interest require that action. Additionally, an ongoing off airport accident reduction program through the Alaskan Region will remain in 

place. This includes aviation hunting season seminars, development and distribution 

of the “Alaskan Off Airport Operations Guide”, and over 400 face to face contacts with 

pilots. To aid in the reduction of accidents by amateur built aircraft, FAA is establishing a Flight Standardization board for Experimental Amateur-Built Aircraft.

Target Achievement: Failed to meet

Target Assessment: The primary reason for the FY 2009 shortfall is in the area of 

amateur-built aircraft. Amateur-built aircraft accounted for approximately 25% of 

general aviation fatal accidents in FY 2009 while only contributing 3.5% of general 

aviation hours.

Future Outlook and Actions: FAA will continue to investigate, develop and implement 

new strategic initiatives to address the challenges of creating a safe environment for 

on-demand and general aviation flights. Additionally, the agency will work to identify human factors that may contribute to accidents. This information will be used 

to develop and implement strategies, methods, and technologies that reduce safety 

risks. The FAA’s General Aviation Joint Steering Committee and its sub-teams produce numerous products and aids to help improve pilot performance and decision 

making. FAA is also developing a new amateur-built aircraft sub-team under the General Aviation Joint Steering Committee. This sub-team will focus on the development 

of additional measures to help reduce fatal accidents in amateur-built aircraft. 
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Timeline for affecting future performance: 

FY 2010 

•	 Continue delivery of dependent surveillance programs to transition the air 

traffic control system from one that relies on radar technology to a system 

that uses precise location data from the global satellite network.

•	 Develop policies, procedures, and approval processes to enable operation of 

unmanned aircraft systems (UAS).

•	 Develop and publish 500 Wide Area Augmentation System (WAAS) 

approaches, enabling an extremely accurate navigation system by allowing 

pilots to fly more precise approaches. 

•	 Identify issues; create strategies, and initiative action plans for commuter 

and on-demand operations.

•	 Continue development and implementation of the International Helicopter 

Safety Team recommendations.

Rail Safety

FY 2009 Enacted Funds: $343 Million 

Strategic Goal: Safety

Reduce transportation-related deaths and injuries

Operating Administration: Federal Railroad Administration (FRA)

Performance Measure: Rail-related accidents and incidents per million train-miles

Why do we measure this? This measure was included in the current DOT Strategic 

Plan (2006–2011), which was developed in year 2005. It was used because it provides 

an over-arching measure for FRA’s six internal safety performance measures, and 

because it ably reflects the vastness of America’s rail environment (e.g. Train accidents; employee accidents/incidents; grade crossing incidents; trespasser incidents). 

Target: 17.00

Actual: 15.81

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Strategic Target: 17.84

How do we set targets? Targets are set based on data from prior years and the current year funds directed towards improving research, outreach, and other efforts to 

the program.

Public Benefit: The National Rail Safety Action Plan was instituted to target the most 

frequent, highest-risk causes of train accidents, to focus FRA oversight and inspection resources more precisely, and to accelerate research efforts that had the potential to lessen the largest risks. An increased awareness of train safety (at grade crossings or through operator behavior) provides public benefits through fewer casualties 

(deaths and injuries), fewer hazmat releases into the environment, the lowering of 

hospital and insurance expenses, and fewer reportable damaged goods.

External factors affecting performance: Public drivers/pedestrians. In 2008, 287 people were killed in almost 2,400 grade-crossing incidents nationwide. Many of these 

deaths were caused by drivers illegally avoiding protective devices at crossings. Additionally, more than 450 people died while trespassing on rail rights-of-way. These two 

categories account for more than 90 percent of all rail-related deaths and, because 

many involve behavioral factors, they are difficult to address effectively.

Partners: Private rail operators; State and local governments; and Operation Lifesaver. Railroad operators have the most direct effect on safety as owners and operators of their rail systems. States have a less direct role, but influence safety through 

legislative and regulatory efforts. Operation Lifesaver, a national, nonprofit safety 

education organization, promotes safety at grade crossings and on rail rights-of-way. 

FRA interacts with the railroads and states through the Rail Safety Advisory Committee, designed to develop mutually satisfactory solutions on safety regulatory issues. 

FRA funds and partners with Operation Lifesaver to sponsor trainers and volunteers, 

and helps produce brochures, videos, etc. for public use.

Associated Funding: 

FY 2009: $159,445,000

Actual results: 15.81 rail-related accidents and incidents per million train-miles

Descripton of Results: These results are based on eleven months of preliminary 

reporting data from the railroads. Part of the performance success is attributable 

to FRA’s targeted inspection efforts on railroads, such as yard switching operations, 
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track integrity, top causes of equipment failures, etc. The focused inspections use 

the safety and inspection data gathered by FRA, analyze the type and kind of accidents/incidents, and find commonalities to assist in determining where FRA inspectors should best use their resources.

Transit Safety

FY 2009 Enacted Funds: $10.2 Million 

Strategic Goal: Safety

Reduce transportation-related deaths and injuries

Operating Administration: Federal Transit Administration (FTA)

Performance Measure: Transit Fatalities per 100 million passenger-miles traveled

Why do we measure this? This measure demonstrates the results of FTA safety 

initiatives 

Target: Target for 2009 is .463 transit fatalities per 100 million passenger-miles 

traveled

Actual: 0.243 fatalities (preliminary) per 100 million passenger-miles traveled.

Strategic Target: .453 fatalities per 100 million passenger-miles traveled

How do we set targets? The target is set based on the performance trends over three 

to five years.

Public Benefit: The public benefits of riding transit are a cleaner environment, reduced 

dependence on foreign oil, basic mobility and accessibility for underserved populations and a positive contribution toward reducing travel costs through less congested 

roads. 

External factors affecting performance: The age and condition of the transportation infrastructure has an impact on the safety of the system. FTA does not currently 

have the statutory authority to address specific safety issues such as hours of service, 

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Performance & Accountability Report FY2009

115

vehicle and track safety standards, or providing additional enforcement authority and 

resources for safety oversight programs. The state of asset management at local transit agencies is inconsistent.

Partners: State and local transit agencies and decision makers

Associated Funding

FY 2009: $10,218,000

Actual results: Preliminary estimate of actual performance for FY 2009 is 0.243 fatalities per 100 million passenger-miles traveled.

Description of Results: Currently transit is one of the safest modes of travel per passenger miles traveled. Each day the nation’s bus, rail, ferryboat and paratransit systems provide over 33 million passenger trips. The challenge is to continue to improve 

on the current safety record for transit as the number of people using transit continues to rise and the transit infrastructure contiunes to age. 

Target Achievement: Expected to meet target

Target Assessment: FTA uses a multi-faceted approach to maintain its safety record. 

Investments in replacing and maintaining the transit infrastructure improves its 

safety. Oversight, technical assistance, safety-related data collection and analyses, 

and training to help the transit industry understand and implement innovative safety 

and security strategies. Research is conducted on new technologies and safety practices to reduce the risks of accidents and fatalities. The FTA works with the states 

to implement the State Safety Oversight for Rail and Rail Fixed Guideway Systems 

rules. Five years of audits conducted by FTA have shown that the drug and alcohol 

programs of grantee, sub-recipients, and their contractors are usually in compliance 

with testing rules. The Administration is proposing reforms to address certain weaknesses in transit safety, oversight, and safety enforcement.
116

Pipeline Safety

FY 2009 Enacted Funds: $72 Million

Strategic Goal: Safety

Reduce transportation related deaths and injuries

Operating Administration: Pipelines and Hazardous Materials Safety Administration 

(PHMSA)

Performance Measure: Number of serious incidents for natural gas and hazardous 

liquid pipelines

Why do we measure this? Serious incidents are those involving death or major injury—

the prevention of which is the most important safety outcome for the pipeline safety 

program. 

Target: 38

Actual: 53 (projected)

Strategic Target: 36 (by 2011)

How do we set targets? Targets reflect continuation of the long-term (20-year) statistical trend, which has shown a 10% decline every three years.

Public Benefit: Reducing incidents involving death or major injury directly impact 

public and occupational safety, and contribute directly to achieving the DOT Strategic Goal for safety.

External factors affecting performance: Excavation damage, damage from natural 

forces (e.g., storms and flooding), and other outside force damage are all significant 

causes of pipeline failure. Operating error by individuals is another significant cause 

of failure.

Partners: State pipeline safety agencies inspect about 80% of all pipelines.

Associated Funding

FY 2009: $72,191,000

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Performance & Accountability Report FY2009

117

Actual results: 53 incidents (projected)

Description of Results: PHMSA projects that it has already missed its goal of 38 Pipeline Incidents Involving Death or Injury in 2009. By the beginning of September there 

had already been 37 pipeline incidents that caused a death or injury. If this trend continues, pipeline accidents could account for 53 deaths and injuries in 2009.

100

10

0

1988199019921994199619982000200220042006

Targets

43 42 40 38

PHMSA Accident and Incident data as of August 3, 2009 2008

20

30

40

50

60

70

80

90

Number of Pipeline Accidents and Incidents Involving

Death or Major Injury (FY 1988 – FY 2008)

50

0

10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1

Data as of August 3, 2009

8/1 9/1

10

20

30

40

38

Pipeline Incidents Involving Death or Injury

(Cumulative – YTD vs. Last Year)

Date of Incident

FY 2008

FY 2009

Target � 38
118

Hazardous liquid pipeline systems have thus far had few accidents causing deaths 

or injuries. On the other hand, natural gas transmission and gas distribution systems 

have experienced a higher incidence of accidents causing deaths and injuries than 

previous years. 

Target Achievement: Expected to miss target

Target Assessment: Of the eight causes of pipeline incidents depicted below, 

“Other outside force damage” appears to be the cause that is increasing. Since 

accidents causing deaths and injuries reported by gas distribution systems are 

by far the largest percentage, the PHMSA Office of Pipeline Safety is focusing its analytical efforts on the causes of these accidents. Accidents on gas distribution mains (those that usually reside in common rights-of-ways) and on 

meters appear to have experienced a slight uptick in FY 2009. Accidents on other 

locations are stable or decreasing. Accidents due to pipe material failure have 

decreased substantially. 

18

0

Corrosion

Excavation

Natural Forces

Human Error

Material Failure

Other Causes

Other 

Outside Force

Equipment

PHMSA Accident and Incident data as of August 3, 2009

2

4

6

8

10

12

14

16

Pipeline Incidents and Accidents Involving

Death or Major Injury (FY 2005 – FY 2009*)

2005 2006 2007 2008 2009*

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Performance & Accountability Report FY2009

119

Outlook and actions: The PHMSA expects to see a decline in accidents causing 

deaths and injuries in gas distribution systems with the Distribution Integrity Management Program. This program will require pipeline operators to systematically 

assess risk and take steps to mitigate it. Moreover, the Office of Pipeline Safety is 

putting more resources into programs to stem the increase of accidents caused by 

outside force and excavation.

Timeline for affecting future performance: The PHMSA expects to meet the target 

for 2010.

Hazardous Materials Safety

FY 2009 Enacted Funds: $177 Million

Strategic Goal: Safety

Reduce transportation-related deaths and injuries

Operating Administration: Pipelines and Hazardous Materials Safety Administration 

(PHMSA)

Performance Measure: Number of serious hazardous materials transportation 

incidents

Why do we measure this? Serious incidents reflect failures with major adverse safety 

consequences or with significant risk factors present. Annual hazardous materials 

(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 are also used on a daily basis to target entities for enforcement efforts, and 

review of applications for exemption renewals.

Target: 458

Actual: 427 (projected)

Strategic Target: 448 (by 2011)

How do we set targets? Targets reflect an expected reduction of 1 percent per year.
120

Public Benefit: Reducing the number of serious incidents reduces risk to the general 

public and to hazardous materials transportation workers.

External factors affecting performance: Since this measure is not normalized for 

changes in risk exposure, there are several external factors that could affect the 

outcomes, including the volume shipped, or changes in the mix of HAZMAT shipped 

(e.g., new products).

Partners: FMCSA, FAA, FRA, and the U.S. Coast Guard all contribute to achieving this 

goal through prevention programs focused on their modes of transportation. State 

and local emergency responders provide an important role as well in mitigating the 

consequences of incidents that do occur.

Associated Funding

FY 2009: $68,983,000

Actual results: 427 (projected)

Description of Results: The DOT expects to exceed the target for calendar year 2009, 

however, reliable data for the full year will not be available until early 2010.

Since 2005, FMCSA has implemented increased educational activities and stronger Federal Motor Carrier Safety Regulations and Federal Hazardous Materials Regulations. 

The number of serious HAZMAT incidents was reduced by various enforcement interventions such as compliance reviews, shipper reviews, cargo tank facility reviews, package inspections, vehicle inspections, educational activities, stronger regulatory standards, and the delivery of strong compliance initiatives. These activities contributed to a 

national improvement in the number of serious HAZMAT incidents by nine percent over 

2007. The agency can attribute its success in part to increased compliance monitoring of 

the industry, as it is on pace to exceed the 2,773 HAZMAT reviews performed in 2008 by 

almost 15 percent in 2009 (3,185 projected). HAZMAT enforcement inspections conducted 

on the roadside are projected to rise by nine percent to 218,400 in Fiscal Year 2009. 

In response to a series of incidents involving over-heated batteries carried by airline 

passengers, PHMSA has pursued a comprehensive strategy to address the transportation risks presented by lithium batteries. Eleven such air-mode fires have been 

reported during FY 2009 thus far. On August 9, 2007, DOT published a final rule to 

tighten the safety standards for transportation of lithium batteries, including both 

primary (non-rechargeable) and secondary (rechargeable) lithium batteries. The 

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Performance & Accountability Report FY2009

121

final rule continues to enforce a limited ban on the transportation of certain lithium 

batteries as cargo aboard passenger aircraft and strengthens standards for the testing, handling, and packaging of lithium batteries. In addition, the program has initiated efforts aimed at reducing the transportation risks posed by batteries of all 

types. DOT is 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.

Target Achievement: Expected to meet

Outlook and Actions: The DOT is optimistic that the trend of reduced numbers of 

serious HAZMAT incidents in motor carriers will continue as FMCSA places a growing emphasis on the HAZMAT Safety Permit (HMSP) program. The agency issued a 

policy change to the states on Sept 16, 2008, entitled “Policy on Considering the Preventability of Crashes in Administrative Review Requests of HMSP Denials Based 

on Crash Rates in the Top 30 of the National Average.” The policy requires a carrier 

to submit compelling evidence and adequate proof that a crash or crashes reported 

to FMCSA were not preventable. Ultimately, a carrier’s request for a renewed HMSP 

will be denied if its crash rate exceeds prescribed regulatory limits. 

To reduce the risk of fire aboard aircraft from the expanding use of battery technology, FAA is drafting a proposal to strengthen battery requirements and expects to 

issue it for public comment in FY 2010. Separately, a proposal to strengthen hazardous materials packaging standards for the aviation mode is also being drafted and is 

expected to be issued for public comment in FY 2010.

In response to the Inspector General Advisory and a Congressional review of the special permits program, PHMSA developed an action plan to modernize IT, improve data 

collection and analysis, and enhance the processing of special permits. These actions 

will improve the safe transport of hazardous materials under special permits, result 

in more efficient issuance of permits, and enable PHMSA to collect and analyze more 

reliable data—enabling PHMSA to better focus resources on reducing risks. There 

are serious data quality issues that make PHMSA unable to assure the completeness 

and reliability of this measure and the underlying data for use in measuring program 

performance. However, in the interest of accountability, data will continue to be collected and reported under the current practices until such time as data and statistical 

improvements can generate more reliable data and statistical results.
122

reduced congestion

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.

The U.S. Department of Transportation leveraged $49,115 million to reduce congestion 

and other impediments to mobility in the U.S transportation system.

Aviation Delay $4,047

Transit Ridership $9,179

FY 2009 Enacted Funding by REDUCED CONGESTION

Strategic Objectives

(Dollars in Millions)

Improved Infrastructure

$11,335

Transportation Accessibility

Highway Congestion $644

$12,775

Total FY 2009 Funding: $49,115 Million

Total FY 2009 Funding: $49,115 Million

Reduced Congestion
Performance & Accountability Report FY2009

123

Key Performance Areas

Strategic outcomes from the DOT Strategic Plan are indicated in blue and FY 2009 results 

for key DOT performance measures are marked to indicate Met Target (✓) and Did Not 

Meet Target (✗).

Highway Safety

Reduction in urban congestion.

✓✓ Percentage of total annual urbanarea travel occurring in congested 

conditions.

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.

Transportation Accessibility

Increased access for all Americans.

✓✓ Percent of bus fleets compliant with the ADA.

✓✓ Percent of key rail stations compliant with the ADA.

2009 Performance Highlights

•	 Urban-area congestion declined again, with only 26.3% of travel occurring in 

congested conditions.

•	 For the first time in three years FAA met and exceeded its target for on-time 

arrivals. Three factors contributed to this success: runway improvements at 

two major airports, improved arrival and departure accuracy, and an overall 

decline in air travel.

Transit Ridership

Reduction in urban congestion.

✓✓ Average percent change in transit 

boardings per transit market (150 

largest transit agencies).

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
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Highway Congestion

FY 2009 Enacted Fund: $12,775 Billion

Strategic Goal: Reduced Congestion

Reduce congestion and other impediments to using the nation’s transportation system.

Operating Administration: Federal Highway Administration (FHWA)

Performance Measure: Percent of total annual urban area travel time occurring in 

congested conditions.

Why do we measure this? This measure provides a picture of the state of congestion on 

the Nation’s roads, specifically in urban areas. This measure is the closest to a nationwide congestion measure that can be developed using existing Highway Performance 

Monitoring System data sets and mature performance measurement methodology.

Target: 27.4% (revised)

Actual: 26.3%

Strategic Target: 31% in the DOT Strategic Plan (was revised in 2009 to 26.9% in 2011)

How do we set targets? The targets are set by extrapolating trend data from the previous 10 or more years.

Public Benefit: Reducing congestion saves time, money, wasted fuel and reduces green 

house emissions. Tracking how much time is spent in congested conditions can aid in 

determining the impact of public investments and transportaiton related policies.

External factors affecting performance: There are a number of external factors such 

as the level of unemployment, freight shipments and the price of fuel that can affect 

the volume of travel and, consequently, the level of congestion.

Partners: State and local Departments of Transportation and Metropolitan Planning 

Organizations are FHWA’s direct partners in trying to reduce congestion. Private sector and academic researchers are partners in developing this performance measurement methodology.

Associated Funding 

FY 2009: $8,779,000,000

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Performance & Accountability Report FY2009

125

Actual results: 26.3% 

Description of Results: The results show that congestion decreased in 2008, down 

from 27.8 percent in 2007. The estimated result for 2009 is 26.3 percent, down from 

27.3 percent in 2008. A variety of operational strategies promoted by the DOT in the 

past decade have helped focus state and local government efforts on reducing congestion on their roadway networks.

DOT made progress in implementing projects that demonstrate the value of congestion 

pricing as a congestion reduction strategy. In Miami, the first phase of a project to convert 21 miles of I-95 to HOT (High Occupancy Toll) lanes and expand a ten-lane highway 

to twelve-lanes was completed. Initial studies of the benefits show improved travel times 

in the corridor. In Minneapolis-St. Paul, a portion of I-35 that was converted from HOV 

(High Occupancy Vehicles) to HOT lanes opened to traffic at the end of September. Also, 

FHWA announced the initial Value Pricing Pilot Program awards and issued a solicitation 

for the remaining FY 2009 funds and any 2010 funds that may be made available.

The FHWA signed working agreements for four multi-state corridor projects including: I-95 from Florida to the Canadian border; I-70 in Missouri, Illinois, Indiana, and 

Ohio; I-15 in Arizona, Utah, Nevada, and California; and I-5 in California, Oregon, and 

Washington. The remaining two projects are for I-10 from California to Florida and 

I-69 from Texas to Michigan. These projects are designed to encourage states and the 

private sector to work together to develop innovative approaches to alleviate congestion on major transportation corridors. 

The 511 travel telephone service was launched statewide in Wisconsin, New York, and 

Pennsylvania, bringing the U.S. population with access to 511 services to 60 percent 

of the total. The 511 service provides an easy way to obtain travel information and 

helps travelers make better decisions on travel routes and modes. Real-time information promotes safety by directing motorists away from incidents and congestion. One 

study showed that 45 percent of San Francisco travelers who received information 

from the area’s travel advisory telephone system changed their travel plans, compared to 25 percent of travelers that altered their plans based on traditional television 

or radio broadcasts. 

Target Achievement: Exceeded

Target Assessment: Although not explicitly shown in the data, FHWA suggests the 

reduction in congestion is related to higher gasoline prices which resulted in lower 
126

Vehicle Miles Traveled (VMT) figures for the same time period. Traffic incident management laws, policies and services potentially also had an effect on lower congestion.

Outlook and Actions: At this time, FHWA cannot specifically isolate how its programs 

effect traffic congestion nationwide, but does have evidence that its programs improve 

local congestion.

Transit Ridership

FY 2009 Enacted Funds: $9,178 Million

Strategic Goal: Reduced Congestion

Operating Administration: Federal Transit Administration (FTA)

Performance Measure: Average percent change in transit boardings per transit market (150 largest transit agencies)

Why do we measure this? Demonstrate the impact of the FTA programs on increasing 

transit ridership 

Target: Target for 2009 is 1.9% average increase in the transit boardings per transit 

market.

Actual: 2.2% (preliminary estimate)

Strategic Target: 2.0% average increase in the transit boardings per transit market

How do we set targets? The target is set based on both an analysis of the performance 

trends over the past several years, and an estimation of the percent of FTA’s Formula 

Funds likely to be spent on the expansion of transit service, and the likely aggregate 

impact on ridership from that additional service.

Public Benefit: Increase in transit ridership is an indication that the traveling public is 

choosing transit over more energy intensive, congesting modes of travel. The public 

benefits are a cleaner environment, reduced dependence on foreign oil, basic mobility 

and accessibility for underserved populations and a positive contribution toward reducing travel costs through less congested roads. Annually, public transportation saves the 

equivalent of 855 millions gallons of gasoline – or 45 million barrels of oil. Public transit 

use also helps avoid the release of nearly 745,000 tons of carbon dioxide.

Reduced Congestion
Performance & Accountability Report FY2009

127

External factors affecting performance: 

•	 Gasoline Prices - Higher retail gasoline prices increase the cost of driving, 

and lead to more consumers choosing transit, which boosts ridership.

•	 Economic Growth - Approximately 50% of transit trips are taken to or from 

work, thus transit ridership is positively correlated with employment.

•	 State and Local Funding - Federal funding only accounts for about 18% of 

total funding for public transportation and only about 8% of operating expenditures. State and Local Government sources account for over half of transit 

operating expenses, so cutbacks in State and Local Government support for 

transit may reduce overall transit service. 

Partners: Transit agency grant recipients; State Departments of Transportation, local 

governments, metropolitan planning organizations.

Associated Funding

FY 2009: $9,178,798,000

Actual results: 2.2% (preliminary estimate)

Description of Results: A combination of factors contributed to the increase in transit 

ridership. 

FTA continued its United We Ride program, which targets underserved populations, 

and the DOT Intelligent Transportation System technologies program by using technology to create a single point of customer access to transportation services no matter what the trip, who provides the ride or who funds the services. 

FTA also continued initiatives to promote ridership and recognize transit agencies 

that developed innovative and successful programs to increase ridership. In 2009, 

FTA recognized 11 transit providers who tried fresh approaches to boost their ridership. Innovations included creative advertising campaigns, fare discounts, and sensible adjustment of routes to capture a greater number of passengers. Winners of 

the FTA Ridership Award were divided into four population categories, ranging from 

service areas of under 50,000 to more than a million people.

2009 FTA Ridership Award Winners

Under 50,000 in population

•	 Finney County Transit, Garden City, Kansas
128

50,000 to 200,000 in population

•	 Coeur d’Alene Tribe and Citylink, Worely, Idaho

•	 Intercity transit, Olympia, Washington

•	 Ozark Regional Transit, Springdale, Arkansas

•	 River Valley Metro Mass Transit, Bourbonnais, Illinois

•	 Whatcom Transportation Authority, Bellingham, Washington

200,000 to 1 million in population

•	 Capital District Transportation Authority, Albany, New York

•	 Coast Transit Authority, Gulfport, Mississippi

•	 Community Transit, Everett, Washington

Over 1 million in population

•	 MTA Bus Company, New York City, New York

Target Achievement: Expected to meet. 

Improved Infrastructure

FY 2009 Enacted Funds: 11,335 Billion

Strategic Goal: Reduced Congestion

Reduce congestion and other impediments to using the nation’s transportation 

system.

Operating Administration: FHWA

Performance Measure: Percent of travel on the National Highway System (NHS) 

meeting pavement performance standards for good ride.

Why do we measure this? Preserving the health of pavement and bridges, particularly on the approximately 160,000 miles and 116,000 bridges of the National Highway System (NHS) that includes the Interstate system, is critical to the structural 

integrity, functionality, and cost effectiveness of the nation’s transportation system. 

This performance measure is used to assess the overall condition of pavements to 

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Performance & Accountability Report FY2009

129

determine if the highway infrastructure on the NHS is able to support system mobility needs and if investments made to maintain and improve infrastructure condition 

is effective. The ride quality condition of NHS pavements affects traffic congestion, 

the wear-and-tear on vehicles, the comfort of travelers, and fuel consumption.

Target: 57%

Actual: 57%

Strategic Target: 59% in 2011.

How do we set targets? Targets were set based on past performance trends, anticipated funding for pavement improvements, predicted future performance trends 

using the Highway Economic Requirements System, and the need to maintain and 

improve conditions at a level that will not require substantial costs to renew failed 

systems in the future. Targets for this measure were also influenced by user feedback 

on ride quality condition obtained through national user surveys.

Public Benefit: Achieving targets set for this performance measure will provide for 

a smoother riding surface on the NHS minimizing undue wear-and-tear on vehicles 

used for personal, commuter, and freight movements. Maintaining a sizeable percentage of pavements in good condition means that states will need to spend fewer dollars 

on pavement preservation and replacement. Conversely, allowing pavement conditions to deteriorate as a result of neglecting this measure would require a substantial 

increase in public funding in the future to conduct major repairs to NHS pavement 

infrastructure. Adherence to this measure will assure that public tax dollars are used 

wisely to maintain a healthy infrastructure system.

External factors affecting performance: There are several factors that affect FHWA’s 

ability to improve pavement quality, among them the transportation funding levels 

and available revenue from federal, state, and local sources needed to support these 

levels. State and local highway agencies, not FHWA, select projects, which may or 

may not address pavement quality. Other factors are the costs of materials and construction services to deliver highway projects, which are highly dependent on worldwide demand, and the quality of the design and construction of highway projects.

Partners: State and local transportation departments carry the prime responsibility 

for effectively utilizing Federal-aid program funds to improve infrastructure conditions. Various universities conduct research to support infrastructure improvements. 

The Transportation Research Board promotes innovation and progress in transportation through research and conducts a variety of programs and activities designed to 
130

support dialogue and information exchange among researchers, practicing transportation professionals, and others concerned with transportation. Industry provides support to practitioners and interest groups. The American Association of State Highway 

and Transportation Officials advocates transportation-related policies, develops and 

adopts common procedures and standards used by the states as best practices, and 

provides technical services to support States in their efforts to efficiently and safely 

move people and goods.

Associated Funding: 

FY 2009: $5,665,000,000

Actual results: 57% 

Description of Results: The preliminary results for 2009 are similar to the results 

reported during the previous two years, which show that the ride quality of the NHS has 

remained constant. In contrast, the condition of the network improved by 15 percent 

from 2002-07. Pavement conditions across the country vary with both improvements 

and declines observed this past year. Many highway agencies are struggling to maintain conditions as transportation funding for pavement preservation is reduced.

Target Achievement: Met

Target Assessment: Ride quality performance targets were met in recent years 

despite a reduction in the size of maintenance programs by highway agencies that 

was exacerbated by record increases in asphalt material prices during 2008. Conditions nationwide were held fairly constant by the use of performance-based construction specifications that focused on ride quality. In addition, state highway agencies 

are increasingly using data-driven management systems to optimize the allocation of 

available funding in order to maximize condition and performance of the pavement 

networks.

Outlook and Actions: Highway agencies will struggle to meet this goal in FY 2010; 

states are focused on using limited resources for replacement and rehabilitation, 

often on roads that are not part of the National Highway System. FHWA will continue to support the implementation of performance-based specifications and testing 

to ensure that paving projects result in better ride quality and that investments in the 

NHS pavement network are more effectively managed. [Note: In 2010, the results for 

ride quality will include all bridge approaches and structures, as a result of a recent 

Highway Pavement Monitoring System reassessment that was made to improve 

Reduced Congestion
Performance & Accountability Report FY2009

131

consistency in reporting across the country. Including bridges in the reporting will 

improve consistency, but will likely have a further negative impact on the results for 

ride quality on the NHS.]

Timeline for affecting future performance: Improvements to the management of 

investments for pavement preservation could improve results for ride quality performance during the next three years.

Strategic Goal: Reduced Congestion

Reduce congestion and other impediments to using the nation’s transportation 

system.

Operating Administration: Federal Highway Administration (FHWA)

Performance Measure: Percent of deck area on National Highway System bridges 

rated deficient.

Why do we measure this? A large portion of our nation’s highway network was built 

decades ago during the construction of the Eisenhower Interstate System. Based on 

the 2008 National Bridge Inventory, approximately 12 percent of all bridges in the 

U.S. need significant maintenance, rehabilitation, or replacement (i.e., structurally 

deficient); and another 15 percent do not have adequate lane widths, shoulder widths, 

or vertical clearances to meet current traffic demand (i.e., functionally obsolete). It is 

in the Nations interest to ensure the safe and efficient movement of people and goods 

over and under all highway bridges. Improving their condition and performance is 

critical to the structural integrity, functionality, and cost effectiveness of the nation’s 

transportation system. Deck area serves as an indicator of the impact that investments 

are having on the conditions of bridges.

Target: 29.0% (revised)

Actual: 29.2% (preliminary as of August 2009)

Strategic Target: (target was revised to 28.0% for FY 2011).

How do we set targets? Targets were established based on a review of historical 

trends and data.

Public Benefit: Bridges will meet the safety and traffic capacity demands of the traveling public.
132

External factors affecting performance: 

•	 States select bridge projects for programming and have considerable flexibility in prioritizing how the funds are used (e.g., type of work performed).

•	 The availability of human and material resources. 

•	 The quality of the design and construction of highway projects.

Partners: 

•	 State and local transportation departments carry the prime responsibility for 

effectively utilizing Federal-aid program funds to improve infrastructure 

conditions.

•	 Various universities conduct research to support infrastructure improvements.

•	 Transportation Research Board promotes innovation and progress in 

transportation through research and conducts a variety of programs and 

activities designed to support dialogue and information exchange among 

researchers, practicing transportation professionals, and others concerned 

with transportation

•	 Industry provides support to practitioners and interest groups. 

•	 The American Association of State Highway and Transportation Officials 

advocates transportation-related policies, develops and adopts common procedures and standards used by the states as best practices, and provides technical services to support states in their efforts to efficiently and safely move 

people and goods.

Associated Funding: 

FY 2009: $5,665,000,000 

Actual results: 29.2% (preliminary)

Description of Results: The preliminary results for 2009 point to a reduction in deck 

area on deficient NHS bridges that is similar to levels reported in two previous years. 

The percentage declined 0.3 percent between 2009 and 2008, and 0.2 percent between 

2008 and 2007. Attempts to improve bridge conditions are offset by an aging infrastructure, increasing construction costs, and diminished resources at all levels of 

government. [Note: The actual result presented for 2009 is based on an August 2009 

archive of the National Bridge Inventory database. But, the final results for the year 

are not expected to differ greatly.]

Reduced Congestion
Performance & Accountability Report FY2009

133

Target Achievement: Not met

Target Assessment: DOT did not meet the NHS bridge improvement targets because 

states across the country had budget shortfalls and the increased cost of construction 

materials.

Outlook and Actions: Highway agencies will continue to struggle to meet the performance targets for reasons cited above. DOT will continue to support effective bridge 

management processes and programs. 

Timeline for affecting future performance: The availability of funding and resources 

will be critical to meeting performance targets for the foreseeable future.

Aviation Delay

FY 2009 Enacted Funds: $4.047 Billion

Strategic Goal: Reduced Congestion

Reduce congestion and other impediments to using the nation’s transportation 

system.

Operating Administration: Federal Aviation Administration (FAA)

Performance Measure: Percent of all flights arriving within 15 minutes of schedule at 

the 35 Operational Evolution Plan airports due to National Air Space-related delays

Why do we measure this? This metric measures on-time performance against the 

carriers’ filed flight plan, rather than published schedules. This metric allows FAA to 

measure delivery of service while taking into account causation of flight delay.

Target: Achieve a National Air Space on-time arrival rate of 88.00% at the 35 Operational Evolution Partnership airports and maintain through FY 2013.

Actual: 88.58% (preliminary)

Strategic Target: Achieve a National Air Space on-time arrival rate of 88.00% at the 

35 Operational Evolution Partnership airports and maintain through FY 2013.
134

How do we set targets? NAS On-Time Arrival is the percentage of all flights arriving at 35 major airports equal to or less than 15 minutes late, based on the carrier 

flight plan filed with the FAA. This figure does not include delays caused by extreme 

weather, scheduling decisions made by the carriers, and security problems. National 

Air Space On-Time Arrival percentage equals the number of flights arriving on or 

before 15 minutes of flight plan arrival time divided by the total number of completed 

flights. The target is set based on 3 years of historical trending data.

Public benefit: This goal helps FAA focus on areas for improvement within their control, thereby increasing the probability that the flying public will reach their destinations on time. 

External factors affecting performance: Weather, airline scheduling practices, runway construction/maintenance, ramp/airport congestion.

Partners: National Business Aircraft Association and airlines

Associated Funding

FY 2009: $4,047,148,000

Actual results: 88.58% (preliminary)

Description of Results: FAA has met this goal for the first time in 3 years. In addition, 

the NAS on-time performance is the highest level since its inception in 2005.

The on-time performance of airports tracked in FAA’s Average Daily Airport Capacity (35 OEP and 7 Metro areas) contributed significantly to the success of the NAS 

on time target. Both measures met and exceeded expectations. The additional runways at Seattle-Tacoma, Dulles, and Chicago O'Hare airports improved arrival and 

departure accuracy, and the economy-driven decline in operations all contributed to 

decreased congestion. In FY 2010, FAA plans to continue its focus on these measures 

to stem the trend of increased congestion when higher levels of operations return.

Target Achievement: Expected to meet 

Target Assessment: Improved on-time performance this fiscal year is most likely due to the 

decline in scheduled and unscheduled operations in many major markets. This has led to 

less congestion in the NAS, less pressure on the Air Traffic Control system, and improved 

on-time performance. In addition, new technologies, such as the Traffic Management Advisor decision support tool, have contributed to more efficient arrival and departure performance at several large airports including Atlanta, Charlotte, and Newark.

Reduced Congestion
Performance & Accountability Report FY2009

135

Outlook and actions: The FAA anticipates on-time performance will continue to 

improve, based on lower traffic levels and the movement toward NextGen technologies; such as time-based metering, En Route Automation Modernization, and Automatic Dependent Surveillance Broadcast.

Through deployment of early NextGen capabilities, FAA is addressing anticipated growth 

in demand by increasing NAS capacity and efficiency while simultaneously improving 

safety, reducing environmental impacts, and increasing user access to the air space.

Timeline for affecting future performance: FAA anticipates that the downturn in the 

aviation economy will rebound and demand will return. FAA expects that as early 

NextGen capability is deployed now through 2012 that will produce measurable steps 

toward reducing congestion and enhancing on-time performance. 

Transportation Accessibility

FY 2009 Enacted Funds: $644 Million

Strategic Goal: Reduced Congestion

Operating Administration: Federal Transit Administration

Performance Measure: Percent of bus fleets that are compliant with the Americans 

with Disabilities Act (ADA)

Why do we measure this? This a measure of the percentage of transit buses that are 

lift-equipped or have low floors to accommodate wheel chairs. This measure indicates 

how accessible the transit bus fleet is to Americans with disabilities.

Target: 98%

Actual: 98% (estimated)

Strategic Target: 98%

How do we set targets? The target is set based on performance trends over three to 

five years.
136

Public Benefit: Accessible public transportation is vital to maintaining independence 

and mobility for people with disabilities and linking them to employment, health care 

and their community. 

External factors affecting performance: 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 that twenty years. FTA has no control over the length 

of time transit operators decide to keep older vehicles.

Partners: State and local transit agencies

Associated Funding

FY 2009: $116,019,000

Actual results: 98% (estimated)

Description of Results: Bus fleets continue to become more accessible as older vehicles are replaced with new vehicles that are lift-equipped 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. While all new 

buses are lift equipped or have low floors, it will be difficult to reach 100% compliance 

because many transit operators retain buses for more than twenty years.

Target Achievement: Expected to meet.

Strategic Goal: Reduced Congestion

Operating Administration: Federal Transit Administration

Performance Measure: Percent of key rail stations that are compliant with the Americans with Disabilities Act (ADA).

Why do we measure this? This is a measure of the percentage of key transit rail stations that are accessible to people with disabilities. Accessibility for key rail facilities 

is determined by standards established in the Americans with Disabilities Act. Transit systems were required to identify key stations. A key station is one designated as 

such by pubic entities that operate existing commuter, light or rapid rail systems. 

Each public entity determines which stations on its system have been designated 

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Performance & Accountability Report FY2009

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as key stations through its planning and public participation process using criteria 

established by DOT regulations. 

Target: 94%

Actual: 95% (preliminary)

Strategic Target: 94.5%

How do we set targets? The target is established based on the performance trends 

over three to five years.

Public Benefit: Accessible public transportation is vital to maintaining independence 

and mobility for people with disabilities and linking them to employment, health care 

and their community. 

External factors affecting performance: Only six of the 33 rail systems affected by 

the ADA compliance requirement have key rail stations that are not accessible to people with disabilities. These are stations that tend to need expensive structure changes 

or replacement of existing facilities.

Partners: State and local transit agencies and decision makers

Associated Funding

FY 2009: $500,000

Actual results: 95% (preliminary) 

Description of Results: There are 680 key rail stations nationwide; and 32 of these 

stations remain inaccessible to people with disabilities. Transit operators have made 

significant progress in meeting this goal. FTA continues to monitor major transit 

systems through a quarterly reporting process. During Fiscal Year 2009 some transit agencies have certified that they have completed all required updates. There are 

six transit systems which have key stations that are not accessible because they are 

either in the planning, design or construction stage. In some cases, certain elements 

in the station may be maintained or owned by a non-transit entity and coordination 

between the parties is needed. FTA will continue to monitor these systems through 

the quarterly reporting process and rail station assessment reviews. 

Target Achievement: Expected to meet.
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Global Connectivity

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 U.S. 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 $1,625 million to promote competition 

and economic development within the U.S. and internationally. 

FY 2009 Enacted Funding by GLOBAL CONNECTIVITY

Strategic Objectives

(Dollars in Millions)

Expanded Opportunities $6

Enhanced Competitiveness $77

More Efficient Movement

of Cargo $1,541

Total FY 2009 Funding: $1,625 Million

Total FY 2009 Funding: $1,625 Million

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139

Key Performance Areas

Strategic outcomes from the DOT Strategic Plan are indicated in blue and FY 2009 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.

✘✓ Number of National Highway 

Systems border crossings with a 

decrease in unexpected delay.

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.

2009 Performance Highlights

•	 The St. Lawrence Seaway, the international shipping gateway to the Great 

Lakes, was operational 99.4% of the time in Fiscal Year 2009.

•	 DOT negotiated new agreements with Laos, Vietnam, Armenia, and Mongolia that extended Open-Skies benefits to several million more potential aviation consumers. 

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.
140

More Efficient Movement of Cargo

FY 2009 Enacted Funds: $1,541 Million

Strategic Goal: Global Connectivity 

Facilitate an international transportation system that promotes economic growth and 

development

Operating Administration: Saint Lawrence Seaway Development Corporation (SLSDC)

Performance Measures: Percent of days in the shipping season that the U.S. portion 

of the St. Lawrence Seaway is available.

Why do we measure this? The Saint Lawrence Seaway Development Corporation’s 

(SLSDC) primary goal is to operate and maintain a safe, efficient, and reliable commercial waterborne transportation route for global users to move goods to and from 

the Great Lakes region of North America. 

Target: 99.0% (FY 2009)

Actual: 99.4% (FY 2009)

Strategic Target: 99.0% (FY 2011)

How do we set targets? The annual target of 99 percent has become a standard 

expected by the waterway’s commercial user base.

Public Benefit: The availability of the St. Lawrence Seaway is critical to the movement of commercial goods to and from the Great Lakes region of North America. Commercial trade on the 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 $3.6 billion in annual transportation cost savings compared to competing rail and highway routes.

External factors affecting performance: Weather conditions and vessel incidents are 

the two most common causes of system unavailability on the St. Lawrence Seaway, 

both external to SLSDC operations. 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 involve ship operations, and are 

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Performance & Accountability Report FY2009

141

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.

Partners: The SLSDC operates the St. Lawrence Seaway with its Canadian counterpart, The St. Lawrence Seaway Management Corporation. This partnership includes 

all facets of waterway management, including vessel traffic control, vessel inspection 

procedures, and other matters affecting the safety and efficiency of the binational 

waterway. In addition, the SLSDC coordinates closely with the U.S. Coast Guard on 

safety, security, and environmental programs.

Associated Funding:

FY 2009: $33,000,000

Actual results: 99.4%

Description of Results: In FY 2009, the SLSDC met its annual performance target related to St. Lawrence Seaway availability. During the fiscal year, the SLSDC 

recorded an availability rate of 99.4 percent, 0.4 percent above its annual goal. An 

analysis of system non-availability during Fiscal Year 2009 indicates that the most 

common causes were weather (63 percent) and vessel-related (19 percent) delays. 

Target Achievement: Met

Target Assessment: The SLSDC continues to perform safe and efficient operations 

and management of the two U.S. Seaway locks and the U.S. waters on the St. Lawrence River under its jurisdiction. 

Its operational business areas in Massena, N.Y., including those directly responsible 

for this performance measure (lock operations, ship inspections, vessel investigations, vessel traffic services, aids to navigation program, channel maintenance, and 

lock maintenance), have well-developed and enforced business processes and procedures for its workforce. 

