Office of Inspector General

Audit Report

LESSONS LEARNED FROM THE EAST SIDE 

ACCESS PROJECT CAN ENHANCE FTA’S 

OVERSIGHT OF MTA’S REPORTING ON 

REMAINING ARRA GRANTS

Federal Transit Administration

Report Number: MH-2013-098

Date Issued: June 12, 2013
U.S. Department of

Memorandum

Transportation

Office of the Secretary

of Transportation

Office of Inspector General

Subject: ACTION: Final Report— Lessons Learned From 

the East Side Access Project Can Enhance FTA’s 

Oversight of MTA’s Reporting on Remaining 

ARRA Grants

Federal Transit Administration

Report No. MH-2013-098

Date: June 12, 2013

From: Joseph W. Comé

Assistant Inspector General for

Highway and Transit Audits

Reply to 

Attn. of: JA-40

To: Federal Transit Administrator

The Metropolitan Transportation Authority’s (MTA) East Side Access (ESA) 

project, located in New York City, is one of the largest transit mega-projects in the 

country currently under construction, with a total estimated project cost of over 

$9.8 billion and an estimated completion date of September 2019. ESA’s primary 

purpose is to expand MTA Long Island Rail Road’s (LIRR) commuter rail service 

in Manhattan to include Grand Central Terminal in addition to Penn Station, 

which is expected to shorten travel time for thousands of Long Island commuters 

and ease passenger crowding at Penn Station. The Federal Transit Administration 

(FTA) has committed nearly $2.7 billion in Federal funding to the project, 

including the most American Recovery and Reinvestment Act (ARRA) New Starts 

funding of any project ($195.4 million).1 As with all ARRA-funded projects, 

MTA’s ESA project has been subject to statutory and Office of Management and 

Budget (OMB) requirements for increased transparency and accountability. 

We initiated this audit in May 2012.2 However, after Hurricane Sandy struck the 

New York metropolitan area in October 2012, FTA and MTA staff needed to 

prioritize their efforts on restoring full transportation services, which

understandably delayed our data collection efforts. To accommodate this situation, 

 1 Under ARRA, the Capital Investment Grants Program made $750 million available for FTA’s discretionary New 

Starts and Small Starts Programs. The total Federal funding commitment for each project did not increase; rather, the 

ARRA funding accelerated award of the funds already committed.

2 OIG announcement letter, Audit Initiated of FTA’s Oversight of Major Transit Projects in New York City: East Side 

Access, May 14, 2012. All OIG announcement letters and reports are available on our Web site at www.oig.dot.gov.
2

we separated the audit into two parts, with this report providing information 

concerning FTA’s compliance with ARRA requirements on the ESA project. 

Specifically, for this first report our objectives were to determine whether 

(1) MTA’s controls over the materials purchased with ARRA funds were 

sufficient to safeguard those items, and (2) FTA ensured that MTA met ARRA’s 

certification and reporting requirements for ESA. Our work on the second part of 

the audit—an assessment of FTA’s oversight of the ESA project’s cost, schedule, 

and local funding risks—is on hold so that we may support oversight of FTA’s 

Hurricane Sandy relief funding in accordance with the Disaster Relief 

Appropriations Act. 

To conduct our ARRA-related work, we performed a physical inventory on a 

random sample of about $10.8 million (approximately 57 percent) of materials that 

were pre-purchased using ARRA funds. We also reviewed ARRA regulations and 

guidance, and evaluated MTA’s ARRA certifications and reports and FTA’s 

oversight of those reports. We interviewed FTA Headquarters and Region II 

officials, and MTA officials. We conducted our work in accordance with generally 

accepted Government auditing standards. Exhibit A provides more detail on our 

audit scope and methodology.

BACKGROUND

As figure 1 illustrates, the ESA project will connect the MTA LIRR’s commuter 

rail lines to an existing tunnel under the East River and to a new LIRR terminal at 

Grand Central Terminal—along with modifications to existing track alignments 

and construction of a storage yard and maintenance facilities.

