United States General Accounting Office

GAO Report to Congressional Requesters

May 1999 RESULTS ACT

Observations on the

Department of

Transportation’s Fiscal

Year 2000 Performance

Plan

GAO/RCED-99-153

GAO United States

General Accounting Office

Washington, D.C. 20548

Resources, Community, and

Economic Development Division

B-282558 

May 7, 1999

Congressional Requesters

Under the Government Performance and Results Act of 1993 (the Results

Act), federal agencies prepare annual performance plans covering the

program activities set out in their budgets. You asked us to summarize our

observations on the Department of Transportation’s (DOT) performance

plan for fiscal year 2000 to facilitate your review of the plan, which was

submitted to the Congress in February 1999. This report provides

information on the usefulness of DOT’s plan for decision-making in terms of

(1) providing a clear picture of intended performance across the

Department, (2) discussing the strategies and resources that DOT will use

to achieve its goals, and (3) providing confidence that the performance

information will be credible. For each of these areas, we also provide

information on the degree to which DOT’s fiscal year 2000 performance

plan represents an improvement over the fiscal year 1999 plan. In addition,

this report provides observations on the extent to which the Department

has implemented performance-based management and the challenges the

Department faces in becoming performance-based.

Results in Brief Overall, DOT’s performance plan for fiscal year 2000 should be a useful tool

for decisionmakers. It provides a clear picture of intended performance

across the Department, a specific discussion of the strategies and

resources that the Department will use to achieve its goals, and general

confidence that the Department’s performance information will be

credible. For example, the performance goal for reducing recreational

boating fatalities from 819 in fiscal year 1997 to 720 or fewer in fiscal year

2000 will be accomplished by activities of several U.S. Coast Guard

programs—boating safety grants provided to the states, regulations

developed by the Recreational Boating Safety program, and boat

inspections conducted by the Coast Guard auxiliary. Figure 1 highlights

the plan’s major strengths and key weaknesses as DOT seeks to make

additional improvements to its plan.

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Figure 1: Major Strengths and Key

Weaknesses of DOT’s Fiscal Year 2000

Performance Plan Major strengths

•Contains results-oriented goals and quantifiable measures.

•Discusses strategies and resources for achieving intended performance.

•Describes efforts to verify and validate performance data and the data’s limitations.

Key weaknesses

•Does not consistently link the strategic outcomes to the performance goals.

•Does not consistently explain coordination strategies with outside organizations.

•Does not consistently include goals and measures for addressing the management

challenges facing the Department.

DOT’s fiscal year 2000 performance plan represents a moderate

improvement over the fiscal year 1999 plan in that it indicates some degree

of progress in addressing the weaknesses that we identified in our

assessment of the fiscal year 1999 plan. We observed that the fiscal year

1999 plan did not (1) sufficiently address management challenges facing

the Department; (2) consistently link strategic goals, program activities,

and performance goals; (3) indicate interagency coordination for

crosscutting areas; or (4) provide sufficient information on external

factors, the processes and resources for achieving the goals, and the

performance data. Among the improvements in the fiscal year 2000 plan

are more consistent linkages among the program activities and

performance goals, additional information on external factors and

strategies for achieving the goals, and a more comprehensive discussion of

the data’s quality. These improvements and other activities indicate that

DOT has clearly made good progress in implementing performance-based

management. For example, the plan indicates that the Department is

incorporating the performance goals into performance agreements

between the administrators of DOT’s agencies and the Secretary. However,

the plan still needs further improvement, especially in explaining how

certain management challenges, such as financial management

weaknesses, will be addressed. For example, DOT’s Office of Inspector

General (OIG) reported that the Department’s accounting system could not

be used as the only source of financial information to prepare its financial

statements. While the fiscal year 2000 plan does not address this issue, the

Department has recognized the financial reporting deficiencies identified

by the OIG and is taking actions to correct them. The lack of accountability

for financial activities is a key challenge that DOT faces in implementing

performance-based management.

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Background The Results Act requires annual performance plans to cover each program

activity set out in the agencies’ budgets. The act requires the plans to

(1) establish performance goals to define the level of performance to be

achieved by a program activity; (2) express such goals in an objective,

quantifiable, and measurable form; (3) briefly describe the strategies and

resources required to meet performance goals; (4) establish performance

indicators to be used in measuring or assessing the relevant outputs,

service levels, and outcomes of each program activity; (5) provide a basis

for comparing actual results with the performance goals; and (6) describe

the means to verify and validate information used to report on

performance. DOT submitted to the Congress performance plans for fiscal

years 1999 and 2000.