These processes and procedures have been certified through the internationally recognized International Standards Organization (ISO) under the ISO 9001: 2000 standard. The ISO recognition is only conferred on those service firms and organizations 

that meet the highest quality customer service and management standards set by the 

Geneva, Switzerland-based ISO. The SLSDC began the process of certifying its business processes in 1998 and has been audited annually for compliance. 
142

Outlook and Actions: In FY 2009, the SLSDC began its 10-year Asset Renewal Program (ARP) to address the St. Lawrence Seaway’s long-term asset renewal needs, 

which include the two U.S. Seaway locks, connecting channels, operational systems, 

and other infrastructure assets. These improvements are expected to help reduce the 

delay hours associated with lock equipment malfunctions.

Strategic Goal: Global Connectivity

Facilitate an international transportation system that promotes economic growth and 

development

Operating Administration: Federal Highway Administration

Performance Measure: Number of freight corridors with an average buffer index 

rating greater than the national average.

Why do we measure this? The reliability of key freight corridors is an important 

transportation system performance component. Unreliable travel times affect American industry’s ability to effectively and efficiently manage their freight logistics and 

respond to customer requirements; this directly affects the cost of goods bought and 

sold in the United States and economic competitiveness. 

Target: 13

Actual: 19

Strategic Target: 22 

How do we set targets? Data for 25 corridors with heavy freight volumes exist from 

May 2006 to the present. In Fiscal Years 2007 and 2008, 19 of the 25 corridors had a 

buffer index rating better than the national average (e.g. were more reliable). 

Public Benefit: Facilitating the efficient movement of freight on key corridors is vital 

to the nation’s economic prosperity and quality of life. The U.S. economy depends on 

an efficient and reliable freight transportation system. Congestion and insufficient 

investment on major freight corridors and other key infrastructure will create a 

weakness in the transportation system that for decades has been a major strength. 

External factors affecting performance: FHWA has very limited influence on the performance of freight corridors. When the economy grows, freight volumes increase 

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Performance & Accountability Report FY2009

143

and place a strain on the available capacity. Private industry decides which transport 

modes and facilities to use for moving freight, taking into account cost and performance. While FHWA provides funds for constructing highway facilities and promotes 

improved strategies for operating highways, States and Metropolitan Planning Organizations decide how to use the funds on State and local highway improvements as 

well as operational improvements.

Most of the success in this area will be from initiatives which impact project selection and operational strategies used by State DOTs and other recipients of Federal 

funds; market forces that drive the behavior of users of the transportation system; 

the availability of attractive modal alternatives; demonstrating new viable/sustainable transportation management options; and alternative funding mechanisms. Some 

of the more attractive strategies, such as congestion pricing, have implementation 

challenges. For example, widespread use of congestion pricing would provide a market force that could significantly affect system usage and could precipitate a modal 

shift for freight. However, this will be difficult due to perceived unequal distribution 

of benefits, traffic diversion and the resultant operational impacts on other roads, and 

various implementation difficulties such as start-up costs, operating technologies, 

and perceived privacy issues.

Partners: U.S. Environmental Protection Agency, US Department of Commerce, 

Research & Innovative Technology Administration, Maritime Administration, and 

Federal Railroad Administration. Non-federal partners include the American Association of State Highway and Transportation Officials, State Departments of Transportation, the Association of Metropolitan Planning Organizations, urban jurisdictions, 

retail and trade associations, and shipper and carrier associations.

Associated Funding:

FY 2009: $649,000,000

Actual results: 19

Description of Results: Of the 25 freight corridors measured, the trips in 19 were 

more reliable than the national average. Focused reliability allows motor carriers to 

better to predict arrival times for shipments in those corridors. This is critical for 

freight logistics and planning.

Target Achievement: Exceeded
144

Target Assessment: Travel time reliability in freight corridors is influenced by highway capacity, as well as recurring (e.g., fluctuations in travel demand) and non-recurring (e.g., weather) causes. FHWA program initiatives designed to improve freight 

management and operations, incident management, real time traffic management, 

bottleneck reduction, road weather management, planned special events management, and work zone management likely contributed to exceeding the target in these 

freight corridors. In addition, travel on the interstate system did not increase significantly during the past year. Reliability improved because reductions in travel and 

freight volumes during the economic downturn lowered traffic demands on the transportation system

Outlook and Actions: Out-year performance targets are aggressive, but may be achieved 

if State DOTs and Metropolitan Planning Organizations (MPO) fund transportation 

projects and services that target improved freight flows. FHWA will support this effort 

by increasing freight management capabilities among State DOT and MPO staff, facilitating the deployment of technology-based options for efficient, safe and sustainable 

intermodal freight movement, providing national level freight data and freight flows 

to support and enable informed decision-making, and advancing regional and corridor 

level collaboration. 

Timeline for affecting future performance: It will take three to five more years of 

intensive efforts to achieve the strategic target. 

Strategic Goal: Global Connectivity

Facilitate an international transportation system that promotes economic growth and 

development

Operating Administration: Federal Highway Administration (FHWA)

Performance Measure: Number of national highway system border crossings with a 

decrease in unexpected delay.

Why do we measure this? The transportation network is a key component of border 

management and should be included in decisions about border operations. Border 

crossing time and its variability are key indicators of transportation system performance. Low variability in crossing time allows goods to get to market with little unexpected delay. High variability in travel times generally causes unplanned delays in 

goods getting to market, which adds costs and creates inefficiency in the goods moveGlobal Connectivity
Performance & Accountability Report FY2009

145

ment. Border delay and crossing time information, along with other information (e.g. 

freight and passenger volumes), can be used to target transportation funding where 

the greatest needs exist. 

Target: 5

Actual: 3

Strategic Target: 5

How do we set targets? Data exists for 5 U.S.-Canada border crossings from May 

2006 to the present. Past performance data is used to set targets. Success in achieving interim and strategic targets is dependent on continued coordination with partner 

agencies on infrastructure and operational improvements for the safe, efficient and 

sustainable movement of goods across our borders with Canada and Mexico. Data are 

currently being collected at two U.S.-Mexico border crossings and will be reported 

during next fiscal year. 

Public Benefit: Cross border trade with Canada and Mexico is an integral component of 

the United States’ national and many regional economies. Total North American surface 

transportation imports rose 2.7 percent between 2007 and 2008, and exports rose by 5.9 

percent during the same period. In 2008, 86 percent of U.S. merchandise trade by value 

with Canada and Mexico moved by land. U.S. businesses depend on efficient movement 

of goods in border regions with Canada and Mexico for profitability and growth. 

External factors affecting performance: FHWA’s core responsibilities at the U.S. border include: Public Safety, Congestion Management, Coordination and Facilitation, 

and Stewardship and Oversight of transportation related projects. There are many 

aspects of border operation and management that are outside FHWA’s sphere of control. Agencies that operate and manage the border, such as U.S. Customs and Border 

Protection, implement policy changes, staff changes and capacity changes that affect 

or influence performance in this area.

Partners: The U.S. Department of Transportation (DOT) and FHWA coordinate with 

the Departments of State, Homeland Security, Commerce and General Services 

Administration on mutually agreeable border and transportation system infrastructure and operational improvements via longstanding bi-lateral and tri-lateral mechanisms with the governments of Canada and Mexico. 

Associated Funding: 

FY 2009: $649,000,000
146

Actual results: 3

Description of Results: Trade using surface transportation between the United States 

and its North American Free Trade Agreement partners Canada and Mexico was 35.4 

percent less in May 2009 than in May of the previous year. With this downturn in overall trade, FHWA expected to see a decrease in unexpected delays at all border crossings, which would represent an improvement in reliability. However, only 3 of the 5 

U.S.-Canada border crossings that FHWA monitors showed a decrease in delays. 

Target Achievement: Did not meet

Target Assessment: Only some border crossings experienced net improvements in 

travel time. Many factors beyond travel and freight volumes affect travel time reliability such as weather, work zones, crashes, law enforcement actions, changes in border 

clearance policies and procedures, threat level, and inspection time. The FHWA continued to work with partner agencies to mitigate these contributing factors to border 

congestion and delay.

Outlook and Actions: Success in achieving out-year performance targets will depend 

on continued coordination with partner agencies on infrastructure and operational 

improvements for the safe, efficient and sustainable movement of goods across our 

borders with Canada and Mexico. Current efforts that support achieving targets 

include coordinating regional master plans on the U.S.- Mexico border, creating an 

infrastructure compendium on the U.S.-Canada border, continuing efforts to use realtime border crossing times to assess performance and automate measurement at 

key US-Canada border crossings, coordinating documentation of freight flows as a 

basis for infrastructure planning and improved transportation systems operations, 

and maintaining partnerships, such as the U.S.-Mexico Joint Working Committee and 

the U.S.-Canada Transportation Border Working Group that facilitate collaborative 

decision-making at both U.S. borders.

Timeline for affecting future performance: It will take three to five years to achieve 

the strategic target. 

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Performance & Accountability Report FY2009

147

Enhance Competitiveness

FY 2009 Enacted Funds: $77 Million

Strategic Goal: Global Connectivity

Facilitate an international transportation system that promotes economic growth and 

development

Operating Administration: Office of the Secretary of Transportation (OST)

Performance Measure: Number of potential air transportation consumers (in billions) 

in international markets.

Why do we measure this? This measure reflects the Department’s mission to open as 

many international aviation markets as possible to the traveling and shipping public.

Target: 3.94 billion

Actual: 4.83 billion

Strategic Target: 3.11 billion 

How do we set targets? Based on funding and the willingness of foreign partners to 

engage in negotiation of air services agreements, DOT sets targets in accordance 

with the likelihood of success in opening or expanding access to international aviation 

markets.

Public Benefit: Open and expanded air service 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.

External factors affecting performance: The health of the global economy and the 

willingness of foreign partners to complete air services agreements directly affect 

DOT’s performance.
148

Partners: DOT works with numerous U.S. Government agencies, including the State 

and Commerce Departments. DOT also works with many airlines, airports and industry associations.

Associated Funding

FY 2009: In FY 2009, no direct funding was attributed to this performance measure. 

This activity was funded as an overhead expense.

Actual results: 4.83 billion potential consumers

Description of Results: The actual results reflect new agreements with Laos, Vietnam, Armenia and Mongolia in fiscal year 2009. 

Target Achievement: Exceeded

Target Assessment: DOT exceeded the target because of the desire of foreign partners to open their markets to the U.S. aviation industry. DOT’s long-standing policy 

of liberalizing aviation markets around the world continues to prove beneficial to U.S. 

and foreign interests. 

Outlook and Actions: DOT expects the number of consumers in international markets 

to continue to increase in the coming years. However, the pace of growth will inevitably slow as there will be fewer and fewer countries without agreements with the 

United States.

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Performance & Accountability Report FY2009

149

Expanded Opportunities

FY 2009 Enacted Funds: $6.4 Million

Strategic Goal: Global Connectivity

Facilitate an international transportation system that promotes economic growth and 

development

Operating Administration: the Office of the Secretary of Transportation

Performance Measure: Percent share of total dollar value of DOT-procurement dollars (direct contracts) that are awarded to small disadvantaged businesses.

Why do we measure this? The Congress mandated federal agencies to provide maximum practical opportunities for small businesses and to establish annual goals for 

utilizing small disadvantaged businesses in the agencies' procurement. 

Target: 14.0%

Actual: 14.5 % (preliminary)

Strategic Target: 14.0%

How do we set targets? The target is set in cooperation with the Small Business 

Administration (SBA). The Office of Small and Disadvantaged Business Utilization 

(OSDBU) works with the operating administrations in DOT to coordinate efforts and 

negotiate procurement targets toward annual achievements. 

Public Benefit: Expanded opportunities for small disadvantaged businesses serve the 

economic interests of the United States, both nationally and globally. In general, a 

Small Disadvantaged Business as defined in current government regulations is at least 

51% owned and controlled by one or more socially and economically disadvantaged 

individuals. Socially disadvantaged individuals include African Americans, Hispanic 
150

Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian Americans, and other minorities or individuals found to be disadvantaged by the Small 

Business Administration pursuant to Section 8(a) of the Small Business Act and SBA 

regulations.

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 help these entrepreneurs 

have a fair opportunity to compete, Congress and the Administration have established 

procurement goals for the Federal Government. This new target will work to overcome the barriers to success for minority-owned businesses. 

External factors affecting performance: The effectiveness of this effort is also dependent on the state of the economy as a whole and available transportation projects. 

OSDBU has developed a comprehensive delivery system of business training, technical assistance, and dissemination of information targeted towards transportation-related small businesses, including disadvantaged businesses. The DOT Small Business 

Transportation Resource Centers and OSDBU strategically conduct outreach events 

for the small business community in their designated region and provide financial 

and technical assistance, business training programs, such as, business assessment, 

management training, counseling, technical assistance, marketing and outreach, and 

the dissemination of information, to encourage and assist small businesses to become 

better prepared to compete for, obtain, and manage DOT funded transportation-related contracts and subcontracts at the federal, state and local levels. 

Partners: External partners include DOT’s Small Business Technical Resource Centers 

located across the nation. There are also a number of SBA programs and small disadvantaged business centers located across the country that contribute to DOT’s success.

Associated Funding: 

FY 2009: $5,337,000 

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151

Actual results: 14.5% (preliminary)

Description of Results: Based on preliminary estimates, DOT will meet the small disadvantaged business related targets. All of the DOT operating administrations continue 

to seek new opportunities to engage the small disadvantaged business community and 

have done superbly. DOT is one of the few Federal agencies to be recognized by SBA 

for surpassing its goals and greatly contributing to the government-wide statutory goal. 

The Office of Small and Disadvantaged Business Utilization (OSDBU) continues to work 

closely with DOT program and procurement personnel to ensure that small businesses 

are afforded maximum practicable opportunities to participate in DOT direct procurement actions. OSDBU provided assistance to the agencies with their acquisition strategies, professional development and access to qualified small businesses. OSDBU also 

increased technical assistance and participation in outreach events.

Target Achievement: Expected to exceed

Strategic Goal: Global Connectivity

Facilitate an international transportation system that promotes economic growth and 

development

Operating Administration: The Office of the Secretary of Transportation (OST)

Performance Measure: Percent share of total dollar value of DOT-procurement dollars (direct contracts) that are awarded to women-owned businesses.

Why do we measure this? The Congress mandated federal agencies to provide maximum practical opportunities for small businesses and to establish annual goals for 

utilizing women-owned businesses in the agencies’ procurement. 

Target: 5.1%

Actual: 9.0% (preliminary)
152

Strategic Target: 5.1%

How do we set targets? The target is set in cooperation with the Small Business 

Administration. The Office of Small and Disadvantaged Business Utilization works 

with the agencies in DOT to coordinate efforts and negotiate procurement targets 

toward annual achievements. 

Public Benefit: 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. 

Women make up 51.1% of the population. Nearly 40% of businesses in the United 

States are women-owned. These businesses generate almost $2.7 trillion in annual 

revenues according to statistics from the Small Business Administration. To help 

these entrepreneurs have a fair opportunity to compete, Congress and the Administration have established procurement goals for the Federal Government. 

External factors affecting performance: Unlike other small business categories, 

women-owned small businesses do not have the set-aside authority so important to 

goal attainment. DOT relies heavily on its outreach efforts, internal training, and 

communication with the public to inform and counsel woman-owned small businesses 

of upcoming procurements. Attention from women’s business organizations, and their 

interaction with state, Federal, and other government officials on the Federal level all 

contribute to DOT’s success in attaining the goal. The effectiveness of this effort is 

also dependent on the state of the economy as a whole. 

Partners: External partners include DOT’s Small Business Technical Resource Centers located across the nation. There are also a number of Small Business Administration programs and women’s business centers located across the country that contribute to DOT’s success.

Associated Funding: 

FY 2009: $5,337,000 

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153

Actual results: 9.0% (preliminary)

Description of Results: Based on preliminary estimates, DOT will meet both of the small business related targets. All of the DOT agencies continue to seek new opportunities to engage the 

women-owned business community even though the Federal government has not finalized 

regulations to allow for set-asides to women-owned businesses. DOT is one of the few Federal agencies surpassing the government-wide five percent woman-owned business statutory goal. The Office of Small and Disadvantaged Business Utilization (OSDBU) continues 

to work closely with all program and procurement personnel to ensure that women-owned 

businesses are afforded maximum practicable opportunities to participate in DOT direct 

procurement actions. OSDBU provided assistance to the agencies with their acquisition 

strategies, professional development and access to qualified small businesses. OSDBU 

also increased technical assistance and participation in outreach events.

Target Achievement: Expected to exceed
154

Environmental Stewardship

Promote Transportation Solutions That Enhance Communities And Protect Thenatural 

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 $7,295 million to protect communities 

and their natural and built assets.

FY 2009 Enacted Funding by ENVIRONMENTAL STEWARDSHIP

Strategic Objectives

(Dollars in Millions)

Steamline Environmental

Review $146

Total FY 2009 Funding: $7,295 Million

Reduction in Pollution

$2,958

Other Environmental

Activities $4,192

Total FY 2009 Funding: $7,295 Million

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155

Key Performance Areas

Strategic outcomes from the DOT Strategic Plan are indicated in blue and FY 2009 

results for key DOT performance measures are marked to indicate Met Target (✓) and 

Did Not Meet Target (✗).

Reduction in Pollution

Reduction in pollution and 

other adverse environmental 

effects from transportation 

andtransportation 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. 

2009 Performance Highlights

•	 For the third consecutive year there were no areas in air quality conformity 

lapse. The downward trend in vehicle emissions is expected to continue due to 

more stringent vehicle and fuel emissions standards.

•	 On average it takes nearly 77 months for DOT-funded transportation projects to 

complete the National Environmental Policy Act process. 

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.
156

Reduction in Pollution

FY 2009 Enacted Funding: $3.0 Billion 

Strategic Goal: Environmental Stewardship - Promote transportation solutions that 

enhance communities and protect the natural and build environment. 

Operating Administration: Federal Highway Administration (FHWA)

Performance Measure: Number of areas in conformity lapse.

Why do we measure this? 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. Areas that exceed, or have previously 

exceeded, certain NAAQS - designated as air quality non-attainment or maintenance 

areas, respectively - are required to meet transportation a conformity requirements 

in the Clean Air Act. Failure to meet the conformity requirements places an area in a 

conformity lapse, which creates a situation in which only limited types of Federallyfunded highway and transit projects can proceed. 

Target: 6.0

Actual: 0.0

Strategic Target: 6.0

How do we set targets? The target is set based on historical trend data. Since DOT has 

exceeded the target for the last several years, it will reduce the target for Fiscal Year 

2010 and years following. 

Public Benefit: Over the past 20 years, contributions of emissions from cars, buses, 

and trucks to all emissions have been rapidly declining. For example, emissions from 

these sources decreased 68, 36, 57, and 59 percent, respectively, for Volatile Organic 

Compounds, Nitrogen Oxides, Particulate Matter, and Carbon Monoxide between 1980 

and 2003. The downward trend in emissions is expected to continue through 2030. 

External factors affecting performance: The NAAQS for fine particulates and ozone 

were revised in 2006 and 2008, respectively. The new requirements create challenges 

for newly designated nonattainment areas.

Environmental Stewardship
Performance & Accountability Report FY2009

157

Partners: State Departments of Transportation, metropolitan planning organizations, 

Environmental Protection Agency, and the Federal Transit Administration

Associated Funding: 

FY 2009: $2,096,000,000

Actual results: 0 

Description of Results: Over the past three years, no areas were in conformity lapses.

Target Achievement: Exceeded

Target Assessment: The downward trend in on-road mobile source emissions is 

expected to continue due to more stringent vehicle and fuel emissions standards. 

In addition, the twelve-month lapse grace period provided by SAFETEA-LU allowed 

areas more time to address the requirements and avoid entering into conformity 

lapse. 

Outlook and Actions: The current trend may be affected by the implementation of 

the new fine particulate matter and ozone standards in 2010 and 2011, respectively, 

but the number of metropolitan areas meeting their emissions goals is expected to 

increase over the longer term. FHWA will work with the EPA to provide guidance and 

training to new areas to ensure that they will have ample time to meet the Clean Air 

Act requirements. In addition, EPA will release a new emissions model in early 2010, 

which will be the required model for emissions analysis. FHWA will continue to provide training to states and metropolitan planning organizations, as the analysis based 

on the emissions model is a critical element for areas to meet the requirements.

Timeline for affecting future performance: Transportation plans, programs, and projects in new nonattainment areas required to meet the NAAQS for fine particulates 

are expected to comply by 2010 and new nonattainment areas required to meet the 

NAAQS for ozone are expected to comply by 2011.
158

Strategic Goal: Environmental Stewardship - Promote transportation solutions that 

enhance communities and protect the natural and build environment. 

Operating Administration: Pipeline and Hazardous Materials Safety Administration

Performance Measure: Number of hazardous liquid pipeline spills in high consequence areas

Why do we measure this? DOT measures the risk pipelines pose to the environment by 

tracking hazardous liquid spills in high consequence areas. This measure focuses on 

accidents that present a particular potential for environmental harm due to their location. High consequence areas include commercially navigable waterways, areas with 

concentrated population, and drinking water or ecological resources that are unusually sensitive to environmental damage from a hazardous liquid pipeline release.

Target: 49

Actual: 57 (projected)

Strategic Target: 46 (by 2011)

How do we set targets? Targets reflect a 2% reduction in risk each year.

Public Benefit: Reducing spills in high consequence areas reduces the risk of harm to 

the public and to environmentally sensitive areas.

External factors affecting performance: Excavation damage, damage from natural 

forces (e.g., storms and flooding), and other outside force damage are all significant 

causes of pipeline failure. Operating error by individuals is another significant cause 

of failure.

Partners: Some state pipeline safety agencies act as interstate agents for PHMSA, 

inspecting hazardous liquid pipelines on its behalf.

Associated Funding

FY 2009: $26,242,000

Environmental Stewardship
Performance & Accountability Report FY2009

159

Actual results: 55 (projected)

Description of Results: We are projecting 57 spills in high consequence areas in calendar year 2009. Although PHMSA is expected to miss the target for the year, this 

preliminary result still a decrease of over 10 percent from year 2008.

70

10

0

200220032004200520062007

Targets

52 51 50 49

PHMSA Accident and Incident data as of August 3, 2009 2008 2009

20

30

40

50

60

Hazardous Liquid Pipeline Spills in

High Consequence Areas (2002–2009)

47

51

67

54

49

55

48

70

0

10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1

PHMSA Accident data as of August 3, 2009

8/1 9/1

10

20

30

40

50

60

Hazardous Liquid Pipeline Spills in HCAs

(Cumulative – YTD vs. Last Two Years)

Date of Spill

FY 2008

FY 2009

FY 2007

Target � 49
160

Target Achievement: Expect to miss

Target Assessment: PHMSA has analyzed spills reported in high consequence areas and 

has concluded Fiscal Year 2009 spills were caused primarily by corrosion and equipment failures on onshore pipelines or at pump/meter stations. Overall, spills originating from pipelines have decreased by one third since Fiscal Year 2007. Spills originating from equipment failures have remained relatively constant. However, it should be 

noted that spills originating from equipment failures are typically smaller in volume. 

Nonetheless, PHMSA has renewed its focus on spills originating from equipment and 

its new inspection program should reduce the numbers next year and thereafter.

16

0

FY 2007 FY 2008 FY 2009*

*PHMSA Accident data as of August 3, 2009

4

2

6

8

10

12

14

Spills in HCAs by Primary Care

(FY 2007 – FY 2009)

Corrosion

Excavation

Natural Forces

Human Error

Material Failure

Other Causes

Other Outside Force

Equipment

35

0

FY 2007 FY 2008 FY 2009

PHMSA Accident data as of August 3, 2009

5

10

15

20

25

30

Hazardous Liquid Pipeline Spills in HCAs

Number of Spills by System Type

Above Ground Storage Tank

Onshore Pipeline

Other

Pump/Meter Station

Environmental Stewardship
Performance & Accountability Report FY2009

161

Although PHMSA may miss its numerical target for the number of spills in High 

Consequence Areas (HCAs), the volume of oil and other commodities spilled in HCAs 

is lower than it was at this time in Fiscal Years 2007 and 2008. More importantly, the 

volume spilled since April 2009 has remained relatively stable. 

25

0

10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1

PHMSA Accident data as of August 3, 2009

8/1 9/1

5

10

15

20

Hazardous Liquid Pipeline Spills in HCAs

(Cumulative – YTD vs. Last Two Years)

Date of Spill

Spill Volume (1,000 Barrels)

FY 2008

FY 2009

FY 2007

60

0

FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008

PHMSA Accident data as of August 3, 2009

10

20

30

40

50

Hazardous Liquid Pipeline Spills in HCAs

Barrels Spilled by Commodity

Spill Volume (1,000 Barrels)

HVLs

Gasoline, Diesel, Fuel Oil

Crude Oil
162

Outlook and Actions: PHMSA continues to retool its analysis, inspection and enforcement tactics to make certain it meets its annual performance targets. In FY 2010 

PHMSA will publish its new accident reporting guidelines, new failure investigation 

form and implement the next round of Integrated Inspections, which will cover more 

pipeline operators. Jointly, these three strategies should enable PHMSA to decrease 

the number of spills in high consequence areas henceforth. There are some significant 

data quality issues that make PHMSA unable to assure the reliability of this measure 

as an indicator of program performance. However, in the interest of accountability, 

data will continue to be collected and reported under the current practices until such 

time that data and statistical improvements can generate more reliable data and statistical results.

Timeline for affecting future performance: PHMSA expects to meet its targets for 

2010.

Strategic Goal: Environmental Stewardship - Promote transportation solutions that 

enhance communities and protect the natural and build environment. 

Operating Administration: The Office of the Secretary of Transportation (OST)

Performance Measure: Percent of DOT facilities characterized as No Further Remedial Action Planned (NFRAP) under the Superfund Amendments and Reauthorization 

Act

Why do we measure this? To serve as an environmental steward by improving U.S. 

Department of Transportation (DOT)-owned or controlled facilities for the benefit of 

host communities by preventing pollution and cleaning up contaminated facilities.

Target: 94% 

Actual: 94%

Strategic Target: 94%

How do we set targets? Targets are based on the number of DOT facilities potentially 

on the EPA docket and the progress of cleanup at those sites.

Public Benefit: DOT has greatly reduced risks to surrounding communities and the 

environment and has protected human health and the environment.

Environmental Stewardship
Performance & Accountability Report FY2009

163

External factors affecting performance: If more sites are added to the EPA docket 

under DOT ownership this would impact the current NFRAP status goal. EPA’s assessment of the completeness of DOT’s cleanup activities at these sites will drive the success of this goal.

Partners: EPA and state environmental regulatory agencies

Associated Funding: 

FY 2009: $38,798,000

Actual results: 94%

Description of Results: The performance goal of 94% NFRAP status was attained and 

maintained during Fiscal Year 2009. Four FAA sites are on the docket and will be there 

for several years. They are: Ronald Reagan National Airport, Kirksville Air Route 

Surveillance Radar, Mike Monroney Aeronautical Center, and the William J. Hughes 

Technical Center. FAA has developed short-term actions (1-4 years) for achieving 

NFRAP status for the Ronald Reagan National Airport site. The other three sites, 

however, are more complex to address and will take much longer to completely clean 

up. For example, FAA expects to finish clean-up at the William J. Hughes Technical 

Center around 2040. 

Target Achievement: Met
164

Streamlined Environmental Review

FY 2009 Enacted Funding: $136 Million 

Strategic Goal: Environmental Stewardship - Promote transportation solutions that 

enhance communities and protect the natural and build environment. 

Operating Administrations: Federal Highway Administration (FHWA), Federal Transit Administration (FTA), and Federal Aviation Administration (FAA)

Performance Measure: Median time in months to complete Environmental Impact 

Statement (EIS) for DOT-funded infrastructure projects. 

Why do we measure this? To determine if transportation projects, in particular the 

environmental reviews, are being delivered in a reasonable amount of time. The measure shows the tension between needing to build transportation facilities and responsibly protecting the environment.

Target: 54 months (revised)

Actual: 76.8 months

Strategic Target: 48 months in FY 2011 (revised)

How do we set targets? Targets are set based on historical median time frames for 

completing National Environmental Policy Act (NEPA) requirements for EISs, and the 

demonstrated benefits of linking the planning process with the environmental review 

process. This provides DOT with a better sense as to possible sources of delay in the 

NEPA process.

Public Benefit: The public benefits by their ability to provide input into the NEPA process, including the identification of resources, community impacts, alternative development, and the opportunity to review and comment on environmental documents. 

Streamlining the NEPA process leads to timely project-related decisions and project 

delivery.

Environmental Stewardship
Performance & Accountability Report FY2009

165

External factors affecting performance: State and local impediments such as lack 

of resources (funding and staff), political considerations, differing resource agency 

missions, and community controversy can lead to delay. On the Federal side, a lack 

of dedicated staff resources can lead to project delays. Differing missions and goals 

of various agencies can also lead to project delays. In addition, the complexity of 

the project as well as the number and significance of protected resources can delay 

projects.

Partners: State Departments of Transportation, State and Federal resource agencies, 

interested parties and the public.

Associated Funding: 

FY 2009: $145,714,000

Actual results: 76.8 months

Description of Results: DOT finished the NEPA process for 35 projects in Fiscal Year 

2009. Twenty-six of those projects took more than four and a half years to complete. 

Target Achievement: Did not meet

Target Assessment: The NEPA process can be delayed for many reasons, including fiscal constraints at the state and local level, changes in leadership at state DOTs, significant community opposition to a project, and delays due to interagency coordination. 

Outlook and Actions: DOT agencies will identify and address the reasons for delay 

on specific projects, particularly instances in which more interagency coordination 

is needed and better project scoping would help, to reduce the overall time required. 

Timeline for affecting future performance: DOT expects a gradual reduction over the 

next few years as older projects move out of the system and others are cancelled.
166

Other Environmental Activities

FY 2009 Enacted Funding: $4.2 Billion 

Strategic Goal: Environmental Stewardship

Promote transportation solutions that enhance communities and protect the natural 

and build environment. 

Operating Administration: FHWA

Performance Measure: Number of exemplary human environment initiatives.

Why do we measure this? Exemplary Human Environment Initiatives (EHEI) identify 

and reward innovation, improve the state of the practice for development of transportation projects and activities, offer the potential of transferability, demonstrate 

partnering and collaboration, provide specific benefits to human activity, and represent the mainstreaming of ecosystem and conservation initiatives.

Target: 15

Actual: 16

Strategic Target: 15

How do we set targets? Targets are set based on the anticipated number of submittals.

Public Benefit: The EHEI promotes environmental stewardship by giving recognition 

to transportation projects and activities that are particularly effective and innovative 

in how they adapt and enhance the human environment. It gives incentives to transportation sponsors to pursue new ways to adapt transportation projects to the human 

environment, thereby better meeting the needs of the communities they serve.

External factors affecting performance: None

Partners: State Departments of Transportation and Federal Lands Management 

Agencies. 

Associated Funding: 

FY 2009: $4,191,000,000

Environmental Stewardship
Performance & Accountability Report FY2009

167

Actual results: 16 

Description of Results: In 2009, 16 EHEI projects were recognized. Of these 16, 6 

were also recognized as Exemplary Ecosystem Initiatives. This is the second year 

that States could submit projects for joint recognition. 

Target Achievement: Exceeded

Target Assessment: Now in its third year, the EHEI program is receiving more visibility. The quality of submissions is increasing and more projects are worthy of recognition. The linkage to the Exemplary Ecosystem Initiative helped raise awareness 

and provided an opportunity to highlight some truly exemplary projects. 

Outlook and Actions: The next call for proposals is in early 2010. FHWA is encouraging more States to participate in the program. 

Timeline for affecting future performance: The next project submittals are due in 

May 2010.
168

Security, Preparedness 

and Response

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 U.S. Department of Homeland Security and 

the U.S. 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 $568 Million to ensure preparedness 

for response to emergencies that impact the transportation system.

FY 2009 Enacted Funding by SECURITY, PREPAREDNESS & RESPONSE

Strategic Objectives

(Dollars in Millions)

Defense Mobilization $265

Intelligence, Preparedness

& Response $6

Total FY 2009 Funding: $568 Million

Security & Readiness $297

Total FY 2009 Funding: $568 Million

Security, Preparedness and Response
Performance & Accountability Report FY2009

169

Key Performance Area

Strategic outcomes from the DOT Strategic Plan are indicated in blue and FY 2009 results 

for key DOT performance measures are marked to indicate Met Target (✓) and Did Not 

Meet Target (✗).

Intelligence, Preparedness Security and Readiness

and Response The DOT Operating Administrations 

 Percent of DOT personnel with work closely with the Departments 

emergency management responsi- of Homeland Security and Defense 

bilities who are prepared to respond and other stakeholders to ensure 

to disasters or emergencies the security of specific modes of 

transportation nationwide. Percent of DOT agencies meeting 

annual response requirements

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.

2009 Performance Highlights

•	 DOT exceeded its targets for both the percentage of ships and crews and the 

percentage of strategic ports that were available for DOD deployment of military equipment.

•	 DOT began measuring its ability to respond to emergencies this year and found 

that its staff and most of its component agencies are prepared.
170

Intelligence, Preparedness and Response

FY 2009 Enacted Funds: $6 Million

Strategic Goal: Security, Preparedness and Response - Balance transportation security requirements with the safety, mobility, and economic needs of the national and 

be prepared to respond to emergencies that affect the viability of the transportation 

sector. 

Operating Administration: Office of the Secretary of Transportation (OST)

Performance Measure: Percent of DOT personnel with emergency management 

responsibilities who are prepared to respond to disasters or emergencies.

Why do we measure this? This is the first year that DOT has reported on this performance measure. DOT tracks the participation of National security professionals who 

complete required training courses and the participation of national security professionals who are required to participate in exercises that simulate disasters.

Target: 100%

Actual: 100%

Strategic Target: 100%

How do we set targets? The Office of the Secretary (OST) identifies activities critical for disaster response, including continuity of operations across the DOT agencies 

during an emergency and evaluates whether the agencies have fulfilled their obligations. National Security professionals throughout the Department have met their 

training requirements.

Public Benefit: DOT tracks this activity to ensure that its staff is able to make effective transportation decisions at all levels to sustain transportation services, mitigate 

adverse economic impacts and, meet national needs, following a disaster.

External factors affecting performance: The Department of Homeland Security operates and schedules the National Exercise Program. It is possible that not all senior 

DOT staff would be able to participate in preparedness exercises because of scheduling conflicts.

Security, Preparedness and Response
Performance & Accountability Report FY2009

171

Partners: All DOT agencies

Associated Funding

FY 2009: $3,730,000

Actual results: 100%

Description of Results: The Office of Intelligence, Security and Emergency Response 

led the Department’s participation in National Level Exercise 2009. In this exercise, 

international terrorist teams were attempting to enter the United States via the southern border or through the ports to disrupt the transportation infrastructure or other 

critical infrastructure targets. During the exercise DOT successfully tested its Alert 

and Notification system, as well as the deployment and activation of alternate sites. 

DOT verified that it is able to communicate between DOT sites and Headquarters and 

to continue essential functions from an alternate location. 

Target Achievement: Met

Strategic Goal: Security, Preparedness and Response - Balance transportation security requirements with the safety, mobility, and economic needs of the national and 

be prepared to respond to emergencies that affect the viability of the transportation 

sector. 

Operating Administration: Office of the Secretary (OST)

Performance Measure: Percent of DOT agencies meeting annual response 

requirements 

Why do we measure this? This is the first year that DOT has reported on this performance measure, which gauges the ability of the Department to effectively respond to 

emergencies affecting the transportation sector. 

Target: 100 percent

Actual: 96 percent

Strategic Target: 100 percent
172

How do we set targets? The Office of the Secretary (OST) identifies and evaluates 

responsibilities, including staffing, across the Department required for continuity of 

operations, the crisis management center and the regional emergency transportation 

program. OST then evaluates how many of the requirements were met. 

Public Benefit: DOT supports this activity to ensure that the Department is able to 

sustain transportation services, mitigate adverse economic impacts, meet societal 

needs, and move emergency relief personnel and commodities following a disaster.

External factors affecting performance: None

Partners: All DOT agencies

Associated Funding

FY 2009: $2,776,000

Actual results: 96 percent

Description of Results: To determine the ability of the DOT agencies to respond to 

disasters, the DOT Office of Intelligence and Security evaluates whether DOT agency 

Continuity of Operations plans meet Department of Homeland Security requirements, whether mandatory communications tests were passed by each DOT agency, 

and whether required resources were provided by each DOT agency for the 24 hour 

DOT Crisis Management Center and the Regional Emergency Response Program. 

OST determined that six agencies and OST were fully ready to respond to disasters. 

Three agencies were fully compliant in all but 1 area measured and the remaining 

agency did not meet two of the requirements. 

Target Achievement: Did not meet

Outlook and Actions: Through training and exercises, the Office of Intelligence and 

Security continues to work with senior staff to ensure that the agency Administrators 

and their senior staff understand the significance of the program. The office has also 

revised the DOT Order that lays out the requirements for each agency. 

Security, Preparedness and Response
Performance & Accountability Report FY2009

173

Security and Readiness

FY 2009 Enacted Funds: $297 Million

Security in the Air In FY 2009, FAA continued to enhance its 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 well-being 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 2009, 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.

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 its 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.
174

Defense Mobilization

FY 2009 Enacted Funds: $250 Million

Strategic Goal: Security, Preparedness and Response – 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. 

Operating Administration: Maritime Administration (MARAD)

Performance Measure: Percentage of Department of Defense (DOD) -required shipping capacity [both commercial and government-owned], complete with crews, available within mobilization timelines.

Why do we measure this? To ensure that the level of shipping capacity is sufficient to 

meet current and projected military requirements to transport cargo to support the 

U.S. military in actions around the world. 

Target: 94% (FY 2009)

Actual: 96%

Strategic Target: 94% (FY 2011)

How do we set targets? Targets are based on readiness response times that have historically met DOD requirements.

Public Benefit: The readiness represented by the government-owned Ready Reserve 

Force, the Maritime Security Program, and the Voluntary Intermodal Sealift Agreement program provide the desired readiness capability to support U.S. national security interests as well as employment for U.S. citizen mariners to crew the commercial 

and government-owned fleets.

External factors affecting performance: DOD requirements contribute to the sizing 

of both the government-owned and commercial fleets. 

* This funding supports all of MARAD’s security activities.

Security, Preparedness and Response
Performance & Accountability Report FY2009

175

Partners: Department of Defense, U.S. Transportation Command, U.S. flag ship operators, Ready Reserve Force ship managers, and Maritime Labor Organizations (e.g., 

Marine Engineers’ Beneficial Association, American Maritime Officers, and Seafarers International Union).

Associated Funding* 

FY 2009: $265,000,000

Actual results: 96%

Description of Results: Maritime Administration met its target while absorbing eight 

Fast Sealift Ships that were assigned from the Military Sealift Command to the Maritime Administration. MARAD, in coordination with ship managers, has implemented 

procedures to correct many of the deficiencies associated with the readiness status 

of these vessels. 

Target Achievement: Exceeded

Strategic Goal: Security, Preparedness and Response – Balance transportation security requirements with the safety, mobility, and economic needs of the national and 

be prepared to respond to emergencies that affect the viability of the transportation 

sector. 

Operating Administration: Maritime Administration (MARAD)

Performance Measure: Percentage of DOD commercial ports available for military 

use within DOD-established readiness timelines.

Why do we measure this? This measure helps MARAD assess the readiness of the 

commercial ports that will be used to transport military equipment and supplies. 

Target: 93% (FY2009)

Actual: 100%

Strategic Target: 93% (FY2011)

* This funding supports all of MARAD’s security activities. 
176

How do we set targets? Targets are based upon forecasts by strategic ports of their 

ability to meet DOD-readiness requirements.

Public Benefit: To help ensure the secure, efficient, and timely flow of military cargo 

through commercial ports with minimal commercial cargo disruption. This mission 

is critical so that the nation can support deployed troops.

External factors affecting performance: The size and timeline of the deployment, 

available commercial port and intermodal capacity, readiness of the port, and weather 

conditions all affect this performance measure. Port readiness is dependent on training, exercises, deployment coordination and monthly and semi-annual readiness 

assessments. 

Partners: Commercial strategic ports and the National Port Readiness Network (NPRN), 

which is composed of the U.S. Transportation Command, Military Surface Deployment 

and Distribution Command, U.S. Coast Guard, Transportation Security Administration, 

U.S. Army Corps of Engineers, U.S. Northern Command, U.S. Army Forces Command, 

U.S. Army Installation Management Command, Military Sealift Command and the Maritime Administration. 

Associated Funding* (In thousands)

FY 2009: $265,000,000

Actual results: 100%

Description of Results: All identified Port Planning Order facilities are available to 

support the deployment, sustainment and redeployment of the U.S. Armed Forces 

and other national emergency requirements. The availability of these facilities will 

help ensure the secure, efficient and timely flow of military cargo through commercial ports with minimal commercial cargo disruption. This mission is critical to the 

Nation’s ability to meet its deployment timelines.

Target Achievement: Exceeded

Target Assessment: MARAD, through its Port Readiness Programs and Chairmanship 

of the National Port Readiness Network (NPRN), continues to enhance DOD’s access to 

the commercial strategic ports and improve DOD’s deployment process through those 

ports. As part of that effort, MARAD Headquarters and field office staff conducted 

more frequent port visits, and assessments and communicated regularly with the ports. 

Security, Preparedness and Response
Performance & Accountability Report FY2009

177

In FY 2010, the NPRN and the American Association of Port Authorities will sponsor 

a national Strategic Port Workshop to bring together the commercial ports and DOD 

deployment communities to discuss and identify areas that can be further improved.

Outlook and Actions: MARAD forecasts high availability of commercial port facilities 

for the next three or four years. The agency will continue to administer the MARAD Port 

Readiness Programs and evaluate ways to improve port access and deployment processes. 

The NPRN continues to evaluate its mission and ways to improve port readiness. 
178

Organizational Excellence

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 $1.30 billion to provide leadership in 

human resources, commercial services, financial management, performance improvement, and eGov.