Figure 1. ESA Project Map

Source: MTA
3

Over $2.6 billion of the nearly $2.7 billion in Federal funds committed to the ESA 

project are from FTA’s New Starts program, which provides Federal financial 

support for locally planned and operated public transit. The ESA project’s New 

Starts funding includes $195.4 million in ARRA New Starts funds for ESA that 

FTA awarded in March 2010 and that MTA expended by August 2010. New Starts 

funds usually require a non-Federal match when Federal funds are expended, but 

FTA deferred this local match for the ARRA funds through the end of the New 

Starts payout period.

ARRA established key requirements for recipients. ARRA Section 1511 requires 

that, for funds made available to State or local governments, the chief executive 

must (1) certify that each ARRA investment has received the full review and 

vetting required by law and (2) accept responsibility that it is an appropriate use of 

taxpayer dollars. In addition, ARRA Section 1512 requires recipients to submit 

quarterly reports on their use of ARRA funds that must include the name, 

description, evaluation of the completion status, and detailed information on any 

subcontracts or subgrants awarded. OMB and FTA provided related guidance on 

ARRA requirements, and FTA established processes to perform oversight of its 

ARRA grantees. In addition to the ARRA-specific requirements, FTA’s ARRA

grantees were subject to FTA’s existing grant management requirements, 

including those to safeguard federally funded assets in accordance with FTA 

Circular 5010.1D. See Exhibit B for additional information on ARRA 

requirements, related OMB and FTA guidance, and the ESA ARRA New Starts 

grant.

RESULTS IN BRIEF

MTA safeguarded the ESA materials purchased with ARRA funds. The ESA 

ARRA New Starts grant provided MTA with over $19 million to procure materials

in advance—such as wire, cable, conduit, and rail—and to store them until needed 

for installation on the project. We performed a physical inventory on a random 

sample of about $10.8 million (about 57 percent) of materials stored in MTA

LIRR’s dedicated ESA warehouse and determined that the materials were present 

in the quantities expected.

MTA met ARRA certification requirements for the ESA ARRA New Starts funds

but its Section 1512 reports omitted required data3 that FTA quality reviews did 

not detect. Specifically, MTA’s final report did not include required vendor 

 3 OMB Guidance related to ARRA Section 1512 requires recipients to submit quarterly reports on their use of ARRA 

funds until they meet the requirements for submitting a final report. According to OMB guidance M-10-14, Updated 

Guidance on the American Recovery and Reinvestment Act (dated March 22, 2010), recipients may submit a final 

Section 1512 report when: (1) the award period has ended, all ARRA funds are received, and the project status is 

complete; or (2) the award has been terminated or cancelled.
4

payment information for over $19 million (nearly 10 percent) of the ESA ARRA 

grant funding. The omitted $19 million in payments were for materials MTA 

procured in advance—the same materials we inventoried at MTA LIRR’s

warehouse. OMB guidance on Section 1512 reporting requires detailed data on all 

vendor payments over $25,000. Yet, MTA did not report 11 such payments in its 

final report. According to OMB guidance, these omitted payments are considered

material omissions because required data were not reported.

4 MTA determined 

that these omissions resulted from an issue with the processes used to develop the 

report data. FTA’s data quality reviews did not account for instances of 

underreported vendor data and, therefore, did not identify these omissions in 

MTA’s Section 1512 reports. Accordingly, FTA underreported vendor payment 

data to the public.5 While MTA has fully spent its ESA ARRA grant funds, issues 

with MTA’s reporting processes and FTA’s data quality checks could reduce the 

accuracy of MTA’s Section 1512 reports going forward. MTA is still responsible 

for submitting Section 1512 reports for its three remaining FTA ARRA grants—

(1) Metro-North/New York City Transit Fixed Guideway Modernization, 

(2) Fulton Street Transit Center,6 and (3) LIRR/Metro-North Railroad/New York 

City Transit Formula. These three ARRA grants had a total of $106.7 million in 

unexpended ARRA funds through March 31, 2013.

We are making recommendations to improve MTA’s Section 1512 reporting and

FTA’s data quality review processes for MTA’s remaining FTA ARRA grants.