DOT’s Performance

Plan Provides a Clear

Picture of Intended

Performance Across

the Department

DOT’s performance plan provides a clear statement of the performance

goals and measures that address program results. Program goals and

measures are expressed in a quantifiable and measurable manner and

define the levels of performance. However, the plan could be improved by

consistently linking the performance goals and strategic outcomes and

consistently describing interagency coordination for crosscutting

programs and the Department’s contribution to these programs. In

addition, the plan could be improved by consistently describing how the

management challenges facing the Department will be addressed,

including how the Department will address certain financial management

challenges identified by its OIG.

Performance Goals and

Measures

DOT’s plan includes performance goals and measures that address program

results and the important dimensions of program performance. The goals

and measures define the level of performance and activities for specific

programs. For example, the performance goal for reducing recreational

boating fatalities from 819 in fiscal year 1997 to 720 or fewer in fiscal year

2000 will be accomplished by the core activities of several U.S. Coast

Guard programs—boating safety grants provided to the states, regulations

developed by the Recreational Boating Safety program, and boat

inspections conducted by the Coast Guard auxiliary.

The plan’s goals and measures are objective, quantifiable, and measurable.

For all except a few performance goals, DOT’s plan includes projected

target levels of performance for fiscal year 2000; for several goals, the plan

includes multiyear targets. For goals that have no targets, an appendix to

the plan explains why a target was not included. For nearly all of the goals

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and measures, the plan includes graphs that show baseline and trend data

as well as the targets for fiscal years 1999 and 2000. The graphs clearly

indicate trends and provide a basis for comparing actual program results

with the established performance goals. For example, the performance

goal for hazardous materials incidents has a graph that shows the number

of serious hazardous materials incidents in transportation from 1985

through 1997. The graph also includes target levels for fiscal years 1999

and 2000 so a reader can conclude that this goal is not new in the fiscal

year 2000 plan. If only a fiscal year 2000 target is indicated on a graph, the

reader can assume that this is a new goal; however, this point is not

explicit. The plan could be improved by indicating new goals that do not

have a counterpart in the previous version.

In addition, the plan includes performance goals to resolve a few

mission-critical management challenges identified by us and/or DOT’s OIG.

1

(See app. I.) For example, we reported that the Federal Aviation

Administration (FAA) had encountered delays in implementing security

initiatives at airports. The plan includes a performance goal to increase the

detection rate of explosive devices and weapons that may be brought

aboard aircraft, which will help measure progress in implementing the

security initiatives. However, for the majority of the management

challenges that have been identified, the plan does not include goals and

measures. For example, the plan lists several activities to address

problems with FAA’s $41 billion air traffic control modernization program,

which since 1995 we have identified as a high-risk information technology

initiative. The plan could be improved by consistently including goals and

specific measures for addressing the challenges.

In addition, the plan could be improved by more fully explaining how the

Department will address certain financial management challenges

identified by the OIG. For example, the OIG reported that the Department’s

accounting system could not be used as the only source of financial

information to prepare its financial statements. The fiscal year 2000 plan

does not address this issue. Additionally, we question whether the plan

includes the most current or complete milestones for solving long-standing

financial management weaknesses. For example, the plan states that in

fiscal year 1999, FAA’s new cost accounting system will capture financial

information by project and activity for all of FAA’s projects. However,

according to FAA’s fiscal year 1998 audit report, the cost accounting system

1

See our report entitled Major Management Challenges and Program Risks: Department of

Transportation (GAO/OCG-99-13, Jan. 1999) and DOT OIG’s report entitled Top Ten Management

Issues: Department of Transportation (TW-1999-031, Dec. 9, 1998).

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that was scheduled to be operational by October 1, 1998, will not be fully

implemented until March 31, 2001.

Strategic Outcomes DOT’s plan includes strategic outcomes for each of the Department’s five

strategic goals.2

 For example, for the strategic goal of safety, the

Department aims to achieve six strategic outcomes—such as reducing the

number of transportation-related deaths, the number and severity of

transportation-related injuries, and the number of reportable

transportation incidents and their related economic costs. The plan then

lists specific annual performance goals that the Department will use to

gauge its progress. However, in a few cases, the strategic outcomes have

no related annual performance goals. For example, a strategic outcome

related to mobility—to provide preventative measures and expeditious

responses to natural and man-made disasters in partnership with other

agencies to ensure that the Department provides for the rapid recovery of

the transportation system—cannot be logically linked to any annual

performance goals. The plan could be improved by including at least one

annual performance goal for each strategic outcome.