Organizational Excellence
Performance & Accountability Report FY2009

179

Key Performance Areas

Strategic outcomes from the DOT Strategic Plan are indicated in blue and FY 2009 results 

for key DOT performance measures are marked to indicate Met Target (✓) and Did Not 

Meet Target (✗).

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.

2009 Performance Highlights

•	 DOT funded 37 infrastructure projects in aviation, highways, and transit 

in FY 2009. Twenty-nine of those projects were on schedule and thirty two 

were within budget at the end of September.

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.
180

Commercial Services Management

Strategic Goal: Organizational Excellence – Advance the Department’s ability to manage for results

Operating Administration: Federal Aviation Administration (FAA)

Performance Measure: For major DOT aviation systems, the percentage of cost goals 

established in the acquisition project baselines that are met. 

Why do we measure this? Maintaining the 90 percent target reached in Fiscal Year 

2009 ensures that FAA meets the Federal Acquisition Streamlining Act of 1994, Title V. 

This Act requires agencies to establish cost, schedule, and measurable performance 

goals for all major acquisition programs and achieve 90 percent of those goals.

Target: 90%

Actual: 100% (preliminary)

Strategic Target: 90%

How do we set targets? The Federal Acquisition Streamlining Act of 1994, Title V, 

requires agencies to establish cost and schedule performance goals for all major 

acquisition programs and to achieve 90 percent of those goals.

Public Benefit: FAA’s ability to keep acquisitions within budget will allow for a timely 

transition to NextGen programs. The transition to NextGen involves acquiring numerous systems to support improved safety and capacity for the flying public.

External factors affecting performance: None

Partners: FAA’s Air Traffic Organization 

Associated Funding: 

FY 2009: $32,390,000

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Actual results: 100% (preliminary)

Description of Results: In Fiscal Year 2009, a total of 97.06 percent of the major system investments remained within their established cost goals. An increase in funding 

for one program was authorized to continue sustainment of the system.

Target Achievement: Exceeded

Target Assessment: FAA implemented quarterly reviews with Air Traffic Organization managers responsible for major systems investments. During these meetings, 

FAA reviews the financial status, annual milestones, earned value management performance data and technical requirements of each project.

Additionally, large or complex capital programs are now segmented into manageable 

phases to improve executive oversight and control. Segmenting large capital programs into phases such as development, demonstration, and production, allows FAA 

management to review incremental progress against cost and schedule baselines and 

approve subsequent program phases based upon program performance achieved to 

date.

Outlook and Actions: FAA plans to combine the separate acquisition cost goal and the 

acquisition schedule goal into one goal based on a programs total cost and schedule 

baseline performance. Combining these measures to represent total program performance would alleviate confusion, provide better clarity and consistency with Congressional reporting, which is based on total program cost and schedule performance. 

Strategic Goal: Organizational Excellence – Advance the Department’s ability to manage for results

Operating Administration: Federal Aviation Administration (FAA)

Performance Measure: For major DOT aviation systems, the percentage of scheduled 

milestones established in the acquisition project baselines that are met. 

Why do we measure this? Maintaining the 90 percent target reached in Fiscal Year 

2009 ensures that FAA meets the Federal Acquisition Streamlining Act of 1994, Title V. 

This Act requires agencies to establish cost, schedule, and measurable performance 

goals for all major acquisition programs and achieve 90 percent of those goals.
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Target: 90%

Actual: 93.75% (preliminary)

Strategic Target: 90%

How do we set targets? The Federal Acquisition Streamlining Act of 1994, Title V, 

requires agencies to establish cost and schedule performance goals for all major 

acquisition programs and to achieve 90 percent of those goals.

Public Benefit: FAA’s ability to keep acquisitions on schedule will allow for a timely 

transition to NextGen programs. The transition to NextGen involves acquiring numerous systems to support improved safety and capacity for the flying public.

External factors affecting performance: None

Partners: FAA’s Air Traffic Organization 

Associated Funding: 

FY 2009: $32,390,000

Actual results: 93.80 % (preliminary)

Description of Results: In FY 2009 a total of 93.8 percent of the major system investments remained within their established schedule goals. Sixty (60) of sixty-four (64) 

milestones were met. Three of the four milestones not completed on their scheduled 

dates were completed within the fiscal year and had no impact on overall program 

performance. One milestone will be completed in Fiscal Year 2010. The FAA’s internal 

management process and alignment with strategic goals continues to result in a higher 

percentage of milestones meeting their schedules. In a January 2009 report titled, “High 

Risk Series and Update”, GAO determined that FAA’s improved management capabilities on major projects warranted removal from the GAO High Risk list. 

Target Achievement: Exceeded

Target Assessment: FAA implemented quarterly reviews with Air Traffic Organization managers responsible for major systems investments. During these meetings, 

FAA reviews the financial status, annual milestones, earned value management performance data and technical requirements stability of each project.

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Additionally, large or complex capital programs are now segmented into manageable 

phases to improve executive oversight and control. Segmenting large capital programs into phases such as development, demonstration, and production, allows FAA 

management to review incremental progress against cost and schedule baselines and 

approve subsequent program phases based upon program performance achieved to 

date.

Outlook and Actions: FAA plans to combine the separate acquisition cost goal and the 

acquisition schedule goal into one goal based on a programs total cost and schedule 

baseline performance. Combining these measures to represent total program performance would alleviate confusion, provide better clarity and consistency with Congressional reporting, which is based on total program cost and schedule performance. 

Financial Performance

Strategic Goal: Organizational Excellence – Advance the Department’s ability to manage for results

Operating Administrations: Federal Highways Administration (FHWA), Federal Aviation Administration (FAA), and Federal Transit Administration (FTA)

Performance Measure: Percent of major Federally-funded transportation infrastructure projects with less than 2% annual growth in the project completion milestone as 

reported in the finance plan. 

Why do we measure this? This measure helps to determine DOT’s effectiveness as a 

steward of Federal resources. Unexpected delays in major projects diminish public 

trust and hinder effective resource planning. 

Target: 90%

Actual: 78.37%

Strategic Target: 90%

How do we set targets? Targets are based on the professional experience of major 

project engineering staff. 
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Public Benefit: Focus on reaching established project milestones improves federal 

stewardship of funding and reduces delays. 

External factors affecting performance: The Federal Government provides funding 

for airports, highways, and transit projects. In all three instances the Government 

is only one of several sources of funding and its control over an entire project is 

limited.

Partners: State Departments of Transportation, local governments, State and local 

transit agencies, airport owners, airlines, cargo carriers, and other aviation users

Associated Funding

FY 2009: $44,639,000

Actual results: 78.37% 

Description of Results: Twenty-nine of thirty-seven major DOT infrastructure projects 

were on schedule at the end of Fiscal Year 2009. All four airport projects were on schedule and one of the projects, a new runway at O’Hare Airport, was completed ahead of 

schedule. Among the 28 highway projects, 22 were on schedule. Five out of seven of 

FTA’s projects are on schedule. Both New York project schedules slipped when the Metropolitan Transit Authority decided to repackage the projects into a number of smaller 

bid packages. This took longer than expected adding by itself at least a year's delay to 

the projects. In addition, there have been extended delays for the East Side Access project due to the default of the original Queen Tunnel contract.

Target Achievement: Failed to meet

Target Assessment: FHWA has found that some highway project sponsors are setting 

overly ambitious schedules or failing to deliver projects within realistic timeframes. 

By reviewing major project finance plans, FHWA intends to improve the feasibility 

of the project schedules set by partners. Through expanded training opportunities 

FHWA is developing a cadre of staff skilled in major project review. 

Outlook and Actions: As DOT personnel become more experienced in reviewing project management plans and monitoring grantees’ progress, as well as advising grantees about how to set realistic milestones, more projects will remain on schedule. 

Organizational Excellence
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Strategic Goal: Organizational Excellence – Advance the Department’s ability to manage for results

Operating Administrations: Federal Highways Administration (FHWA), Federal Aviation Administration (FAA), and Federal Transit Administration (FTA) 

Performance Measure: Percent of finance plan cost estimates for major Federallyfunded transportation infrastructure projects with less than 2% annual growth.

Why do we measure this? This measure helps to determine DOT’s effectiveness as a 

steward of Federal resources. Unexpected cost increases in major projects diminish 

public trust and hinder effective resource planning. 

Target: 90%

Actual: 83.78%

Strategic Target: 90% 

How do we set targets? Targets are based on the professional experience of major 

project engineering staff. 

Public Benefit: Focus on cost overruns improves federal stewardship of funding and 

reduces costs. 

External factors affecting performance: The Federal Government provides funding 

for airports, highways, and transit projects. In all three instances the Government 

is only one of several sources of funding and its control over an entire project is 

limited.

Partners: State Departments of Transportation, local governments, state and local 

transit agencies, airport owners, airlines, cargo carriers, and other aviation users

Associated Funding

FY 2009: $44,639,000

Actual results: 83.78%

Description of Results: Collectively, the three DOT agencies that fund major infrastructure projects increased the percentage of projects within budget by nearly 2% 

over last year’s results (82%). Airport projects did particularly well. A new runway 
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opened in Seattle in November 2008 and a new runway and runway extension opened 

at the Chicago O’Hare airport in 2008. All three projects were within budget. Twentyfour of twenty-eight major highway projects were within budget. The Federal Transit 

Administration has funded seven projects that each exceed $1 billion. Five of the 

projects are within their original budget estimates. 

Target Achievement: Failed to meet

Target Assessment: The increase in cost over the original budget for the New York 

Metropolitan Transit Authority East Side Access and Second Avenue subway projects 

is due to a combination of events including higher cost of materials, a less competitive bidding environment that required repackaging that delayed the project, poor 

contractor performance, unbudgeted stakeholder requirements, and lack of timely 

decisions. FHWA found that much of the budget increase on major highway projects 

could be attributed to increased construction and development costs in recent years. 

Actions and Outlook: FTA is withhold Recovery Act funds for the New York projects 

until the New York Metropolitan Transit Authority has provided FTA with a recovery 

plan and a revised cost and schedule for each project. 

Timeline for affecting future performance: Improving the overall percentage of projects that remain on budget requires good performance on new projects, to balance 

older projects that have overrun their budgets. A gradual year-by-year improvement 

will require improved oversight and management of new projects. 

Organizational Excellence
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Organizational Excellence

E-Government

During FY 2009, DOT actively pursued the goals of President Obama’s call for transparency, participation and collaboration, as well as other externally- and internally-driven 

initiatives that improved agency operations. DOT continued to eliminate redundant 

operations and improve overall service and security levels through expanding the Common Operating Environment (COE), enterprise services that are provided to the Operating Administrations (OA) to support the information technology (IT) infrastructure, to 

the field offices across the country. Associated efforts to institutionalize cybersecurity 

throughout the Department were evident in DOT’s selection of a Department-wide security management tool and continued advancement of the DOT HSPD-12 plan and logical 

access capabilities to an additional 2,400 headquarters personnel.

Also during FY 2009, DOT improved “line-of-sight” into investments and provided the 

OAs a tool to facilitate quarterly and annual review by integrating OMB’s IT Dashboard 

requirement into the Capital Planning Process. Modernizing DOT’s web presence was 

initiated during the year to facilitate transparency and accountability to the public collaboratively. In addition, records management stakeholder working groups were created 

to begin to address a major FY 2010 initiative to establish an agency-wide, standardized 

practice for records management. With these efforts, along with continued policy development, foundations will be laid to support continued and sustainable improvements, 

exhibiting DOT’s commitment to ensuring that investment in IT significantly improves 

its ability to serve the public effectively, securely and cost-effectively.

FY 2009 Accomplishments 

•	 Expanded DOT Common Operating Environment (COE)

In FY 2009, the DOT COE expanded the number of supported desktop users to 

7,662. This includes support for 4,909 headquarters users and 2,753 field users. 

As part of the expansion to the COE, efforts were made to transfer 87 field offices 

located across the country. These efforts to eliminate redundant operations, as 

well as improve overall service and security levels

During FY 2010, the COE is continuing to refine the field and Mobility Support 

Model to begin the transition of the remaining sites over the next two years. This 
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will include an additional 110 field offices with an expected 3,349 users which will 

bring the support for the COE to over 11,000 users.

•	 Improved Investment/Portfolio Management

In June of 2009, OMB launched the IT Dashboard for Government agencies and 

the public to view details of Federal IT investments online and to track their 

progress over time. DOT took a leadership role by integrating the Dashboard into 

the Departmental Capital Planning and Investment Control Process. The Dashboard has already improved DOT’s line-of-sight into investments by virtue of 

presenting data in a graphical and easy-to-use interface. Also, DOT Operating 

Administrations (OA) can use the Dashboard as part of their quarterly and annual 

review processes.

During FY 2010, the Dashboard will be part of a redefined effort to embrace 

portfolio management by looking at investments by common business segments 

rather than individual OAs.

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Other Performance Highlights

American Recovery And Reinvestment Act Of 2009

The American Recovery and Reinvestment Act of 2009 (Recovery Act) is an extraordinary response to a crisis unlike any since the Great Depression. This landmark legislation 

is the most sweeping and ambitious domestic aid package the Federal Government has 

implemented in generations. It reflects an unprecedented effort to jumpstart our economy, create or save millions of jobs, and put a down payment on addressing long-neglected 

challenges so our country can thrive in the 21st century. Since the President signed this 

hallmark legislation on February 17, 2009, the Department of Transportation has been 

working hard to ensure that the Recovery Act is being implemented quickly, wisely, and 

with unprecedented transparency and accountability to finance transportation projects 

throughout America.

Program plans for each DOT Recovery Act program can be found at http://www.dot.gov/

recovery/programs.html.

Status at the Close of Fiscal Year 2009

DOT has made substantial progress since the enactment of the Recovery Act obligating 

funds ahead of schedule and helping our State and local partners with a diverse array of 

projects large and small. In fiscal year 2009, DOT: 

•	 Obligated $29.4 billion, or 61%, of the funds provided.

•	 Disbursed over $3.6 billion from the U.S. Treasury to pay bills associated with 

Recovery Act activities. 

•	 Supported over 9,000 projects. 

TRANSIT - $7.2 billion

more information is provided at: http://www.fta.dot.gov/index_9440.html#

The Federal Transit Administration (FTA) provided grants to transit agencies for capital 

projects to improve the condition of the nation's transit assets. FTA was able to award 

almost 90% of its grant funds totaling $7.4 billion by September 30. In addition, the FTA 

has processed over a quarter of a billion dollars in FHWA Recovery Act funds where 

States and localities have chosen to "flex" highway resources to transit investments. 
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Fixed Guideway Infrastructure - $742.5 million

The Fixed Guideway Infrastructure program is intended to provide capital assistance 

for the modernization of existing fixed guideway systems such as rail, trolleybus, aerial 

tramway, cable car, ferryboats, and that portion of motor bus service operated on exclusive or controlled rights-of-way, and high-occupancy-vehicle (HOV) lanes. By September 

30th, FTA had awarded almost over 99.4% of its funds for capital investments. 

Capital Investment Grants - $742.5 million

The purpose of the Capital Investment Grant program is to provide funding for new fixedguideway transit systems or for extensions of existing fixed guideway systems including 

heavy rail, light rail, commuter rail, bus rapid transit, streetcars, ferries, and substantial 

corridor-based bus systems. By September 30th, FTA had awarded over 63.1% of its funds 

for capital investments.

Transit Capital Assistance - $6.7508 billion

The purpose of the Transit Capital Assistance program is to support the capital, and to a 

limited extent operating, needs of public transportation systems in urbanized, rural, and 

tribal areas. The program also supports investments that reduce the overall energy use 

and greenhouse gas emissions of transit systems. By September 30th, FTA had awarded 

almost 97.7% of its funds for transit capital assistance.

HIGHWAY - $27.5 billion

http://www.fhwa.dot.gov/economicrecovery/index.htm

Highway Infrastructure Investment – $27.5 billion

A major portion of DOT’s Recovery Act resources are at work improving our highways 

and bridges. Of the $27.5 billion appropriated specifically to the Federal Highway Administration (FHWA), $19.4 billion – or about 72% – has been obligated to support work on 

more than 8,000 projects as of September 30. Almost 60% of FHWA funding has been 

obligated to projects that support economically distressed areas as defined by the Department of Commerce.

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RAIL - $9.3 billion

http://www.fra.dot.gov/us/content/2153

High-Speed Rail - $8 billion

With President Obama’s focus on high speed rail, the Recovery Act provided $8 billion 

to the Federal Railroad Administration (FRA) to develop high speed rail capability in the 

United States. At the end of the Fiscal Year 2009, FRA was still reviewing over 45 applications requesting over $50 billion in funds for high speed rail funding.

AMTRAK – $1.3 billion

The Recovery Act provided $1.3 billion for AMTRAK to improve and expand its fleet, 

track, bridges, tunnels, and signals, as well as improve the safety and security of its facilities. Of the $1.3 billion provided to AMTRAK, $450 million was specifically designated for 

capital security grants. As of September 30th, FRA had obligated 100% of these funds to 

AMTRAK.

AIR - $1.3 billion

http://www.faa.gov/recovery/

Airport Grants – $1.1 billion

The Federal Aviation Administration (FAA) provided $1.1 billion in funding for upgrades 

and improvements on runways and airport facilities in Fiscal Year 2009. These projects will 

enhance safety, capacity, and security at airports. They include construction or rehabilitation of new airports, runways, runway safety areas, taxiways, aprons, terminal buildings, 

and Aircraft Rescue and Fire Fighting (ARFF) buildings. By the end of fiscal year, 99% of 

these funds had been obligated to over 300 projects at airports around the country.

Airport Facilities and Equipment Upgrades - $200 million

FAA’s Facilities and Equipment Upgrades program finances major capital investments 

related to modernizing and improving air traffic control and airway facilities, equipment, 

and systems. Of the $200 million provided for Facilities and Equipment Upgrades, $50 

million each will fund upgrades to power systems and air route traffic control centers, $80 

million will be provided for airport traffic control towers, and $20 million will be provided 

for navigation and landing equipment. By the end of the Fiscal Year, almost 45% of these 

funds were obligated. 
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MARITIME - $100 million

http://www.marad.dot.gov/about_us_landing_page/marad_recovery_act/recovery.

htm

Assistance to Small Shipyards - $100 million

The Recovery Act provided the Maritime Administration (MARAD) with $98 million in 

grant funding to make capital and infrastructure improvements at small shipyards. The 

grants provided to the shipyards will facilitate the efficiency, cost-effectiveness, and 

quality of domestic ship construction, conversion, or repair for commercial and federal 

use. In August, MARAD awarded grants to 70 projects throughout the nation worth $98 

million. The balance of the $100 million funded administrative costs.

GRANTS FOR NATIONAL SURFACE TRANSPORTATION SYSTEMS - $1.52 billion

http://www.dot.gov/recovery/ost/

Supplemental Discretionary Grants for National Surface Transportation System - $1.5 billion

The Recovery Act provided the Office of the Secretary of Transportation $1.5 billion in 

grant funding for capital investments in surface transportation infrastructure projects 

that will have a significant impact on the Nation, a metropolitan area, or a region (including highway, bridge, public transportation, passenger rail, freight rail, and port infrastructure projects). The deadline for submitting applications for funding, regardless of 

the mode of transportation, was September 15th 2009 and over 1300 applications for projects worth $56.5 billion were received. These grants are currently under review and these 

funds will be awarded in Fiscal Year 2010. 

Disadvantaged Business Enterprise Bonding Assistance - $20 million

The Disadvantaged Business Enterprise (DBE) Bonding Assistance Program assists 

DBEs to obtain bid, payment, and performance bonds in a timely and efficient manner. 

These funds will enable DBEs to compete for and perform transportation-related projects 

receiving Recovery Act funding for DOT. Because the program began in September of 

Fiscal Year 2009, funding for only one project was obligated by the end of the fiscal year.

Jobs & Projects

One of the primary goals of the Recovery Act was to preserve and create jobs. The money 

appropriated to DOT by the Recovery Act is doing exactly what Congress intended it to 

do: it is creating jobs and reinvigorating our economy. DOT is collecting information on 

the number of jobs created and sustained by Recovery Act funding and information about 

jobs will be available during Fiscal Year 2010.

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It is important to recognize that many projects came in under budget. State departments 

of transportation around the country have reported intense competition by contractors 

for Recovery Act projects. Examples of winning bids include the replacement of the US 

378 Bridge over the Little Pee Dee River in Marion and Horry counties in South Carolina. 

Of the seven bids received, the winning bid came in at $26.5 million, which was more than 

25% below the state’s estimate for the project. Similarly, the lowest bid for the Bartlesville, Oklahoma Municipal Airport project to rehabilitate runway 17/35 came in at $3.4 

million, which was well below the $4.2 million estimate. Because of such underbids, DOT 

has been able to fund more projects than originally expected under the Recovery Act.

Accountability

DOT brought together an intermodal team of experts from our policy, legal, financial, 

and information technology disciplines to work along side programmatic experts in our 

operating administrations to anticipate the requirements in the new legislation. This new 

team – termed Transportation Investments Generating Economic Recovery, or TIGER 

Team – was tasked with coordinating and overseeing the Department’s responsibilities 

and reporting regularly on their progress.

In order to address the management challenges associated with the Recovery Act, DOT 

has developed a systematic and comprehensive approach to risk assessment and management. The risk management tool developed by DOT was so well regarded by the Office of 

Management and Budget that it subsequently adopted the tool for Government-wide use. 

The tools use a four-step approach, which is built upon the sound foundation of internal 

controls assessments:

•	 Formal assessment of potential programmatic risks;

•	 Risk profile that categorizes the level of risk;

•	 Risk management and mitigation plans; and

•	 Validation and testing.

The Recovery Act has been implemented with an unprecedented level of transparency 

and accountability. A variety of reports on Recovery Act programs can be found at http://

www.dot.gov/recovery/reports.htm.
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The DOT portion of the Recovery Act specified additional reporting by grant recipients 

that is unique to the Department of Transportation. The TIGER Team deployed an online 

website to assist recipient reporting in time for the first reporting deadline of May 31, registered grant recipients, and provided guidance on needed data elements to assure consistent reporting. Two reports (of the five recurring reports required by section 1201(c) of 

the Recovery Act) were prepared in 2009.

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Car Allowance Rebate System (Cars)

In 2009, the Department of Transportation administered the Car Allowance Rebate System (CARS), popularly known as Cash-for-Clunkers. The purpose of this program was to 

stimulate the automobile industry while improving the environment and reducing fuel 

consumption. At a time when consumers are likely to hold off on new purchases because 

of concerns about the economy, the CARS program provided an incentive to consumers 

to help boost the economy.

Beginning in July 2009, the CARS program provided rebates of $3,500 or $4,500 for trading 

in a less fuel efficient vehicle for a more fuel efficient vehicle. The program required the 

scrapping of eligible trade-in vehicles. Congress increased the $1 billion initially appropriated to the program to a total of $3 billion as a result of high demand for the vouchers. 

The CARS program was administered by the National Highway Traffic Safety Administration (NHTSA). Program information and status of reimbursements for the CARS program can be found at http://www.cars.gov/.

Status at the Close of Fiscal Year 2009

In the final months of 2009, DOT provided reimbursement for nearly 700,000 claims worth 

$2.9 billion through the CARS program. Of the vehicles traded in under CARS, 84 percent 

were trucks. Of the vehicles purchased through the CARS program, 59% were passenger 

cars. 

Industry Viability

The CARS program helps to lower CO2

 emissions and reduce fuel consumption because 

the statute required new vehicles purchased through this program to be more fuel-efficient than the vehicle for which it is traded.

•	 Purchases occurred in a 30 day period which helped boost overall car sales by 

10.6 percent, increased the fuel economy when compared to traded cars by 60 

percent, and increased the nation’s retail sales by 2.7 percent.

Fuel Economy

The CARS program helps to lower CO2

 emissions and reduce fuel consumption because 

new vehicles purchased through this program must be more fuel-efficient than the vehicle for which it is traded.

•	 The average fuel economy of trade-ins was 15.8 miles per gallon and the average fuel economy of purchased vehicles was 24.9 mpg. This amounts to annual 

fuel savings of 277 gallons and $720 per driver, assuming average use of both the 

trade-in and new vehicle.
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Safety

The CARS program also increased the safety of the vehicle fleet because the new cars 

purchased through the program are generally safer than older ones.

•	 Over 200,000 SUVs and light trucks with no Electronic Stability Control (ESC) 

were traded-in.

The Economy

Many auto producers such as Ford and General Motors announced production increases 

for the third and fourth quarter as a result of the demand generated by the program. The 

top ten new vehicles purchased in the CARS program included the Ford Focus and the 

Ford Escape, while General Motors vehicles were purchased at the second highest level. 

CARS Transactions

A highly notable accomplishment in FY 2009, not reflected in previously published performance measures, was the administration of the CARS program. In 90 days, DOT developed 

and implemented a rule and created an information technology system that allowed car 

dealers to apply for rebates through the electronic system. This new system allowed for 

a rigorous review of claims and dealer payments with efficiency and allowed for unprecedented transparency of public funds to deter fraud in the disbursement of federal funds 

that will be an effective tool in years to come as a means of providing accountability in 

Government.

By the end of Fiscal Year 2009, 99% of the claims had been processed and paid. Transaction data and reports are available for download at http//www.cars.gov/carsreport.

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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.
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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.

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.

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 Operating Administrations (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.

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Performance & Accountability Report FY2009

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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 undercoverage, 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, most 

of the FY 2009 measures must be projected from either partial-year data or historical 

trends. The projections based on partial-year data from FY 2009 are more likely to reflect 

changes effected by current DOT policies and programs. The measures projected from 

FY 2008 and prior historical data reflect continuing trends from ongoing programs, but do 

not reflect the effects of changes implemented in FY 2009.

External Data Source Limitations—Data that originates 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. 
200

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. 

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DOT 

Agency Program

Type of 

Evaluation

Source of 

Evaluation Status

SAFETY

FAA Operational Error Program Outcome External Complete with actions initiated

FMCSA Compliance Reviews (On-Site Safety 

Interventions)

Data Verification External Complete

NHTSA Highway Safety Research and 

Development: Highway Safety Programs

Outcome External Initiated

NHTSA Vehicle Safety: Research and Analysis Cost Benefit/ 

Cost-Effectiveness

Internal Initiated

PHMSA Hazardous Materials Safety and 

Pipeline Safety

Process Internal Complete

PHMSA Hazardous Materials Safety Process Internal Complete

PHMSA Pipeline Safety Process Internal Deferred

FRA Research & Development Process External Complete

FRA Railroad Safety Process External Complete

FMCSA Enforcement of Compliance Operations Process External Complete but pending approval 

prior to release

REDUCED CONGESTION

FTA Contracted Paratransit Pilot Program Outcome Internal Complete but pending approval 

prior to release

Global Connectivity

SLSDC Operations and Maintenance Compliance External Complete

ENVIRONMENTAL STEWARDSHIP

MARAD Ship Disposal Process External Deferred

SECURITY, PREPAREDNESS AND RESPONSE

MARAD Maritime Security Program Impact External Complete

ORGANIZATIONAL EXCELLENCE

FAA Acquisition Management System Outcome External Complete

FMCSA Information Technology Security 

Program Evaluation

Outcome External Complete, but pending approval 

prior to release

RITA University Transportation Centers Outcome Internal Cancelled
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Safety

Operating Federal Aviation Administration

Administration

Program Operational Error Program

Partners NA

Name of Study FAA’s Process for Reporting and Investigating Operational Errors 

(Report Number AV-2009-045)

Listed in DOT Yes (FY 2008)

Plan Y/N

Reason for NA

replacement or 

addition

Status Complete with actions initiated

Type Outcome

Source External OIG

Link http://www.oig.dot.gov/StreamFile?file=/data/pdfdocs/WEB_FILE_

Operational_Errors_Reporting_Issued_Mar_24.pdf

Purpose

The purpose of this evaluation was to determine whether the FAA had adequate policies and procedures in place to ensure the accuracy and consistency of operational error 

reporting and to review the roles and responsibilities of the Air Traffic Organization and 

FAA’s Aviation Safety lines of business in reporting and investigating operational errors. 

Contribution to Goal Performance

Operational errors occur when the air traffic control system fails to maintain separation 

between two aircraft. Such an occurrence can be an extremely serious incident that can 

lead to a catastrophic accident. Ensuring that all events involving a loss of separation are 

accurately reported, investigated, and addressed is critical to the safe operation of the 

National Airspace System and support FAA’s Safety Goal. 

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Methodology

This program evaluation was conducted by the Department of Transportation’s Office of 

Inspector General between November 2007 and December 2008 in compliance with generally accepted Government Accounting Standards. They statistically reviewed 166 pilot 

deviations with a loss of separation that occurred during FY 2007 at 13 Air Traffic facilities and interviewed FAA representatives. Additionally, they reviewed:

•	 Radar and voice data.

•	 Preliminary and final pilot deviation reports and related documentation.

•	 Quality Assurance Review reports and related documentation.

•	 Operational Error Detection Program alert logs and related documentation.

•	 Operational error documentation if the pilot deviation was also an operational 

error.

•	 FAA guidance.

Findings

This audit found that problems identified at the Dallas Fort Worth (DFW) Terminal Radar 

Approach Control (TRACON) facility were not systemic. However, the audit found that 

significant weaknesses exist in FAA’s processes for reporting and investigating incidents 

involving a loss of separation. 

Recommendations

Recommendations included establishing (1) a follow-up mechanism to ensure Flight Standards inspectors comply with new guidance for investigating pilot deviations, (2) a process 

to rate the severity of pilot deviations and a corresponding goal to reduce the most severe 

incidents, (3) milestones for fully implementing Traffic Analysis and Review Program 

(TARP), and (4) an internal audit of the planned changes to the ATO’s safety oversight. 

Planned Actions 

Office of Safety personnel now conduct an independent review of all reported pilot deviations involving a loss of separation to ensure that any operational errors associated with 

the event are also properly reported. The Office of Safety provides a weekly report to Air 

Traffic Oversight Service (AOV) on the results of these reviews.

The Office of Safety is in coordination with the Office of Flight Standards to modify current pilot deviation reporting so that all preliminary loss reports are coordinated through 

the ATO’s new Quality Assurance Service Area groups, which will be established in FY 

2010.
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In FY 2010, the Office of Safety will conduct Risk Analysis of all losses in which less 

than 66 percent separation was maintained, including separation loss which is currently 

reported as operational errors and pilot deviations. 

Operating Federal Motor Carrier Safety Administration (FMCSA)

Administration

Program Compliance Reviews (On-Site Safety Interventions)

Partners State partners provided quantitative and qualitative analytical 

support

Name of Study FMCSA Compliance Review Effectiveness Model, March 2009

Listed in DOT Yes

Plan

Status Complete

Type Data verification

Source External: Volpe National Transportation Systems Center

Link http://ai.fmcsa.dot.gov/ProgramMeasures/Intro/Program

MeasuresMain.asp

Purpose

This review was not a traditional program evaluation. The purpose of the review was to 

verify crash and fatality data submitted by state partners over several years. As a result, 

there were no findings or recommendations to improve program execution.

Operating National Highway Traffic Safety Administration (NHTSA)

Administration

Program Highway Safety Research and Development: Highway Safety Programs

Partners None

Name of Study New Mexico Comprehensive Impaired Driving Program

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Listed in DOT No

Plan

Reason for Scheduled program evaluations were completed in previous fiscal 

addition years. 

Status Initiated

Type Outcome

Source External: Pacific Institute for Research & Evaluation

Purpose

NHTSA initiated the in-depth evaluation of its New Mexico Comprehensive Impaired 

Driving Program Demonstration to determine the effectiveness of this large-scale demonstration program. NHTSA will complete the program evaluation by 9/30/2011 and it 

will document the impact of this demonstration program in New Mexico. This program 

could serve as a model for other States if the evaluation shows it is effective in reducing 

alcohol-related crashes, deaths and injuries. 

Contribution to Goal Performance

Impaired driving is one of the leading causes of traffic crashes and fatalities. It is critical that NHTSA determine the effectiveness of this comprehensive program designed to 

reduce alcohol-related crashes and thus improve highway safety. If shown effective, this 

program will serve as a model for other States.

Methodology

The evaluation will document all aspects of this comprehensive program and determine 

its effectiveness in reducing alcohol-related crashes, deaths and injuries. The evaluation with also examine the impact of a task force on composed of the State Police, Driver 

Licensing Agency, Prosecutors, Courts, Medical Examiners, Probation on generating a 

comprehensive impaired-driving program. The study will review:

•	 Measures of law enforcement activity (arrests, blood alcohol content statistics, 

number of enforcement checkpoints/patrols) at sites with increased enforcement during the program, 

•	 Media activity (focusing on impaired driving and enforcement activity), 

•	 Pre/post measures of public attitudes toward impaired driving and awareness of 

the enforcement activity, and 

•	 Analysis of trends in alcohol-related crashes.
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Findings

Findings will become available in FY2011.

Recommendations

Recommendations will become available in FY2011.

Planned Actions

Data collection is currently underway. A report on the results of the evaluation will be 

completed in FY 2011.

Operating National Highway Traffic Safety Administration (NHTSA)

Administration

Program Vehicle Safety: Research and Analysis

Partners None

Name of Study Effectiveness of Tire Pressure Monitoring Systems (TPMS) on 

Tire Pressure

Listed in DOT No

Reason for Scheduled program evaluations were completed in previous 

addition fiscal years. 

Status Initiated

Type Cost-Benefit/Cost-Effectiveness

Source Internal

Link NA

Purpose

In accordance with Executive Order 12866, Regulatory Planning and Review, NHTSA 

routinely evaluates each of its major existing regulations and programs, and measures 

their effectiveness. NHTSA’s Evaluation Program Plan 2008-2012 catalogues these evaluations. Federal Motor Vehicle Safety Standard (FMVSS) No. 138 requires tire pressure 

monitoring systems (TPMS) on passenger vehicles, which is technology that will add to 

the cost of new vehicles. TPMS, however, has the potential for significant benefits by 

reducing crashes attributable to under-inflated tires.

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NHTSA initiated the evaluation of the effectiveness of tire pressure monitoring systems—on 10/1/2008. The agency will use statistical analysis to complete this program 

evaluation by 9/30/2011. 

Contribution to Goal Performance

Passenger vehicles include cars, light trucks, and vans. In a survey conducted before 

FMVSS No. 138 became effective, 26 percent of cars and 29 percent of light trucks and 

vans on the road had at least one tire more than 25 percent below the pressure recommended for that vehicle. Under-inflation creates safety risks associated with thousands 

of injuries and over 100 fatalities per year, reduces fuel economy, and shortens a tire’s 

life. The evaluation will determine the extent to which tire pressure monitoring systems 

reduce under-inflation, save lives, prevent injuries, and increase fuel economy.

Methodology

NHTSA will conduct a survey of tire pressures in cars and light trucks at a nationally representative sample of gas stations. When a driver purchasing fuel agrees to participate in 

the survey, engineers will record the pressure in each tire and identify the make, model, 

and model year of the vehicle. The proportion of vehicles equipped with tire pressure 

monitoring systems with at least one tire 25 percent or more below the recommended 

pressure will be compared to the corresponding proportion in vehicles of similar age and 

market class without the monitoring system. The under-inflation rate with the system will 

be compared to the baseline rate without the system. The survey will also gather information on how and when drivers are using information from the monitoring system to keep 

their tires properly inflated.

Findings

Findings will be available in 2011.

Recommendations

Recommendations will be available in 2011.

Planned Actions

NHTSA will consider subsequent actions, if any, when findings are available.

Operating Pipeline and Hazardous Materials Safety Administration

Administration

Program Hazardous Materials Safety and Pipeline Safety
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Partners Federal Aviation Administration, Federal Motor Carrier Safety 

Administration, Federal Railroad Administration, U.S. Coast Guard

Name of Study Evaluation of PHMSA’s Enforcement Programs

Listed in DOT Yes

Plan

Status Completed

Type Process Evaluation

Source Internal

Link None

Purpose

This evaluation reviewed current enforcement practices and identify ways to improve 

the effectiveness and efficiency of PHMSA's enforcement program.

Contribution to Goal Performance

Enforcement is an important tool for achieving compliance with safety regulations, and 

compliance is an important element in our overall strategy for reducing deaths and serious injuries from pipeline and hazardous materials incidents.

Methodology

Objectives and issues were identified in a strategic planning workshop, after which a task 

force evaluated issues and ideas from the program offices, regions, and counsel—all of 

the organizational elements involved in the enforcement process.

Findings

There is a need for greater consistency, more investment up-front in the process, greater 

transparency and trust in the process, and better linkage to safety performance.

Recommendations

The task force provided recommendations in 14 areas, including guiding principles for 

enforcement, decision making authority, settlement procedures, analytical support, civil 

penalty criteria, interagency efforts, process control, electronic documents, human 

resource flexibility, annual reporting, training, a repository for documents, program logic 

modeling, and pipeline safety enforcement procedures.

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Planned Actions

PHMSA will develop and implement enforcement policy and a delegation order that clarifies roles and responsibilities, increases transparency, and accelerates the process. A 

preliminary report is due to agency leadership December 1, 2009; action plans will go to 

the Administrator of the Pipelines and Hazardous Materials Safety Administration for 

approval by December 20, 2009; followed by implementation.

Operating Pipeline and Hazardous Materials Safety Administration

Administration

Program Hazardous Materials Safety

Partners Federal Aviation Administration, Federal Motor Carrier Safety 

Administration, Federal Railroad Administration, U.S. Coast Guard

Name of Study Evaluation of the Hazardous Materials Emergency Preparedness 

(HMEP) Grants Program

Listed in DOT Yes

Plan

Reason for Listed as “Evaluation of Readiness Among Emergency Responders”

replacement 

or addition

Status Completed

Type Process Evaluation

Source Internal

Link None

Purpose

This evaluation identified major weaknesses in program design or execution that may 

limit its effectiveness. The evaluation also measured the adequacy of internal controls 

used to administer funding, and provided a baseline for program improvement.
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Contribution to Goal Performance

The HMEP grants program is an important source of funding for emergency response 

planning and training. The Pipeline and Hazardous Materials Safety Administration 

(PHMSA) depends on the grant program as a component of its national strategy for reducing deaths and injuries from hazmat incidents. The primary strategy for hazmat safety 

is prevention, but where the agency cannot prevent an incident, it aims to reduce the 

consequences.

Methodology

The evaluation included a review of laws, legislative history, regulations, external guidance, program policy, public information about the program, past reviews and findings, 

process flowcharts, program funding, grant agreements, and limited information from 

State grantees. It also included interviews with individuals within DOT involved with 

program administation. With this information, the evaluation traced the program logic—

from inputs through activities, to outcomes and impacts—and traced the flow of requirements from legislation through regulations to policy and implementation. Both of the 

approaches helped identify gaps, weaknesses and opportunities that might be addressed 

to improve the program.

Findings

The evaluation provided over 75 findings and 12 major conclusions. 

1. There are some significant warning indicators about program effectiveness/efficiency that need to be explored and better understood. 

2. The funding allocation formula generally targets risk, but does not address 

additional needs, such as the strength of grantees’ plans, the history of grantee 

performance, or agency priorities. 

3. PHMSA is not incorporating applicants’ plans into the grant agreements, so they 

become superfluous in evaluating whether costs are reasonable when grantees 

request reimbursement. 

4. PHMSA is generally disbursing grant funds as advances rather than reimbursements (the “preferred” approach). 

5. PHMSA requests considerable information from grantees that it does ot use. 

6. PHMSA has almost no monitoring or evaluation function to regularly evaluate 

and improve the program. 

7. PHMSA generally lacks a framework for internal controls. 

8. PHMSA is missing some basic program internal controls that should be 

addressed. 

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9. PHMSA disallows expenses that are technically allowable.

10. Many of the key processes are too cumbersome on grantees. 

11. Hazardous Materials Emergency Preparedness Grants Program is not organized 

optimally given the size/scope of the grants program and the diversity of stakeholder interests, and it probably does not have adequate resources (especially 

people and IT) to run the program effectively. 

12. In general, the way the program works is not reflected in how it is documented. 

Recommendations

This evaluation suggests that PHMSA needs to restructure the program—to better target 

needs, provide reasonable management and internal controls, and put in place the organization, processes, and resources needed to sustain a continually-improving program. This 

evaluation recommends steps to correct the funds certification process, reconciliation of 

program funding with the accounting system, limiting changes to policy guidance until 

the agency can get more broad stakeholder input. The evaluation also recommends developing FAQs on allowable expense, development of a remediation plan to address internal 

control deficiencies, and follow on evaluation to examine each of the steps in the program 

processes more closely. 

Planned Actions

All of the recommended actions have been initiated. Frequently Asked Questions and 

changes in the funds certification process have been completed and additional program 

changes will be developed and implemented through FY 2010.

Operating Pipeline and Hazardous Materials Safety Administration

Administration

Program Pipeline Safety

Partners State Pipeline Safety programs

Name of Study Evaluation of the State Pipeline Safety Grants program

Listed in DOT Yes

Plan

Status Deferred

Type Process Evaluation
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Source Internal

Link None

Operating Federal Railroad Administration

Administration

Program Research & Development

Partners N/A

Name of Study Annual Review and Evaluation of FRA’s Research 

& Development Program 

Listed in DOT Yes

Plan

Status Completed

Type Process

Source External: Transportation Research Board

Link NA

Purpose

The Transportation Research Board’s (TRB) Committee for Review of the Federal Railroad Administration Research and Development (R&D) Program conducts an annual 

review and evaluation on the program management structure and approach, allocation of 

resources among program areas, outreach to the program’s customers and stakeholders, 

project selection criteria and project management. 

Contribution to Goal Performance

FRA’s Office of Research and Development partners with other program offices in developing the interests of freight and passenger rail while balancing safety, policy, and R&D 

issues. This research and advancement determines ways to keep the Nation’s rail networks safe in accordance with the DOT safety strategic goal.

Methodology

The TRB conducts its evaluation on the above facets of the Federal Railroad Administration (FRA) Research and Development (R&D) Program through a peer review process. 

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This process includes an interactive request for data and off-site meetings, and workshops which are used to determine FRA’s R&D priority research area needs. 

Findings

The Committee found that FRA responds quickly and responsibly and demonstrates flexibility managing the intersection of freight and passenger rail interests while balancing 

safety, policy, and R&D issues. The Committee believes that the results of R&D projects will be critical to the successful implementation of new technologies for large-scale 

investments in Positive Train Control and high-speed rail. The Committee also noted that 

the R&D Office faces challenges hiring staff in engineering and transportation disciplines 

and obtaining additional funding so it can address areas of Administration focus. The 

Committee expressed that FRA need to develop a new 5-year strategic R&D plan.