MTA SAFEGUARDED ESA MATERIALS PURCHASED WITH 

ARRA FUNDS

We determined that MTA safeguarded the ESA materials it purchased with ARRA 

funds in accordance with grant management requirements in FTA Circular 

5010.1D. The ESA ARRA New Starts grant provided MTA with over $19 million 

to procure materials—such as wire, cable, conduit, and rail—in advance and to 

store them until needed for installation on the project. MTA implemented controls 

to safeguard these materials. For example, MTA stores materials purchased for the 

ESA project in a dedicated LIRR warehouse protected by a fence and a security 

system. In addition, LIRR’s warehouse staff maintains a list of personnel who are 

 4 According to OMB M-09-21, Implementing Guidance for the Reports on Use of Funds Pursuant to the American 

Recovery and Reinvestment Act of 2009 (dated June 22, 2009), material omissions are instances where required data 

are not reported or where reported information is not otherwise responsive to the data requests. Material omissions 

result in significant risk that the public is not fully informed as to the status of a Recovery Act project or activity. 5 The Section 1512 reporting data are made public using the following process: after a recipient reports its data on 

www.FederalReporting.gov, the Federal agency that awarded the grant reviews the data, and the Recovery 

Accountability and Transparency Board releases the data on www.recovery.gov. For its grantees, FTA also posts the 

released ARRA Section 1512 data from www.recovery.gov on its Web site.

6 We previously reported on FTA’s oversight of the Fulton Street Transit Center project, including its oversight of 

ARRA funding. See New York City Fulton Street Transit Center: FTA’s Sustained Focus on Key Risk Areas Will Be

Needed Until the Project Is Completed (Report Number MH-2011-150), August 15, 2011.
5

authorized to charge out materials and assigns all materials charged out to a 

project number. The MTA ESA project office is responsible for generating 

documentation for each charge out, and LIRR performs periodic inventories of the 

materials. We performed a physical inventory on a random sample of about 

$10.8 million (approximately 57 percent) of the ESA ARRA materials that were 

purchased in advance and determined that the materials were present in MTA 

LIRR’s warehouse in the quantities expected.

7

MTA MET ARRA CERTIFICATION REQUIREMENTS BUT 

OMITTED REQUIRED REPORTING DATA THAT FTA QUALITY 

REVIEWS DID NOT DETECT

Although MTA met ARRA certification requirements for the ESA ARRA New 

Starts funds, it omitted required vendor payment information from its Section 

1512 reports. FTA’s data quality reviews of MTA’s Section 1512 reports were not 

sufficient to detect these omissions. According to OMB guidance, these omitted 

payments are considered material omissions because required data were not 

reported, and OMB specifically calls for data quality reviews of Section 1512 

reports to identify material omissions. As a result, MTA’s ESA ARRA vendor 

payment information was underreported on FTA’s ARRA Web site and 

www.recovery.gov.

MTA’s Section 1511 Certification for the ESA ARRA New Starts Funds 

Met Requirements

MTA issued a timely Section 1511 certification for the ESA ARRA New Starts 

grant that met ARRA requirements and followed FTA’s guidance on 

implementing those requirements. ARRA Section 1511 requires that, for funds 

made available to State or local governments, the chief executive certify that each 

ARRA investment has received the full review and vetting required by law. FTA 

guidance also states that the certification must provide a description of the project, 

total funding, and ARRA funding. Our review determined that MTA’s 

certification included the required statements, as well as a description of the 

investment, estimated total cost, and amount of ARRA funds to be used. Although 

the certification contained one error—MTA misstated the source of the ARRA 

funds—it had no material effect on the statements.