Crosscutting Programs For each performance goal, the plan typically mentions those federal

agencies that have outcomes in common with the Department. The plan

also indicates goals and measures that are being mutually undertaken to

support crosscutting programs. For example, the plan states that both FAA

and the National Aeronautics and Space Administration (NASA) have

complementary performance goals to decrease by 80 percent the rate of

aviation fatalities by the year 2007. However, the plan could be improved

by describing the nature of the coordination and consistently discussing

the Department’s contribution to the crosscutting programs. The plan does

not discuss the roles played by FAA and NASA and how their partnership will

help reduce the rate of aviation fatalities.

Comparison With the

Fiscal Year 1999 Plan

The discussion of performance goals and measures in DOT’s fiscal year

2000 performance plan is a moderate improvement over the discussion in

the fiscal year 1999 performance plan and shows some degree of progress

in addressing the weaknesses that we identified in the fiscal year 1999

plan. We observed that the fiscal year 1999 plan could have been improved

by (1) explaining how the management challenges are related to the rest of

2

DOT has five strategic goals relating to safety, mobility, economic growth and trade, the human and

natural environment, and national security.

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the performance plan and by including goals and specific measures for

addressing the challenges; (2) consistently linking strategic goals, program

activities, and performance goals; and (3) indicating interagency

coordination for the crosscutting programs and consistently discussing the

Department’s contribution to these programs. Among the improvements,

the fiscal year 2000 plan describes the management challenges facing the

Department, explains activities that will be undertaken to address them,

and provides page citations for specific performance goals that address

the challenges discussed elsewhere in the plan.

DOT’s Performance

Plan Provides a

Specific Discussion of

the Strategies and

Resources the

Department Will Use

to Achieve Its Goals

DOT’s plan provides a specific discussion of the strategies and resources

that the Department will use to achieve its performance goals. The plan

covers each program activity in the Department’s $51 billion proposed

budget for fiscal year 2000. An appendix to the performance plan lists the

Department’s program activities and proposed funding levels by strategic

goal. These funds are also mentioned in the discussions of strategic goals

in the body of the plan.

For each performance goal, the plan lists an overall strategy for achieving

it, as well as specific activities and initiatives. For example, DOT expects to

increase transit ridership through investments in transit infrastructure,

financial assistance to metropolitan planning organizations and state

departments of transportation for planning activities, research on

improving train control systems, and fleet management to provide more

customer service.

However, our work has identified problems associated with some

strategies. The plan identifies the rehabilitation of approximately 200

airport runways in the year 2000 as one of the activities contributing to the

performance goal concerning the condition of runway pavement. We

reported that there is a lack of information identifying the point at which

rehabilitation or maintenance of pavement can be done before relatively

rapid deterioration sets in. As a result, FAA is not in a position to determine

which projects are being proposed at the most economical time.3

 We have

also reported on strategies for addressing the performance goal of

reducing the rate of crashes at rail-grade crossings, some of which are

included in the performance plan. For example, the plan addresses two

strategies noted in our report—closing more railroad crossings and

3

See Airfield Pavement: Keeping Nation’s Runways in Good Condition Could Require Substantially

Higher Spending (GAO/RCED-98-226, July 31, 1998).

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developing education and law enforcement programs—but does not

address the installation of new technologies.4

For each performance goal, the plan also describes external factors, called

special challenges, that can affect the Department’s ability to accomplish

the goal. For example, the performance goal for passenger vessel safety

includes the external factors of (1) the remote and unforgiving

environment at sea and human factors, which play an important role in

maritime accidents; (2) the complexity of the operation and maintenance

of passenger vessels; and (3) foreign and international standards that

apply to vessels. The plan describes how particular programs, such as the

marine safety program, will contribute to reducing the number of

casualties associated with high-risk passenger vessels. The plan also

indicates activities to address the external factors, including conducting

oversight of technologically advanced vessels, such as high-speed ferries,

and implementing and marketing the International Safety Management

Code.

In discussing corporate management strategies, the plan briefly describes

how the Department plans to build, maintain, and marshal the resources,

such as human capital, needed to achieve results and greater efficiency in

departmental operations. The corporate strategies are broadly linked to

the strategic goals. For example, the plan states that the human resource

management strategy supports the strategic goals by ensuring that DOT’s

workforce has the required skills and competencies to support program

challenges. The plan lists four key factors that will contribute to this

corporate strategy: workforce planning that will identify the need for key

occupations; managing diversity; learning and development activities to

support employees’ professional growth; and redesigning human resource

management programs, such as personnel and payroll processing.

In some cases, the plan lists specific programs under the corporate

strategies but does not consistently identify the resources associated with

them. For example, the plan discusses the completion of all remediation or

appropriate contingency plans to make the computer systems ready for

the year 2000 so that there are no critical system disruptions. However,

there is no discussion of the resources needed to support this strategy.