Recommendations

The Committee offered five recommendations:

1. The Office of R&D should focus on the role of R&D initiatives and results in 

large-scale programs, such as PTC and high-speed rail. 

2. FRA should help build the case for Nationwide Differential GPS (NDGPS) funding by linking the needs to big projects such as PTC and rail right-of-way mapping, and it should urge the Department to develop and operate NDGPS.

3. FRA and the Department of Energy should have better coordination on rail-related research.

4. FRA should continue to work on design standards that can reduce accidental 

hazmat releases for the next-generation tank car.

5. The Committee encourages FRA to pursue its initiative for improving the accuracy and usefulness of rail traffic forecasts.

Planned Actions

FRA is developing a new strategic plan and will use the Committee’s recommendations as 

a roadmap for its future activities. In addition, FRA is working through the other issues 

raised by this evaluation.

Operating Federal Railroad Administration

Administration

Program Railroad Safety

Partners None
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Name of Study “Enhancing the FRA’s Oversight of Track Safety Inspections” 

Listed in DOT Yes

Plan

Status Completed

Type Process

Source External: OIG

Link NA

Purpose

As part of its regularly scheduled review of programs in the Department, the OIG performed an audit to evaluate FRA’s oversight of track-related safety issues. 

Contribution to Goal Performance

FRA’s mission is safety-driven which directly aligns to the DOT strategic goal of safety. 

Monitoring and reducing track-related incidents and accidents enables FRA to enhance 

the overall safety of the Nation’s freight rail lines.

Methodology

The Office of the Inspector General (OIG) took a two-step approach in this track safety 

evaluation. The OIG began its evaluation by interviewing officials from FRA, Class I 

(large freight), and non-Class I (smaller) railroads, and railroad associations, on track 

safety regulations, freight railroad inspection policies and procedures, and track safety 

issues. Second, the OIG visited four Class I railroads and analyzed a random sample of 

track inspection reports to assess the frequency and type of inspection, the results of the 

inspection, and the remedial actions taken.

Findings

The OIG found that FRA has taken many steps to improve its track safety oversight program by expanding inspection activities and implementing new initiatives. In its analysis 

of FRA’s track inspection data reported from 2004 to 2007, the OIG found that FRA inspectors had conducted 62,529 inspections, identified 410,441 defects, and recommended 6,629 

of these defects for violations. However, the OIG found two areas of improvement for 

FRA to enhance its oversight of the railroads’ track safety inspections.

Recommendations

OIG recommended that FRA: 1) revise its track safety regulations for internal rail flaw 

testing to require railroads to report all track locations (milepost numbers or track miles) 

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covered during internal rail flaw testing and 2) revise its Track Safety Compliance Manual and inspection data system. 

Planned Actions

FRA’s Railroad Safety Advisory Committee’s has an active Rail Integrity Task Force. FRA 

is in discussion with the National Transportation Safety Board, rail carriers, organized 

labor, and railroad contractors to address the issue of internal rail flaw detection. One 

of the areas the Task Force is examining is the FRA-mandated reporting process. FRA’s 

Office of Railroad Safety agreed that it is vital to require railroads to maintain records to 

which FRA has access on demand during oversight on the property. That process should 

be added through the Railroad Safety Advisory Committee process. The process is ongoing and the timeframe for changing the regulation is uncertain.

FRA agreed that including another inspection activity code for track inspections was 

helpful in tracking the number of rail inspection reports FRA inspects. With the addition 

of the Rail Integrity Group within the Office of Railroad Safety, FRA has added two more 

activity codes to be used specifically by that group. The Rail Integrity Group is now using 

codes for inspecting flaw detection processes and auditing and inspection vehicles. In 

February 2009, FRA issued a new activity code for rail inspection records that was distributed to track inspectors and specialists with instructions on how and when to use the 

code.

Operating Federal Motor Carrier Safety Administration (FMCSA) 

Administration

Program Enforcement of Compliance Operations 

Partners State partners providing quantitative and qualitative support

Name of Study Quality Assurance Review of the Field Enforcement Processes at the 

FMCSA Headquarters and Service Centers.

Listed in DOT No. The “Quality Assurance Review of the Field Enforcement ProPlan cesses at the FMCSA Headquarters and Service Centers” replaced the 

“New Entrant Safety Audit” program evaluation because GAO performed a comprehensive audit identifying opportunities to improve 

prior to the planned start date. FMCSA responded with a comprehensive rule change. The impact of the New Entrant Safety Assurance 

Program rule will be measured annually.
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Status Complete but pending approval prior to release

Type Process

Source External: Oak Ridge National Laboratory

Link None

Purpose

The purpose of the “Quality Assurance Review of the Field Enforcement Processes at 

the FMCSA Headquarters and Service Centers” was to determine the adequacy, consistency, objectivity, efficiency, effectiveness and integrity of the FMCSA field enforcement 

case process as performed by FMCSA field offices. The review also attempted to identify 

any program or process improvements/best practices which might yield operational efficiencies or improved effectiveness in changing unsafe behavior of carriers to ultimately 

reduce crashes, injuries, and fatalities. 

Contribution to Goal Performance

The evaluation supports the Department’s Safety Strategic goal of “Enhancing public 

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

injuries” by ensuring the current process for evaluating the safety-related behavior of a 

commercial motor vehicle carrier or driver is carried out in a consistent, effective, and 

equitable manner.

Methodology

The analysis assessed the current enforcement process by conducting site visits and surveying process stakeholders at various levels within FMCSA. The analysis included a 

mapping of the process, and paid special attention to certain sub-processes such as the 

issuance of a civil penalty (Notice of Claim) and the process for determining the safety 

fitness of a carrier. The analysis also assessed the adequacy of enforcement record keeping and the adjudication process. 

Findings

1. Carriers that the FMCSA has put out of business sometimes return under a different name, but with the same staff and the same inadequate safety practices.

2. Multiple passwords and lack of system integration are cited as a source of frustration for Field enforcement staff trying to use agency data systems.

3. Some Field staff have trouble carving out the time necessary for training classes, 

especially when it involves travel and multiple day commitments. 

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Recommendations

1. Change the issuance of a US DOT Number or changes in the policies on identifying a reincarnated carrier could help FMCSA with motor carrier compliance. 

The US DOT Number serves as a unique identifier when collecting and monitoring a company’s safety information acquired during audits, compliance reviews, 

crash investigations, and inspections. As more States become Performance and 

Registration Information Systems Management (PRISM) States, consider innovative practices to identify reincarnated carriers. 

2. Integrate software with a single password to lessen the burden to memorize multiple passwords for various systems.

3. Offer in-class and web-based training to staff as a way to maintain and build 

enforcement competencies. 

Planned and Completed Actions:

1. FMCSA continues to work very closely with state partners to expand the implementation of the Performance and Registration Information System Management (PRISM). As of the end of FY 2009, 46 of the 47 PRISM Grant eligible states 

have received PRISM Grants. In August 2008, the Agency put in place a process 

by which FMCSA and state partners scrutinize passenger carrier requests for 

new operating authority using a New Applicant Screening (NAS) process which 

includes an Evasion Detection Algorithm (EDA). The New Applicant Screening 

Process identifies carriers that may be attempting to reincarnate themselves by 

comparing critical data on new applicants for operating authority with data in 

FMCSA’s safety and registration records for other companies. Each application 

identified through the use of the EDA receives a follow-up investigation. The 

agency is engaged in longer term planning to eventually find ways to apply this 

process to all carriers applying for authority to operate.

2. FMCSA, through the COMPASS initiative has introduced a single sign-on for 

multiple information systems. Also, the agency is implementing new training 

modules for both field and headquarters staff through web-based and in-service 

training as new systems are implemented.

3. FMCSA is implementing both web-based and in-service training. Additionally, 

the agency has recently opened a new, more centrally located training facility in 

Austin, TX.
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Reduced Congestion

Operating Federal Transit Administration 

Administration

Program Contracted Paratransit Pilot Program

Partners None

Name of Study Report on the Contracted Paratransit Pilot Program

Listed in DOT Yes

Plan

Status Complete but Pending Approval Prior to Release

Type Outcome

Source Internal

Link N/A

Purpose

The purpose of the report is to respond to the congressional direction in the Safe, 

Accountable, Flexible, and Efficient Transportation Equity Act: A legacy for Users 

(P.L. 109-59) which required the Secretary to submit a report to Congress on the implementation of the Contracted Paratransit Pilot Program.

Contribution to Goal Performance

The Contracted Paratransit Pilot Program contributes to the Reduced Congestion strategic goal and the ridership performance goals by allowing small-and mid-sized transit 

operators the ability to leverage Federal funds towards paratransit operating needs, 

including complementary paratransit services for individuals with disabilities who cannot use the fixed-route services.

Methodology

The Tulsa Metropolitan Transit Authority was the sole participant in the pilot program. 

Data obtained from the National Transit Database (NTD) and FTA’s Transportation Electronic Awards Management (TEAM) system was used to complete the assessment.

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Findings

The report is currently being reviewed.

Recommendations

The report is currently being reviewed.

Planned Actions

To be determined.
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Global Connectivity

Operating Saint Lawrence Seaway Development Corporation (SLSDC)

Administration

Program Operations and Maintenance

Partners None

Name of Study International Standards Organization (ISO) Certification Renewal

Listed in DOT No

Plan

Status Complete (Conducted Annually)

Type Compliance

Source External

Link NA

Purpose 

Each year, the SLSDC’s operations and maintenance business processes are audited for 

compliance under the ISO 9001:2000 standard. The focus of the ISO 9001:2000 standard is 

on self assessment, ongoing improvements, and performance metrics. The ISO recognition is only conferred on those service firms and organizations that meet the highest quality customer service and management standards set by the Geneva, Switzerland-based 

ISO. The SLSDC began the process of certifying its business processes in 1998 and has 

been audited by (LQRA) annually for compliance.

Contribution to Goal Performance

Maintaining the ISO certification has kept U.S. Seaway officials focused on finding better ways of operating the St. Lawrence Seaway and recognizing how agency initiatives 

and decisions affect customers, both internally and externally. Other benefits of the ISO 

certification include improved communications within the organization, redefined business processes that are clearly understood by employees, and integrated performance 

measurements and objectives with the agency’s mission. SLSDC management reviews 

the agency’s quality system annually to ensure its continued suitability, adequacy, and 

effectiveness.

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Methodology

As part of its annual surveillance, LQRA audits the following ISO elements for compliance: 

document control; quality policy; organizational changes; training; corrective actions; management review; internal audit plan; and use of LRQA logo on letterhead and documents. 

Seaway business areas covered by ISO include: lock operations; ship inspections; vessel 

investigations; vessel traffic services; aids to navigation program; channel maintenance; 

lock maintenance; management information systems; administration; and IT services.

Findings

In June 2009, LQRA completed its annual surveillance audit of the SLSDC quality management system for ISO recertification. All elements of ISO 9001:2000 standard were 

applied within the scope the audit. The SLSDC quality system was found to be mature 

with no areas of weakness identified and, accordingly, it was recommended that certification approval continue uninterrupted. The certificate renewal date is June 30, 2010, at 

which time it will be audited for certification under the new ISO 9001:2008 standard and 

requirements. Effective November 14, 2009, the SLSDC will be required to adhere to the 

ISO 9001:2008 standard. 

Recommendations

Although no weaknesses were identified in the weaknesses were identifi ed in the SLSDC quality system, Lloyd’s did high- SLSDC quality system, Lloyd’s did high- SLSDC quality system, Lloyd’s did high quality system, Lloyd’s did highlight three areas for attention where improvement could be realized. Those were:

1. Indicating the condition status of fire extinguishers on their maintenance record 

labels aboard SLSDC tugs. 

2. Continuing agency implementation of the BIGFOOT computerized maintenance 

management system as well as incorporating historical data, if feasible. 

3. Including maintenance or repairs completed as a result of a breakdown or failure into the BIGFOOT system, as well as buoy-related data to ensure that maintenance history is preserved for future planning purposes.

Planned Actions

Related to the weaknesses highlighted, the SLSDC has taken various steps to remediate the 

three areas. For example, the agency has reinitiated the Occupational Safety and Health 

Administration’s monthly assessment program for each department to inspect fire extinguishers and ensure first aid supplies are readily available as needed. Monthly information 

is documented by each division, making the necessary improvements at the time of inspection. Documentation is forwarded to the SLSDC Safety and Occupational Health Manager 

for review, retention, and reporting requirements. In terms of the BIGFOOT maintenance 

management system, the SLSDC has completed the migration of obtainable historical data 

and has developed new internal procedures to enter emergency repairs into the system.
222

Environmental Stewardship

Operating Maritime Administration

Administration

Program Ship Disposal

Partners None

Name of Study Ship Disposal

Listed in DOT Yes

Plan

Reason for This evaluation was deferred, as all available FY 2009 program 

replacement evaluation funding was allocated to conduct a high quality, independent 

or addition Maritime Security Program evaluation in FY 2009. The Ship Disposal program evaluation is deferred, pending availability of funds, 

and review of Maritime Administration program evaluation priorities to ensure full support of the pending, new DOT Strategic Plan for 

2010–2015.

Status Deferred

Type Process

Source External Source: Independent auditor

Link NA

DOT Program Evaluations
Performance & Accountability Report FY2009

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Security

Operating Maritime Administration 

Administration

Program Maritime Security Program

Partners None

Name of Study Maritime Security Program Impact Evaluation

Listed in DOT Yes

Plan

Status Complete

Type Impact

Source External: Econometrica, Inc.

Link www.marad.dot.gov/documents/MSP_Revised_Final_Report_

Transmitted_07-24-09.pdf

Purpose

The evaluation was a routine periodic review of the Maritime Security Program (MSP). 

The purpose of the evaluation was to determine the program’s effectiveness and its impact 

on the U.S. flag fleet, U.S. crew members, and its military usefulness. 

Contribution to Goal Performance 

The evaluation assessed the impact of the MSP in supporting DOT's strategic goal for 

Security, Preparedness and Response. To measure the influence the program has on meeting the Department’s goal, the contractor, Econometrica, analyzed existing quantitative 

data to estimate the program’s impact on: 

•	 U.S. flag shipping presence in international commercial waters;

•	 number, types, and capacities of U.S. flag oceangoing ships available for military 

use; and

•	 Number of U.S. crewmembers available to serve on such ships.
224

Methodology

The evaluator reviewed past research and quantitative data and interviewed experts from 

the military community, the maritime industry and academia who were familiar with 

Department of Defense (DOD) sealift requirements or maritime policy.

Findings

There were several findings from this evaluation:

1. Resources allocated to the program appear to be adequate to manage and coordinate the program activities.

2. In the expansion of the 2005 MSP and in the selection of replacement vessels, 

MARAD has adhered to statutory and regulatory requirements.

3. The program has established effective linkages with representatives of the 

Department of Defense resulting in increased effectiveness in addressing emerging DOD mobility requirements.

4. Commercial carriers and the DOD community gave positive feedback regarding 

effectiveness, communication, and responsiveness of MARAD’s MSP staff.

5. There are no significant problems in the operation of the MSP. 

Recommendations

The evaluator made several recommendations for improving the program: 

1. Staffing - One or two additional full-time equivalent staff positions should be 

filled to support program management.

2. Data Availability—MARAD should work towards interagency cooperation to 

reduce or alleviate data limitations.

3. Competitive Pricing – MARAD could consider alternative selection procedures, such as selecting ships to fill MSP slots through the competitive bidding 

process.

4. Maritime Policy— MARAD should consider a broader view of maritime policy to 

address the long-term decline of the U.S. flag fleet.

Planned Actions

1. Staffing – MARAD’s MSP is reviewing its current staffing. 

2. Data Availability – MARAD will continue to work with its government partners 

on data availability. 

3. Competitive Pricing - MARAD, like the study team, does not believe this action 

is appropriate under the current MSP or the future MSP. The MSP helps to offset 

the highly volatile nature of the industry and ensures that DOD has a steady and 

DOT Program Evaluations
Performance & Accountability Report FY2009

225

reliable base of ships in which it can call upon when needed. Note that planning 

for the next MSP is still several years away.

4. Maritime Policy – MARAD agrees with the recommendation that there should 

be a broader view of US maritime policy. Despite the difficulties in getting the 

various segments of the maritime industry to come to consensus on a defined 

US maritime policy, MARAD will continue in its efforts to ensure that the US 

has a strong, competitive and viable maritime industry which supports the US 

economy and national security goals. 
226

Organizational Excellence

Operating Federal Aviation Administration

Administration

Program Acquisition Management System

Partners There are no partners external to FAA for this evaluation. 

Name of Study Independent Assessment of FAA’s Acquisition Management System 

(AMS)

Listed in DOT No

Plan

Reason for This independent assessment was determined to be a more

replacement informative evaluation for the agency than the scheduled DOT

or addition Strategic Plan evaluation. 

Status Complete with actions initiated

Type Outcome

Source External: PriceWaterhouseCoopers

Link http://atoexperience.faa.gov/acqbus/index.php?option=com_content

&task=view&id=332

Purpose

The FAA’s Acquisition Management System (AMS) defines lifecycle management policy, 

activities, and roles to plan, select, implement, and manage FAA’s equipment, systems, 

facilities and services. 

The purpose of an independent assessment of AMS was to: 

•	 Analyze the efficiency and effectiveness of AMS policy and guidance

•	 Understand the current state of AMS lifecycle phases, with emphasis on investment analysis and procurement processes

•	 Compare AMS against other acquisition systems, industry leading practices, 

and trends

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227

•	 Understand to what extent AMS addresses past GAO and IG concerns and 

recommendations 

•	 Develop findings and recommendations for future improvements to AMS

Contribution to Goal Performance

This evaluation contributed to achieving two of FAA’s FY 2009 performance targets:

•	 In FY 2009, 90 percent of Major System Investments are within 10 percent variance of current baseline total budget estimate at completion (BAC). 

•	 In FY 2009, 90 percent of select Major System Investment annual milestones are 

achieved. 

Because the AMS provides the framework for all major system investments, this evaluation served to identify critical improvements for managing major system acquisitions. 

Methodology

The assessment involved analyzing data collected through source documentation, interviews, focus groups, external research, and surveys. Data was collected from over 80 

AMS stakeholders involved in AMS lifecycle. Input from FAA’s contractors was also key 

to assessing the effectiveness of AMS procurement processes.

Findings

The findings from the assessment indicate that although AMS is conceptually sound, FAA 

often does not take full advantage of the opportunities provided by the AMS framework. 

Given the level, frequency, and scope of change at FAA over the past several years, AMS 

governance, processes, systems, roles, responsibilities, and performance metrics must 

continue to adapt. Selected findings with the greatest impact on implementation of AMS 

included:

•	 AMS was designed to manage the lifecycle of large, complex major systems 

acquisitions and may not appropriately accommodate other investments.

•	 The established FAA governance structure is appropriate but there appears to 

be an inadequate use of subordinate investment review boards.

•	 FAA has not clearly defined the roles and responsibilities of the offices reviewing the investment analyses. 

•	 AMS policy does not accurately reflect subordinate policies.

•	 Service organizations may not have the requisite skills or resources needed to 

perform investment analysis responsibilities within AMS.

•	 Contracting process time is perceived as being too long and not proportionate to 

the size of the procurement.
228

Recommendations

Within the major themes were three recommendations with a potential for high impact 

that require further analysis: 

•	 Institute acquisition categories defining a specific path and review authorities 

based on specific program criteria.

•	 Assess the investment selection review processes and identify an approach to 

streamline the process.

•	 Establish processes to support development of AMS process schedules for capital investments.

Planned Actions

In late 2009, FAA began implementing one high impact recommendation to establish 

acquisition categories. This recommendation will streamline decision-making and documentation required for FAA’s investment selection. 

Also in 2009, FAA also began work to implement another high impact recommendation to 

streamline the investment selection process. Streamlined investment analysis processes 

and reviews are expected to improve the time and effort to transition proposed investments from concept and requirements definition to detailed business case analysis.

FAA plans to complete these activities early in Fiscal Year 2010. 

Operating Federal Motor Carrier Safety Administration (FMCSA) 

Administration

Program Information Technology Security Program Evaluation

Partners Volpe, North Dakota State University, Upper Great Plains Transportation Institute 

Name of Study Information Technology (IT) Security Program Evaluation

Listed in DOT Yes

Plan

Status Complete, but pending approval prior to release

Type Outcome

DOT Program Evaluations
Performance & Accountability Report FY2009

229

Source External: The Dalton Gang (TDG)

Link None

Purpose

The purpose of this evaluation is to provide a systematic assessment of the contribution, 

value, and impact of FMCSA’s information technology security program.

Contribution to Goal Performance

The evaluation addresses the Organizational Excellence Goal by reviewing and evaluating key policies, procedures and configuration management of the Agency’s IT systems. 

In addition, the review addresses Safety by evaluating the IT systems that link all of 

the Agency’s safety data together. By finding vulnerable areas and making recommendations to strengthen these weaknesses, both our IT systems and the data processes will be 

enhanced.

Methodology

The independent evaluator used a standard government-wide tool, called the Program 

Review for Information Security Management Assistance (PRISMA), which assesses 

information technology security methodology. The tool is the industry standard and was 

developed by the National Institute for Standards and Technology (NIST). The evaluation not only assessed compliance with the PRISMA standards, but also researched best 

practices from highly performing entities. The independent evaluator conducted documentation reviews, onsite visits, and interviews with FMCSA headquarters and field personnel, Volpe National Transportation Systems Center, Science Applications International 

Corporation, and the North Dakota State University, Upper Great Plains Transportation 

Institute.

Findings

The evaluation discovered that FMCSA security policies and procedures documents were 

in some cases out of date, absent entirely, or non compliant with Homeland Security Presidential Directive (HSPD)-12 and Office of Management and Budget (OMB) implementation mandates. This deficiency could pose risks to confidentiality of highly sensitive motor 

carrier industry and Agency information. 

The evaluation found that FMCSA had several potential security vulnerabilities, including a lack of an FMCSA designated privacy officer, deficient secure space and storage, 

and a lack of effective and reliable employee access control processes and procedures. 

These all pose a risk to privacy, integrity and confidentiality of systems and data.
230

Recommendations

The evaluation made several key recommendations and the report suggested that 

FMCSA:

•	 Make the establishment and continued maintenance of comprehensive, actionable security policies and procedures a high priority. 

•	 Ensure these documents are created, reviewed, signed, and periodically updated 

in a timely manner. 

•	 Train management, operators and technicians on the essentials of these policies 

and procedures. 

•	 Track all related activities to closure, and ensure complete management reporting on work in progress throughout this remedial process. 

•	 Employ technical security and IT support “tiger teams” to periodically conduct 

internal assessments. 

•	 Assign a privacy officer, develop and publish personnel security and privacy 

policies, and develop any other required operational procedures.

•	 Acquire secure facilities and systems for processing, printing, storing and communicating sensitive employee privacy information and streamlining background check operations in order to comply with OMB, NIST and HSPD-12 privacy, security and access control regulations. 

Planned Actions

The Agency has developed and is already implementing an action plan that addresses all 

of the recommendations. FMCSA will comply with all recommendations that correspond 

to the PRISMA methodology.

Operating Research and Innovative Technology Administration

Administration

Program University Transportation Center Program (UTC)

Partners Modal Administration Subject Matter Experts

Name of Study University Technology Center

Listed in DOT Yes

Plan

DOT Program Evaluations
Performance & Accountability Report FY2009

231

Status Canceled

Type Outcome

Source External

Link NA
Intentionally Left Blank
Financial Report 
Intentionally Left Blank
Financial Report

235

OFFICE OF INSPECTOR GENERAL

QUALITY CONTROL REVIEW
Intentionally Left Blank
Financial Report

237

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 2009 and 2008, DOT

Report Number: QC-2010-011

Date: November 16, 2009

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) 2009 and 2008.

The audit of DOT’s Consolidated Financial Statements as of and for the year 

ended September 30, 2009, was completed by Clifton Gunderson LLP, of 

Calverton, Maryland (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 (OMB) Bulletin 07-04, “Audit Requirements for Federal Financial 

Statements,” as amended. 

Clifton Gunderson 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, 2009, and its net costs, changes in net position, 

and budgetary resources, for the year then ended, in conformity with accounting 

principles generally accepted in the United States. KPMG LLP, of Washington, 

D.C., under contract to OIG, audited last year’s DOT Consolidated Financial 

Statements and also expressed an unqualified opinion on those statements.1

1 Quality Control Review of Audited Consolidated Financial Statements for Fiscal Years 2008 and 2007, 

Department of Transportation, Report Number QC-2009-009, November 14, 2008. OIG reports and 

testimony can be found on our Web site at: www.oig.dot.gov.
238

2

We congratulate DOT for obtaining clean audit opinions with no material 

weaknesses for the last 2 years. Your senior leadership team, including the Chief

Financial Officer and Modal Administrators, should be commended for its 

commitment to improving financial management. DOT continued its assessment 

of internal controls over financial reporting (to comply with OMB Circular 123, 

Appendix A requirements) and expanded this year’s assessment to include the 

additional controls established in the Operating Administrations that received 

American Recovery and Reinvestment Act (ARRA) funds. DOT also expanded 

its review and analysis of financial statement fluctuations, reconciliations between 

proprietary and budgetary account balances, and testing for improper payments for 

its four major grants programs—a key control to ensure accountability and 

transparency for use of Federal funds. While recognizing these improvements, 

DOT still faces key financial management challenges that require its attention.

Effectively Managing Highway Trust Fund Resources

The Highway Trust Fund (HTF)—primarily funded by motor fuel excise tax 

revenues—is the primary source for financing highway and mass transit projects.

To remain solvent, the HTF required $15 billion in cash infusions from the general 

fund for the past 2 years (FYs 2008 and 2009). While DOT awaits decisions on 

future funding, it also needs to ensure effective use of available funds. Yet DOT

continues to experience difficulties in releasing (de-obligating) funds that were no 

longer needed from completed or cancelled projects. Last year, we reported about 

$300 million of unneeded obligations. This year, Clifton Gunderson reported that 

about $800 million of obligations were no longer needed and should have been 

released for other use.2 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 the National 

Highway System infrastructure. DOT needs to closely monitor use of available

resources to help maintain the solvency of the HTF and provide the maximum 

benefit to the economy and the public. 

Strengthening Financial Management Oversight and Correcting Antideficiency Violations by the Maritime Administration 

During this year’s audit, Clifton Gunderson reported a significant deficiency in the 

Maritime Administration’s (MARAD) financial management oversight due to 

erroneous recording of the values of eight ships transferred from the Navy, errors 

in calculating MARAD’s environmental liability, and inaccurate accounting for 

2 As of September 30, 2009, DOT reported a total of almost $102 billion in outstanding obligations, most 

of which were associated with HTF obligations.
Financial Report

239

3

MARAD ships not in use. DOT needs to work closely with MARAD to ensure 

these deficiencies are corrected. 

Violations of the Anti-deficiency Act were also reported for the U.S. Merchant 

Marine Academy. Specifically, in March 2009, DOT reported Anti-deficiency

Act violations to the President—violations that were initially identified in 

FY 2007 and totaled as much as $20 million. In August 2009, the Government 

Accountability Office reported numerous instances of improper and questionable 

sources and uses of funds by the Academy, including other potential Antideficiency Act violations, and made 47 recommendations to improve financial 

management controls at the Academy. During FY 2010, MARAD needs to 

determine whether any other Anti-deficiency Act violations exist at the Academy 

and report confirmed violations. MARAD also needs to continue to correct 

financial management controls at the Academy. 

Improving Financial Reporting and Accounting Controls 

Several deficiencies reported by Clifton Gunderson this year were also reported as 

internal control deficiencies in prior years. First, Clifton Gunderson has noted an 

over-reliance on the use of journal entries to get the financial statement numbers 

right. While the use of journal entries is necessary for recording non-routine 

transactions, such as the accrual of liability estimates, many journal entries could 

have been avoided by processing normal financial transactions through the Delphi 

accounting system. During FY 2009, DOT recorded more than 9,000 journal 

entries with an absolute value of $685 billion. Second, several deficiencies in the 

Federal Aviation Administration’s (FAA) accounting and reporting of Property, 

Plant, and Equipment remain uncorrected, despite improvements made in 

FY 2009. For example, properties are still not capitalized in, or retired from, 

accounting records in a timely manner. Finally, the Federal Highway 

Administration (FHWA) and the Federal Transmit Administration (FTA) continue

to experience difficulties in developing reliable estimates for yearend grant 

accruals—expenditures incurred but not paid. The actual expenditures exceeded 

the estimate by more than $600 million in one case. DOT needs to continue 

strengthening financial controls in these areas to ensure that reliable financial 

information is available for decision-making. 

Disclosing Transportation Investments 

During the past 5 years, DOT has invested more than $239 billion in surface and 

air transportation projects nationwide. These investments include projects related 

to the National Highway and Interstate Systems, state and local transit and rail 

systems, and airport planning and development at public use airports. DOT also 

provided other forms of financial assistance such as loan guarantees for shipping 
240

4

companies. Some investments have resulted in special financial interests. For 

example, in October 2009, DOT disclosed that the Federal Railroad 

Administration has owned all preferred stock and a major portion of the equities in 

Amtrak since the 1980s.3 As a result of this disclosure, DOT had to perform a 

special evaluation to determine how this financial interest should be addressed in 

DOT’s Consolidated Financial Statements. DOT determined that Amtrak was not 

a reporting entity that needed to be consolidated into DOT’s financial statements 

and a disclosure in the financial statements would suffice. However, to prevent 

recurrence of similar incidents, DOT needs to work with the Operating 

Administrations to fully disclose financial investments in outside entities, and 

changes to related legislation, so that these investments could be properly reflected 

in the DOT’s Consolidated Financial Statements.

Strengthening Oversight of Grantee Operations 

Both the President and Congress have emphasized the need for full accountability, 

efficiency, and transparency in the allocation and expenditure of ARRA funds. In 

June 2009, we issued an ARRA Advisory on the sampling methodology used for 

testing improper payments.4 During FY 2009, DOT significantly expanded the

FY 2009 improper payment testing for all four major grants programs—the 

FHWA Federal-aid Highway Program, the FTA Formula Grants Program, the 

FTA Capital Investment Grants Program, and the FAA Airport Improvement 

Program. In FY 2008, DOT tested payments totaling $59.6 million; in FY 2009 

DOT tested payments totaling $663 million—more than a 10-fold increase—and 

identified significant improper payments in FHWA’s Federal-aid Highway 

program. Most of these improper payments were due to insufficient supporting 

documentation provided by grantees. Requiring grantees to provide adequate 

support for use of Federal funds is essential to ensure accountability and provide 

for transparency. During FY 2010, DOT should implement corrective actions to 

minimize improper payments to grantees and expand improper payment testing to 

other high-risk programs such as the high-speed rail program. 

The Single Audit Act requires state and local entities (grantees) expending more

than $500,000 of Federal funds to conduct a single audit in accordance with OMB 

Circular A-133. In addition to rendering an opinion on the grantee’s financial 

statements, Single Audits test whether the grantee complied with grant 

3 This financial investment was specified in the Amtrak Improvement Act of 1981 (Public Law 97-35) and 

the Amtrak Reform and Accountability Act of 1997 (Public Law 105-134). While former departmental 

officials, including OIG, had knowledge of the legislation, there is no process to ensure special 

congressional decisions are properly disclosed for inclusion in DOT financial statements. 4 ARRA Advisory – Sampling of Improper Payments in Major DOT Grants Programs, Department of 

Transportation, Advisory Number AA-2009-002, June 22, 2009. OIG reports and testimony can be 

found on our Web site at: www.oig.dot.gov.
Financial Report

241

5

requirements in spending Federal funds. An analysis of the FY 2008 Single 

Audits for 51 FHWA grantees (49 states, the Government of Guam, and the Puerto 

Rico Highways and Transportation Authority) showed that 29 of the 51 grantees 

had not complied with at least one Highway Planning and Construction grant 

requirement; while 8 of the 29 had significant noncompliance.5 For example, 10 

states had not complied with allowable costs principle requirements in calculating 

the Federal share of costs, 9 states had not complied with Davis-Bacon Act labor 

rate requirements, and 8 states had not complied with cash management 

requirements. DOT has taken steps to improve the Single Audit resolution process 

to help ensure responsible use of regular grant and ARRA funds. However, 

sustained management attention is needed to ensure timely correction of Single 

Audit findings by DOT grantees.

Clifton Gunderson FY 2009 Audit Report 

Clifton Gunderson reported five internal control significant deficiencies and one

instance of potential or known noncompliance with laws and regulations:

Significant Deficiencies

1. Financial Accounting, Reporting and Analysis

2. Undelivered Orders 

3. Grant Accruals 

4. Financial Management Oversight by MARAD

5. Information Technology Controls over Financial Systems and Applications 

Noncompliance with Laws and Regulations

1. Antideficiency Act 

Clifton Gunderson made 22 recommendations to strengthen financial, accounting, 

and system controls for remediation; 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 submitting to OIG a detailed action plan to address the findings contained in the 

audit report no later than December 31, 2009. 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, 2010.

5 The eight received qualified opinions from the auditors for their overall compliance with FHWA grant 

requirements. 
242

6

Our review disclosed no instances where Clifton Gunderson did not comply, in all 

material respects, with applicable auditing standards. 

We appreciate the cooperation and assistance of DOT and Clifton Gunderson

representatives. If we can answer any questions, please call me at (202) 366-1959; 

Ann Calvaresi-Barr, 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

#
Financial Report

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            

          

          



          





 



            



 

             









  

              

           

         





             

     

          

             
244

             

         

             





            

               





     

              

           



            

            

           











            

           

        

    

           





 

 

 

 

 

 



    

         

            

             


Financial Report

245

            





  



        

              



              











    

            

            



             



      



           





            





             












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







         



             

           

            

          



           









         







         





           

             

      

          

           



            







            

            



           

           


Financial Report

247

       

  

            



 



            

            

           

              



              





              

           

             

      





           

 






















248

          









 







           



            



 



           

           



 

           



    



 





             







            

       





           

            




Financial Report

249





            

        



          



          

         



           



            



 

           

     



           







 

           



          

         

      

              

     



    

           





           






250



             

           



          

         

            

  





             



           





            

         

             

         

           



            















          

          





 





                   

           




Financial Report

251

      









         





 



            

  

             



      

           





            

   







            



               

              



        



               









           



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252

            

           



            

          







      



 



            



               



  

 







            



   

              

          



 

           



 





            

         

          

     


Financial Report

253

         

            





          









            



           



         



  

            

           

         

            



 

           

            

            

          

            

         







             

             

            

         


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          



     

           

          



        

           





 



             







 

         

            

           

         

            

          





 

           

   

            



           

      



           



      



          


Financial Report

255

 



          







 

            

        



          









            

           





          

          

        



            

          



         

           

          



          




256





           



           



          



       

         

         



             

           



   



          

        









       

           

            









   



  



 
Financial Report

257





              

          



         

         



            



 

         





         

          



         

          



         





          

         

          



         



           



         

             







         


258

 









 



           

          

        











              



              

          

         

            



 

            

        



            

       

 







            

             


Financial Report

259

             

            



















 

   



          




260











 









































    

 

     

     













 

      

     

       

      







      

    

     









     

     

      



 





 



 







 




Financial Report

261

 









      

     































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



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







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
Financial Report

263
Intentionally Left Blank
Financial Report

265

Principal Statements
Intentionally Left Blank
Financial Report

267

The accompanying notes are an integral part of these financial statements.

U.S. Department of Transportation

Consolidated Balance Sheets

As of September 30, 2009 and 2008

(Dollars in Thousands)

Assets 2009 2008

Intragovernmental:

Fund balance with Treasury (Note 2) $ 62,685,783 $ 22,074,754

Investments, net (Note 3) 20,684,481 21,699,531

Accounts receivable (Note 4) 285,748 235,638

Other (Note 5) 38,450 38,915

Total intragovernmental 83,694,462 44,048,838

Cash 250 54,675

Investments, net (Note 3) - 28,707

Accounts receivable, net (Note 4) 99,006 67,852

Direct loan and loan guarantees (Note 6) 2,219,298 1,670,284

Inventory and related property, net (Note 7) 797,310 802,368

General property, plant and equipment, net (Note 8) 14,439,603 14,512,568

Other (Note 5) 256,130 182,492

Total assets $ 101,506,059 $ 

Stewardship property, plant and equipment (Note 9)

61,367,784

Liabilities (Note 10)

Intragovernmental:

Accounts payable $ 20,503 $ 11,046

Debt (Note 11) 2,478,348 1,762,985

Other (Note 15) 3,092,982 3,263,123

Total intragovernmental 5,591,833 5,037,154

Accounts payable 736,223 532,579

Loan guarantee liability (Note 6) 310,710 258,050

Federal employee benefits payable (Note 12) 975,442 984,710

Environmental and disposal liabilities (Note 13) 1,195,249 828,757

Grant accrual (Note 14) 6,769,814 5,810,147

Other (Note 15) 1,351,571 1,365,257

Total liabilities 16,930,842 14,816,654

Commitments and contingencies (Note 17) 

Net position (Note 18)

Unexpended appropriations - earmarked funds 1,212,951 1,010,409

Unexpended appropriations - other funds 50,425,385 7,643,564

Cumulative results of operations - earmarked funds 22,481,668 25,944,043

Cumulative results of operations - other funds 10,455,213 

Total net position 84,575,217 

Total liabilities and net position $ 101,506,059 $ 

The accompanying notes are an integral part of these financial statements.

11,953,114

46,551,130

61,367,784

U.S. Department of Transportation

Consolidated Balance Sheets

As of September 30, 2009 and 2008

(Dollars in Thousands)

Assets 2009 2008

Intragovernmental:

Fund balance with Treasury (Note 2) $ 62,685,783 $ 22,074,754

Investments, net (Note 3) 20,684,481 21,699,531

Accounts receivable (Note 4) 285,748 235,638

Other (Note 5) 38,450 38,915

Total intragovernmental 83,694,462 44,048,838

Cash 250 54,675

Investments, net (Note 3) - 28,707

Accounts receivable, net (Note 4) 99,006 67,852

Direct loan and loan guarantees (Note 6) 2,219,298 1,670,284

Inventory and related property, net (Note 7) 797,310 802,368

General property, plant and equipment, net (Note 8) 14,439,603 14,512,568

Other (Note 5) 256,130 182,492

Total assets $ 101,506,059 $ 61,367,784

Stewardship property, plant and equipment (Note 9)

Liabilities (Note 10)

Intragovernmental:

Accounts payable $ 20,503 $ 11,046

Debt (Note 11) 2,478,348 1,762,985

Other (Note 15) 3,092,982 3,263,123

Total intragovernmental 5,591,833 5,037,154

Accounts payable 736,223 532,579

Loan guarantee liability (Note 6) 310,710 258,050

Federal employee benefits payable (Note 12) 975,442 984,710

Environmental and disposal liabilities (Note 13) 1,195,249 828,757

Grant accrual (Note 14) 6,769,814 5,810,147

Other (Note 15) 1,351,571 1,365,257

Total liabilities 16,930,842 14,816,654

Commitments and contingencies (Note 17) 

Net position (Note 18)

Unexpended appropriations - earmarked funds 1,212,951 1,010,409

Unexpended appropriations - other funds 50,425,385 7,643,564

Cumulative results of operations - earmarked funds 22,481,668 25,944,043

Cumulative results of operations - other funds 10,455,213 11,953,114

Total net position 84,575,217 46,551,130

Total liabilities and net position $ 101,506,059 $ 61,367,784
268

U.S. Department of Transportation

Consolidated Statements of Net Cost

For the Years Ended September 30, 2009 and 2008

(Dollars in Thousands)

Program Costs (Note 19): 2009 2008

Surface Transportation:

Gross costs $ 58,120,836 $ 50,416,782

Less: earned revenue 523,182 263,771

Net program costs 57,597,654 50,153,011

Air Transportation:

Gross costs 16,868,905 15,913,667

Less: earned revenue 579,983 381,546

Net program costs 16,288,922 15,532,121

Maritime Transportation:

Gross costs 1,113,672 706,649

Less: earned revenue 384,985 491,570

Net program costs 728,687 215,079

Cross-Cutting Programs:

Gross costs 648,325 565,861

Less: earned revenue 321,117 542,360

Net program costs 327,208 23,501

Costs not assigned to programs 366,041 386,130

Less earned revenues not

 attributed to programs 10,708 39,379

Net cost of operations $ 75,297,804 $ 66,270,463

The accompanying notes are an integral part of these financial statements.