The discussion of strategies and resources in DOT’s fiscal year 2000

performance plan is much improved over the fiscal year 1999 plan. We

4

See Railroad Safety: DOT Faces Challenges in Improving Grade Crossing Safety, Track Inspection

Standards, and Passenger Car Safety (GAO/T-RCED-96-114, Apr. 1, 1996).

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observed that the fiscal year 1999 plan generally did a good job of

discussing the Department’s strategies and resources for accomplishing its

goals. However, we noted that the plan could have been improved in

several ways, such as by more clearly describing the processes and

resources required to meet the performance goals and recognizing

additional external factors—such as demographic and economic trends

that could affect the Department’s ability to meet its goals. DOT’s fiscal

year 2000 plan contains such information.

DOT’s Performance

Plan Provides General

Confidence That the

Performance

Information Will Be

Credible

The Department’s fiscal year 2000 performance plan generally provides a

clear and comprehensive discussion of the performance information. The

plan discusses the quality control procedures for verifying and validating

data, which, it says, DOT managers follow as part of their daily activities, as

well as an overall limitation to DOT’s data—a lack of timeliness—and how

the Department plans to compensate for this problem. In addition, for

each performance measure, the plan provides a definition of the measure,

data limitations and their implications for assessing performance,

procedures to verify and validate data, the source database, and the

baseline measure—or a reason why such information is missing. For

example, the plan defines the performance measure for maritime oil

spills—the gallons spilled per million gallons shipped—as counting only

spills of less than 1 million gallons from regulated vessels and waterfront

facilities and not counting other spills. The plan further explains that a

limitation to the data is that they may underreport the amount spilled

because they exclude nonregulated sources and major oil spills. However,

the plan explains that large oil spills are excluded because they occur

rarely, and, when they do occur, they would have an inordinate influence

on statistical trends. The plan also explains that measuring only spills from

regulated sources is more meaningful for program management.

However, in some cases, we found additional problems with DOT’s data

systems that could limit the Department’s ability to assess performance.

For example, the performance measure for runway pavement

condition—the percentage of runway pavements in good or fair

condition—is collected under FAA’s Airport Safety Data Program. We

reported that this information provides only a general pavement

assessment for all runways. This information is designed to inform airport

users of the overall conditions of the airports, not to serve as a pavement

management tool. We further noted that these assessments are made by

safety inspectors who receive little training in how to examine pavement

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conditions.5 The performance plan acknowledges our concerns and states

that FAA will update its guidance for inspecting and reporting the condition

of runway pavement and will ensure that inspectors are aware of the

guidance. However, as of March 1999, FAA had not updated its guidance for

inspectors. According to the National Association of State Aviation

Officials, which is under contract to FAA to conduct inspections and

provide data on runway conditions, new guidance would require

additional training for all inspectors, which is not provided for in the

contract. In addition, we discuss problems with DOT’s financial

management information later in this report.

The discussion of data issues in DOT’s fiscal year 2000 performance plan is

much improved over that in the fiscal year 1999 plan and is well on its way

to addressing the weaknesses that we identified in the fiscal year 1999

plan. We observed that the fiscal year 1999 plan provided a general

discussion of procedures to verify and validate data, which was not linked

to specific measures in the plan. For most measures, information about

the data’s quality was lacking. Among the improvements in the fiscal year

2000 plan is detailed information about each performance measure, which

includes information on verification, validation, and limitations.

Other Observations

on DOT’s

Implementation of

Performance-Based

Management

DOT is making good progress in setting results-oriented goals, developing

measures to show progress, and establishing strategies to achieve those

goals. However, the Department’s progress in implementing

performance-based management is impeded primarily by the lack of

adequate financial management information.

Progress in Implementing

Performance-Based

Management

DOT has clearly made good progress in implementing performance-based

management. The Department’s September 1997 strategic plan and

performance plan for fiscal year 1999 were both considered among the

best in the federal government. And, as discussed in this report, DOT’s

fiscal year 2000 performance plan improves upon the fiscal year 1999 plan.

Furthermore, our work has shown that prior to these Department-wide

efforts, several of DOT’s agencies made notable efforts in becoming

performance-based.

5

See Airfield Pavement: Keeping Nation’s Runways in Good Condition Could Require Substantially

Higher Spending (GAO/RCED-98-226, July 31, 1998).

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For example, in reviewing programs designated as pilots under the Results

Act, we noted the successful progress of the Coast Guard’s marine safety

program. We reported that the Coast Guard’s pilot program became more

performance-based, changing its focus from outputs (such as the number

of vessel inspections) to outcomes (saving lives). The Coast Guard’s data

on marine casualties indicated that accidents were often caused by human

error—not by deficiencies in the vessels. Putting this information to use,

the Coast Guard shifted its resources and realigned its processes away

from inspections and toward other efforts to reduce marine casualties. We

reported that the marine safety program not only improved its mission

effectiveness—for example, the fatality rate in the towing industry

declined significantly—but did so with fewer people and at lower cost.6

Additionally, in 1997, we cited the National Highway Traffic Safety

Administration (NHTSA) as a good example of an agency that was

improving the usefulness of performance information.7

 The agency’s fiscal

year 1994 pilot performance report provided useful information by

discussing the sources and, in some cases, the limitations of its

performance data. In 1998, we again cited NHTSA as a good example of an

agency that was developing performance measures for outcome goals that

are influenced by external factors.8

 Additionally, in 1997, we reported that

the Federal Railroad Administration had shifted its safety program to

focus on results—reducing railroad accidents, fatalities, and

injuries—rather than the number of inspections and enforcement actions.9

The fiscal year 2000 performance plan indicates that the Department is

taking further steps to instill performance-based management into its daily

operations. According to the plan, DOT has incorporated all of its fiscal

year 1999 performance goals into performance agreements between the

administrators of DOT’s agencies and the Secretary. At monthly meetings

with the Deputy Secretary, the administrators are expected to report

progress toward meeting these goals and program adjustments that may

be undertaken throughout the year.

6

Executive Guide: Effectively Implementing the Government Performance and Results Act

(GAO/GGD-96-118, June 1996).

7

The Government Performance and Results Act: 1997 Governmentwide Implementation Will Be

Uneven (GAO/GGD-97-109, June 2, 1997).

8

Managing for Results: Measuring Program Results That Are Under Limited Federal Control

(GAO/GGD-99-16, Dec. 11, 1998).

9

Rail Transportation: Federal Railroad Administration’s New Approach to Railroad Safety

(GAO/RCED-97-142, July 23, 1997).

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Finally, some individual agencies in DOT have developed performance

information that includes leading indicators associated with the

Department-wide goals. For example, the Department’s fiscal year 2000

budget submission for FAA’s facilities and equipment includes 10

performance goals—such as reducing the rate of accidents or incidents in

which an aircraft leaves the pavement—related to reducing the fatal

accident rate for commercial air carriers. According to DOT’s performance

plan, such indicators will be used to help assess the results of DOT’s

programs and provide a basis for redirecting them.

Challenges in

Implementing

Performance-Based

Management

A key challenge that DOT faces in implementing performance-based

management is the lack of accountability for its financial activities. In fact,

serious accounting and financial reporting weaknesses at FAA led us to

designate FAA’s financial management as a high-risk area. From an overall

perspective, DOT’s accounting information system does not provide reliable

information about the Department’s financial performance. DOT’s OIG has

consistently reported that it has been unable to express an opinion on the

reliability of DOT’s financial statements because of, among other things,

problems in the Department’s accounting system. Although the fiscal year

1998 audit report stated that FAA is making significant progress, it cited

deficiencies that include inaccurate general ledger balances and

unreconciled discrepancies between the general ledger balances

maintained in FAA’s accounting system and subsidiary records. The OIG also

cited problems with the Department’s accounting systems that prevented

the systems from complying with the requirements of the Federal

Financial Management Improvement Act of 1996. The OIG concluded that

for the Department’s systems to comply with the requirements of the act,

the Department needs, among other things, to modify its accounting

system so that it is the only source of financial information for the

consolidated financial statements. Concerns have also been expressed by

the OIG about the number and total dollar amount of adjusting entries

made outside the accounting system to prepare the financial statements.

For example, FAA made 349 adjustments to its accounting records, which

totaled $51 billion, in the process of manually preparing its fiscal year 1998

financial statement.

DOT is taking actions to correct the financial reporting deficiencies that

were identified by the OIG. On September 30, 1998, the Department

submitted to the Office of Management and Budget (OMB) a plan that

identified actions by DOT, especially FAA and the Coast Guard, to correct

the weaknesses reported in the OIG’s audits. For example, the plan called

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for DOT to complete physical counts of and develop appropriate support

for the valuation of property, plant, equipment, and inventory at FAA and

the Coast Guard.