U.S. Department of Transportation

Consolidated Statements of Net Cost

For the Years Ended September 30, 2009 and 2008

(Dollars in Thousands)

Program Costs (Note 19): 2009 2008

Surface Transportation:

Gross costs

Less: earned revenue

Net program costs

$ 58,120,836

 523,182

 57,597,654

$ 50,416,782

 263,771

 50,153,011

Air Transportation:

Gross costs

Less: earned revenue

Net program costs

 16,868,905

 579,983

 16,288,922

 15,913,667

 381,546

 15,532,121

Maritime Transportation:

Gross costs

Less: earned revenue

Net program costs

 1,113,672

 384,985

 728,687

 706,649

 491,570

 215,079

Cross-Cutting Programs:

Gross costs

Less: earned revenue

Net program costs

 648,325

 321,117

 327,208

 565,861

 542,360

 23,501

Costs not assigned to programs 366,041 386,130

Less earned revenues not

 attributed to programs 10,708 39,379

Net cost of operations $ 75,297,804 $ 66,270,463

The accompanying notes are an integral part of these financial statements.
Financial Report

269

U.S. Department of Transportation

Consolidated Statements of Changes in Net Position

For the Years Ended September 30, 2009 and 2008

(Dollars in Thousands)

2009 2008

Earmarked Funds All Other Funds Total Earmarked Funds All Other Funds Total

Cumulative Results of Operations:

Beginning balance $ 25,944,043 $ 11,953,114 $ 37,897,157 $ 26,552,761 $ 11,427,564 $ 37,980,325 

Budgetary Financing Sources:

Other adjustments - - - (783) 756 (27) 

Appropriations used 3,574,704 20,240,117 23,814,821 2,582,284 14,220,954 16,803,238

Non-exchange revenue (Note 20) 45,875,842 3,829 45,879,671 48,688,029 (3,679) 48,684,350

Donations/forfeitures of cash/cash equivalents 1,102 - 1,102 1,557 - 1,557

Transfers-in/(out) without reimbursement (Note 18) 7,178,707 (6,970,844) 207,863 8,035,031 (7,997,976) 37,055

Other Financing Sources (Non-Exchange):

Transfers-in/(out) without reimbursement (517,922) 364,291 (153,631) (1,898,408) 1,919,255 20,847

Imputed financing 649,662 106,563 756,225 548,956 93,192 642,148

Other (237,241) 68,718 (168,523) - (1,873) (1,873) 

Total financing sources 56,524,854 13,812,674 70,337,528 57,956,666 8,230,629 66,187,295 

Net cost of operations 59,987,229 15,310,575 75,297,804 58,565,384 7,705,079 66,270,463 

Net change (3,462,375) (1,497,901) (4,960,276) (608,718) 525,550 (83,168) 

Cumulative Results of Operations 22,481,668 10,455,213 32,936,881 25,944,043 11,953,114 37,897,157 

Unexpended Appropriations:

Beginning balance 1,010,409 7,643,564 8,653,973 1,213,189 8,563,101 9,776,290 

Budgetary Financing Sources:

 Appropriations received (Note 1U) 3,879,582 61,003,496 64,883,078 2,404,596 13,319,232 15,723,828 

 Appropriations transferred-in/(out) 4,916 2,022,133 2,027,049 (6) 28,006 28,000 

 Other adjustments (107,252) (9,657) (116,909) (25,086) (45,821) (70,907) 

 Appropriations used (3,574,704) (20,234,151) (23,808,855) (2,582,284) (14,220,954) (16,803,238)

 Total budgetary financing sources 202,542 42,781,821 42,984,363 (202,780) (919,537) (1,122,317) 

Total unexpended appropriations 1,212,951 50,425,385 51,638,336 1,010,409 7,643,564 8,653,973 

Net position $ 23,694,619 $ 60,880,598 $ 84,575,217 $ 26,954,452 $ 19,596,678 $ 46,551,130 

The accompanying notes are an integral part of these financial statements.
270

U.S. Department of Transportation

Combined Statements of Budgetary Resources

For the Years Ended September 30, 2009 and 2008

(Dollars in Thousands)

Budgetary Resources (Note 21):

Unobligated balance, brought forward, October 1

Recoveries of prior year unpaid obligations

Budget authority:

 Appropriations received (Note 1U)

 Borrowing authority

 Contract authority

 Spending authority from offsetting collections

 Earned

 Collected

 Change in receivables from Federal sources

 Change in unfilled customer orders

 Advance received

 Without advance from Federal sources

 Expenditure transfers from trust funds

$ 

 

 

 

 

 

 

 

 

 

2009

Budgetary 

 45,806,953

 713,588

 128,142,339

 175,000

 56,717,041

 2,435,351

 11,725

 (25,133) 

 49,115

 5,284,320

2008

Non-Budgetary Non-Budgetary

Credit Reform Credit Reform

Financing Accounts Budgetary Financing Accounts

$ 240,230 $ 46,511,710 $ 332,405

 12,240 909,305 37,788

 - 79,462,754 -

 1,383,169 215,000 950,094

 - 55,933,312 -

 202,488 2,182,754 507,519

 - (66,642) (188) 

 - 216,149 -

 47,617 (192,676) 33,973

 - 6,447,419 -

 Subtotal

Nonexpenditure transfers, net

Temporarily not available pursuant to Public Law

Permanently not available

Total budgetary resources

Status of Budgetary Resources:

Obligations incurred:

 Direct 

 Reimbursable

 

 

 

 

$ 

$ 

 

 192,789,758

 2,003,700

 (2,251) 

 (67,481,807)

 173,829,941

 113,733,058

 2,103,199 

 1,633,274 144,198,070 1,491,398

 - 2,000 -

 - - -

 (71,393) (59,405,333) (359,787) 

$ 1,814,351 $ 132,215,752 $ 1,501,804

$ 1,550,214 $ 84,438,020 $ 1,261,574 

 - 1,970,779 - 

 Subtotal

Unobligated balance:

 Apportioned 

 Exempt from apportionment

 

 

 

 115,836,257

 49,012,606 

 276,374 

 1,550,214 86,408,799 1,261,574

 8,947 26,059,115 4,796 

 - 299,415 - 

 Subtotal

Unobligated balance not available

Total status of budgetary resources 

The accompanying 

 

 

 49,288,980 

 8,704,704 

 8,947 26,358,530 4,796 

 255,190 19,448,423 235,434 

$ 

notes are 

 173,829,941

an integral part of 

$ 1,814,351 $ 132,215,752 $ 1,501,804

these financial statements.
Financial Report

271

Change in Obligated Balances:

Obligated balance, net:

 Unpaid obligations, brought forward, October 1 

 Uncollected customer payments from Federal sources,

 brought forward, October 1 

 Total unpaid obligated balance, net

Obligations incurred 

Gross outlays

Obligated balance transferred, net

Unpaid obligations 

Recoveries of prior year unpaid obligations, actual

Change in uncollected customer payments from Federal sources 

Obligated balance, net, end of period:

 Unpaid obligations

 Uncollected customer payments from Federal sources 

 Total unpaid obligated balance, net, end of period

Net Outlays:

Net Outlays

 Gross outlays

 Offsetting collections 

 Distributed offsetting receipts

Net outlays $ 80,254,610

2009

Non-Budgetary

Credit Reform

Budgetary Financing Accounts

$ 80,075,300 $ 1,850,080 

 (1,444,636) (169,268) 

 78,630,664 1,680,812 

 115,836,257 1,550,214 

 (88,136,410) (868,249) 

 25,000 - 

 (713,588) (12,240) 

 (68,228) (47,618) 

 107,086,559 2,519,805 

 (1,512,864) (216,886) 

$ 105,573,695 $ 2,302,919 

$ 88,136,410 $ 868,249 

 (7,692,821) (202,488) 

 (188,979) (39,360) 

 $ 626,401 $ 73,087,734

2008

Non-Budgetary

Credit Reform

Budgetary Financing Accounts

$ 76,707,884 $ 2,017,708 

 (1,707,556) (135,484) 

 75,000,328 1,882,224 

 86,408,799 1,261,574 

 (82,157,078) (1,391,414) 

 25,000 - 

 (909,305) (37,788) 

 262,920 (33,784) 

 80,075,300 1,850,080 

 (1,444,636) (169,268) 

$ 78,630,664 $ 1,680,812 

$ 82,157,078 $ 1,391,414 

 (8,850,341) (507,519) 

 (219,003) (106,676) 

 $ 777,219

The accompanying notes are an integral part of these financial statements.

U.S. Department of Transportation

Combined Statements of Budgetary Resources

For the Years Ended September 30, 2009 and 2008

(Dollars in Thousands)
272

notes to Principal Statements
Financial Report

273

Notes to the Financial Statements

Note 1. Summary of 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 for 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)

Federal Transit Administration (FTA) 

Maritime Administration (MARAD)

National Highway Traffic Safety Administration (NHTSA)

Office of Inspector General (OIG)

Pipeline and Hazardous Materials Safety Administration (PHMSA)

Research and Innovative Technology Administration (RITA) [includes Volpe National Transportation System Center]

Surface Transportation Board (STB)

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, 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 consolidated financial statements have been prepared to report the Department's financial position and its results of operations 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.

The Consolidated Balance Sheets present agency assets and liabilities, and the resulting 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 August

2009. 
274

Notes to the Financial Statements

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 August 2009. Budgetary accounting facilitates compliance with legal constraints and

controls over the use of Federal funds. Each year, Congress provides appropriations to each Operating Administration within DOT to incur

obligations in support of agency programs. For FY 2009 and FY 2008, 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 statute 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. 

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. 
Financial Report

275

Notes to the Financial Statements

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.

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. 

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).

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.
276

Notes to the Financial Statements

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.

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.
Financial Report

277

Notes to the Financial Statements

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 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 (including American Recovery and

Reinvestment Act funds), accrued workers’ compensation, 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. 

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. 
278

Notes to the Financial Statements

U. Revenues and Other Financing Sources:

Earmarked Excise Tax Revenues (Nonexchange):

DOT receives 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). 

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, 2009 financial statements reflect excise taxes certified by the IRS through June 30, 2009 and excise taxes estimated 

by OTA for the period July 1, 2009 to September 30, 2009 as specified by SFFAS Number 7, Accounting for Revenue and Other

Financing Sources. Actual tax collections data for the quarter ended September 30, 2009 will not be available from the IRS until January

2010. Management does not believe that the actual tax collections for the quarter ended September 30, 2009 will be materially different

than the OTA estimate, which would be recorded in the DOT's accounting system.

Appropriations (Financing Source): 

DOT 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.

American Recovery and Reinvestment Act: 

On February 17, 2009, the President signed into law the American Recovery and Reinvestment Act (ARRA), which designated over $48

billion to the DOT operating administrations. The funding was provided to Federal Highway Administration, the Federal Transit

Administration, the Federal Rail Administration, the Office of Secretary Administration and the Maritime Administration. These funds

were designated to invest in transportation infrastructure, including transit capital assistance, high speed rail, pavement improvements and

bridge repair, as well as to preserve and create jobs, and promote economic recovery that will provide long term economic benefits. As of

September 30, 2009, the Department had obligated $29.5 billion and disbursed $3.6 billion. 

Consumer Assistance to Recycle and Save Act: 

On June 24, 2009, the President signed into law the Consumer Assistance to Recycle and Save Act (CARS), initiating the program which

designated $3 billion to the National Highway Traffic Safety Administration to accelerate motor fuel savings nationwide and provide

incentives to registered owners of high polluting automobiles to replace such automobiles with new fuel efficient and less polluting

automobiles. As of September 30, 2009, the Department had obligated and disbursed all valid requests for reimbursement.

V. Fiduciary Activities:

Fiduciary assets and liabilities are not assets and liabilities of the Department and as such are not recognized on the balance sheet. In

accordance with the provisions of the Federal Accounting Standards Advisory Board's Statement of Federal Financial Accounting Standards 

(SFFAS) No. 31, Accounting for Fiduciary Activities, this activity is reported separately in a note disclosure. This new requirement became

effective for reporting periods beginning on or after October 1, 2008. In accordance with SFFAS No. 31, prior year information is not

displayed in the initial year of implementation. The Maritime Administration Title XI Escrow Fund contains fiduciary activity (See Note 25

for specific required disclosures). 

W. Reclassifications:

Certain reclassifications were made to the FY 2008 consolidated financial statement presentation to conform to that used in FY 2009. 
Financial Report

279

Notes to the Financial Statements

X. Related Parties

The Secretary of Transportation has possession of all the preferred stock shares (109,396,994) of the National Railroad Passenger Service

Corporation (more commonly referred to as Amtrak). Congress through the Department continues to fund Amtrak since 1981; originally

through the purchase of preferred stock and then through grants after 1997. The Amtrak Reform and Accountability Act of 1997 changed

the structure of the preferred stock by rescinding the voting rights and eliminating the preferred stock's liquidation over the common stock.

The Act also eliminated further issuance of preferred stock to the Department. The Department does not record the Amtrak stock in its

financial statements because it is not publicly traded and no fair market value can be placed on it.

Amtrak is not a department, agency or instrumentality of the United States Government or the Department. The nine members of Amtrak’s

Board of Directors are appointed by the President of the United States and are subject to confirmation by the United States Senate. Once

appointed, Board Members, as a whole, act independently without the consent of the United States government or any of its officers to set

Amtrak policy, determine its budget and decide operational issues. The Secretary of Transportation is statutorily appointed to the nine

member Board. Traditionally, the Secretary of Transportation has designated the Administrator of the Federal Rail Administration to

represent the Secretary at Board meetings (See Note 17).
280

Note 2. Fund Balance with Treasury:

2009 2008

Fund Balances:

 Trust Funds $ 3,669,004 $ 6,283,435

 Revolving Funds 764,682 636,287

 General Funds 57,900,427 14,831,421

 Other Fund Types 351,670 323,611

 Total $ 62,685,783 $ 22,074,754

Status of Fund Balance with Treasury:

 Unobligated balance:

 Available $ 30,866,347 $ 7,453,124

 Unavailable 2,294,653 2,380,690

 Obligated balance not yet disbursed 29,473,421 12,021,987

 Non-Budgetary Fund Balance with Treasury

 Total

 51,362 218,953

$ 62,685,783 $ 22,074,754

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.

Notes to the Financial Statements
Financial Report

281

Note 3. Investments:

As of September 30, 2009

Amortized Market

(Premium) Investments Value

Intragovernmental Securities: 

Cost Discount (Net) Disclosure

 Marketable $ 29,405 $ 122 $ 29,527 $ 29,803

 Non-Marketable Par Value 19,313,905 - 19,313,905 19,313,905

 Non-Marketable Market-Based 1,289,850 (6,770) 1,283,080 1,317,582

 Subtotal

 Accrued Interest

 

 

20,633,160

57,969

 

 

(6,648) 20,626,512

- 57,969

 20,661,290

Total Intragovernmental Securities $ 20,691,129 $ (6,648) $ 20,684,481 $ 20,661,290

As of September 30, 2008

Amortized Market

(Premium) Investments Value

Intragovernmental Securities: 

Cost Discount (Net) Disclosure

 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

21,647,443

 Accrued Interest 85,906 - 85,906

Total Intragovernmental Securities $ 21,699,414 $ 117 $ 21,699,531

Securities with the Public:

 Marketable $ 28,535 $ (250) $ 28,285 $ 28,355

 Subtotal

 Accrued Interest

Total Securities with the Public

 

 

$ 

28,535

422

28,957

 

$ 

(250) 28,285

 422

(250) $ 28,707

 

$ 

28,355

28,355

Notes to the Financial Statements
282

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. The premiums and discounts are amortized over the life of the non-marketable market-based and

marketable securities using the interest method. 

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.
Financial Report

283

Notes to the Financial Statements

Note 4. Accounts Receivable:

Gross Allowance for

Amount Uncollectible Net Amount

Due Amounts Due

As of September 30, 2009

Intragovernmental:

 Accounts Receivable $ 285,717 $ - $ 285,717

 Accrued Interest 31 - 31

Total Intragovernmental 

Public:

 285,748 - 285,748

 Accounts Receivable 123,909 (25,405) 98,504

 Accrued Interest 909 (407) 502

 Total Public 

Total Receivables

 

$ 

124,818 (25,812)

$ (25,812)

 99,006

410,566 $ 384,754

Gross Allowance for

Amount Uncollectible Net Amount

Due Amounts Due

As of September 30, 2008

Intragovernmental:

 Accounts Receivable $ 235,620 $ - $ 235,620

 Accrued Interest 18 - 18

Total Intragovernmental $ 235,638

Public:

$ 235,638 $ -

 Accounts Receivable 85,141 (17,722) 67,419

 Accrued Interest 896 (463) 433

Total Public 

Total Receivables

 

$ 

86,037 (18,185)

$ (18,185)

 67,852

321,675 $ 303,490
284

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, employees and contractors.

 Notes to the Financial Statements

Note 5. Other Assets:

2009 2008

Intragovernmental:

 Advances and Prepayments $ 38,450 $ 38,915

Total Intragovernmental $ 38,450 $ 38,915

Public:

 Advances to States for Right of Way $ 101,084 $ 91,529

 Other Advances and Prepayments 154,778 90,646

 Other 268 317

Total Public $ 256,130 $ 182,492
Financial Report

285

Direct Loans 

Value of

2009 Assets

 Obligated Prior to FY 1992 (Allowance for Loss Method) Loans Allowance Related to

Receivable, Interest for Loan Direct Loans,

Direct Loan Programs Gross Receivable Losses Net

(1) Railroad Rehabilitation Improvement Program $ 7,053 $ - $ - $ 7,053

Value of

2009 Assets

 Obligated After FY 1991 Loans Allowance for Related to

Receivable, Interest Subsidy Cost Direct Loans,

Direct Loan Programs Gross Receivable (Present Value) Net

(1) Railroad Rehabilitation Improvement Program $ 377,437 $ 634 $ (3,729) $ 374,342

(2) TIFIA Loans

 Total

 

$ 

1,879,727

2,257,164

 - (89,770)

$ (93,499)

 1,789,957

$ 634 $ 2,164,299

Value of

2008 Assets

 Obligated Prior to FY 1992 (Allowance for Loss Method) Loans Allowance Related to

Receivable, Interest for Loan Direct Loans,

Direct Loan Programs Gross Receivable Losses Net

(1) Railroad Rehabilitation Improvement Program $ 13,757 $ 154 $ - $ 13,911

Value of

2008 Assets

 Obligated After FY 1991 Loans Allowance for Related to

Receivable, Interest Subsidy Cost Direct Loans,

Direct Loan Programs Gross Receivable (Present Value) Net

(1) Railroad Rehabilitation Improvement Program $ 289,862 $ 552 $ (2,408) $ 288,006

(2) TIFIA Loans

 Total

 

$ 

1,488,123

1,777,985

 - (158,716)

$ (161,124)

 1,329,407

$ 552 $ 1,617,413

Notes to the Financial Statements

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 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, 

 track, components of tract, bridges, yards, buildings, and shops; refinance outstanding debt incurred; and develop or establish new intermodal 

 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 

 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 ship owners and shipyards. The guarantee provides the benefit 

 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 

 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:
286

Notes to the Financial Statements

Note 6. Direct Loans and Loan Guarantees, Non-Federal Borrowers: (Cont.)

Total Amount of Direct Loans Disbursed (Post-1991)

Direct Loan Programs 2009 2008

(1) Railroad Rehabilitation Improvement Program $ 96,344 $ 70,027

(2) TIFIA Loans 317,164 1,079,316

 Total $ 413,508 $ 1,149,343

Subsidy Expense for Direct Loans by Program and Component

Subsidy Expense for New Direct Loans Disbursed

2009

Interest Fees and Other Other

Direct Loan Programs Differential Defaults Collections Subsidy Costs Total

(1) Railroad Rehabilitation Improvement Program $ - $ 2,297 $ (2,297) $ - $ -

(2) TIFIA Loans - 49,078

 Total $ - $ 51,375

2008

 -

$ (2,297)

 -

$ -

 

$ 

49,078

49,078

Interest Fees and Other Other

Direct Loan Programs Differential Defaults Collections Subsidy Costs Total

(1) Railroad Rehabilitation Improvement Program $ - $ - $ 1,409 $ - $ 1,409

(2) TIFIA Loans - 118,763

 Total $ - $ 118,763

 -

$ 1,409

 -

$ -

 

$ 

118,763

120,172

Modifications and Re-estimates

2009

Total Interest Rate Technical Total

Direct Loan Programs Modifications Re-estimates Re-estimates Re-estimates

(1) Railroad Rehabilitation Improvement Program $ - $ - $ 986 $ 986

(2) TIFIA Loans - -

 Total $ - $ -

 (111,685)

$ (110,699)

 (111,685)

$ (110,699)

2008

Total Interest Rate Technical Total

Direct Loan Programs Modifications Re-estimates

(1) Railroad Rehabilitation Improvement Program $ - $ -

Re-estimates

$ 13,801

Re-estimates

$ 13,801

(2) TIFIA Loans - -

 Total $ - $ -

 11,944

$ 25,745

 11,944

$ 25,745

Total Direct Loan Subsidy Expense

Direct Loan Programs 2009 2008

(1) Railroad Rehabilitation Improvement Program $ 986 $ 15,210

(2) TIFIA Loans (62,607) 130,707

 Total $ (61,621) $ 145,917

Budget Subsidy Rates for Direct Loans for the Current Year Cohort

2009

Interest Fees and Other

Direct Loan Programs Differential Defaults Collections Other Total

(1) Railroad Rehabilitation Improvement Program -1.28% 3.09% -1.81% 0.00% 0.00%

(2) TIFIA Loans 0.44% 10.06% 0.00% 0.00% 10.50%

 Total -0.84% 13.15% -1.81% 0.00% 10.50%

The subsidy rates disclosed pertain only to the current year's cohorts. These rates cannot be applied to the direct loans disbursed during the current 

reporting year to yield the subsidy expense. The subsidy expense for new loans reported in the current year could result from disbursements of loans 

from both current year cohorts and prior year(s) cohorts. The subsidy expense reported in the current year also includes modifications and reestimates.
Financial Report

287

Notes to the Financial Statements

Note 6. Direct Loans and Loan Guarantees, Non-Federal Borrowers: (Cont.)

Schedule for Reconciling Subsidy Cost Allowance Balances (Post-1991 Direct Loans)

 Beginning Balance, Changes, and Ending Balance 2009 2008

Beginning balance of the subsidy cost allowance $ 161,124 $ 30,109

Add: subsidy expense for direct loans disbursed during the reporting years by component:

 Default costs (net of recoveries) 51,375 118,763

 Fees and other collections (2,297) 1,409

 Total of the above subsidy expense components 49,078 120,172

Adjustments:

 Subsidy allowance amortization (8,301) (14,902)

 Other 2,297 

 

-

Ending balance of the subsidy cost allowance before reestimates 204,198 135,379

Add or subtract subsidy reestimates by component:

 Technical/default reestimate (110,699) 25,745

 Total of the above reestimate components (110,699) 25,745

Ending balance of the subsidy cost allowance $ 93,499 $ 161,124
288

Notes to the Financial Statements

Note 6. Direct Loans and Loan Guarantees, Non-Federal Borrowers: (Cont.)

Defaulted Guaranteed Loans from Post-1991 Guarantees

Value of

2009 Assets

Defaulted Related to

Guaranteed Default

Loans Guaranteed

Receivable, Interest Foreclosed Allowance Loans

Loan Guarantee Programs Gross Receivable Property for Subsidy Receivable, Net

(3) Federal Ship Financing Fund (Title XI) $ 68,945 $ 1,974 $ 28,110 $ (51,083) $ 47,946

Value of

2008 Assets

Defaulted Related to

Guaranteed Default

Loans Guaranteed

Receivable, Interest Foreclosed Allowance Loans

Loan Guarantee Programs Gross Receivable Property for Subsidy Receivable, Net

(3) Federal Ship Financing Fund (Title XI) $ 43,680 $ 600 $ - $ (5,320) $ 38,960

Guaranteed Loans Outstanding

Outstanding Principal

of Guaranteed Loans, Amount of Outstanding

Loan Guarantee Programs Face Value Principal Guaranteed

(3) Federal Ship Financing Fund (Title XI) $ 2,441,098 $ 2,441,098

(4) OST Minority Business Resource Center 3,500 2,625

 Total $ 2,444,598 $ 2,443,723

New Guaranteed Loans Disbursed 2009

Outstanding Principal

of Guaranteed Loans, Amount of Outstanding

Loan Guarantee Programs Face Value Principal Guaranteed

(3) Fed Ship Financing Fund (Title XI) $ 269,230 $ 269,230

(4) OST Minority Business Resource Center 3,150 2,362

 Total $ 272,380 $ 271,592

2008

Outstanding Principal

of Guaranteed Loans, Amount of Outstanding

Loan Guarantee Programs Face Value Principal Guaranteed

(4) OST Minority Business Resource Center $ 2,600 $ 1,950

 Total $ 2,600 $ 1,950

Liability for Loan Guarantees (Present Value Method Post-1991 Guarantees):

2009

Liabilities for 

Post-1991

Guarantees, 

Loan Guarantee Programs Present Value

(3) Federal Ship Financing Fund (Title XI) $ 310,593

(4) OST Minority Business Resource Center 117

 Total $ 310,710
Financial Report

289

Notes to the Financial Statements

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

2009

Interest Fees and Other 

Loan Guarantee Programs Supplements Defaults Collections Other Total

(3) Federal Ship Financing Fund (Title XI) $ - $ 31,257 $ ( 15,669) $ - $ 15,588 

(4) OST Minority Business Resource Center - 58 

 Total $ - $ 31,315 

 - 

$ ( 15,669)

 - 

$ - 

 

$ 

58 15,646 

2008

Interest Fees and Other 

Loan Guarantee Programs Supplements Defaults Collections Other Total

(3) Federal Ship Financing Fund (Title XI) $ - $ 38,599 $ (23,108) $ - $ 15,491 

(4) OST Minority Business Resource Center - 53 

 Total $ - $ 38,652

 - 

$ ( 23,108)

 -

$ - 

 

$ 

53 15,544 

Modifications and Re-estimates

2009

Total Interest Rate Technical Total

Loan Guarantee Programs Modifications Re-estimates

(3) Federal Ship Financing Fund (Title XI) $ - $ - 

Re-estimates

$ 51,761

Re-estimates

$ 51,761

(4) OST Minority Business Resource Center - - 

 Total $ - $ - 

 ( 65)

$ 51,696

 ( 65)

$ 51,696

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 - - 

 Total $ - $ - 

 ( 153)

$ (106,553)

 (153)

$ (106,553)

Total Loan Guarantee Subsidy Expense

Loan Guarantee Programs 2009 2008

(3) Federal Ship Financing Fund (Title XI) $ 67,349 $ ( 90,909)

(4) OST Minority Business Resource Center (7) ( 100)

 Total $ 67,342 $ ( 91,009)

Budget Subsidy Rates for Loan Guarantees for the Current Year Cohort

2009

Loan Guarantee Programs Interest Fees and Other

Supplements Defaults Collections Other Total

(3) Federal Ship Financing Fund (Title XI) 0.00% 11.14% -4.89% 0.00% 6.25%

(4) OST Minority Business Resource Center 0.00% 1.86% 0.00% 0.00% 1.86%

 Total 0.00% 13.00% -4.89% 0.00% 8.11%

The subsidy rates disclosed pertain only to the current year's cohorts. These rates cannot be applied to the guarantees of loans disbursed during the 

current reporting year to yield the subsidy expense. The subsidy expense for new loan guarantees reported in the current year could result from 

disbursements of loans from both current year cohorts and prior year(s) cohorts. The subsidy expense reported in the current year also includes 

modifications and re-estimates.
290

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 2009 2008

Beginning Balance of the loan guarantee liability $ 258,050 $ 336,626

Add: subsidy expense for guaranteed loans disbursed during the 

 reporting years by component: 

 Default costs (net of recoveries) 31,315 38,652

 Fees and other collections (15,669) (23,108)

 Other subsidy costs 

 Total of the above subsidy expense components

 

 

- -

15,646 15,544

Adjustments:

 Fees Received 16,541 -

 Foreclosed Property and Loans Acquired 9,875 -

 Claim Payments to Lenders (52,837) -

 Interest accumulation on the liability balance 13,752 11,910

 Other (2,013) 523

Ending balance of the loan guarantee liability before reestimates 259,014 364,603

Add or subtract subsidy reestimates by component:

 Technical/default reestimate 51,696 (106,553)

 Total of the above reestimate components 51,696 (106,553)

Ending balance of the loan guarantee liability $ 310,710 $ 258,050

Interest on the loans is accrued based on the terms of the loan agreement. DOT does not accrue interest on non-performing loans that have filed for

bankruptcy protection. DOT management considers administrative costs to be insignificant.

The upward reestimate on the Federal Ship Financing Fund (Title XI) was a result of significant the reassessment of risk levels on high risk loans.

The economic assumptions of the TIFIA upward and downward re-estimates were the result of a reassessment of risk levels as well as estimated

changes in future cash flows on loans. 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, 2009 will largely depend on future economic 

and market conditions and could differ from current estimates.

Notes to the Financial Statements
Financial Report

291

Notes to the Financial Statements

Note 7. Inventory and Related Property:

As of September 30, 2009

Allowance

Cost for Loss Net

Inventory:

 Inventory Held for Current Sale $ 96,485 (84) $ 96,401

 Excess, Obsolete and Unserviceable Inventory 4,984 (4,984) - 

 Inventory Held for Repair 493,356 (99,909) 393,447

 Raw Materials 23,410 (10,591) 12,819

Total Inventory

Operating Materials and Supplies:

$ 618,235 (115,568) $ 502,667

 Items Held for Use $ 184,334 (1,881) $ 182,453

 Items Held in Reserve for Future Use 90,797 (165) 90,632

 Excess, Obsolete and Unserviceable Items 411 (411) - 

 Items Held for Repair 40,764 (19,206) 21,558

Total Operating Materials & Supplies

Total Inventory and Related Property

$ 316,306 (21,663) $ 

$ 

294,643

797,310

As of September 30, 2008

Allowance

Cost for Loss Net

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

Operating Materials and Supplies:

$ 615,349 (126,510) $ 488,839

 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

Total Inventory and Related Property

$ 336,883 (23,354) $ 

$ 

313,529

802,368
292

Notes to the Financial Statements

Note 8. General Property, Plant and Equipment:

As of September 30, 2009

Service Acquisition

Major Classes Life Value

Accumulated

Depreciation Book Value

 Land and Improvements

 Buildings and Structures

 Furniture and Fixtures

 Equipment

 ADP Software

 Assets Under Capital Lease

 Leasehold Improvements

 Aircraft

 Ships and Vessels

 Small Boats

 Construction in Progress

 Property Not in Use

30

15-40

15-20

15-20

15-20

6-10

40

40

11-20

20

$ 

 

 

 

 

 

 

 

 

 

 

 

102,799

5,224,590

68,760

18,948,598

365,618

204,485

117,595

397,341

1,911,639

23, 032

2,849,639

176,282

$ (1,355)

 (2,813,668)

 (67,320)

 (10,580,619)

 (280,080)

 (96,036)

 (52,435)

 (328,503)

 (1,289,052)

 (291,554)

 -

 (150,153)

$ 

 

 

 

 

 

 

 

 

 

 

 

$ 

101,444

2,410,922

1,440

8,367,979

85,538

108,449

65,160

68,838

350,077

3,988

2,849,639

26,129

 Total $ 30,390,378 $ (15,950,775) 14,439,603

As of September 30, 2008

Major Classes

Service

Life 

Acquisition

Value

Accumulated

Depreciation Book Value

 Land and Improvements

 Buildings and Structures

 Furniture and Fixtures

 Equipment

 ADP Software

 Assets Under Capital Lease

 Leasehold Improvements

 Aircraft

 Ships and Vessels

 Small Boats

 Construction in Progress

 Property Not in Use

 Total

30

15-40

15-20

15-20

15-20

6-10

40

40

11-20

20

$ 

 

 

 

 

 

 

 

 

 

 

 

$ 

103,056

5,054,765

67,509

18,797,474

252,778

166,387

90,392

401,614

1,656,764

17,724

2,409,108

95,013

29,112,584

$ 

 

 

 

 

 

 

 

 

 

 

 

$ 

(1,084)

(2,665,384)

(65,050)

(9,843,868)

(208,227)

(125,137)

(43,519)

(314,282)

(1,241,137)

(15,180)

-

(77,148)

(14,600,016)

$ 

 

 

 

 

 

 

 

 

 

 

 

$ 

101,972

2,389,381

2,459

8,953,606

44,551

41,250

46,873

87,332

415,627

2,544

2,409,108

17,865

14,512,568
Financial Report

293

Note 9. Stewardship Property, Plant and Equipment:

Personal Property Heritage Assets

Real Property Heritage Assets

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" (The NRC method of preparing nuclear facilities for storage and 

decontamination) retention under the provisions of its NRC license.

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. 

Notes to the Financial Statements

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 longterm 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. The artifacts and other collections are removed from inventory when

returned to MARAD or destroyed while on loan. A total of 646 units of artifacts and other collections were collected

as of September 30, 2009 and 658 units were collected as of September 30, 2008. There were 12 additions and 24

withdrawals of artifacts and other collections through September 30, 2009. 

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. 
294

Notes to the Financial Statements

Note 10. Liabilities Not Covered by Budgetary Resources:

2009 2008

Intragovernmental:

 Other Liabilities $ 345,840 $ 364,516 

 Total Intragovernmental 

 Federal Employee Benefits Payable 

 345,840 364,516 

 975,442 984,710 

 Environmental and Disposal Liabilities (Note 13) 1,195,249 828,757 

 Other Liabilities 809,252 864,520 

 Total Liabilities Not Covered by Budgetary Resources 3,325,783 3,042,503 

 Total Liabilities Covered by Budgetary Resources 13,605,059 11,774,151 

 Total Liabilities $ 16,930,842 $ 14,816,654 
Financial Report

295

Notes to the Financial Statements

Note 11. Debt:

2008 2008 2008 2009 2009

Beginning Net Ending Net Ending

Intragovernmental Debt:

Balance Borrowing Balance Borrowing Balance

 Debt to the Treasury $ 1,038,303 $ 722,458 $ 1,760,761 $ 715,612 $ 2,476,373 

 Debt to the Federal Financing 

Total Intragovernmental Debt

Bank 2,458 (234) 2,224 (249) 1,975

$ 1,040,761 $ 722,224 $ 1,762,985 $ 715,363 $ 2,478,348 
296

Note 12. Federal Employee Benefits Payable:

2009 2008

 Intragovernmental Liability for FECA (Note 15) $ 227,241 $ 221,586

 Expected Future Liability for FECA 975,442 984,710

 Total Federal Employee Benefits Payable $ 1,202,683 $ 1,206,296

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 provided by future appropriations.

The intragovernmental amount is not an actuarial liability.

 

Notes to the Financial Statements
Financial Report

297

Note 13. Environmental and Disposal Liabilities:

September 30, 2009 September 30, 2008

Public:

 Environmental Remediation $ 737,421 $ 464,081

 Asset Disposal

 Total Public

 457,828

$ 1,195,249

 364,676

$ 828,757

Notes to the Financial Statements

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. Cost estimates for environmental cleanup and asset

disposal liabilities are not adjusted for inflation and are subject to revision as a result of changes in technology

and environmental laws and regulations.

As of September 30, 2009 and 2008, 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.

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. Residual fuel, asbestos, and solid polychlorinated

biphenyls (PCB) sometimes exist onboard MARAD's non-retention ships. The asset disposal liability at

September 30, 2009 includes the estimated cost of disposing 174 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.
298

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, 2009 and 2008 are summarized as 

follows:

2009 2008

Federal Highway Administration $ 4,240,468 $ 3,730,005

Federal Transit Administration 1,662,252 1,373,270

Federal Aviation Administration 775,734 642,041

Other 91,360 64,831

Total Grant Accrual $ 6,769,814 $ 5,810,147

Notes to the Financial Statements
Financial Report

299

Notes to the Financial Statements

Note 15. Other Liabilities:

September 30, 2009:

Non-Current Current Total

Intragovernmental: 

 Advances and Prepayments $ 2,293,739 $ 334,334 $ 2,628,073 

 Accrued Pay and Benefits 36,878 90,594 127,472 

 FECA Billings (Note 12) 129,994 97,247 227,241 

 Uncleared Disbursements and Collections - 156 156 

 Other Accrued Liabilities 37,123 72,917 110,040 

Total Intragovernmental $ 2,497,734 $ 595,248 $ 3,092,982 

Public:

 Other Accrued Unbilled Payments $ - $ 44,573 $ 44,573 

 Advances and Prepayments - 132,272 132,272 

 Accrued Pay and Benefits 109,053 729,507 838,560 

 Deferred Credits - 53,612 53,612 

 Uncleared Disbursements and Collections - 50 50 

 Legal Claims 10,004 41,374 51,378 

 Capital Leases 92,548 23,292 115,840 

 Other Custodial Liability - 32,028 32,028 

 Other Accrued Liabilities 80,989 2,269 83,258 

Total Public $ 292,594 $ 1,058,977 $ 1,351,571 

The $2.29 billion in the Non-Current Intragovernmental Advances and Prepayments for FY 2009 is

recorded by the Federal Transit Administration and is the remaining advance from the Federal Emergency

Management Agency (FEMA) for the construction of Lower Manhattan area in New York.
300

Notes to the Financial Statements

Note 15. Other Liabilities: (Cont.)

As of September 30, 2008:

Non-Current Current Total

Intragovernmental: 

 Advances and Prepayments $ 2,554,413 $ 232,447 $ 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 $ 2,772,957 $ 490,166 $ 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 

 
Financial Report

301

Note 16. Leases:

ENTITY AS LESSEE:

Capital Leases: 

2009 2008

 Summary of Assets Under Capital Lease by Category: 

 Land, Buildings & Machinery $ 204,485 $ 166,387 

 Accumulated Amortization (96,036) (125,137) 

 Net Assets Under Capital Lease $ 108,449 $ 41,250 

Future Payments Due:

Fiscal Year

Year 1 (2010) $ 15,769 

Year 2 (2011) 14,765 

Year 3 (2012) 11,586 

Year 4 (2013) 8,977

Year 5 (2014) 8,698

After 5 Years (2015+) 96,254 

Total Future Lease Payments $ 156,049 

Less: Imputed Interest 40,209 

Net Capital Lease Liability $ 115,840 

Operating Leases:

Future Payments Due:

Land, Buildings,

Machinery &

Fiscal Year Other

Year 1 (2010) $ 238,479 

Year 2 (2011) 222,117 

Year 3 (2012) 180,415 

Year 4 (2013) 131,378 

Year 5 (2014) 115,117 

After 5 Years (2015+) 662,950 

Total Future Lease Payments $ 1,550,456 

Notes to the Financial Statements

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 lease expense incurred during the years ended September 30, 2009 and 2008 was $297 million and 

$251 million, respectively, including General Services Administration (GSA) leases that have a short 

termination privilege; however, DOT intends to remain in the leases. Estimates of the lease termination dates 

are subjective, and any projection of future lease payments would be arbitrary.
302

Note 17. Commitments and Contingencies 

Legal Claims:

Grant Programs:

Contract Options and Negotiations:

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 of eligible costs for large and medium primary hub airports is 75 percent 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.

Notes to the Financial Statements

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, 2009 and

September 30, 2008, FTA had approximately $4.2 billion and $1.7 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, 2009 and

2008.

As of September 30, 2009 and 2008, FAA had contract options of $10.2 billion and $3.7 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.

As of September 30, 2009 and 2008, DOT's contingent liabilities, in excess of amounts accrued, for

asserted and pending legal claims reasonably possible of loss were estimated at $96.9 million and $88.2

million, respectively. DOT does not have material amounts of known unasserted claims.

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,

2009, FAA issued letters of intent covering FY 1988 through FY 2020 totaling $5.9 billion. As of

September 30, 2009, FAA had obligated $4.9 billion of this total amount leaving $1.0 billion unobligated.

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. 

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, 2009 and 2008, FHWA has pre-authorized $41 billion and $46.2 billion,

respectively, under these arrangements. These commitments have not been recognized in the DOT

consolidated financial statements at September 30, 2009 and 2008.
Financial Report

303

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. 

Contract Options and Negotiations:

Aviation Insurance Program:

As of September 30, 2009 and 2008, FAA had contract options of $10.2 billion and $3.7 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.

Program grant agreements. FAA records an obligation when a grant is awarded. Through September 30,

2009, FAA issued letters of intent covering FY 1988 through FY 2020 totaling $5.9 billion. As of

September 30, 2009, FAA had obligated $4.9 billion of this total amount leaving $1.0 billion unobligated.

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. 
304

Note 17. Commitments and Contingencies: (Cont.)

Aviation Insurance Program Continued:

Environmental Liabilities:

National Railroad Passenger Service Corporation (Amtrak)

The United States and the Department are not at risk if Amtrak fails and they do not guarantee the

indebtedness of Amtrak, whose debt is secured primarily by assets of the corporation. Amtrak has been

operating with an accumulated deficit and is dependent upon appropriations from Congress to continue

operations. Amtrak has been receiving federal funds from Congress through the Department since 1981.

For FY 2009 and FY 2008, the Department issued grants to Amtrak for $1.5 billion and $1.3 billion,

respectively. These grants were for both operating and capital improvements. Refer to Note 1X

(Significant Accounting Policies) for additional disclosure.

As of September 30, 2009, there are no pending aviation insurance claims. There is approximately $1.3

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.

As of September 30, 2009, FAA has estimated contingent liabilities, categorized as reasonably possible of

$202.2 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.

Notes to the Financial Statements

During FY 2009, FAA provided premium war-risk insurance to 63 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 36 carriers with 1,593 aircraft for Department of Defense

charter operations for Central Command and standby non-premium war-risk insurance policies for 6

carriers for State Department charter operations.
Financial Report

305

Note 18. Earmarked Funds: 

Highway Trust Fund

Airport and Airway Trust Fund

Funding currently comes from several aviation related excise tax collections from passenger 

tickets, passenger flight segments, international arrivals/departures, cargo waybills and aviation 

fuels. 

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. 

Notes to the Financial Statements

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. 

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, 2009 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:

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 August

2009 and September 2008, Congress appropriated $7 billion and $8 billion respectively for

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. 
306

Note 18. Earmarked Funds: (Cont.)

Mass Transit Account

Other Earmarked Funds

Aviation Insurance Revolving Fund

Alaska Pipeline Task Force, Oil Spill Liability Trust Fund

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. 

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. 