Furthermore, the Department’s ability to implement performance

management is limited by the lack of a reliable cost accounting system or

an alternative means to accumulate costs. As a result, DOT’s financial

reports (1) may not be capturing the full cost of specific projects and

activities and (2) may lack a reliable “Statement of Net Cost,” which

includes functional cost allocations. The lack of cost accounting

information also limits the Department’s ability to make effective

decisions about resource needs and to adequately control the costs of

major projects, such as FAA’s $41 billion air traffic control modernization

program. For example, without good cost accounting information, FAA

cannot reliably measure the actual costs of its modernization program

against established baselines, which impedes its ability to effectively

estimate future costs. Finally, the lack of reliable cost information limits

DOT’s ability to evaluate performance in terms of efficiency and

effectiveness, as called for by the Results Act.

Agency Comments We provided the Department of Transportation (DOT) with the information

contained in this report for review and comment. The Department stated

that it appreciated our favorable review of its fiscal year 2000 performance

plan and indicated that it had put much work into improving on the fiscal

year 1999 plan by addressing our comments on that plan. DOT made several

suggestions to clarify the discussion of its financial accounting system,

which we incorporated. The Department acknowledged that work remains

to be done to improve its financial accounting system and stated that it has

established plans to do this. DOT also acknowledged the more general need

for good data systems to implement the Results Act and indicated that it is

working to enhance those systems.

Scope and

Methodology

To assess the plan’s usefulness for decisionmakers and maintain

consistency with our approach in reviewing the fiscal year 1999

performance plan, we used criteria from our guide on performance goals

and measures, strategies and resources, and verification and validation.10

This guide was developed from the Results Act’s requirements for annual

performance plans; guidelines contained in OMB Circular No. A-11, part 2;

10The Results Act: An Evaluator’s Guide to Assessing Agency Annual Performance Plans, Version 1

(GAO/GGD-10.1.20, Apr. 1998).

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B-282558 

and other relevant documents. The criteria were supplemented by our

report entitled Agency Performance Plans: Examples of Practices That

Can Improve Usefulness to Decisionmakers (GAO/GGD/AIMD-99-69, Feb. 26,

1999), which builds on the opportunities for improvement that we

identified in the fiscal year 1999 performance plans.11 In addition, we

relied on our knowledge of DOT’s operations and programs from our

numerous reviews of the Department. To determine whether the

performance plan covered the program activities set out in DOT’s budget,

we compared the plan with the President’s fiscal year 2000 budget request

for DOT. To determine whether the plan covered mission-critical

management issues, we assessed whether the plan included goals,

measures, or strategies to address major management challenges

identified by us or the OIG.

12 To identify the degree of improvement over

the fiscal year 1999 plan, we compared the fiscal year 2000 plan with our

observations on the previous plan.13 We performed our review in

accordance with generally accepted government auditing standards from

February through April 1999.

We are providing the Honorable Rodney E. Slater, Secretary of

Transportation, and the Honorable Jacob J. Lew, Director, OMB, with

copies of this report. We will make copies available to others on request. If

you or your staff have any questions about this report, please call me at

(202) 512-2834. Major contributors to this report are listed in appendix II.

Phyllis F. Scheinberg

Associate Director,

 Transportation Issues

11Managing for Results: An Agenda to Improve the Usefulness of Agencies’ Annual Performance Plans

(GAO/GGD/AIMD-98-228, Sept. 8, 1998).

12See Major Management Challenges and Program Risks: Department of Transportation

(GAO/OCG-99-13, Jan. 1999) and DOT OIG’s report entitled Top Ten Management Issues: Department

of Transportation (TW-1999-031, Dec. 9, 1998).

13Results Act: Observations on the Department of Transportation’s Annual Performance Plan for Fiscal

Year 1999 (GAO/RCED-98-180R, May 12, 1998).

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List of Congressional Requesters

The Honorable Richard K. Armey

Majority Leader

House of Representatives

The Honorable Dan Burton

Chairman, Committee on Government Reform

House of Representatives

The Honorable Fred Thompson

Chairman, Committee on Governmental Affairs

United States Senate

The Honorable Richard C. Shelby

Chairman, Subcommittee on Transportation

Committee on Appropriations

United States Senate

The Honorable John McCain

Chairman

The Honorable Ernest F. Hollings

Ranking Minority Member

Committee on Commerce,

 Science, and Transportation

United States Senate

The Honorable Frank R. Wolf

Chairman, Subcommittee on Transportation

Committee on Appropriations

House of Representatives

The Honorable Bud Shuster

Chairman

The Honorable James L. Oberstar

Ranking Democratic Member

Committee on Transportation

 and Infrastructure

House of Representatives

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Page 15 GAO/RCED-99-153 DOT’s Fiscal Year 2000 Performance Plan
Appendix I 

Management Challenges

In January 1999, we reported on major performance and management

challenges that have limited the effectiveness of the Department of

Transportation (DOT) in carrying out its mission.14 In December 1998, the

Department’s Office of Inspector General (OIG) issued a similar report on

the Department.15 Table I.1 lists the issues covered in those two reports

and the applicable goals and measures in the fiscal year 2000 performance

plan.