Safety of Cross-Border Trucking Between the United States and Mexico

The following is a list of other earmarked funds for which the DOT has program management

responsibility:

Payment to Air Carriers

Right of Way Revolving Fund Program Account

Cooperative Work, Forest Highways

Notes to the Financial Statements

Contributions for Highway Research Program

Pipeline Safety

Emergency Preparedness Grant

University Transportation Centers

Aviation User Fees

Essential Air Service and Rural Airport Improvement Fund

Equipment, Supplies, etc., for Cooperating Countries

Gifts and Bequests, Maritime Administration

Special Studies, Services and Projects

Gifts and Bequests, DOT Office of the Secretary

Right-of-Way Revolving Fund Trust Fund

Technical Assistance, United States Dollars Advanced from Foreign Governments
Financial Report

307

Notes to the Financial Statements

Note 18. Earmarked Funds: 

FY 2009

Highway Airport & Airway Mass Other Total

Trust Fund Trust Fund Transit Earmarked Funds Earmarked

Balance Sheet as of September 30, 2009

Assets

Fund Balance with Treasury $ 2,607,082 $ (204,227) $ 1,385,079 $ 3,084,552 $ 6,872,486

Investments, Net 11,484,437 7,829,468 - 1,370,576 20,684,481

Accounts Receivable, Net 46,311 - 6,949 3,966,432 4,019,692

Property, Plant & Equipment 121,162 - - 3,831 124,993

Other 383,634 46,290 957 3,591,674 4,022,555

 Total Assets $ 14,642,626 $ 7,671,531 $ 1,392,985 $ 12,017,065 $ 35,724,207

Liabilities and Net Position

Accounts Payable $ 130,897 $ 3,722,213 $ 401 $ 452,581 $ 4,306,092

FECA Liabilities 22,848 - - 1,112,446 1,135,294

Grants Accrual 4,501,677 - 113,714 683,946 5,299,337

Other Liabilities 253,467 - 2,824 982,574 1,238,865

Unexpended Appropriations - - 41,793 1,171,158 1,212,951

Cumulative Results of Operations

 Total Liabilities and Net Position

 9,733,737 3,899,318 1,234,253 7,614,360 22,481,668

$ 14,642,626 $ 7,621,531 $ 1,392,985 $ 12,017,065 $ 35,674,207

Statement of Net Cost For the Period

Ended September 30, 2009

Program Costs $ 44,758,237 $ 11,783,177 $ 747,099 $ 3,190,332 $ 60,478,845

Less Earned Revenue 92,806 - 5,332 531,178 629,316

Net Program Costs 44,665,431 11,783,177 741,767 2,659,154 59,849,529

Costs Not Attributable to Programs

Net Cost of Operations

Statement of Changes in Net Position

 - - - 137,700 137,700

$ 44,665,431 $ 11,783,177 $ 741,767 $ 2,796,854 $ 59,987,229

For the Period September 30, 2009

Beginning Net Position $ 12,435,464 $ 4,822,612 $ 2,017,018 $ 7,679,358 $ 26,954,452

Budgetary Financing Sources 42,150,918 10,859,883 795 3,821,301 56,832,897

Other Financing Sources (187,214) - - 81,713 (105,501)

Net Cost of Operations

Change in Net Position

Net Position End of Period

 44,665,431 11,783,177 741,767 2,796,854 59,987,229

 (2,701,727) (923,294) (740,972) 1,106,160 (3,259,833)

$ 9,733,737 $ 3,899,318 $ 1,276,046 $ 8,785,518 $ 23,694,619
308

Notes to the Financial Statements

Note 18. Earmarked Funds: (Cont.)

FY 2008

Highway Airport & Airway Mass Other Total

Trust Fund Trust Fund Transit Earmarked Funds Earmarked

Balance Sheet as 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 38,820 - - 3,918,375 3,957,195

Property, Plant & Equipment 112,119 - - 3,794 115,913

Other

 Total Assets

 

$ 

 380,932 - 777 2,579,181 2,960,890

 17,348,469 $ 8,594,919 $ 2,158,041 $ 10,839,953 $ 38,941,382

Liabilities and Net Position

Accounts Payable $ 51,774 $ 3,772,307 $ 2,039 $ 315,627 4,141,747

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 Appropriation - - 41,197 969,212 1,010,409

Cumulative Results of Operations

 Total Liabilities and Net Position

 12,435,464 4,822,612 1,975,821 6,710,146 25,944,043

$ 17,348,469 $ 8,594,919 $ 2,158,041 $ 10,839,953 $ 38,941,382

Statement of Net Cost For the Period

Ended September 31, 2008

Program Costs $ 43,416,975 $ 13,466,390 $ 1,322,007 $ 866,911 $ 59,072,283

Less Earned Revenue

Net Program Costs

 111,467 - (15,330) 558,714 654,851

 43,305,508 13,466,390 1,337,337 308,197 58,417,432

Costs Not Attributable to Programs

Net Cost of Operations

 - - - 147,952 147,952

$ 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 31, 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

Change in Net Position

Net Position End of Period

 43,305,508 13,466,390 1,337,337 456,149 58,565,384

 1,141,623 (1,224,174) (1,340,222) 611,275 (811,498)

$ 12,435,464 $ 4,822,612 $ 2,017,018 $ 7,679,358 $ 26,954,452
Financial Report

309

Notes to the Financial Statements

Note 19. Intragovernmental Costs and Exchange Revenues:

For the Period Ended September 30, 2009

Intra- With the 

governmental Public Total

Surface Transportation:

Federal-Aid Highway Program:

Gross Costs $ 105,064 $ 35,789,451 $ 35,894,515

Less Earned Revenue 32,448 39,807 72,255

Net Program Costs 72,616 35,749,644 35,822,260

Mass Transit Program

Gross Costs 36,332 11,585,418 11,621,750

Less Earned Revenue 269,677 920 270,597

Net Program Costs (233,345) 11,584,498 11,351,153

Other Surface Transportation Programs:

Gross Costs 265,763 10,338,808 10,604,571

Less Earned Revenue 21,332 158,998 180,330

Net Program Costs 244,431 10,179,810 10,424,241

Total Surface Transportation Program Costs 83,702 57,513,952 57,597,654

Air Transportation:

Gross Costs 2,440,109 14,428,796 16,868,905

Less Earned Revenue 244,329 335,654 579,983

Net Program Costs 2,195,780 14,093,142 16,288,922

Maritime Transportation:

Gross Costs 61,761 1,051,911 1,113,672

Less Earned Revenue 378,111 6,874 384,985

Net Program Costs (316,350) 1,045,037 728,687

Cross-Cutting Programs:

Gross Costs 39,448 608,877 648,325

Less Earned Revenue 316,241 4,876 321,117

Net Program Costs (276,793) 604,001 327,208

Costs not assigned to programs 85,041 281,000 366,041

Less: Earned Revenues not attributed to programs 15,640 (4,932) 10,708

Net Cost of Operations $ 1,755,740 $ 73,542,064 $ 75,297,804
310

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.

Notes to the Financial Statements

Note 19. Intragovernmental Costs and Exchange Revenues: (Cont.)

For the Period Ended September 30, 2008

Intra- With the 

governmental 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:

Gross Costs 2,251,497 13,662,170 15,913,667

Less Earned Revenue 27,663 353,883 381,546

Net Program Costs 2,223,834 13,308,287 15,532,121

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

Cost not assigned to a program 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

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.
Financial Report

311

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.

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

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.
312

Notes to the Financial Statements

Note 20. Excise Taxes and Other Non-Exchange Revenue:

The Internal Revenue Service (IRS) collects various excise taxes that are deposited in the HTF and AATF. 

Monthly, the United States Treasury, Office of Tax Analysis (OTA) estimates the amount collected/revenue 

recognized, and adjusts the estimates to reflect actual collections quarterly. The IRS submits certificates of 

actual tax collections to DOT three months after the quarter-end and, accordingly the DOT financial 

statements are adjusted to reflect such actual amounts at that time. Total taxes recognized for the year ended 

September 30, 2008 and 2007 includes OTA estimates as follows:

9/30/2008 9/30/2007

Actual 12,861,000 13,569,000 

Estimate 13,047,000 13,372,000 

 Under (Over) accrual (186,000) 197,000 

These differences were reflected as an adjustment in the DOT subsequent year's financial statements. During 

FY 2009, DOT continued to experience differences between its estimated and actual excise tax collections as 

follows:

 Quarter Ended

Actual

12/31/08

11,731,000

3/31/2009

10,801,000

6/30/2009

12,001,000

Estimate

 Under (Over) accrual

11,945,000

(214,000)

11,648,000

(847,000)

14,267,000

(2,266,000)

Excise taxes estimated by OTA in the 1st, 2nd and 3rd quarters of FY 2009 exceeded amounts subsequently 

certified as actual by the IRS by $214 million, $847 million and $2.2 billion, respectively. Total taxes 

recognized in DOT FY 2009 financial statement included the OTA estimate of $12.4 billion the for quarter 

ended September 30, 2009. 

The large downward adjustment for the 3rd quarter was the result of an inflated estimate distribution from 

Treasury. However, OTA modified its 4th quarter distribution calculation estimate of excise taxes for this 

matter. It is expected that this modification will minimize the variance between the 4th quarter FY 2009 

estimate and corresponding subsequent IRS certified amount, expected to be reported in January 2010.

For the years ended September 30, 2009 and 2008, respectively, excise taxes and associated nonexchange 

revenue, which are reported on the Statement of Changes in Net Position, were as follows:

Non-Exchange Revenue:

Highway Trust Fund

Excise Taxes and Other Non-Exchange Revenue 2009 2008

 Gasoline $ 24,626,848 $ 25,325,646 

 Diesel and Special Motor Fuels 9,323,118 10,531,919 

 Trucks 3,166,825 2,870,560 

 Fines and Penalties 25,586 17,989 

 Total Taxes 37,142,377 38,746,114 

 Less: Transfers (1,135,367) (1,305,069)

 Gross Taxes 36,007,010 37,441,045 

 Less: Refunds of Taxes (1,045,767) (1,056,512)

 Total Excise Taxes 34,961,243 36,384,533 

 Other Non-Exchange Revenue

Net Highway Trust Fund Excise Taxes & Other 

 1,151 2,628 

 Non-Exchange Revenue

Federal Aviation Administration

 34,962,394 36,387,161 

Excise Taxes and Other Non-Exchange Revenue:

 Passenger Ticket 7,465,647 8,260,611 

 International Departure 2,187,182 2,462,375 

 Fuel (Air) 556,570 624,493 

 Waybill 469,881 521,040 

 Investment Income 281,994 429,572 

 Tax Refunds and Credits (110,034) (55,957)

 Other 34,532 36,626 

Net Federal Aviation Administration Excise Taxes & Other 

 Non-Exchange Revenue 10,885,772 12,278,760 

Other Miscellaneous Net Non Exchange Revenue 31,505 18,429 

Total Non-Exchange Revenue $ 45,879,671 $ 48,684,350 
Financial Report

313

Notes to the Financial Statements

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: 

2009 2008

Direct Reimbursable Total Direct Reimbursable Total

 Category A $ 8,185,100 $ 992,716 $ 9,177,816 $ 9,147,943 $ 1,009,893 $ 10,157,836

 Category B 107,055,097 1,110,483 108,165,580 76,467,131 727,083 77,194,214

 Exempt from apportionment 43,075 - 43,075 87,419 230,904 318,323

 Total $ 115,283,272 $ 2,103,199 $ 117,386,471 $ 85,702,493 $ 1,967,880 $ 87,670,373

2009 2008

Available Contract Authority at year-end $ 28,959,336 $ 26,974,765

Available Borrowing Authority at year-end $ 335,573 $ 207,985

Undelivered Orders at year-end $ 101,592,347 $ 75,032,596

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.

Unobligated Budgetary Resources:

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.

Statement of Budgetary Resources vs Budget of the United States Government:

The reconciliation for the year ended September 30, 2008 is presented below. The reconciliation for the fiscal year ended September 30, 2009 is not presented, 

because the submission of the Budget of the United States (Budget) for FY 2011, which presents the execution of the FY 2009 budget, occurs after publication of 

these financial statements. The Department of Transportation Budget Appendix can be found on the OMB website (http://www.gpoaccess.gov/usbudget) and 

will be available in early February 2010.

 (Dollars in millions)

Distributed 

Budgetary Obligations Offsetting 

Resources Incurred Receipts Ne

$ 

t Outlays

Combined Statement of Budgetary Resources $ 133,717 $ 87,670 $ (326) 73,865

Funds not Reported in the Budget

 Expired Funds (381) (105) - -

 Recoveries of prior year obligations (12) - - -

 Expenditure transfers from trust funds 19 - - -

 Recovered subsidy costs (14)

 Actual FY 09 recoveries (3)

 Future capital improvements (15)

 Returned to Treasury general fund 3 - - -

 Distributed Offsetting Receipts - - 326 281

Other

Budget of the United States Government

Other differences represent financial statement a

Statement of Budgetary Resources and the Budget of the United States.

 (9) (17) -

$ 133,305 $ 87,548 $ -

djustments, timing differences and other immaterial differ

 37

74,183

etween amounts reported in the Department s '

$ 

ences b
314

Notes to the Financial Statements

Note 22. Incidental Custodial Collections:

Revenue Activity:

Sources of Cash Collections: 2009 2008

 Miscellaneous Receipts $ 26,184 $ 32,061 

 Fines, Penalties and Forfeitures 6,136 17,873 

Total Cash Collections 32,320 49,934 

Total Custodial Revenue 32,320 49,934

Disposition of Collections:

 Transferred to Treasury's General Fund

Net Custodial Activity

 

$ 

32,320 49,934

 - $ -
Financial Report

315

Notes to the Financial Statement

Note 23. Reconciliation of Net Cost of Operations to Budget:

s

2009 2008

Resources Used to Finance Activities:

 Budgetary Resources Obligated

 Obligations Incurred $ 117,386,471 $ 87,670,373 

Less: Spending Authority from Offsetting Collections and 

Recoveries 8,731,311 10,075,399

 Obligations Net of Offsetting Collections and Recoveries 108,655,160 77,594,974

 Less: Distributed Offsetting Receipts (228,339) (325,679)

 77,269,295

 20,847

 642,148

 (1,873)

 661,122

 77,930,417

 3,137,262

 259,382

 (513,984)

 (126,464)

 2,569,811

 7,984,827

 Net Obligations 108,426,821

 Other Resources

 Transfers In/Out Without Reimbursement 

 Imputed Financing From Costs Absorbed by Others

 Other 

 (153,631) 

 756,225

 (168,523) 

 Net Other Resources Used to Finance Activities

Total Resources Used to Finance Activities

 434,071

 108,860,892

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

 Resources That Fund Expenses Recognized in Prior Periods

Credit Program Collections That Increase Liabilities for Loan 

Guarantees or Allowances for Subsidy

Other/Change in Unfilled Customer Orders

Resources That Finance the Acquisition of Assets

Other Resources or Adjustments to Net Obligated Resources 

That Do Not Affect Net Cost of Operations

Total Resources Used to Finance Items Not Part of the Net Cost 

 26,709,777

 238,485

 (209,856) 

 (75,777) 

 1,712,741

 6,999,368

Of Operations 35,374,738 13,310,834

Total Resources Used to Finance the Net Cost of Operations $ 73,486,154 $ 64,619,583 
316

Notes to the Financial Statements

Note 23. Reconciliation of Net Cost of Operations to Budget: (Cont.)

2009 2008

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 $ 14,084 $ 45,281

 Increase in Environment and Disposal Liability 366,360

Upward/Downward Reestimates of Credit Subsidy Expense (58,536) 98,889

 Increase in exchange revenue receivable from the public (23,370) (1,600)

 Change in Other Liabilities 56,513 210,361

Total Components of Net Cost of Operations That Will Require or 

Generate Resources in Future Periods 355,051 352,931

Components Not Requiring or Generating Resources:

 Depreciation and Amortization 1,209,740 1,213,539

 Revaluation of Assets or Liabilities 12,924 21,850

Other Expenses and Adjustments not Otherwise Classified 

Above 233,935 62,560

Total Components of Net Cost of Operations That Will Not 

Require or Generate Resources 1,456,599 1,297,949

Total Components of Net Cost of Operations That Will Not 

Require or Generate Resources in the Current Period 

Net Cost of Operations $ 

 1,811,650 1,650,880

 75,297,804 $ 66,270,463 
Financial Report

317

Notes to the Financial Statements

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:

2009 2008

Cash and Short-Term Time Deposits $ 28,529 $ 16,176

Long-Term Time Deposits 1,271 2,153

Accounts Receivable 113 108

Inventories 267 266

Other Current Assets 27 1

Property, Plant and Equipment 73,533 73,181

Deferred Charges 3,457 3,705

Other Assets 622 605

Total Assets $ 107,819 $ 96,195

Current Liabilities $ 3,465 $ 2,790

Actuarial Liabilities 3,457 3,705

Total Liabilities 6,922 6,495

Invested Capital

Cumulative Results of Operations

 

 

 88,661

 12,236

 

 

 88,219

 1,481

Total Net Position 100,897 89,700

Total Liabilities and Net Position $ 107,819 $ 96,195

Operating Revenues $ 30,639 $ 17,993

Operating Expenses 22,652 19,169

Operating Income (loss) 7,987 (1,176)

Other Financing Sources

Operating revenues and other financing sources over 

 2,768 2,890

(under) operating expenses 10,755 1,714

Beginning cumulative results of operations (deficit)

Ending cumulative results of operations

 1,481 (233)

$ 12,236 $ 1,481

MARAD Non-Appropriated Fund Instrumentality (NAFI)

The Non-Appropriated Fund Instrumentality (NAFI) operate using their own funds generated

from the proceeds received from various non-governmental sources, rather than appropriated

funds. At DOT, NAFI's operate 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 cash balances and operating expenses are separate

and distinct from those recorded in the books of the Federal Government. For the fiscal years

September 30, 2009 and September 30, 2008, NAFI operating revenues and proceeds from

midshipmen fees totaled $13 million and $18 million respectively.
318

Notes to the Financial Statements

Note 25. Fiduciary Activities

The Title XI Escrow Fund was authorized pursuant to the Merchant Marine 

Act of 1936, as amended. The fund was originally established to hold 

guaranteed loan proceeds pending construction of MARAD approved and 

financed vessels.

The Act was recently amended to allow the deposit of additional cash 

security items such as reserve funds or debt reserve funds. Individual 

shipowners provide funds to serve as security on MARAD guaranteed 

loans. Funds deposited and invested by MARAD remain the property of 

individual shipowners. In the event of default, MARAD will use the 

escrow funds to offset the shipowners' debt to the Government.

Fund investments are limited to U.S. Government securities purchased by 

MARAD through the Treasury.

Fiduciary Net Assets

As of September 30, 2009

Fiduciary Assets

Fiduciary Fund Balance with Treasury $ 75

Investments in Treasury Securities 141,681

Fiduciary Liabilities

Less: Liabilities 141,756

Total Fiduciary Net Assets

There are no inflows and outflows of fiduciary activity. 

 -
Financial Report

319

required supplementary information
320

Deferred Maintenance:

2009 2008

 DOT Asset Cost to Return to Cost to Return to

Entity Major Class of Asset Method of Measurement Condition* Acceptable Condition** Acceptable Condition**

FAA Buildings Condition Assessment 4 & 5 $ 111,298 $ 116,785

 Survey

Other Structures and Condition Assessment 4 & 5 151,000 124,828

 Facilities Survey

MARAD Vessels, Ready Reserve Condition Assessment 2 6,285 4,511

 Force (Various Locations) Survey

Real Property, Buildings Condition Assessment 2 40 40

(Anchorage) Survey

Other (Fleet Craft) Condition Assessment 2&3 350 350

 Survey

Other (Pier and Berthing Estimate 2 35 35

Surveys and Studies)

Other (Heritage Assets) Condition Assessment 3&4

Total

 200

$ 269,208

 200

$ 246,749

*Asset Condition Rating Scale: **Acceptable Condition is:

 1 - Excellent FAA Buildings 3 - Fair 

 2 - Good FAA Other Structures and Facilities 3 - Fair 

 3 - Fair MARAD Vessels, Ready Reserve 1 - Excellent - Ships are seaworthy and ready for 

 4 - Poor Force mission assignments within prescribed time

 5 - Very Poor 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 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.
Financial Report

321

U.S. Department of Transportation

Required Supplementary Information 

Combining Statements of Budgetary Resources By Major Account

For the Year Ended September 30, 2009

(Dollars in Thousands)

Budgetary Resources:

Unobligated balance, brought forward, October 1 $ 

Federal-Aid FAA FTA MARAD All Other TOTAL

 35,439,498 $ 2,822,280 $ 4,456,802 $ 499,971 $ 2,828,632 $ 46,047,183

Recoveries of prior year unpaid obligations - 385,377 37,871 59,833 242,747 725,828

Budget authority:

 Appropriations received 41,440,266 16,830,694 19,040,663 599,202 50,231,514 128,142,339

 Borrowing authority - - - 209,000 1,349,169 1,558,169

 Contract authority 43,186,476 3,900,000 8,360,565 - 1,270,000 56,717,041

 Spending authority from offsetting collections

 Earned

 Collected 86,112 829,788 280,061 494,245 947,633 2,637,839

 Change in receivables from Federal sources 1,573 70,202 3,228 (21,834) (41,444) 11,725

 Change in unfilled customer orders

 Advance received 7,667 66,512 (260,677) 45,174 116,191 (25,133)

 Without advance from Federal sources 76,146 (39,911) (18,828) 30,188 49,137 96,732

 Expenditure transfers from trust funds

 Subtotal

 

 

 - 

 

 5,238,005

 26,895,290

 25 

 

 15,956

 1,371,931

 

 

 

 

 30,334

53,952,534

 

 

 

 5,284,320

 194,423,032

 2,003,700

 84,798,240 27,405,037

Nonexpenditure transfers, net (977,819) (46,300) 1,265,065 - 1,762,754

Temporarily not available pursuant to Public Law - (2,251) (2,251)

Permanently not available (53,342,158) (3,744,234) (8,770,000) (234,066) (1,462,742) (67,553,200)

Total budgetary resources $ 65,917,761 $ 26,312,413 $ 24,394,775 $ 1,697,669 $ 57,321,674 $ 175,644,292

Status of Budgetary Resources:

Obligations incurred: 

 Direct $ 40,049,960 $ 21,971,269 $ 15,420,778 $ 787,413 $ 37,053,852 $ 115,283,272

 Reimbursable 48,640 743,001 20,525 367,068 923,965 2,103,199

 Subtotal 40,098,600 22,714,270 15,441,303 1,154,481 37,977,817 117,386,471

Unobligated balance:

 Apportioned 19,186,099 1,707,455 8,946,604 247,783 18,933,612 49,021,554

 Exempt from apportionment - - - 2,027 274,347 276,374

 Subtotal 19,186,099 1,707,455 8,946,604 249,810 19,207,959 49,297,928

Unobligated balance not available 6,633,062 1,890,688 6,868 293,378 135,898 8,959,894

Total status of budgetary resources $ 65,917,761 $ 26,312,413 $ 24,394,775 $ 1,697,669 $ 57,321,674 $ 175,644,292
322

U.S. Department of Transportation

Required Supplementary Information 

Combining Statements of Budgetary Resources By Major Account

For the Year Ended September 30, 2009

(Dollars in Thousands)

Change in Obligated Balances: Federal-Aid FAA FTA MARAD All Other TOTAL

Obligated balance, net:

 Unpaid obligations, brought forward, October 1 $ 48,973,366 8,904,431 18,025,560 369,343 5,652,680 $ 81,925,380

 Uncollected customer payments from Federal sources,

 brought forward, October 1 (438,541) (432,888) (100,351) (144,756) (497,368) (1,613,904)

 Total unpaid obligated balance, net 48,534,825 8,471,543 17,925,209 224,587 5,155,312 80,311,476

Obligations incurred 40,098,600 22,714,270 15,441,303 1,154,481 37,977,817 117,386,471

Gross outlays (36,440,893) (21,553,160) (11,370,605) (1,061,789) (18,578,212) (89,004,659)

Unpaid obligations - - - - 25,000 25,000

Recoveries of prior year unpaid obligations, actual - (385,377) (37,871) (59,833) (242,747) (725,828)

Change in uncollected customer payments from Federal sources (77,718) (30,291) 15,601 (8,354) (15,084) (115,846)

Obligated balance, net, end of period:

 Unpaid obligations 52,631,073 9,680,164 22,058,387 402,202 24,834,538 109,606,364

 Uncollected customer payments from Federal sources (516,259) (463,179) (84,750) (153,110) (512,452) (1,729,750)

 Total unpaid obligated balance, net, end of period $ 52,114,814 $ 9,216,985 $ 21,973,637 $ 249,092 $ 24,322,086 $ 107,876,614

Net Outlays:

Net Outlays

 Gross Outlays $ 36,440,893 $ 21,553,160 $ 11,370,605 $ 1,061,789 18,578,212 $ 89,004,659

 Offsetting collections (93,779) (6,134,305) (19,409) (555,375) (1,092,441) (7,895,309)

 Distributed offsetting receipts - (49,703) (568) (39,806) (138,262) (228,339)

 Net outlays $ 36,347,114 $ 15,369,152 $ 11,350,628 $ 466,608 $ 17,347,509 $ 80,881,011
Financial Report

323

U.S. Department of Transportation

Required Supplementary Information 

Combining Statements of Budgetary Resources By Major Account

For the Year Ended September 30, 2008

(Dollars in Thousands)

Budgetary Resources: Federal-Aid FAA FTA MARAD All Other TOTAL

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
324

U.S. Department of Transportation

Required Supplementary Information 

Combining Statements of Budgetary Resources By Major Account

For the Year Ended September 30, 2008

(Dollars in Thousands)

Change in Obligated Balances: Federal-Aid FAA FTA MARAD All Other TOTAL

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
Financial Report

325

required supplementary

stewardship information
326

Surface Transportation:

Federal Highway Administration 

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

 Federal Aid Highways (HTF) $ 29,750,120 $ 32,190,231 $ 32,800,748 $ 34,470,595 $ 37,618,049 

 Other Highway Trust Fund Programs 445,083 452,022 366,672 481,762 136,002 

 General Fund Programs 330,790 14,240 51,119 31,740 3,228,008 

 Appalachian Development System 425,810 366,816 329,161 185,316 321,480 

 Federal Motor Carrier 195,740 117,004 196,967 144,455 837 

 Total Federal Highway Administration 

Federal Transit Administration

 31,147,543 33,140,313 33,744,667 35,313,868 41,304,376 

 Discretionary Grants $ 119,277 $ 91,961 $ 11,719 $ 27,174 $ 16,424 

 Formula Grants 4,521,288 3,376,068 2,086,876 1,329,811 743,604 

 Capital Investment Grants 3,375,206 3,073,294 2,662,845 2,473,141 2,175,758 

 Washington Metro Area Transit Authority 1,719 4,255 28,430 46 33 

 Interstate Transfer Grants 1,411 206 1,774 360 316 

 Formula and Bus Grants - 1,862,772 4,193,989 5,968,651 

 

7,264,278 

 Total Federal Transit Administration 8,018,901 8,408,556 8,985,633 9,799,183 10,200,413

Total Surface Transportation Nonfederal

 Physical Property Investments $ 39,166,444 $ 41,548,869 $ 42,730,300 $ 45,113,051 $ 51,504,789 

NON-FEDERAL PHYSICAL PROPERTY

ANNUAL STEWARDSHIP INFORMATION, September 30, 2009

TRANSPORTATION INVESTMENTS

(Dollars in thousands)
Financial Report

327

NON-FEDERAL PHYSICAL PROPERTY

ANNUAL STEWARDSHIP INFORMATION, September 30, 2009

TRANSPORTATION INVESTMENTS

(Dollars in thousands)

Air Transportation: FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Federal Aviation Administration

Airport Improvement Program $ 3,712,423 $ 3,852,141 $ 3,923,719 $ 3,753,840 $ 4,034,970 

Total Air Transportation Nonfederal 

 Physical Property Investments $ 3,712,423 $ 3,852,141 $ 3,923,719 $ 3,753,840 $ 4,034,970 

Total Nonfederal Physical Property

 Investments $ 42,878,867 $ 45,401,010 $ 46,654,019 $ 48,866,891 $ 55,539,759 

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 nonurban 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. 
328

Surface Transportation: FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Federal Highway Administration 

 National Highway Institute Training $ 11,844 $ 14,123 $ 4,083 $ 1,205 $ 375

Federal Motor Carrier Safety Administration 

 California Highway Patrol 41 - 127 722

 Safety Grants - - 748 426 1,230

 Idaho Video 208 - - 302 399

 Kentucky IT Conference - 175 - - - 

 Massachusetts Training Academy 53 - 172 - - 

 Minnesota Crash Investigation - 1 - - - 

 New York Crash Reconstruction - - 36 180 - 

 Tennessee Crash Investigation - - 165 167 - 

Federal Transit Administration

(1) National Transit Institute Training 3,318 3,961 3,879 4,577 3,440

 - - 

National Highway Safety Administration 

 Section 403 Highway Safety Programs 110,981 221,523 235,382 162,038 143,639

 Highway Traffic Safety Grants 216,702 279,244 416,241 485,721 566,790

HUMAN CAPITAL INVESTMENT EXPENSES

 ANNUAL STEWARDSHIP INFORMATION, SEPTEMBER 30, 2009

(Dollars in thousands)
Financial Report

329

Pipeline and Hazardous Materials Safety

 Administration

 Hazardous Materials (Hazmat) Training

Total Surface Transportation Human

 8,065 7,800 7,798 13,263 13,263

 Capital Investments 351,212 526,827 668,631 668,601 729,136

Maritime Transportation: FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Maritime Administration

(1) State Maritime Academies Training 9,215 7,528 8,978 9,406 11,041

 Additional Maritime Training

Total Maritime Transportation Human

 328 134 555 800 1,751

 Capital Investments

Total Human Capital Investments 

 9,543

$ 360,755

 7,662

$ 534,489

 9,533

$ 678,164

 10,206

$ 678,807

 

$ 

 12,792

 741,928

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.
330

(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).

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.

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. 
Financial Report

331

RESEARCH AND DEVELOPMENT INVESTMENTS

ANNUAL STEWARDSHIP INFORMATION, SEPTEMBER 30, 2009

 (Dollars in thousands)

Surface Transportation: FY 2005 FY 2006 FY 2007

Federal Highway Administration 

FY 2008 FY 2009

 Intelligent Transportation Systems $ 183,634 $ 129,219 $ 152,799 $ 128,931 $ 111,219 

 Other Applied Research and Development 114,315 105,336 74,942 63,906 28,259 

Federal Railroad Administration 

 Railroad Research and Development Program $ 6,032 $ 11,681 $ 5,551 $ 3,049 $ 3,349 

Federal Transit Administration

Applied Research and Development

 Transit Planning and Research $ 2,546 $ 6,543 $ 3,144 $ 6,076 $ 6,914 

Pipeline and Hazardous Materials Safety Administration

Applied Research and Development

 Development Research and Development Pipeline Safety

 Applied Research and Development Pipeline Safety $ 10,810 $ 12,953 $ 5,494 $ 12,762 $ 9,198 

 Applied Research and Development Hazardous Materials 1,638 2,225 1,072 1,084 1,593 
332

Research and Innovative Technology Administration

Applied Research and Development

 Research and Technology $ 1,564 $ 1,110 $ 1,036 $ 1,036 $ 1,936 

Total Surface Transportation Research and 

 Development Investments $ 320,539 $ 269,067 $ 244,038 $ 216,844 $ 162,468

Air Transportation: 

Federal Aviation Administration

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

 Research and Development Plant $ 5,287 $ 3,821 $ 4,217 $ 3,498 $ 3,381 

 Applied Research 103,659 106,390 102,782 88,114 95,764 

 Development 547 587 844 814 1,102 

 Administration 29,163 30,566 32,050 33,519 35,055 

Total Air Transportation Research and

 Development Investments $ 138,656 $ 141,364 $ 139,893 $ 125,945 $ 135,302

Total Research and Development 

 Investments $ 459,195 $ 410,431 $ 383,931 $ 342,789 $ 297,770

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.
Financial Report

333

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 Federal Transit Administration supports research and development in the following program areas: 

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 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.

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.
Intentionally Left Blank
Other Accompanying 

Information
Intentionally Left Blank
Other Accompanying Information

337

Performance Data Completeness 

and Reliability Details

The Performance and Accountability Report includes performance measures to monitor DOT’s progress towards achieving it’s strategic goals. Some information about the 

performance measures are provided within the Performance Report Section of this document however the Performance Data Completeness and Reliability Details is provided 

online at: www.dot.gov

The Performance Data Completeness and Reliability Details 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
338

summary of financial statement audit and

management assurances
Other Accompanying Information

339

Table 1. Summary of Financial Statement Audit

Beginning 

Balance New Resolved Consolidated Reassessed Ending Balance

0 0

0 0 0 0 0 0

Table 2. Summary of Management Assurances

Beginning 

Balance New Resolved Consolidated Reassessed Ending Balance

0 0

Beginning 

Balance New Resolved Consolidated Reassessed Ending Balance

√ √ 0

1 1 0

Beginning 

Balance New Resolved Consolidated Reassessed Ending Balance

0 0

Yes

Yes

Yes

2. Accounting Standards

3. USSGL at Transaction Level

Overall Substantial Compliance

Yes

Yes Yes

Agency Auditor

Yes

Non-Conformances

Total Non-Conformances

Conformance with Federal Financial Management Improvement Act (FFMIA)

1. System Requirements Yes

Material Weaknesses

FISMA Noncompliance

Total Material Weaknesses

Conformance with Financial Management System Requirements (FMFIA, Section 4)

Statement of Assurance Unqualified

Total Material Weaknesses

Effectiveness of Internal Control over Operations (FMFIA, Section 2)

Statement of Assurance Unqualified

Effectiveness of Internal Control over Financial Reporting (FMFIA, Section 2)

Statement of Assurance Unqualified

Material Weaknesses

Total

Material Weaknesses

None

Summary of Financial Statement Audit

Audit Opinion Unqualified

Restatement No
340

inspector general's fy 2008 top

management challenges
Other Accompanying Information

341

TOP MANAGEMENT CHALLENGES 

Department of Transportation 

Report Number: PT-2010-008

Date Issued: November 16, 2009 
342

U.S. Department of

Memorandum

Transportation

Office of the Secretary

of Transportation

Office of Inspector General

Subject: INFORMATION: DOT’s Fiscal Year 2010 

Top Management Challenges 

Report Number PT-2010-008 

Date: November 16, 2009 

From: Calvin L. Scovel III 

Inspector General 

Reply to 

Attn. of: J-1 

To: The Secretary 

Deputy Secretary

We have identified the Department of Transportation’s (DOT) top management 

challenges for fiscal year 2010. The Nation’s economy and the quality of life for 

all Americans rely heavily on a safe and vital transportation system. The 

Department spends about $70 billion annually on a wide range of programs and 

initiatives to meet this objective, and we continue to support its efforts through our 

audits and investigations. 

Improving transportation safety remains the Department’s overarching goal. The 

Department, the Administration, and Congress continue to face significant 

challenges in achieving this goal—challenges that will require difficult decisions. 

Longstanding concerns we have identified that demand ongoing attention include 

relieving highway and air traffic congestion, financing the Highway Trust Fund, 

and addressing the Nation’s aging surface infrastructure. At the same time, the 

Department must address new OIG concerns, such as starting up an intercity highspeed rail system and ensuring that the Department has a sufficient acquisition 

workforce with the skills needed to oversee contracts. We have begun to build a 

body of work to help the Department effectively manage these and other emerging 

issues. 

The Department’s challenges are further exacerbated by budget constraints, 

uncertain financial markets, fluctuating fuel prices, and an increasing reliance on 

contractors. While the American Recovery and Reinvestment Act in February 

2009 aimed to stimulate the economy, it also created new challenges for the 

Department in overseeing the rapid disbursement of billions of dollars to address 

the Nation’s transportation concerns. We recognize the commitment of the 

Secretary and his staff to the success of DOT’s recovery initiatives. DOT has 

been proactive on several fronts, including establishing the Transportation 
Other Accompanying Information

343

ii

Investment Generating Economic Recovery (TIGER) team to coordinate DOT’s 

role in the recovery program, ensure accountability, and develop a risk 

management and financial reporting plan. 

There are important opportunities for the Department to set priorities; establish 

sound management policies, practices, procedures; and thereby maximize its 

return on transportation investments. Strong leadership and careful stewardship of 

taxpayer dollars are essential for successfully addressing the top challenges facing 

the Department. 

Several criteria were considered in identifying the following ten challenges, 

including their impact on safety, documented vulnerabilities, large dollar 

implications, and the ability of the Department to effect change in these areas: 

• Maximizing the Department’s Economic Recovery Investments 

• Enhancing Surface Safety Programs to Reduce Injuries and Fatalities While 

Defining a New Federal Role in Transit Safety 

• Maximizing Federal Surface Infrastructure Investments by Helping States 

Better Allocate Resources and Providing Effective Oversight 

• Addressing Human Factors and Strengthening the Regulatory and Oversight 

Framework for Aviation Safety 

• Moving Toward the Next Generation Air Transportation System and 

Improving Performance of the National Airspace System 

• Improving Contract Management and Oversight 

• Enhancing the Ability to Combat Cyber Attacks and Improving the 

Governance of Information Technology Resources 

• Developing a Funding Framework for the Next Surface Transportation 

Reauthorization 

• Strengthening the Department’s Acquisition Workforce 

• Successfully Implementing the Newly Created Multi-Billion Dollar HighSpeed Intercity Passenger Rail Program 

We remain committed to keeping decision makers informed of longstanding as 

well as emerging problems identified through our audits and investigations so that 

timely corrective actions can be taken. 

This report and the Department’s response will be included in the Department’s 

Performance and Accountability Report, as required by law. The Department’s 

response can be found in the appendix. 
344

iii

If you have any questions concerning this report, please contact me at (202) 

366-1959. You may also contact Ann Calvaresi Barr, Principal Assistant 

Inspector General for Auditing and Evaluation, at (202) 366-1427. 

# 
Other Accompanying Information

345

 _______________________________________________________________________ 

Table of Contents 

1. Maximizing the Department’s Economic Recovery Investments ................................ 1 

2. Enhancing Surface Safety Programs to Reduce Injuries and Fatalities 

 While Defining a New Federal Role in Transit Safety ................................................. 6 

3. Maximizing Federal Surface Infrastructure Investments by Helping 

 States Better Allocate Resources and Providing Effective Oversight ........................ 12 

4. Addressing Human Factors and Strengthening the Regulatory and 

 Oversight Framework for Aviation Safety ................................................................. 16 

5. Moving Toward the Next Generation Air Transportation System 

 and Improving Performance of the National Airspace System ................................. 21 

6. Improving Contract Management and Oversight ....................................................... 27 

7. Enhancing the Ability to Combat Cyber Attacks and Improving 

 the Governance of Information Technology Resources ............................................ 33 

8. Developing a Funding Framework for the Next Surface 

 Transportation Reauthorization .................................................................................. 40 

9. Strengthening the Department’s Acquisition Workforce ........................................... 45 

10. Successfully Implementing the Newly Created Multi-Billion Dollar 

 High-Speed Intercity Passenger Rail Program ........................................................... 51 

Exhibit. Comparison of FY 2010 and FY 2009 Top Management Challenges................ 55 

Appendix. Department Response...................................................................................... 56 
346

CHAPTER 1

Maximizing the Department’s 

Economic Recovery Investments 

2010 Top Management Challenges, Department of Transportation 1 

Source: Minnesota 2020, used with permission

I n February 2009, Congress passed and the President signed the American Recovery and 

Reinvestment Act1 in an effort to jumpstart the economy, create or save jobs, and put a 

down payment on addressing transportation needs across the country. In the 8 months 

since ARRA’s passage, DOT has obligated $29.6 billion—62 percent of its total $48.1 billion

Recovery Act funds—on nearly 9,476 highway, road, bridge, transit, and rail projects

nationwide. With much at stake, ARRA calls for unprecedented levels of transparency and 

accountability to know how, when, and where tax dollars are being spent. DOT took steps 

to enhance oversight of its ARRA funding, including establishing the DOT-wide 

Transportation Investment Generating Economic Recovery (TIGER) team to coordinate the 

Department’s role in the recovery program, ensure accountability, and develop a risk 

management and financial reporting plan. While proactive steps like these are important, 

DOT still faces several key challenges in meeting ARRA’s goals and requirements going 

forward.

 

1 Pub. L. No. 111-5, February 17, 2009. 
Other Accompanying Information

347

CHAPTER 1

Maximizing the Department’s Economic Recovery 

Investments

2010 Top Management Challenges, Department of Transportation 2

Key Challenges

• Implementing the Office of the Secretary’s (OST) $1.5 billion TIGER Discretionary Grants 

Program. 

• Enhancing oversight of ARRA spending on existing and new programs. 

• Reporting accurate and consistent job creation data. 

Implementing OST’s $1.5 Billion TIGER Discretionary Grants Program 

One of ARRA’s new discretionary grants programs includes $1.5 billion under OST for 

surface transportation infrastructure projects. To better ensure this program meets its 

objective, OST was required to develop comprehensive and sound program plans and 

criteria. 

OST must overcome management and resource obstacles to effectively implement this 

discretionary grant program. For example, OST has not finalized its role in the post-grant 

award process once grants are awarded. Also, OST has not thoroughly assessed what 

additional grant oversight resources or expertise it will need to effectively administer these 

grants.

An immediate challenge OST faces is to establish and carry out objective internal grant 

review and selection procedures based on the selection criteria it publicly released in 

June.2 Qualitative factors such as “improving existing transportation facilities or systems” 

and “livability,” are subject to interpretation by OST grant application evaluators. OST

issued internal guidance at the end of September 2009 that provides details on evaluating 

applications against the criteria, and the review process is under way. At the same time, 

OST must meet the statutory requirement that ARRA grants be equitably distributed 

geographically. These potentially competing requirements, mandated by law, could be 

difficult to reconcile, and revising the list of selected projects to satisfy the geographic 

distribution requirements could result in higher rated projects being taken off the list. 

 

2 Federal Register, Vol. 74, No. 115, Wednesday, June 17, 2009.
348

CHAPTER 1

Maximizing the Department’s Economic Recovery 

Investments

2010 Top Management Challenges, Department of Transportation 3

Enhancing Oversight of ARRA Spending on Existing and New Programs

DOT faces several challenges in overseeing its ARRA programs. The large increase in 

funding and tight time frames involved in the implementation of ARRA have strained DOT’s 

resources, particularly the time and attention of its field staff. Key focus areas for DOT: 

• Following through on comprehensive workforce plans. To help agencies prepare for 

the added responsibility of awarding ARRA funding, the Office of Management and 

Budget (OMB) directed agencies to assess the gap between their current workforce and 

ARRA human capital requirements. OMB’s guidance requires agencies to identify 

mission-critical human capital needs for ARRA implementation using competencybased workforce planning methodologies. While the Federal Highway Administration 

(FHWA) developed an agencywide workforce plan, not all Operating Administrations 

have developed or implemented such plans. Additionally, FAA did not fully consider 

the effects that meeting ARRA requirements might have on existing programs and 

obligations, which agencies are expected to continue to fulfill. The significant increase 

in DOT’s workload underscores the importance of finalizing and following through on a

comprehensive workforce plan.