Table I.1: Management Challenges at DOT

Management challenge

Applicable goals and measures in the fiscal year 2000

performance plan

Acquisition of major aviation and U.S. Coast Guard systems lacks adequate

management and planning.

•The Federal Aviation Administration’s (FAA) $41 billion air traffic control

modernization program has experienced cost overruns, delays, and

performance shortfalls.

•The Coast Guard needs to more thoroughly address the justification and

affordability of its $9.8 billion project to replace/modernize its ships and

aircraft.

(DOT’s OIG also identified air traffic control modernization as a top priority

management issue.)

None. The plan, however, acknowledges that air traffic

control modernization is a management issue that needs

to be addressed. Furthermore, the plan states that DOT

has formulated activities to address this issue.

The plan also identifies the Coast Guard’s acquisition

project as a management issue and describes activities

to address it.

Important challenges remain in resolving FAA’s Year 2000 risks.

(The OIG also identified this area as a management issue.)

None. However, the plan’s corporate management

strategies include an objective to complete all Year 2000

remediation or contingency plans so that there are no

critical system disruptions. 

In addition, the plan states that the Year 2000 issue is a

management challenge that needs to be addressed and

identifies activities and milestones for addressing it.

FAA and the nation’s airports face funding uncertainties. DOT and the

Congress face a challenge in reaching agreement on the amount and

source of long-term financing for FAA and airports.

(The OIG also identified this area as a management issue.)

None. However, the plan identifies financing for FAA’s

activities as a major issue that the Department, the

Congress, and the aviation community need to address.

The plan also lists activities that FAA is undertaking to

develop the information needed to make financing

decisions.

(continued)

14Major Management Challenges and Program Risks: Department of Transportation (GAO/OCG-99-13,

Jan. 1999).

15Top Ten Management Issues: Department of Transportation (TW-1999-031, Dec. 9, 1998).

Page 16 GAO/RCED-99-153 DOT’s Fiscal Year 2000 Performance Plan
Appendix I 

Management Challenges

Management challenge

Applicable goals and measures in the fiscal year 2000

performance plan

Aviation safety and security programs need strengthening.

•Shortcomings in aviation safety programs include the need for FAA to

improve its oversight of the aviation industry, record complete information

on inspections and enforcement actions, provide consistent information and

adequate training for users of weather information, and resolve data

protection issues to enhance the proactive use of recorded flight data to

prevent accidents.

•FAA has encountered delays in implementing security initiatives at

airports. Completing the initiatives will require additional funding and

sustained commitment from FAA and the aviation industry.

•FAA’s computer security of its air traffic control systems is weak.

(The OIG also identified aviation safety and transportation security as

management issues.)

The plan includes performance goals to

•reduce the fatal aviation accident rate for commercial air

carriers and general aviation,

•reduce the number of runway incursions,a

•reduce the rate of operational errors and deviations,b

•increase the detection rate for explosive devices and

weapons that may be brought aboard aircraft, and

•get threat information to those who need to act within 24

hours.

In addition, the plan’s corporate management strategies

include objectives to

•conduct vulnerability assessments on all new information

technology systems to be deployed in fiscal year 2001

that fall under the purview of Presidential Decision

Directive 63c and

•ensure that all DOT employees receive or have received

general security awareness training in fiscal years 1999 or

2000 and that 60 percent of the systems administrators

receive specialized security training by September 30,

2000.

The plan also identifies computer security as a

management challenge that needs to be addressed.

A lack of aviation competition contributes to high fares and poor service for

some communities. Increasing competition and improving air service will

entail a range of solutions by DOT, the Congress, and the private sector.

None. The plan identifies airline competition as a

management challenge. DOT has submitted to the

Congress a number of legislative proposals to address

the issue.

DOT needs to continue improving oversight of surface transportation

projects. Many highway and transit projects continue to incur cost

increases, experience delays, and have difficulties acquiring needed

funding.

(The OIG also identified this area as a management issue.)

None. The plan identifies surface transportation

infrastructure needs as a management challenge and

identifies activities to address the issue.

Amtrak’s financial condition is tenuous. Since it began operations in 1971,

Amtrak has received $22 billion in federal subsidies. Because there is no

clear public policy that defines the role of passenger rail in the national

transportation system and because Amtrak is likely to remain heavily

dependent on federal assistance, the Congress needs to decide on the

nation’s expectations for intercity rail and the scope of Amtrak’s mission in

providing that service.

(The OIG also identified this area a management issue.)

None. The plan identifies the financial viability of Amtrak

as a management challenge and states that, as a

member of Amtrak’s Board, DOT will work to address the

issue.

(continued)

Page 17 GAO/RCED-99-153 DOT’s Fiscal Year 2000 Performance Plan
Appendix I 

Management Challenges

Management challenge

Applicable goals and measures in the fiscal year 2000

performance plan

DOT’s lack of accountability for its financial activities impairs its ability to

manage programs and exposes the Department to potential waste, fraud,

mismanagement, and abuse. Since 1993, the OIG has been unable to

express an opinion on the reliability of the financial statements of certain

agencies within the Department. DOT also lacks a cost accounting system

or alternative means of accumulating the full costs of specific projects or

activities.

(The OIG also identified this area as a management issue.)

None. However, the plan’s corporate management

strategies include objectives to

•receive an “unqualified,” or “clean,” audit opinion on

the Department’s fiscal year 2000 consolidated financial

statement and stand-alone financial statements;

•enhance the efficiency of the accounting operation in a

manner consistent with increased accountability and

reliable reporting; and

•implement a pilot of the improved financial systems

environment in at least one operating administration.

The plan identifies financial accounting as a management

challenge facing the Department and addresses key

weaknesses that should be resolved before DOT can

obtain a “clean” opinion in fiscal year 2000.

Other areas identified by DOT’s OIG

DOT needs to address major surface transportation safety issues, such as 

•improving the Department’s motor carrier safety program and taking

prompt and meaningful enforcement actions for noncompliance,

•increasing the level of safety of commercial trucks and drivers entering the

United States from Mexico,

•increasing seat belt usage,

•reducing railroad grade-crossing and trespasser accidents,

•improving compliance with safety regulations by entities responsible for

transporting hazardous materials, and

•enhancing the effectiveness of the Federal Railroad Administration’s Safety

Assurance and Compliance Program.

DOT’s plan includes performance goals to

•reduce the rate of fatalities involving large trucks,

•increase seat belt usage nationwide,

•reduce the rate of grade-crossing crashes,

•reduce the rate of rail-related fatalities for trespassers,

•reduce the number of serious hazardous materials

incidents in transportation, and

•reduce the rate of rail-related crashes and fatalities.

DOT needs to provide leadership to maintain, improve, and develop the

port, waterway, and intermodal infrastructure to meet current and future

needs. There is also a need to identify funding mechanisms to maintain and

improve the harbor infrastructure of the United States.

DOT’s plan includes performance goals to

•reduce the percentage of ports reporting landside

impediments to the flow of commerce and

•ensure the availability and long-term reliability of the St.

Lawrence Seaway’s locks and related navigation facilities

in the St. Lawrence River.

(continued)

Page 18 GAO/RCED-99-153 DOT’s Fiscal Year 2000 Performance Plan
Appendix I 

Management Challenges

Management challenge

Applicable goals and measures in the fiscal year 2000

performance plan

DOT faces several challenges in implementing the Government

Performance and Results Act. Many of DOT’s performance outcomes, such

as improved safety, a reduction in fatalities and injuries, and

well-maintained highways, depend in large part on actions by other federal

agencies, states, and the transportation industry. Their assistance will be

critical in meeting DOT’s goals, which were developed under the Results

Act. DOT’s ability to achieve its goals will also be influenced by the effective

utilization of human resources.

None. The plan identifies the Department’s

implementation of the Results Act as a management

challenge and mentions activities to address the issue.

aA runway incursion occurs when an aircraft, ground vehicle, or person enters or crosses a

runway that is in active use for takeoffs or landings without adequate separation from aircraft

cleared to use the runway.

bPilots using instrument procedures rely on air traffic controllers’ instructions to guide them. When

aircraft are allowed to violate these separation standards, an operational error occurs. When

aircraft are allowed to penetrate airspace that has not been precoordinated for that aircraft’s use,

an operational deviation occurs.

cPresidential Decision Directive 63, Critical Infrastructure Protection, requires the federal

government to achieve and maintain the ability to protect our nation’s critical infrastructure by

2003.

Page 19 GAO/RCED-99-153 DOT’s Fiscal Year 2000 Performance Plan
Appendix II 

Major Contributors to This Report

Resources,

Community, and

Economic

Development Division

Janet Barbee

Tina Kinney

Lewison Lem

Teresa Spisak

Accounting and

Information

Management Division

Laura Castro

John Fretwell

Elizabeth Martinez

Colleen Phillips

Office of the General

Counsel

Helen Desaulniers

(348166) Page 20 GAO/RCED-99-153 DOT’s Fiscal Year 2000 Performance Plan
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