• Enhancing oversight mechanisms. To mitigate the risk of inefficient or imprudent 

expenditure of ARRA dollars, OMB directed agencies to take steps, beyond standard 

practice, to enhance oversight of ARRA grant programs and contracts. Enhanced 

oversight mechanisms have been established for some DOT programs, but ARRA still 

poses ongoing management challenges that will require sustained focus. This is 

especially important for FHWA and FTA, which received three-fourths of DOT’s total 

ARRA funds. For example, to oversee the $27.5 billion it received in ARRA funding, 

FHWA developed national review teams. However, FHWA’s management challenge is 

to make sure these teams have a consistent approach to conducting compliance 

reviews across its 52 Division Offices and promote vigilant oversight of recovery 

projects. In the past, ensuring that its widely dispersed staff provided sufficient 

oversight to grantees had been a challenge for FHWA.3

 

3 OIG Report Number MH-2009-013, “National Bridge Inspection Program: Assessment of FHWA’s 

Implementation of Data-Driven, Risk-Based Oversight,” January 12, 2009.

 In contrast, FTA plans to 

primarily rely on existing reviews to provide oversight of ARRA-funded projects, using 

ARRA funds to increase the level of these reviews. At the grantee level, this will include 

a set of established periodic reviews, such as triennial reviews. Follow-through by FTA 
Other Accompanying Information

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CHAPTER 1

Maximizing the Department’s Economic Recovery 

Investments

2010 Top Management Challenges, Department of Transportation 4

to ensure that all oversight activities are conducted consistently with sufficient rigor is 

key, given the dramatic increase in funds that FTA is charged with overseeing.

OMB required Federal agencies to aggressively address fraud, waste, and abuse in 

ARRA projects. DOT’s Operating Administrations are taking action to combat the 

significant risk of fraud in the recovery program; but continued outreach is needed to 

enhance understanding among DOT staff, grantees, and their contractors on how to 

detect, prevent, and report potential fraud. Efforts to date are mixed. For example, 

while FTA sponsored a week-long “Grants A to Z” seminar, the Maritime Administration 

(MARAD) continues to lack a systematic fraud prevention strategy. An effective 

strategy centers on deterring fraud schemes that could occur on projects receiving 

recovery funding, such as bid-rigging, false claims for materials and labor, and product 

substitution through mismarking or mislabeling products and materials. A key element 

of this strategy is increased awareness of certain “red flags” that could indicate the 

presence of one or more fraud schemes on a project. As more recovery projects are 

initiated across the country, OIG’s investigative staff will continue to partner with 

program officials to provide fraud prevention and awareness education. However, 

each Operating Administration must maintain its own rigorous fraud prevention and 

awareness programs.

Reporting Accurate and Consistent Job Creation Data To provide 

transparency and accountability for Federal recovery dollars, ARRA mandated extensive 

new reporting requirements to include estimating and reporting on job creation. However, 

a lack of guidance to the individual Operating Administrations on assessing data reliability 

and untimely reporting on new jobs may impede the Department’s ability to provide 

accurate reports.

OMB provided general guidance to agencies on how to obtain and report job creation data 

for ARRA projects, but DOT’s plans for estimating and reporting such jobs raises concerns. 

For example, OST has not provided guidance on how the Operating Administrations should 

assess the reliability of job creation data provided by recipients. In addition, OST’s 

methodology for estimating the number of indirect jobs created by ARRA projects is 

inconsistent with the Council of Economic Advisors recommended methodology for 

estimating total employment. Further, OST intends to report indirect and total jobs on the 

date recipients are reimbursed for expenditures, which could result in a lag between when 
350

CHAPTER 1

Maximizing the Department’s Economic Recovery 

Investments

2010 Top Management Challenges, Department of Transportation 5

jobs are actually created or saved and when they are reported. Given the ambiguity these 

weaknesses create in OST’s estimates—particularly its estimates of indirect jobs it is critical 

that DOT expeditiously address risks related to the quality of job creation data. 

Related Products The following related reports, testimonies, and advisories can be 

found on the OIG website at http://www.oig.dot.gov. 

• Status of Operating Administrations’ Processes To Conduct Limited Quality Reviews of 

Recovery Act Recipient Data, October 6, 2009. 

• ARRA Advisory: FAA’s Process for Awarding ARRA Airport Improvement Program 

Grants, August 6, 2009. 

• ARRA Advisory: Sampling of Improper Payments in Major DOT Grants Programs 

Department of Transportation, June 22, 2009. 

• ARRA Advisory: DOT's Suspension and Debarment Program, May 18, 2009. 

• American Recovery and Reinvestment Act: DOT’s Implementation Challenges and the 

OIG’s Strategy for Continued Oversight of Funds and Programs, April 30, 2009, and 

April 29, 2009. 

• American Recovery and Reinvestment Act of 2009: Oversight Challenges Facing the 

Department of Transportation, March 31, 2009. 

• Top Management Challenges Facing the Department of Transportation, March 10, 

2009. 

For more information on the issues identified in this chapter, please contact

Madeline Chulumovich, Special Assistant for Economic Recovery, at 

(202) 366-6512.
Other Accompanying Information

351

CHAPTER 2 

Enhancing Surface Safety Programs To 

Reduce Injuries and Fatalities While 

Defining a New Federal Role in Transit 

Safety

2010 Top Management Challenges, Department of Transportation 6 

D espite recent decreases, motor vehicle-related crashes cause nearly 95 percent of 

all transportation deaths.

 4 In 2008, such crashes killed more than 37,000 people

and injured an estimated 2.35 million. Some types of fatalities, such as those 

involving motorcycles, increased in 2008, and serious problems—such as alcohol-impaired 

driving and unrestrained occupants—persist. Motor vehicle-related fatalities and injuries 

also have significant public health and economic consequences. Motor vehicle crashes cost 

about $230 billion for medical care, property damage, and lost productivity in 2000, the 

most recent data available. The Department continues its commitment to improving

safety. Recently, the Transportation Secretary announced an initiative to combat 

distracted driving—a contributing factor in about 16 percent of fatal crashes and 22 

percent of injury crashes. 

 

4 All data in this chapter from National Highway Traffic Safety Administration sources, unless otherwise 

noted.
352

CHAPTER 2 

Enhancing Surface Safety Programs To Reduce Injuries 

and Fatalities While Defining a New Federal Role in 

Transit Safety 

2010 Top Management Challenges, Department of Transportation 7

Key Challenges

• Promoting meaningful performance indicators to consistently measure states’ progress

in improving safety. 

• Targeting unsafe motor carriers and commercial drivers for enforcement and 

enhancing the Commercial Driver’s License (CDL) program. 

• Overseeing the safety of public transit systems.

Promoting Meaningful Performance Indicators to Consistently Measure 

States’ Progress in Improving Safety The Department has helped reduce highway 

fatalities and injuries by establishing motor vehicle safety standards, providing safety 

grants to states, funding road and bridge improvements, and supporting research on 

driving behavior. As vehicle miles traveled decreased during the economic recession, the 

number of people killed and injured in motor vehicle crashes also decreased (see figure 2-

1). However, fatalities in alcohol-impaired driving crashes accounted for 32 percent of all 

traffic fatalities in 2007 and 2008. Further, the percentage of unrestrained passenger 

fatalities rose to 55 percent of all passenger fatalities in 2008. Recent fatalities and injuries 

in other modes of surface transportation—particularly transit—also raise concerns.
Other Accompanying Information

353

CHAPTER 2 

Enhancing Surface Safety Programs To Reduce Injuries 

and Fatalities While Defining a New Federal Role in 

Transit Safety 

2010 Top Management Challenges, Department of Transportation 8

Figure 2-1. U.S. Highway Fatalities and Injuries, 2004 through 2008

Fatalities

Source: National Highway Traffic Safety Administration

30,000

35,000

40,000

45,000

2004 2005 2006 2007 2008

Injuries

1,500,000

2,000,000

2,500,000

3,000,000

2004 2005 2006 2007 2008

Each year, the Department provides about $600 million in Federal grants for state and local 

highway safety programs, including those aimed at reducing alcohol-impaired driving and 

promoting seat belt use.5

 The Department must continue working with states to reinforce 

current safety initiatives and introduce new initiatives through strong leadership, clear 

Federal standards, and empirical evidence regarding safety program performance. Our 

work has shown that the Department 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 year-round sustained 

enforcement of alcohol-impaired driving laws. Performance indicators would provide 

states with better tools to judge their progress, allow the Department to compare states’ 

success and promulgate best practices, and enhance public accountability.

The Department and the Governors Highway Safety Association developed a set of 14 

minimum performance measures for states to use in priority programs. The Department 

committed to work with states to develop uniform definitions, protocols, and reporting 

requirements for each measure. However, to monitor the success of these efforts, the 

 

5 United States Department of Transportation, Fiscal Year 2008 Budget In Brief.
354

CHAPTER 2 

Enhancing Surface Safety Programs To Reduce Injuries 

and Fatalities While Defining a New Federal Role in 

Transit Safety 

2010 Top Management Challenges, Department of Transportation 9

Department will need to ensure states establish measureable goals and report their 

progress in meeting these goals. 

Targeting Unsafe Motor Carriers and Commercial Drivers for Enforcement and 

Enhancing the CDL Program Approximately 4,500, or 1 in 8 overall fatalities in 2008 

were related to crashes involving large trucks or buses.

6

 To reduce these fatalities, the 

Department must take on several challenges. First, the Department must take stringent 

enforcement action against carriers that repeatedly violate safety regulations—an action 

we recommended in 2006—and ensure that unsafe carriers are placed out of service and 

not re-issued authority under new identities. In response to our work, the Federal Motor 

Carrier Safety Administration (FMCSA) revised its policies to enhance controls for assessing 

maximum fines for repeat violations of motor carrier regulations. FMCSA has also 

proposed stronger CDL standards and implemented a more stringent motor carrier 

application vetting process to identify carriers that might have had a previous authority 

revoked for unsafe operations.

Second, the Department must improve enforcement and data systems used to oversee the 

motor carrier industry and commercial motor vehicle drivers. For example, we identified 

weaknesses in the Commercial Driver’s License Information System, including state 

tardiness in posting commercial driver convictions and inadequate system security. The 

Department also lacks reliable traffic conviction data on holders of commercial driver’s 

licenses from Mexico, diminishing its ability to effectively oversee cross-border trucking. 

Finally, the Department must implement our long-standing recommendations for revising 

knowledge and skills testing standards, implementing fraud prevention efforts, and 

establishing new minimum standards for states to issue commercial driver’s permits.

The Department's Comprehensive Safety Analysis 2010 initiative—an initiative to increase

the effectiveness of compliance and enforcement programs—will rely heavily on 

information systems and data reporting. Accordingly, it is imperative that the Department 

continue improving the quality of crash, inspection, and census data. The Department

must take enforcement action against carriers that do not comply with census data 

reporting requirements, as these data are vital to the success of the Department’s new

motor carrier applicant vetting and safety rating processes. 

 

6 National Highway Traffic Safety Administration and Federal Motor Carrier Safety Administration, Motor 

Carrier Safety Progress Report, June 30, 2009.
Other Accompanying Information

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CHAPTER 2 

Enhancing Surface Safety Programs To Reduce Injuries 

and Fatalities While Defining a New Federal Role in 

Transit Safety 

2010 Top Management Challenges, Department of Transportation 10

Finally, the Department should continue working with OIG investigators and state and local 

agencies to identify and stop CDL holders who are not properly licensed. For example, as 

part of one of our criminal investigations, FMCSA has sent notices to more than 5,000 CDL 

holders that they need to be retested. Our investigation indicates that employees of a 

private driving academy might have improperly administered CDL tests for some students 

who attended this driving academy. 

 

Overseeing the Safety of Public Transit Systems In 2008, transit systems’ 

ridership continued to increase, with over 10 billion trips. Historically, transit systems have 

provided safe transportation relative to other modes, particularly motor vehicles. 

However, the June 2009 collision of two Metrorail trains outside Washington, D.C., which 

killed 9 people and injured more than 70, as well as other recent transit incidents have 

elevated concerns about the safety of these systems and the Federal role in ensuring 

safety. Of particular concern are issues related to operator performance, physical 

infrastructure, fleet operations and control systems, and management of rail cars and 

transit buses.

The Department faces challenges in defining a transit safety oversight structure, including

closing gaps in regulatory and enforcement authority. The Department must explore 

options for a complete approach to safety and to address statutory authority issues that 

could impede the Federal role in ensuring that safety. Accordingly, the Department

established a multimodal team of safety officials and experts to address transit safety and 

statutory authority reform. A critical challenge facing this group will be to identify safety 

practices that can be applied effectively by all transit agencies.
356

CHAPTER 2 

Enhancing Surface Safety Programs To Reduce Injuries 

and Fatalities While Defining a New Federal Role in 

Transit Safety 

2010 Top Management Challenges, Department of Transportation 11

Related Products The following related reports and testimonies can be found on the 

OIG website at http://www.oig.dot.gov. 

• Follow-up Audit on the Implementation of NAFTA’s Cross-Border Trucking Provisions, 

August 17, 2009. 

• Audit of the Data Integrity of the Commercial Driver’s License Information System, July 

30, 2009. 

• Status Report on NAFTA Cross-Border Trucking Demonstration Project, February 2, 

2009.

• Use of Income Derived from the Commercial Driver’s License Information System for 

Modernization, July 10, 2008. 

• Best Practices for Improving Oversight of State Highway Safety Programs, March 25, 

2008. 

• Cross-Border Trucking Demonstration Project, Testimony, March 11, 2008. 

• Interim Report on NAFTA Cross-Border Trucking Demonstration Project, March 10, 

2008. 

• Effectiveness of Federal Drunk Driving Programs, October 25, 2007. 

• Issues Pertaining to the Proposed NAFTA Cross-Border Trucking Demonstration Project,

September 6, 2007. 

• Follow-Up Audit of the Implementation of the North American Free Trade Agreement’s 

(NAFTA) Cross-Border Trucking Provisions, August 6, 2007. 

• Motor Carrier Safety: Oversight of High Risk Trucking Companies, July 11, 2007. 

• Audit of the National Highway Traffic Safety Administration’s Alcohol-Impaired Driving 

Traffic Safety Program, March 5, 2007. 

For more information on the issues identified in this chapter, please contact

Joseph Comé, Assistant Inspector General for Surface and Maritime Program 

Audits, at (202)-366-5630, or Timothy Barry, Principal Assistant Inspector 

General for Investigations, at (202) 366-1967.
Other Accompanying Information

357

CHAPTER 3 

Maximizing Federal Surface 

Infrastructure Investments by Helping 

States Better Allocate Resources and 

Providing Effective Oversight

2010 Top Management Challenges, Department of Transportation 12

Source: DOT

 

A 2009 report from the American Society of Civil Engineers (ASCE) noted that onethird of the Nation’s major roads are in poor or mediocre condition and that more 

than one-quarter of our bridges are deficient. According to ASCE, current spending 

on roads is well below the estimated $186 billion needed annually to substantially improve 

them; FHWA recently estimated that $65 billion could be invested immediately to address 

current bridge deficiencies. Meanwhile, the Highway Trust Fund7, which provides most of 

the funding for highway and transit programs, faces an ongoing cash flow problem. 

Key Challenges

• Developing improved tools and techniques to help states better allocate scarce 

resources. 

• Providing effective oversight of Federal investments through better use of data, 

management tools, and performance measures. 

7 See Chapter 8 for a discussion of Highway Trust Fund issues.
358

CHAPTER 3 

Maximizing Federal Surface Infrastructure Investments by 

Helping States Better Allocate Resources and Providing 

Effective Oversight 

2010 Top Management Challenges, Department of Transportation 13

Developing Improved Tools and Techniques To Help States Better 

Allocate Scarce Resources Maximizing Federal investment in surface infrastructure 

is particularly challenging because the majority of the Department’s federally assisted 

highway programs are administered by states, which have broad flexibility in deciding how 

to use their funds, which projects to pick, and how to implement them. For example, in 

fiscal year 2009, states received over $5 billion through the Highway Bridge Program—the 

primary Federal funding program for replacing and rehabilitating bridges nationwide—and 

states may transfer up to 50 percent of these funds to other Federal-aid highway programs. 

Some states have chosen to make such transfers, such as Pennsylvania, which from fiscal 

years 2001 to 2008 transferred approximately $1.2 billion of its $3.5 billion in Highway 

Bridge Program funding to other Federal-aid highway programs.

The Department can assist states in making better resource allocation decisions by 

developing improved tools and techniques. In early 2009, we reported that FHWA could 

strengthen its oversight role by expanding states’ use of bridge management systems—

computerized systems that prioritize replacement and repair projects and thereby allow 

states to more effectively use their resources, preserve existing infrastructure, and best 

serve the public. By routinely collecting and evaluating information on states’ use of bridge 

management systems, FHWA can target technical and training resources and provide other 

assistance to states most in need of help in implementing effective systems. FHWA has 

begun to take such action, but a sustained effort will be needed to help ensure states use 

their bridge funds wisely.

Providing Effective Oversight of Federal Investments through Better 

Use of Data, Management Tools, and Performance Measures DOT has 

begun to develop data systems, management tools, and performance measures to improve 

its oversight over Federal infrastructure investments. However, additional improvements 

in these ongoing efforts would enable the Department to better determine whether 

programs are achieving intended results and assist in holding states and other grantees 

accountable for results. 
Other Accompanying Information

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Maximizing Federal Surface Infrastructure Investments by 

Helping States Better Allocate Resources and Providing 

Effective Oversight 

2010 Top Management Challenges, Department of Transportation 14

A major concern is the monitoring of funds disbursed through the Highway Bridge 

Program, which was authorized $21.6 billion through 2009 to improve the condition of 

deficient bridges through replacement and rehabilitation.8

 FHWA is responsible for 

overseeing the efficient and effective use of these and other Federal-aid highway funds.9

 

However, our recent work has shown that FHWA lacks the tools needed to effectively track 

bridge expenditures and measure performance. Specifically, FHWA is currently unable to 

determine how much of the funding provided to states is actually spent on deficient 

bridges because its financial management system lacks the details necessary to link 

expenditures to improvements made to deficient bridges. FHWA also lacks a systematic 

approach for establishing performance goals and sharing with states and other 

stakeholders the results of their performance—key strategies in assessing the impact of 

Federal dollars on bridge conditions and targeting oversight activities. FHWA must ensure 

that the significant investment in the Highway Bridge Program is used effectively by states 

to improve the condition of the Nation’s deficient bridges. 

We also reported in late 2008 on weaknesses in FTA’s oversight of $4.55 billion in Federal 

funds to reconstruct Lower Manhattan’s transportation infrastructure following its

extensive devastation on September 11, 2001. While FTA’s risk management tool 

identified project management issues, including those that contributed to cost increases 

and schedule delays, FTA’s efforts to identify and mitigate risks to grantee performance 

were not fully successful in keeping the Lower Manhattan Recovery Projects within budget 

and on schedule. Over a period of 2 years, there was a continuing trend of escalating 

project costs and schedule delays. FTA has enhanced its risk management process to 

establish new guidelines and milestones for managing cost and schedule risks. To make its 

use of the risk management tool fully effective, FTA must follow through and ensure that 

grantees mitigate risks in a timely manner. Successful use of such tools will be critical as 

FTA oversees work on the Access to the Region’s Core project in the New York-New Jersey 

area—a project currently estimated at $9 billion.

 

8 States are also allowed to use Highway Bridge Program funds for other activities, such as systematic 

preventative maintenance, regardless of a bridge’s deficiency status. 9 23 U.S.C. §106 (2006).
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Helping States Better Allocate Resources and Providing 

Effective Oversight 

2010 Top Management Challenges, Department of Transportation 15

Related Products The following related reports and testimonies can be found on the 

OIG website at http://www.oig.dot.gov. 

• National Bridge Inspection Program: Assessment of FHWA’s Implementation of DataDriven, Risk-Based Oversight, January 12, 2009. 

• DOT’s FY 2009 Top Management Challenges, November 17, 2008. 

• Baseline Report on the Lower Manhattan Recovery Projects, September, 26, 2008. 

• FHWA Can Do More in the Short Term To Improve Oversight of Structurally Deficient 

Bridges, September 20, 2007. 

• Federal Highway Administration’s Oversight of Structurally Deficient Bridges, 

September 5, 2007. 

For more information on the issues identified in this chapter, please contact 

Joseph Comé, Assistant Inspector General for Surface and Maritime Program 

Audits, at (202)-366-5630.
Other Accompanying Information

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Addressing Human Factors and 

Strengthening the Regulatory and 

Oversight Framework for Aviation Safety

2010 Top Management Challenges, Department of Transportation 16

Source: Federal Aviation Administration

T he past several years have been one of the safest periods in history for the aviation 

industry, largely due to the Federal Aviation Administration’s (FAA) and the aviation 

industry’s dedicated efforts to improve safety. A dramatic example of aviation skill 

was witnessed last January when U.S. Airways flight 1549 made an emergency landing in 

the Hudson River and all 155 passengers and crew survived. However, the crash of 

Continental Connection flight 3407, which occurred just weeks later and resulted in 

50 fatalities, confirmed the need for constant vigilance over aviation safety. 

Key Challenges

• Increasing efforts to address human factors. 

• Providing an equivalent level of safety for passengers flying on-demand carriers by 

strengthening FAA regulations and oversight. 

• Maintaining momentum in joint FAA/industry efforts to improve runway safety.
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Regulatory and Oversight Framework for Aviation Safety 

2010 Top Management Challenges, Department of Transportation 17

Increasing Efforts To Address Human Factors Human factors such as fatigue have 

been on the National Transportation Safety Board’s (NTSB) Most Wanted Safety List of 

Safety Improvements since the list was created 19 years ago. According to NTSB, fatigue 

has been associated with 250 air carrier fatalities in the last 16 years. NTSB’s preliminary 

investigation into the cause of the Continental accident last February found some evidence 

that suggests pilot fatigue and lack of training may have contributed to the crash. While 

NTSB identified these issues as areas of concern for all air carriers, they are particularly 

critical at regional carriers, which were involved in the last six fatal Part 12110 accidents. 

NTSB cited pilot performance as a potential factor in four of those accidents.

Our work indicates that operational differences between regional and mainline carriers 

could affect safety issues such as pilot fatigue. For example, regional carriers typically 

perform short and medium hauls to hub airports, which can result in many short flights in 

1 day for a regional air carrier pilot. Multiple studies by agencies such as the National 

Aeronautics and Space Administration have concluded that these types of operations can 

contribute to pilot fatigue. Despite these differences, FAA has yet to revise its rules 

governing crew rest requirements. FAA is reviewing its pilot rest requirements to 

determine what changes should be made, and expects to issue a Notice of Proposed 

Rulemaking by then end of the year.

Fatigue among air traffic controllers is also a major air safety issue. For example, NTSB 

expressed concerns about the effect controller fatigue had on the August 2006 crash of 

Comair Flight 5191. In its investigative report, NTSB noted that the lone controller on duty 

at the time of the accident had only 2 hours of sleep prior to his shift. Our June 2009 

report on controller fatigue found that minimal hours between shifts, counter rotational 

shifts with progressively earlier start times, scheduled overtime, and on-the-job training

likely contribute to controller fatigue.11 FAA is amending its policies governing controller 

rest requirements; however, changes have not yet been implemented. Given the serious 

risks pilot and controller fatigue poses to aviation safety, FAA needs to implement its 

proposed rulemaking and regulation changes expeditiously.

 

10 14 CFR 121, Operating Requirements: Domestic, Flag, and Supplemental Operations. This FAA regulation 

governs commercial air carriers, including regional air carriers, with primarily scheduled flights.

11 OIG Report Number AV-2009-065, Air Traffic Control: Potential Fatigue Factors, June 29, 2009.
Other Accompanying Information

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Regulatory and Oversight Framework for Aviation Safety 

2010 Top Management Challenges, Department of Transportation 18

Providing an Equivalent Level of Safety for Passengers Flying OnDemand Carriers by Strengthening FAA Regulations and Oversight In 

2007 and 2008, small, commercial on-demand carriers experienced 33 fatal accidents 

resulting in 109 deaths—a bleak safety record when compared to large U.S. commercial air 

carriers, which had no passenger deaths in the same period. In addition to air tour flights 

and cargo operations, on-demand operators provide critical services, such as emergency 

medical, rescue, and human organ transportation, as well as air service to small remote 

communities. However, these carriers typically operate in a riskier environment than 

commercial aircraft. They perform more takeoffs and landings, making them more 

vulnerable to terrain, weather, and other obstacles.

Despite these risks, we reported in July 2009 that on-demand operators have less 

restrictive regulations and oversight than commercial carriers.12 For example, on-demand 

regulations allow lower minimum pilot experience for flight crews than commercial air 

carriers and maintenance inspection requirements are less restrictive for smaller ondemand aircraft. In addition, not all on-demand operators are required to have advanced 

equipment that commercial aircraft must have, such as ground proximity warning systems 

and traffic alert and collision avoidance systems. Further, many of the existing regulations 

for on-demand operators have not been updated to address changes in the industry. Some 

regulations date as far back as 1978. 

Our work has shown that targeted, risk-based oversight from FAA could help mitigate these 

risk factors and better address the diversity of on-demand operators. However, FAA 

oversight of on-demand operators is based on compliance with regulations rather than 

where risk dictates. FAA is developing a new risk-based oversight approach for on-demand 

operators, but this new system is not scheduled for full deployment for at least another 

4 years. Because of the high fatality rate associated with on-demand operations, FAA 

needs to implement an interim process that considers the inherent operational risk factors 

in on-demand operations. 

 

12 OIG Report Number AV-2009-066, On-Demand Operators: Less Stringent Safety Requirements and 

Oversight than Large Commercial Carriers, July 13, 2009. 
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Regulatory and Oversight Framework for Aviation Safety 

2010 Top Management Challenges, Department of Transportation 19

Maintaining Momentum in Joint FAA/Industry Efforts To Improve 

Runway Safety Reducing the risk of runway collisions and other runway incursions is a 

critical issue that requires ongoing efforts on the part of FAA, airlines, and airport 

operators. While new FAA technologies provide potential solutions to improving runway 

safety in the future, our reviews of three such technologies13 disclosed serious concerns 

about the timeliness of these solutions and underscored the need for more near-term 

solutions. In August 2007, FAA, airline, and airport officials created a Call to Action Plan 

that identified a series of short-, mid-, and long-term initiatives to reduce runway 

incursions. These included addressing needed near-term solutions such as airport-specific 

infrastructure and procedural changes.

Since the plan’s inception, the most serious runway incursions have decreased by 50 

percent (from 24 to 12). However, factors outside the Plan’s actions may have also 

contributed to the significant decrease in serious incidents. For example, since fiscal year

2007, airport operations have decreased 14 percent, resulting in fewer aircraft and vehicles 

using runways, taxiways, and airport ramps, thus diminishing the potential for runway 

incursions to occur. Additionally, many safety improvements at airports were 

implemented before the Plan was established. 

Nevertheless, most airport, airline, and air traffic control officials we spoke with credited 

the Plan for creating an environment of heightened attention about runway safety among 

all users—a substantial accomplishment. To sustain this momentum and achieve its overall 

goal of reducing runway incursions by 10 percent by fiscal year 2013, FAA needs to fully vet 

and set milestones for the Plan’s mid- and long-term initiatives. Our past work has shown 

that FAA’s actions to improve runway safety diminished as it met its overall goal for 

reducing runway incursions.14

 

13 Automatic Dependent Surveillance Broadcast—a satellite-based technology that allows aircraft to 

broadcast their position to other aircraft and ground systems; the Airport Surface Detection EquipmentModel-X—a ground surveillance system intended to alert controllers to potential ground collisions; and 

Runway Status Lights—automated, surveillance-driven lights to alert pilots in departing or crossing aircraft 

that the runway is occupied. 14 OIG Report Number AV-2007-050, Progress Has Been Made in Reducing Runway Incursions, but Recent 

Incidents Underscore the Need for Further Proactive Efforts, May 24, 2007. 
Other Accompanying Information

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Addressing Human Factors and Strengthening the 

Regulatory and Oversight Framework for Aviation Safety 

2010 Top Management Challenges, Department of Transportation 20

Related Products The following related reports and testimonies can be found on the 

OIG website at http://www.oig.dot.gov.

• Report on On–Demand Operators: Less Stringent Safety Requirements and Oversight 

than Large Commercial Air Carriers, July 13, 2009. 

• Air Traffic Control: Potential Fatigue Factors, June 29, 2009. 

• Testimony before the House Subcommittee on Aviation: Regional Air Carriers and Pilot 

Workforce Issues. June 11, 2009. 

• Training Failures Among Newly Hired Air traffic Controllers. June 8, 2009. 

• FAA Is Not Realizing the Full Benefits of the Aviation Safety Action Program, May 14, 

2009. 

• Controller Staffing at Key California Air Traffic Control Facilities, April 23, 2009. 

• Actions Taken and Needed to Improve FAA’s Runway Safety Area Program, March 3, 

2009. 

• Review of FAA’s Oversight of Airlines and Use of Regulatory Partnership Programs, June 

30, 2008. 

• Progress Has Been Made in Reducing Runway Incursions, but Recent Incidents 

Underscore the Need for Further Proactive Efforts, May 24, 2007. 

For more information on the issues identified in this chapter, please contact

Lou Dixon, Assistant Inspector General for Aviation and Special Programs, at 

(202) 366-0500. 
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Moving Toward the Next Generation Air 

Transportation System and Improving 

Performance of the National Airspace 

System 

2010 Top Management Challenges, Department of Transportation 21

Source: Federal Aviation Administration

T he National Airspace System handles almost 50,000 flights per day and more than 

700 million passengers per year. Historically, steadily increasing levels of air traffic 

have resulted in increasing delays and cancellations, particularly at heavily 

congested airports such as Newark International, John F. Kennedy International, and 

Atlanta Hartsfield-Jackson International. To better manage air traffic and congestion, the 

Federal Aviation Administration (FAA) is developing the Next Generation Air Transportation 

System (NextGen), which is expected to yield significant benefits in terms of reducing 

delays, saving fuel, adding capacity, improving access, enhancing safety, and reducing 

environmental impact. NextGen, however, is a high-risk effort involving billion-dollar 

investments from both the Government and the airline industry. NextGen’s challenges are 

multi-dimensional and involve research and development, complex software development 

and integration for existing and new systems, workforce changes, and policy questions 

about how to spur aircraft equipage.
Other Accompanying Information

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System and Improving Performance of the National 

Airspace System 

2010 Top Management Challenges, Department of Transportation 22

Key Challenges

• Taking actions to deliver NextGen benefits in the near- and mid-term. 

• Maximizing the benefits of performance-based navigation in the national airspace 

system and keeping airspace redesign projects on track. 

• Improving programs for developing the next generation of air traffic controllers.

Taking Actions To Deliver NextGen Benefits in the Near- and Mid-Term 

A key challenge for the Department and FAA involves setting realistic expectations for what 

NextGen can deliver in the near- and mid-term. Between fiscal years 2009 and 2014, FAA 

plans to spend about $7 billion on NextGen-related programs, which include a new 

satellite-based system for surveillance and a new information sharing system (see figure 5-

1).

Figure 5-1. FAA Capital Funding for Fiscal Years 2008 through 2014

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2008 2009 2010 2011 2012 2013 2014

Fiscal Year

Remaining Facilities and Equipment NextGen Funding

MILLIONS

Source: Federal Aviation Administration
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System and Improving Performance of the National 

Airspace System 

2010 Top Management Challenges, Department of Transportation 23

However, a recent FAA analysis indicates that NextGen capabilities, originally envisioned 

for 2025, would cost several times the current projected cost estimate of $40 billion. 

Further, it is likely that some of NextGen’s advanced automated air and ground capabilities 

will not be implemented until 2035 or later. Consequently, keeping existing projects on 

track is critical because about 30 projects serve as enabling platforms for NextGen 

initiatives. For example, core NextGen capabilities, such as data link communications, 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. 

While the effort remains on schedule, ERAM has experienced some technical problems, 

and future ERAM software requirements related to NextGen are undefined and costs are 

uncertain.

In September 2009, an FAA-sponsored government-industry task force issued a report 

detailing what can be done in the next 3 to 5 years. The task force made 28

recommendations, including maximizing existing aircraft navigation capabilities, improving 

the use of runways at congested airports, and enhancing airport surface operations. FAA is 

committed to implementing the task force’s recommendations, but several areas require 

sustained management attention to advance NextGen in the near- and mid-term and build 

confidence with congressional and aviation stakeholders:

• Clearly establish and articulate budget priorities for the near-term and identify 

programmatic interdependencies.

• Keep existing projects, such as the billion-dollar ERAM effort, on schedule.

• Continue to refine a mid-point architecture (a technical road map) for the 2015 to 2018 

time frame that provides a transition path for existing acquisitions.

• Assess and obtain the necessary skills with respect to contract management and 

systems engineering needed to manage and execute NextGen.

• Establish metrics for assessing progress with NextGen that focus on enhancing capacity, 

boosting productivity, and reducing operating costs.

15

 

15 The analysis—referred to as the NextGen portfolio or “trade space” analysis—was sponsored by FAA’s Joint 

Planning and Development Office. The analysis began in October 2008, and interim results were available in 

May 2009. FAA is continuing to update and revise the analysis.
Other Accompanying Information

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Airspace System 

2010 Top Management Challenges, Department of Transportation 24

Maximizing the Benefits of Performance-Based Navigation in the 

National Airspace System and Keeping Airspace Redesign Projects on 

Track A fundamental building block of FAA’s NextGen efforts is establishing new 

Performance-Based Navigation (PBN) routes and procedures, using Area Navigation (RNAV) 

and Required Navigation Performance (RNP) specifications.

16 The potential benefits of 

RNAV and RNP are significant and include shorter, more direct flight paths; improved 

airport arrival and departure efficiency; enhanced controller productivity; fuel savings; and 

reduced aircraft noise. FAA faces several challenges in implementing these initiatives. 

First, air carriers are not satisfied with most of the FAA’s new RNP approach procedures 

because the procedures rely heavily on laying RNP routes over existing routes to deploy 

them more quickly. Second, use of RNAV/RNP procedures at some airports has been 

limited due to continuing operational issues and concerns over workload and training for 

controllers and pilots. Third, the role of non-government third parties in developing 

RNAV/RNP procedures is unclear, and industry representatives are skeptical of FAA’s ability 

to deliver the more complex procedures in a timely manner.

In addition, FAA has not yet made adjustments to key programs that will be needed to 

realize the expected benefits of RNAV and RNP, such as airspace redesign efforts. 

Currently, FAA is pursuing six airspace projects nationwide, including a major but 

controversial effort to revamp airspace in the New York/New Jersey/Philadelphia area. A 

level of coordination between airspace redesign projects and RNAV/RNP procedures—

which currently does not exist—will be essential as procedures move beyond overlays and 

local operations to networking routes between city pairs.

As we noted in July 2009,17 several areas will require sustained management attention to 

get RNAV and RNP on track. These include producing quality RNP procedures that have 

significant benefits rather than focusing on the number of procedures, establishing 

priorities for new routes and funding requirements for related airspace redesign projects, 

ensuring air traffic controllers and pilots are properly trained on procedures before they 

are implemented, and developing an effective oversight strategy for the third parties.

 

16 RNAV is a method of navigation in which aircraft use avionics, such as Global Positioning Systems, to fly any 

desired flight path without the limitations imposed by ground-based navigation systems. RNP is a form of 

RNAV that adds on-board monitoring and alerting capabilities for pilots; thus, allowing aircraft to fly more 

precise flight paths.

17 OIG Testimony CC-2009-086, Challenges in Implementing Performance-Based Navigation in the U.S. Air 

Transportation System, July 29, 2009. 
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System and Improving Performance of the National 

Airspace System 

2010 Top Management Challenges, Department of Transportation 25

Improving Programs for Developing the Next Generation of Air Traffic 

Controllers Over the next decade, FAA plans to hire and train nearly 15,000 new 

controllers to replace those who are close to retirement. Ensuring that these controllers 

are properly trained and certified at FAA’s more than 300 air traffic control facilities is a key 

watch item for the Department and Congress. Currently, new controllers require 2 to 3 

years of training before they are able to fully certify at their assigned location.

Effective national oversight and accurate metrics for measuring progress are critical tools 

for addressing this challenge. Since 2004, we have issued a series of reports focusing on 

FAA’s programs for developing the air traffic controller workforce. Our work has

repeatedly found that improved national oversight is needed. FAA is taking some steps to 

address our concerns such as appointing a national director for training and creating a 

national training data base to centrally monitor progress at individual locations. However, 

our current work shows that continued management focus is still needed.

Most recently, we reported that FAA does not have accurate metrics for effectively 

monitoring training failures among newly hired air traffic controllers to identify trends and 

take corrective actions.

18 Effective national oversight of controller training is even more 

critical as FAA now relies heavily on outside contractor support to accomplish this mission. 

In September 2008, FAA awarded a 10-year, nearly $900 million contract to Raytheon 

Technical Services Corporation to provide extensive training support for controllers. Our 

past work has shown that FAA has a poor track record in effectively managing and 

overseeing large acquisition and support services contracts. 

FAA must also focus on its programs for screening and placing new controllers with no 

prior air traffic control experience—whose numbers increased from 7 percent of all newly 

hired controllers to over 72 percent in just a year and a half. Initial results of our current 

review of new controller screening and placement indicate that FAA needs to improve its 

process for integrating new controllers into the workforce. Currently, FAA places new 

controllers at locations based primarily on preferences rather than on potential abilities

and likelihood of success. In fact, controller candidates are assigned to a facility even 

before entering initial training at the FAA Academy. 

 

18 OIG Report Number AV- 2009-059, Training Failures Among Newly Hired Air Traffic Controllers, June 8, 

2009.
Other Accompanying Information

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System and Improving Performance of the National 

Airspace System 

2010 Top Management Challenges, Department of Transportation 26

Related Products The following related reports and testimonies can be found on the 

OIG website at http://www.oig.dot.gov. 

• Challenges in Implementing Performance-Based Navigation in the U.S. Air 

Transportation System, July 29, 2009. 

• Training Failures Among Newly Hired Air Traffic Controllers, June 8, 2009. 

• Progress and Remaining Challenges in Reducing Flight Delays and Improving Airline 

Customer Service, May 20, 2009. 

• Aviation Industry Performance: A Review of the Aviation Industry in 2008, May 6, 2009. 

• Controller Staffing at Key California Air Traffic Control Facilities, April 23, 2009. 

• Federal Aviation Administration: Actions Needed To Achieve Mid-Term NextGen Goals, 

March 18, 2009. 

• Key Issues for Reauthorizing the Federal Aviation Administration, February 11, 2009. 

• Observations on Short-Term Capacity Initiatives, September 26, 2008. 

For more information on the issues identified in this chapter, please contact

Lou Dixon, Assistant Inspector General for Aviation and Special Programs, at 

(202)-366-0500. 
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Oversight

2010 Top Management Challenges, Department of Transportation 27

Source: AAA Foundation for Traffic Safety, used with permission

 

19 Based on data from the Federal Procurement Data System-Next Generation (FPDS-NG) provided by DOT’s 

Office of the Senior Procurement Executive. 20 In July 2009, the Office of Management and Budget issued a Governmentwide memorandum requiring 

agencies to (1) review their existing contracts and acquisition practices and develop a plan to save 7 percent 

of baseline contract spending by the end of fiscal year 2011 and (2) reduce by 10 percent the share of dollars 

obligated in fiscal year 2010 under new contract actions awarded with high-risk contracting authorities.

D OT spent about $5.5 billion in fiscal year 200919 on contracts for goods and services 

to support its mission, ranging from strategic planning and program management to

software engineering and road maintenance. Our audits and investigations 

continue to find weaknesses in the Department’s contract planning, administration, and 

oversight. Recent Governmentwide efforts to stimulate the economy and reduce spending 

heighten the need for DOT to address these weaknesses.20

Key Challenges

• Strengthening DOT’s suspension and debarment program to effectively safeguard 

against awards to improper parties.

• Improving award-fee contracting processes to meet acquisition outcomes. 

• Maintaining high ethical standards among DOT employees and fund recipients. 
Other Accompanying Information

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2010 Top Management Challenges, Department of Transportation 28

Strengthening DOT’s Suspension and Debarment Program To 

Effectively Safeguard Against Awards to Improper Parties To better ensure 

taxpayer dollars are spent wisely, Federal suspension and debarment (S&D) regulations 

permit agencies to exclude unethical, dishonest, or otherwise irresponsible businesses and 

individuals from receiving Federal contracts and grants. Over the past 2 years, we have 

identified weaknesses in DOT’s S&D program that increase the risk of awarding contracts 

and grants to irresponsible contractors—a risk that has escalated with the recent 

disbursement of Recovery Act funds.

Of particular concern are the significant delays in making and reporting S&D decisions. 

Timely S&D decisions and reporting are critical to helping ensure that government 

contractors who have acted unethically do not receive additional government dollars. In 

June 2005, DOT revised its S&D policy to include established deadlines for making S&D 

decisions. However, our ongoing work indicates that Operating Administrations’ S&D 

processes remain inefficient and time-consuming. For example, between June 2005 and 

December 2008, FAA, FHWA, and FTA took an average of 301 days to make a suspension 

decision and 415 days to make a debarment decision. DOT’s revised policy also calls for 

timely reporting of S&D decisions to the General Services Administration (GSA) and annual 

reporting of all S&D actions. Yet nearly half of the decisions we reviewed were not entered 

into GSA’s Excluded Party Listing System in accordance with DOT’s 5-day requirement—and 

almost one-quarter of these were delayed by more than 3 months.

DOT has taken several actions in response to our May 2009 ARRA Advisory, which 

highlighted our concerns about the efficiency and effectiveness of its Suspension and 

Debarment Program.21 For example, DOT issued a memorandum clarifying its policies for 

making and reporting S&D actions. Also, DOT a recently drafted and distributed for review 

a new S&D Order. Ensuring Operating Administrations understand and adhere to these 

policies—along with other needed actions to address weaknesses we identified—will be 

critical to establishing an efficient and effective S&D program.

 

21 U.S. Department of Transportation, Office of Inspector General, ARRA Advisory – DOT’s Suspension and 

Debarment Program, AA-2009-001, May 18, 2009. OIG reports can be found on our website: 

www.oig.dot.gov. 
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2010 Top Management Challenges, Department of Transportation 29

Improving Award-Fee Contracting Processes to Meet Acquisition 

Outcomes As of June 2008, DOT had 47 cost-plus-award-fee contracts with a potential 

value of approximately $5.5 billion, including about $271.4 million in potential award fees. 

Award-fee contracts are intended to spur innovation to create cost and schedule

efficiencies and improve performance. Because payments to contractors are based on 

their performance, award-fee contracts have the potential to minimize cost risks to the 

Government. However, Congress recently expressed concerns about Governmentwide 

contracting practices, including paying fees on award-fee contracts, regardless of whether 

the fees paid were reasonable and linked to achieving acquisition outcomes.22 In March 

2009, the President stressed that Federal agencies have the capacity to carry out robust 

and thorough management and oversight of its contracts in order to achieve program 

goals, avoid significant overcharges, and curb wasteful spending.23

From fiscal year 2003 through fiscal year 2007, DOT has paid contractors millions of dollars 

in award fees on contracts that were not sufficiently justified, designed, and administered, 

as required by regulations. Between February and October 2008, we issued several reports 

that identified approximately $230 million that DOT could have better used had it 

developed clear and measurable award-fee criteria for evaluating contractor performance 

and justified the use of an award-fee contract by performing a cost/benefit analysis.24 For 

example, FAA’s performance evaluation plan for its National Airspace System 

Implementation Support II Bridge contract—valued at approximately $234 million with 

about $18.2 million in award fees—did not include clear and measurable award-fee criteria 

to adequately evaluate contractor performance, calling into question the reasonableness 

of the high fees paid under the contract.

In response to our report on the National Airway Systems support services contract, valued 

at approximately $316 million, FAA decided to modify the award-fee contract to a cost-

 

22 Pub.L 110-417, Duncan Hunter National Defense Authorization Act for Fiscal Year 2009, Section 867, 

requires that the Federal Acquisition Regulation be revised to ensure that all new contracts using award fees 

link such fees to acquisition outcomes and establish standards for the percentage of award fees paid. 23 Memorandum for the Heads of Executive Departments and Agencies on Government Contracting, March 4, 

2009.

24 See Interim Report on Award–Fee Criteria for the System Engineering and Technical Assistance II (SETA–II) 

Contract, October 7, 2008; Interim Report on Award-Fee Criteria for the Transportation Information Project 

Support (TRIPS) Contract, August 14, 2008; Interim Report on Award-Fee Criteria for the National Airway 

Systems Contract, May 28, 2008; and Interim Report on Award-Fee Criteria for the National Airspace System 

Implementation Support II Contract and Bridge Contract, February 27, 2008.
Other Accompanying Information

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plus-fixed-fee contract because the cost and time required for it to oversee, monitor, and 

document the award-fee process outweighed the benefits to administer the contract. To 

better ensure taxpayer dollars are used efficiently, FAA will need to continue to take such 

actions. Moreover, it will need to provide guidance and training to its acquisition 

workforce to ensure the use of these contracts is justified and that its award-fee contracts 

are designed and administered appropriately to help ensure they achieve intended 

acquisition outcomes. Without such actions, the costs risks to the American taxpayer are 

significant.

Maintaining High Ethical Standards Among DOT Employees and Fund 

Recipients Ensuring DOT employees, contractors, and their grantees focus on 

preventing, detecting, and reporting potential fraud is essential to ensuring transparency 

and accountability. DOT’s oversight of over $40 billion in Recovery Act funds heightens the 

importance of vigilance on ethics training and awareness. While DOT has an annual ethics 

training program for its acquisition and grant management personnel, the Department and 

its Operating Administrations need to keep a sustained focus to fully implement this 

important annual training requirement. The Department also needs to increase its 

outreach to recipients of DOT funding to ensure they and their contractors have 

meaningful ethics programs and sound internal controls to prevent and detect fraud 

involving DOT funding.

Contract and grant fraud cases currently comprise about 36 percent of active OIG 

investigations, and employee integrity cases represent about 10 percent. The following 

examples of OIG investigations illustrate the need for DOT’s continued attention to 

procurement integrity issues: 

• A former New Jersey FAA supervisor was sentenced to 2 years’ imprisonment for 

accepting bribes from a computer engineering company to which he issued $2.5 million 

in purchase orders.

2010 Top Management Challenges, Department of Transportation 30
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2010 Top Management Challenges, Department of Transportation 31

• The Federal Highway Administration (FHWA), using our lead, determined a project 

scheduled to receive $750,000 in ARRA funds in Washington State was ineligible for 

Federal participation. In this case, FHWA learned a county official overseeing the 

project had a potential conflict of interest due to ownership of property adjacent to the 

proposed project and his role in designing and acquiring property for the project. 

• Following the sentencing of two former FAA employees for Procurement Integrity Act 

violations, OIG began investigations of 31 FAA procurement officials. We initiated the 

investigations, in part, on comments made by a Federal Judge at sentencing, who 

expressed appall by the many letters from FAA employees trying to justify the 

defendants’ behavior, which involved the release of confidential bid data to help a 

contractor win an FAA contract. Our investigations, which we are completing, revealed 

that approximately one-third of the 31 FAA officials accepted gratuities from prohibited 

sources.

DOT’s stewardship over billions of taxpayer dollars requires the Department to promote 

and maintain high ethical standards among its employees and recipients of DOT funding. 

For DOT employees, this involves fully implementing annual ethics training requirements. 

Outside DOT, this involves expanding its outreach to ensure that contractors and grantees 

prevent and detect fraud involving DOT funding.

Related Products The following related reports, testimonies, and advisories can be 

found on the OIG website at http://www.oig.dot.gov.

• ARRA Advisory–DOT’s Suspension and Debarment Program, May 18, 2009.

• American Recovery and Reinvestment Act of 2009: Oversight Challenges Facing the 

Department of Transportation, March 31, 2009. 

• Interim Report on Award-Fee Criteria for the FAA’s System Engineering and Technical 

Assistance II (SETA–II) Contract, October 7, 2008. 
Other Accompanying Information

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2010 Top Management Challenges, Department of Transportation 32

• Interim Report on Award-Fee Criteria for the Transportation Information Project 

Support (TRIPS) Contract, August 14, 2008. 

• Interim Report on Award-Fee Criteria for the National Airway Systems Contract, May 

28, 2008. 

• Interim Report on Award-Fee Criteria for the National Airspace System Implementation 

Support II Contract and Bridge Contract, February 27, 2008. 

For more information on the issues identified in this chapter, please contact 

Mark Zabarsky, Assistant Inspector General for Procurement and Acquisition 

Audits, at (202) 366-5225 and Timothy Barry, Principal Assistant Inspector 

General for Investigations, at (202) 366-1967. 
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Attacks and Improving the Governance 

of Information Technology Resources

2010 Top Management Challenges, Department of Transportation 33

Source: Federal Aviation Administration

 

I n May 2009, the White House reported on the urgent need to secure the Nation’s 

digital infrastructure from hackers, who “pose some of the most serious economic and 

national security challenges of the 21st Century.”25 DOT’s financial systems manage 

and disburse over $50 billion in Federal funds each year. At the same time, DOT’s 

information technology (IT) budget covers more than 400 information systems across its 13 

Operating Administrations—nearly two-thirds of which belong to the Federal Aviation 

Administration (FAA). Given the scope and complexity of these systems, it is critical that 

DOT effectively manage and secure its IT resources. 

Key Challenges 

• Establishing a robust information security program to support the Department’s 

missions. 

• Increasing security protection and resilience of the air traffic control system to reduce 

the risks of cyber attacks. 

25 Cyberspace Policy Review Report “Assuring a Trusted and Resilient Information and Communication 

Infrastructure,” May 2009.
Other Accompanying Information

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Resources 

2010 Top Management Challenges, Department of Transportation 34

• Strengthening the privacy protection program to secure personally identifiable 

information. 

• Enhancing control of IT investments through oversight and accountability. 

Establishing a Robust Information Security Program to Support the 

Department’s Missions The Federal Information Security Management Act of 2002 

requires each agency to establish an information security program to help protect agency 

information systems. Last year, we reported that the Department’s information security 

program was ineffective in meeting Federal IT security standards. While the Department 

made progress in enhancing security protection during fiscal year 2009, it continues to face 

several challenges. 

First, persistent security deficiencies in key control areas—including management of 

information security weaknesses, system authorization, configuration management, 

security awareness and training, and contingency planning—continue to make the 

Department vulnerable to cyber attacks. For example, in February 2009, hackers gained 

unauthorized access to the personal records of 48,000 current and former FAA employees. 

To build an information security program that adequately protects DOT from cyber threats, 

the Department needs to address these security deficiencies in a manner that is 

sustainable and flexible enough to allow DOT to quickly adapt to avert new threats.

Second, the Department’s Chief Information Officer (CIO) continues to lack sufficient 

influence over DOT’s Operating Administrations. Unlike some Federal agencies, DOT’s CIO 

does not have budget or performance evaluation authority over Operating

Administrations. In response to this concern, the CIO developed performance objectives to 

be included in each modal CIO’s performance plan. However, the CIO’s office does not 

provide input into modal performance evaluations. Until the Department’s CIO can

influence Operating Administration’s CIO performance, DOT policy may not get 

implemented.

Finally, DOT has yet to meet OMB’s October 2008 deadline for issuing Personal Identity 

Verification (PIV) cards to employees and contractors—a key governmentwide initiative to 

secure Federal information and information systems. The responsibility of managing PIV 

card issuance is shared among the CIO, the Assistant Secretary of Administration, and FAA. 

As of September 2009, only 31 percent of DOT’s approximately 75,000 employees and 

contractors had a PIV card. Despite this significant lag in implementing OMB’s directive, 
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Resources 

DOT has yet to develop a plan to complete issuance of PIV cards to its remaining

employees and contractors. In addition, the Department lacks an approved process for 

issuing PIVs and does not adequately secure the information systems used to store, 

process, and transmit personally identifiable information. Until DOT takes action to 

address these weaknesses, the Department not only risks issuing PIVs to non-DOT 

employees and contractors, it cannot secure personal information such as Social Security 

numbers (SSN). 

Increasing Security Protection and Resilience of the Air Traffic Control 

System To Reduce the Risks of Cyber Attacks To modernize air traffic control 

systems, FAA is increasingly relying on the use of Internet Protocol (IP)-based commercial 

software rather than proprietary software. While this strategy has enabled FAA to 

efficiently collect and disseminate information to facilitate air traffic control services, it 

poses a higher security risk due to the vulnerabilities inherent in using commercial IP 

products. 

Web applications used in supporting air traffic control systems have been vulnerable to 

attacks. For example, in August 2008, hackers executed malicious codes and took control 

of FAA’s critical network servers. We were also able to gain unauthorized access to an air 

traffic control system used to monitor critical power supply at six en route centers—which 

control high-altitude traffic and disseminate flight plan information to all other air traffic 

control facilities. While most cyber attacks to date have primarily disrupted FAA’s traffic 

control mission-support function, the threat to real-time control services exists. FAA needs 

to ensure Web applications are configured according to security standards.

The Department’s Cyber Security Management Center (CSMC) has limited capability to 

monitor and detect cyber incidents in air traffic control facilities. When cyber incidents 

have been detected, remediation has not always been timely. For example, none of the air 

traffic control operational systems at FAA air traffic control facilities were monitored by 

CSMC, and 17 percent of the security incidents detected at FAA in fiscal year 2008 

remained unresolved at the end of the year. Without comprehensive monitoring and 

timely remediation of identified cyber threats, air traffic control systems remain vulnerable 

to catastrophic subterfuge. FAA needs to assign priority to implementing its corrective 

actions.

2010 Top Management Challenges, Department of Transportation 35
Other Accompanying Information

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Resources 

2010 Top Management Challenges, Department of Transportation 36

FAA also lacks sufficient on-site review procedures to ensure required security controls are 

in place. FAA has enhanced the process used to review and certify the adequacy of 

security for air traffic control systems deployed to operational sites. However, the process 

still lacks an effective means to target security reviews for operational sites at risk of having 

unauthorized system configurations. These configuration variances have led to security 

weaknesses and disrupted system operations. For example, flight data supporting various 

services had to be manually disseminated. In addition, security reviews conducted at 

operational sites to ensure proper implementation of security controls relied primarily on 

interviews with system operators and lacked examination and testing. FAA needs to 

strengthen security reviews of air traffic control systems supporting live operations.

In the event air traffic control systems are disrupted—either maliciously or inadvertently—

a Homeland Security Presidential Directive requires the Department to resume essential 

services in a timely manner to minimize the impact on the Nation’s economy and citizens’ 

mobility and safety. FAA is in the final stage of implementing a recovery center where 

operations would be resumed if any en route center becomes inoperable. However, FAA 

must conduct a more comprehensive analysis of the impact on domestic air travel and 

demonstrate that activating the recovery center will not compromise its safety.

The potential for exploitation of air traffic control systems is expected to increase with 

FAA’s implementation of the NextGen—a multibillion dollar system that will adopt IPbased commercial software and Web-enabled design technologies to collect, exchange, 

and disseminate air traffic information among controllers, pilots, support staff, and 

industry partners. While NextGen has great potential to improve air travel, the White 

House Cyberspace Policy Review report emphasized the importance of developing a robust 

security design for NextGen. Another concern is the level of oversight needed to ensure 

security is properly reserved in contractor-owned systems, such as NextGen’s nationwide 

ground infrastructure, and their interface with the rest of air traffic control infrastructure.
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Improving the Governance of Information Technology 

Resources 

2010 Top Management Challenges, Department of Transportation 37

Strengthening the Privacy Protection Program to Secure Personally 

Identifiable Information In fiscal year 2009, the Department made progress in 

addressing its statutory responsibility to protect personally identifiable information. In 

response to our previous recommendations, the Department completed a Breach 

Notification Policy, developed a status report to track weekly meetings with modal privacy 

personnel, held advanced training sessions for modal privacy personnel, and performed an 

analysis on all DOT IT systems to identify those containing personally identifiable 

information. 

Despite these actions, personally identifiable information remains unsecure—in part 

because the Department has been unable to get an accurate count of the systems that 

contain this information. Last year, the Department reported that 109 out of 425 IT 

systems contained personally identifiable information. Further analyses identified 

additional systems, but the results of these analyses were inconsistent. In 2009, the 

Department reported three separate counts over 5 months, ranging from 132 to 201. 

While system inventory is not static, the magnitude of the flux suggested the need for 

further verification. Without an accurate count, DOT has no assurance that its systems 

with personally identifiable information are properly secured and meet regulatory 

requirements. For those systems that were consistently identified as containing personally 

identifiable information, not all were secured according to Department requirements, 

leaving them vulnerable to unauthorized access. For example, we found one system that 

lacked basic security controls contained personally identifiable information on 3 million 

individuals. To secure personally identifiable information, the Department must finalize

the inventory and properly secure the systems.

To minimize the risks associated with the unauthorized disclosure of personally identifiable 

information, OMB required agencies to eliminate the unneeded use of SSNs by November 

2009. While DOT has preliminarily identified 70 systems that need to be evaluated for SSN 

elimination, it does not plan to complete the elimination until 2015. To protect the public’s 

privacy and comply with OMB requirements, the Department must assign a priority to 

meet the mandate of eliminating unneeded use of SSNs in a more timely manner.

The reporting structure of the Chief Privacy Officer has also contributed to deficiencies in 

privacy protection. Specifically, the departmental CIO is also the designated Chief Privacy 

Officer. However, the manager responsible for privacy program operations does not report 

directly to the Chief Information/Privacy Officer. According to privacy experts, privacy 
Other Accompanying Information

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Resources 

2010 Top Management Challenges, Department of Transportation 38

officials require direct access to top management to better ensure the timely 

implementation of sound privacy policies and processes. In view of continued deficiencies 

in this area, the Department needs to re-evaluate the reporting structure of the privacy 

program.

Enhancing Controls of IT Investments through Oversight and 

Accountability The Clinger-Cohen Act of 199626 requires Federal agencies to establish 

effective management structures to govern and improve IT investments. With close to 

$3 billion annual IT investments, the Department is responsible for managing one of the 

largest IT portfolios among civilian agencies and relies on cost and schedule variances for 

early identification of investments that require management attention. Both OMB and 

the Department require Operating Administrations to use Earned Value Management 

(EVM)—which compares the value of work accomplished in a given period against the 

planned value of work scheduled for that period—to compile the cost and schedule 

variances. However, Operating Administrations did not specify EVM requirements in 

acquisition contracts; contractors’ systems for compiling EVM data were not certified, as 

required by OMB; and standard work breakdown structures were not used in compiling

reliable EVM measures. In response, the Department issued detailed EVM 

implementation guidance. The Department needs to evaluate whether Operating 

Administrations have implemented the EVM system in compliance with Department

guidance.

Another area requiring senior management’s continued attention is the monitoring and 

oversight of the Department’s major IT investment projects. The Department initially 

established an Investment Review Board to oversee DOT’s major IT investments. In fiscal 

year 2007, the Department delegated oversight responsibility to Operating

Administration review boards, which include modal CIOs, Chief Financial Officers, Heads 

or Chiefs of Contracting, Chief Counsels, and Administrators (if appropriate). However, 

Operating Administrations did not perform this duty properly. For example, some 

Operating Administrations were not meeting to review investments. The Department 

needs to hold Operating Administrations’ senior management accountable for overseeing 

the performance of their major IT investment projects.

 

26 Pub.L. 104-106, Information Technology Management Reform Act of 1996, February 10, 1996.
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Improving the Governance of Information Technology 

Resources 

2010 Top Management Challenges, Department of Transportation 39

Related Products The following related reports, testimonies, and advisories can 

be found on the OIG website at http://www.oig.dot.gov. 

• Data Integrity of the Commercial Driver’s License Information System, July 30, 2009. 

• Web Applications Security and Intrusion Detection in Air Traffic Control Systems, May 

4, 2009. 

• Department’s Implementation of Earned Value management and Security Cost 

Reporting, April 24, 2009. 

• DOT Information Security Program, October 8, 2008. 

• DOT Privacy Policies and Procedures, September 9, 2008. 

For more information on the issues identified in this chapter, please contact, 

Rebecca Leng, Assistant Inspector General for Financial and Information 

Technology Audits, at (202) 366-1407. 
Other Accompanying Information

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CHAPTER 8

Developing a Funding Framework for the 

Next Surface Transportation 

Reauthorization

2010 Top Management Challenges, Department of Transportation 40

Source: Missouri Department of Labor and Industrial Relations

I n fiscal year 2009, the Federal Government spent over $38 billion to help states 

preserve and enhance America’s roadways. Despite this spending, over one-half of the 

Nation’s roads are in less than good condition and more than one-quarter of the 

Nation’s bridges are structurally deficient or functionally obsolete. Further, this spending 

is mostly directed at existing infrastructure not on new capacity. Over the past few 

decades, the total number of miles traveled by automobiles and trucks roughly doubled, 

while total number of highway lane miles grew only 4.4 percent. The next surface 

transportation reauthorization will need to provide a comprehensive funding framework 

for addressing infrastructure needs.

Key Challenges

• Ensuring the short-term solvency of the Highway Trust Fund (HTF). 

• Assessing the annual Federal funding needed to preserve and enhance surface 

transportation infrastructure.

• Developing a comprehensive funding framework for the future.
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Transportation Reauthorization

2010 Top Management Challenges, Department of Transportation 41

Ensuring the Short-Term Solvency of HTF HTF confronted a severe cash crisis 

during each of the past 2 fiscal years, necessitating an $8 billion and $7 billion cash infusion 

from the general fund in fiscal years 2008 and 2009, respectively. Several actions 

contributed to this crisis.

First, beginning in FY 2001, halfway through the period authorized by the Transportation 

Equity Act for the 21st Century (TEA-21), outlays began to outpace receipts and erode a 

cash surplus. The surplus was further eroded following the enactment of the Safe, 

Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) 

in 2005, which increased contract authority over TEA-21 without an associated increase in 

receipts (see figure 8-1). 

Figure 8-1. Highway Account - Comparison of Outlays to Receipts under SAFETEA-LU, 

Fiscal Year in Billions of Dollars

Note: Fiscal years 2008 and 2009 receipts do not include the $8 billion and $7 billion general fund transfers, 

respectively. 

Source: Federal Highway Administration
Other Accompanying Information

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2010 Top Management Challenges, Department of Transportation 42

Second, the unforeseen decline in vehicle miles travelled over the past couple of years—

due to high fuel prices and a lagging economy—also caused the Highway Account balance 

to decline more rapidly than anticipated (see figure 8-2). Barring congressional 

intervention, the Department would have been forced to reduce or suspend 

reimbursements to states for eligible highway expenditures.

Figure 8-2. Highway Account – Ending Cash Balance under SAFETEA-LU, Fiscal Year in 

Billions of Dollars

Source: Federal Highway Administration

Finally, because the current highway authorization, SAFETEA-LU, expired at the end of 

fiscal year 2009 and was extended rather than reauthorized, measures to address future 

shortfalls in HTF have yet to be addressed. To avoid disruptions in payments to states, the 

Department must work with Congress to manage HTF’s on-going solvency concerns and 

replenish HTF funds.
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Transportation Reauthorization

2010 Top Management Challenges, Department of Transportation 43

Assessing the Annual Federal Funding Needed To Preserve and 

Enhance Surface Transportation Infrastructure While the Department and

Congress agree that the surface transportation infrastructure plays a key role in the growth 

of the Nation’s economy and that an increase in Federal spending in support of surface 

transportation is needed, what the increase should be has yet to be determined. 

The House Transportation and Infrastructure Committee recently proposed legislation that 

would channel $500 billion—$450 billion for highway, public transportation and safety 

programs and $50 billion for high speed rail—in Federal funding to support state surface 

transportation programs over 6 years. This proposed funding level is significantly higher 

than the spending levels laid out in SAFETEA-LU, which authorized $244 billion in Federal 

funding over a 5-year period. 

While the Department recognizes the need for an increase in Federal spending in support 

of state highway programs, it has yet to propose spending levels for the next surface 

transportation reauthorization. Consequently, the Department must work closely with 

Congress and other stakeholder groups to develop a consensus on what an appropriate 

level of Federal surface infrastructure investment should be. 

Developing a Comprehensive Funding Framework for the Future The 

Department’s ability to reimburse states for authorized expenditures depends on the HTF 

balance, which has been declining steadily—partly because the fuel tax rate is not adjusted 

for inflation and has not been increased since 1993. Essentially, in response to 

unprecedented increases in fuel prices during fiscal year 2008, followed by the ongoing 

economic recession, motorists began cutting back on their driving and fuel purchases and 

purchases of new heavy trucks dropped dramatically, thereby generating fewer tax 

receipts for HTF. Since the beginning of SAFETEA-LU, the current funding mechanism was

barely able to raise $30 billion to $34 billion annually for the Highway Account compared to 

annual outlays of $33 billion to $38 billion, which led to a significant deterioration in the 

cash available to HTF’s Highway Account. 

The current funding mechanism is unable to generate adequate cash receipts to meet 

current outlay levels, let alone the higher levels implied by an increase in the Federal 

funding for surface transportation. Since the Administration has opposed any increase in 

the gas tax given the economic environment, the Department will have to work closely 
Other Accompanying Information

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Transportation Reauthorization

2010 Top Management Challenges, Department of Transportation 44

with Congress, states, and other stakeholders to evaluate all options—including potential 

changes to the current funding mechanism as well as the use of alternative funding 

mechanisms—to address the resulting funding gap.

The Department must work with Congress to enact a comprehensive funding framework 

for the next surface transportation reauthorization that sufficiently increases HTF’s cash 

receipts to match its outlays. Barring this, HTF will continue to experience cash shortfalls

that could impede the flow of Federal funding for surface transportation.

Related Products The following related reports and testimonies can be found on the 

OIG website at http://www.oig.dot.gov.

• Letter to Senate Budget Committee Ranking Member Gregg Regarding DOT’s 

Projections of Highway Trust Fund Solvency, June 24, 2009. 

• Growth in Highway Construction and Maintenance Costs, September 26, 2007. 

• Report on Federal Highway Administrations Oversight of Load Ratings and Postings on 

Structurally Deficient Bridges on the National Highway System, March 21, 2006. 

For more information on the issues identified in this chapter, please contact 

Mitchell Behm, Program Director for Amtrak, High-Speed Rail, and Economic 

Analysis, at (202) 366-1995. 
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Strengthening the Department’s 

Acquisition Workforce

2010 Top Management Challenges, Department of Transportation 45

Source: Colorado Department of Transportation, used with permission

 

D OT’s acquisition workforce is responsible for managing and overseeing the 

Department’s contracts for goods and services, which DOT estimated at 

$5.5 billion27 in fiscal year 2009. Since 2001, human capital management has been 

identified as a Governmentwide high-risk area. With the expanding and increasingly 

complex acquisition workload, addressing this risk is critical.28 Succession planning is a 

major concern across the Government—at DOT alone, about 46 percent of contracting 

specialists are eligible for retirement in less than 5 years. DOT has completed several initial 

assessments of its acquisition workforce to meet OMB and Office of Personnel 

Management mandates. However, DOT needs to do more to ensure it has the needed size 

and skill levels to support its mission, especially given its need to oversee billions of dollars 

in Recovery Act funds. 

27 Based on data from the Federal Procurement Data System-Next Generation (FPDS-NG) provided by DOT’s 

Office of the Senior Procurement Executive. 28 GAO, High-Risk Series, An Update, January 2009, GAO-09-271. 
Other Accompanying Information

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2010 Top Management Challenges, Department of Transportation 46

Key Challenges

• Addressing acquisition workforce retention and recruitment concerns.

• Ensuring a sufficient and competent acquisition workforce to meet mission needs. 

Addressing Acquisition Workforce Retention and Recruitment 

Concerns DOT’s acquisition workforce is facing a potential retirement wave. According 

to the Federal Acquisition Institute, the percentage of current employees in DOT’s 

contracting series29 who are eligible to retire will more than triple—from 20 percent (77 

employees) to 63 percent (241 employees)—between fiscal years 2008 and 2018 (see 

figure 9-1). This rate is about 10 percent higher than the average for civilian agencies. The 

bulk of contract specialists eligible to retire are experienced mid-managers, heightening 

the need for DOT’s attention. While DOT developed a Strategic Acquisition Workforce 

Succession Plan in 2009, the plan is based on a Department survey of less than half of its 

acquisition workforce and may not adequately capture retirement rates.

30 For example, 

the plan shows an estimated 27 percent of DOT’s contract series workforce will be eligible 

to retire in 2014, while the Federal Acquisition Institute estimates 47 percent will be 

retirement eligible in 2013. To better capture retirement rates, DOT may need to 

reevaluate its succession plan and the underlying acquisition workforce data upon which it 

is based. 

 

29 Under U.S. Office of Personnel Management position classification standards, the contracting series (GS1102) includes positions that manage, supervise, perform, or develop policies and procedures for 

professional work involving the procurement of supplies, services, construction, or research and 

development using formal advertising or negotiation procedures; the evaluation of contract price proposals; 

and the administration or termination and close out of contracts.

30 DOT had a 44.7 percent survey response rate; 553 of DOT’s acquisition employees in the following work 

areas responded to the survey: contracting (1102s), COTRs, and project managers.
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2010 Top Management Challenges, Department of Transportation 47

Figure 9-1. Retirement Eligibility of DOT’s Contracting Series Workforce by Fiscal Year

77

176

241

0

50

100

150

200

250

300

350

400

2008 2013 2018

Retirement Eligible Total Number

Source: Federal Acquisition Institute Fiscal Year 2008 Annual Report on the Federal Acquisition Workforce

DOT has taken actions to address recruitment and retention issues facing its acquisition 

workforce, including establishing an Acquisition Workforce Working Group, comprised of 

contracting and human resource officials from across the Department, to focus on these 

issues. FAA similarly created action teams to develop plans and identify resources required 

to implement strategies for core National Airspace Systems projects.

DOT has defined acquisition as a mission critical function. As such, the Department needs 

to keep moving forward in implementing initiatives to strategically assess its acquisition 

workforce to ensure it is sufficient and competent.
Other Accompanying Information

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2010 Top Management Challenges, Department of Transportation 48

Ensuring a Sufficient and Competent Acquisition Workforce To Meet 

Mission Needs In February 2009, DOT issued its first Strategic Acquisition Workforce 

Succession Plan.

31 However, according to a senior Office of Senior Procurement Executive 

official responsible for workforce issues, DOT did not thoroughly assess its acquisition 

workforce and contract needs across the Department. While DOT has completed an 

inventory of acquisition positions for contracting officers and specialists, program 

managers, and contracting officer technical representatives (COTR), the plan does not 

show the relationship between its existing and planned contract awards and the 

acquisition workforce needed to accomplish this work. The Department has also identified 

hiring, retention, and skills development strategies to address its acquisition workforce 

needs. However, Operating Administrations have not made sufficient progress in 

implementing these strategies—in part because DOT has not determined the optimal size 

for its workforce or planned for obtaining needed resources and staff to implement the 

strategies and the new demands of ARRA.

At the same time, DOT issued an Acquisition Workforce Gap Analysis and Improvement 

Plan that highlights weaknesses in several key competencies in its contracting, COTR, and 

project manager functions (see table 9-1).

32

Table 9-1. Key Competency Gaps by Function

Contracting COTRs Project Managers

• Defining government • Pre-award communication • Business cost-estimating and 

requirements • Contract management financial management

• Defining performance-based • Life cycle logistics

acquisitions • Contracting

• Conducting proposal analysis 

and evaluation

Source: OIG analysis of DOT’s Acquisition Workforce Gap Analysis and Improvement Plan

DOT is designing strategies to address several of these gaps, and in June 2009, submitted a 

progress report to OPM on its efforts. For example, DOT reported that the Office of the 

Senior Procurement Executive has begun to develop a training curriculum for program 

 

31 DOT developed the -plan to meet National Defense Authorization Act, Fiscal Year 2008, Pub.L. 110-181, 

855, which required agencies to address recruitment and training needs of their acquisition workforce. 

32 The plan used results from the Federal Acquisition Institute’s (FAI) 2008 survey of the Federal acquisition 

workforce, based on the FAI’s Federal Competency Assessment Tool-Acquisition Workforce.
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2010 Top Management Challenges, Department of Transportation 49

managers, and that several Operating Administrations developed their own training plans 

for their program managers. While training strategies are likely needed given project 

management’s role in the day-to-day planning and oversight of acquisitions, it is not clear 

that DOT’s efforts are appropriately targeted because its gap analysis is based on the 

Department’s survey of less than half of its acquisition workforce. To better prioritize its 

acquisition workforce development strategies, DOT will need to base future improvements 

on surveys that are more representative of its workforce.

FAA, whose procurement function is autonomous from DOT’s, has made some progress in 

developing an acquisition workforce plan and created action teams to implement it.33 The 

plan is based on FAA’s Lifecycle Management Process, which is used to manage the 

acquisition of major capital investments supporting the National Airspace System. 

Consistent with other Federal agencies that manage large procurements, FAA broadly 

defines its acquisition workforce to include employees in disciplines such as 

research/engineering, business and finance, and test and evaluation. Based on its need to 

sustain systems and support new Next Generation Air Transporation System programs, 

FAA’s plan identifies a requirement to increase the acquisition workforce by 35 percent (as 

least 350 positions) through fiscal year 2011.34 FAA faces significant challenges in 

implementing its acquisition workforce plan, including executing a sourcing/hiring plan; 

reviewing acquisition supply/demand across the organization to meet priorities; creating 

an acquisition career development plan; and institutionalizing an acquisition workforce 

planning process.

DOT also established career development programs to help ensure that its acquisition 

workforce meets Federal Acquisition Institute and OMB certification requirements. FAA , 

while not covered by these mandates, established similar career development programs. 

However, all of DOT’s workforce is not yet certified to the level as required for their 

positions. DOT will need to ensure that its managers provide sufficient funds and time for 

staff to complete required certification and training requirements and that its workforce 

follows through to meet these requirements.

 

33 FAA is exempt from the Federal Procurement Policy Act. 34 Increased positions are based on a comparison of existing positions for the first quarter of fiscal year 2009 

to projected staffing needs at the end of fiscal year 2011.
Other Accompanying Information

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2010 Top Management Challenges, Department of Transportation 50

Related Product The following related report can be found on the OIG website at 

http://www.oig.dot.gov. 

• American Recovery and Reinvestment Act of 2009: Oversight Challenges Facing the 

Department of Transportation, March 31, 2009.

For more information on the issues identified in this chapter, please contact

Mark Zabarsky, Assistant Inspector General for Procurement and Acquisition 

Audits, at (202) 366-5225.
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CHAPTER 10

Successfully Implementing the Newly 

Created Multi-Billion Dollar High-Speed 

Intercity Passenger Rail Program

2010 Top Management Challenges, Department of Transportation 51

 

I n April 2009, the President, along with the Vice President and the Transportation 

Secretary, announced a new vision for a national network of high-speed rail corridors.35 

Implementing DOT’s High-Speed Intercity Passenger Rail (HSIPR) Program represents a 

significant change to the Nation’s transportation system—one that will require substantial 

planning on the part of states and the Federal Government. Three key pieces of legislation 

establish the framework for HSIPR: DOT Appropriations Acts for fiscal years 2008 and 2009, 

the Passenger Rail Investment and Improvement Act of 2008 (PRIIA), and the American 

Recovery and Reinvestment Act of 2009 (ARRA).

Key Challenges

• Designing and implementing the HSIPR program from the ground up.

• Establishing policies and practices for the program’s grant lifecycle process and 

oversight activities.

35 High-speed rail is a family of transportation options that address longer-distance passenger transport 

needs in heavily populated corridors.
Other Accompanying Information

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CHAPTER 10

Successfully Implementing the Newly Created MultiBillion Dollar High-Speed Intercity Passenger Rail 

Program 

2010 Top Management Challenges, Department of Transportation 52

Designing and Implementing the HSIPR Program from the Ground Up 

The HSIPR program demands that the Federal Railroad Administration (FRA) undergo a 

major organizational transformation, from a relatively small agency focused primarily on 

rail safety issues to a grant-making agency responsible for starting up a large, long-term 

program—one that is likely to receive significant public attention and scrutiny. Taking on 

the new responsibilities that come with this transformation has been a challenge for FRA. 

Consequently, FRA asked Congress to increase the amount of ARRA funds it can use to set 

up, administer, and oversee the HSIPR program from $20 million to $80 million—or 1 

percent of its total ARRA funding. FRA has also requested an additional 27 full-time 

equivalents (FTE) in its fiscal year 2010 budget—a large portion of which are planned to 

help support the HSIPR program .36

FRA has yet to acquire sufficient capacity to effectively manage the program, and start-up 

deadlines are tight. FRA was required to issue its strategic plan for HSIPR by April 2009—

just 2 months after ARRA’s enactment—and interim guidance by June 2009. Funding for 

HSIPR is divided among four tracks. 

• Track 1 focuses on intercity passenger rail projects funded under ARRA and under

PRIIA. Eligible projects include infrastructure, facilities, and equipment. These projects 

also fall under the competitive grant programs authorized by Section 301 or Section 

302 of PRIIA, for the benefit of existing services, including those that support 

development of high-speed rail.

• Track 2 focuses on new high-speed rail corridor and intercity passenger rail services, or 

substantial upgrades to existing corridor services. According to FRA’s ARRA-required 

interim guidance, track 2 programs represent the long-term emphasis of the HSIPR 

program. In addition to being eligible under PRIIA section 301, track 2 projects are also 

eligible under PRIIA Section 501.

• Track 3 focuses on establishing a pipeline of future high-speed rail and intercity 

passenger rail projects and service development programs. This will be done by 

advancing planning activities for applicants at an earlier stage of the development 

process. Under track 3, FRA will enter into cooperative agreements for preparing 

service development programs, state rail plans, and service-level environmental 

documents.

 

36 These staff are to be distributed between FRA’s Office of Railroad Development (22 positions), Office of 

Chief Counsel (2 positions), and Office of Financial Management and Administration (3 positions). FRA 

already started hiring and anticipates these new staff will be on-board by the second quarter of FY 2010.
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• Track 4 provides an alternative for projects that would otherwise fit under track 1, but 

requires at least a 50-percent non-Federal funding match.

The program’s grant selection and award process for each of its four tracks was also fast 

paced (see table 10-1). 

Table 10-1. ARRA Track Deadlines According to FRA’s Interim Guidance

Track 1 Track 2 Track 3 Track 4

Preapplication

July 10, 2009 July 10, 2009 July 10, 2009 July 10, 2009

Application

Aug. 24, 2009 Oct. 2, 2009 Aug. 24, 2009 Aug. 24, 2009

FRA Obligation

By Sept. 30, 2010 By Sept. 30, 2011 As soon as possible 

after selection

As soon as possible 

after selection

Project(s) Completion

Within 2 years of 

obligation

Sept. 30, 2017 Within 2 years of 

obligation

Within 5 years of 

obligation

Source: Federal Railroad Administration

In the face of these tight deadlines, FRA has acknowledged it lacks the capacity to start up 

and effectively manage HSIPR—shortfalls it attributes to the limited availability of staff to 

dedicate to the program and the limited operating funds authorized in ARRA. According to 

FRA officials, the money currently allotted for program management will be depleted 

during the grant evaluation and award phase, leaving no money for grant administration 

oversight.

Establishing Policies and Practices for the Program’s Grant Lifecycle 

Process and Oversight Activities While FRA officials recognize the challenge 

before them, the Agency has not finalized or fully documented its program implementation

strategy. FRA has developed a grants management master plan (GMMP) that contains over 

400 action items, but the plan does not contain deadlines or contingencies for performing 
Other Accompanying Information

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critical pre-award tasks, such as establishing standard grant agreements and standard 

operating procedures, tools, or templates to help oversee projects and conduct site visits.

37 

FRA planned to begin awarding its first found of grants in fall 2009. However, following 

receipt of our draft report that discussed the risks associated with trying to award the 

grants that early without a fully documented process, FRA decided to delay the awards 

until early 2010.

In addition, while the initial process of evaluating applications has been completed, 

questions still remain as to how FRA will evaluate cost, schedule, and ridership estimates. 

For example, FRA has not fully determined how it will assess the accuracy of applicants’ 

rider and revenue forecasts—a key aspect of how the merit and feasibility of proposed 

projects will be determined. FRA officials indicated that, given the tight time frames placed 

on the Agency by ARRA, they are currently addressing only the tasks they deem to be on 

the “critical path.” Concurrent implementation and integration of a new electronic 

management system for administering grants further heightens implementation risks in the 

rush to meet statutory deadlines.38

Related Products The following related reports and testimonies can be found on the 

OIG website at http://www.oig.dot.gov. 

• American Recovery and Reinvestment Act: DOT’s Implementation Challenges and the 

OIG’s Strategy for Continued Oversight of Funds and Programs, April 30, 2009, and April 

29, 2009. 

• American Recovery and Reinvestment Act of 2009: Oversight Challenges Facing the 

Department of Transportation,” March 31, 2009.

For more information on the issues identified in this chapter, please contact 

Mitch Behm, Program Director for Amtrak, High-Speed Rail, and Economic 

Analysis, at (202)-366-1995. 

 

37 With the assistance of a contractor, FRA expects to complete a grant management manual, which will 

include comprehensive grants management policies and procedures by March 2010.

38 ARRA requires FRA to select all projects by September 30, 2012.
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2010 Top Management Challenges, Department of Transportation 55

EXHIBIT. COMPARISON OF FY 2010 AND FY 2009 TOP 

MANAGEMENT CHALLENGES 

Items in FY 2010 Report Items in FY 2009 Report 

• Maximizing the Department’s Economic 

Recovery Investments

• Enhancing Surface Safety Programs to • Enhancing and Deploying Programs for 

Reduce Injuries and Fatalities While Defining Reducing the Serious Consequences of 

a New Federal Role in Transit Safety Surface Transportation Crashes 

• Maximizing Federal Surface Infrastructure • Maximizing Current Highway and Transit 

Investments by Helping States Better Infrastructure Investments

Allocate Resources and Providing Effective • Preventing Catastrophic Failures and 

Oversight Obsolescence in the Nation’s Aging Surface 

Transportation Infrastructure

• Addressing Human Factors and • Enhancing Aviation Safety and Maintaining 

Strengthening the Regulatory Oversight Confidence in FAA’s Ability to Provide 

Framework for Aviation Safety Effective Oversight of a Rapidly Changing 

Industry

• Moving Toward the Next Generation Air • Operating the National Airspace System 

Transportation System and Improving While Developing and Transitioning to the 

Performance of the National Airspace System Next Generation Air Transportation System 

• Improving Contract Management and • Improving Contract Operations and 

Oversight Maintaining Procurement Integrity

• Enhancing the Ability to Combat Cyber • Protecting Against Increasing Cyber Security 

Attacks and Improving the Governance of Risks and Managing Limited Information 

Information Technology Resources Technology Resources More Effectively 

• Developing a Funding Framework for the • Developing a Plan to Address Projected

Next Surface Transportation Reauthorization Highway and Transit Funding Shortfalls 

• Strengthening the Department’s Acquisition • Improving Contract Operations and 

Workforce Maintaining Procurement Integrity

• Successfully Implementing the Newly 

Created Multi-Billion Dollar High-Speed 

Intercity Passenger Rail Program 

• Enhancing Mobility and Reducing 

Congestion in America’s Transportation 

System
Other Accompanying Information

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APPENDIX: DEPARTMENT RESPONSE

56
402

57
Other Accompanying Information

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58
IMPROPER PAYMENTS INFORMATION ACT OF 2002

Refer to pages 35-41 for IPIA reporting.

404
Other Accompanying Information

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The Performance Crosswalk – 

Outcomes, Areas and Measures

The Performance Crosswalk – Outcomes, Areas and Measures tables enable the reader to 

track measures as they are presented in the DOT Strategic Plan to how they are applied in 

practice and reported in the DOT Performance and Accountability Report. For any measure that has not been selected for PAR reporting, DOT has provided an explanation as to 

why it is not considered to be the most informative representation of DOT performance.

Generally, there are three rationale that explain why adjustments were made to the portfolio of measures and which measures are presented in the PAR:

•	 Because there are many more measures in the plan than are reasonable to 

report in the PAR, DOT selected the most representative measures to include in 

this document.

•	 DOT has made progress in several measurement areas in terms of program 

accomplishments or in improvements the measures themselves, therefore DOT is 

also presenting several improved measures that are enhancements on the spirit 

and intent of the measures as stated in the Strategic Plan. 

•	 DOT grouped related programs and measures into like categories to capture 

and report information in the most logical manner. Therefore the PAR presents 

measurement results by Performance Areas that relate to the Strategic Outcomes 

stated in the Strategic Plan.

To review this information in greater detail, please visit: www.dot.gov.
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