 7 After we completed our inventory, the District Attorney from Nassau County, NY, announced on January 25, 2013, 

that 15 LIRR employees were charged with stealing more than $250,000 of new and used copper wire from other LIRR 

facilities over a 3-year period. In response to this incident, the LIRR reported that it is taking immediate action to curb 

employee thefts and tighten security measures. MTA stated that, as of February 2013, the reported thefts did not 

involve the LIRR warehouse that stores the ESA materials.
6

FTA’s Data Quality Reviews Did Not Detect MTA’s Omission of

Required Information From Its Section 1512 Reports

FTA data quality reviews were insufficient to detect that MTA did not report 

required vendor payment information for over $19 million (nearly 10 percent) of 

the ESA ARRA grant funding in its final report. OMB guidance requires Federal

agencies to perform data quality reviews on all Section 1512 reports and states that 

the reviews are intended to avoid two key reporting problems—material omissions 

and significant reporting errors. OMB defines material omissions as instances 

where required data are not reported or where reported information is not 

otherwise responsive to the data requests. Accordingly, MTA’s vendor payment 

omissions are considered material because MTA did not include detailed reporting 

for vendor payments over $25,000, which ARRA requires. FTA acknowledged 

that MTA’s ESA Section 1512 reports should have included these vendor 

payments to comply with OMB guidance but did not agree that these omissions 

were material.

To comply with ARRA Section 1512, MTA submitted three quarterly reports on 

the use of ESA ARRA grant funds, including a final report submitted in October 

2010. As figure 2 below shows, the final ESA Section 1512 report provided

detailed information on four vendor payments over $25,000—totaling about 

$176.4 million.

Figure 2. Excerpt from ESA ARRA Final Section 1512 Report

VENDOR TRANSACTIONS

GRAMERCY GROUP, INC. – NY-36-0002 GRANITE-TRAYLOR-FRONTIER (JV) – NY-36-0002

Product & Service Description: Madison Yard Product & Service Description: Construct Queens Bored 

Demolition Infrastructure

Payment Amount: $31,663,054 Payment Amount: $139,031,054

PERINI CORPORATION – NY-36-0002 YONKERS CONTRACTING CO, INC – NY-36-0002

Product & Service Description: Harold Structures Product & Service Description: East 44th St. and 245 Park 

(Part 2A) Ave. Entrance

Payment Amount: $2,065,559 Payment Amount: $3,596,834

Source: www.recovery.gov

Our review identified 11 additional vendor payments over $25,000 that were not 

included in MTA’s final Section 1512 report. MTA inadvertently omitted all

vendor payments related to advanced procurement of materials—the same 

materials we inventoried at MTA LIRR’s warehouse. After we shared our findings 

with MTA, MTA determined that the algorithm it used to develop its Section 1512 

reports for all ARRA grants was set up to report only vendors that had job hours 

associated with their contracts. Because the vendors providing materials did not 
7

charge job hours, the algorithm did not include them in the reports. MTA is 

evaluating the effect that this algorithm issue may have had on the Section 1512 

reports for its other ARRA grants.

To carry out OMB’s requirement to perform data quality reviews on all Section 

1512 reports, FTA developed a Data Quality Review Plan (Plan). The Plan calls 

for FTA to perform two different checks of vendor payments in Section 1512 

reports but does not include a step that would identify underreporting of vendor 

payments. FTA’s first step for vendor payments is to check whether the reports 

have expenditures over an established threshold and to flag any reports that do not 

include any vendor information. Because MTA reported some vendor information, 

it met the requirements of the first check. The second step is to check the amount 

paid to vendors with the total award amount and to flag any report where the 

amount paid to vendors exceeds the total award. Because MTA underreported its 

vendor information, the second FTA check would not have detected an error. 

FTA would likely have detected MTA’s underreporting of vendor payments if the 

Plan had included an additional step to total the vendor payments and subaward 

amounts in the final report, and then compare that total with the amount expended. 

According to FTA, the administrative costs associated with performing a data 

quality check to flag underreported vendor payments outweigh the benefits.

However, limiting such checks to the final report could address FTA concerns 

about the additional burdens imposed.

Further, because FTA’s data quality reviews did not detect MTA’s reporting 

omissions, the ARRA information reported to the public is inaccurate. The Section 

1512 reporting data are made public using the following process: after MTA 

reports its data on www.FederalReporting.gov, FTA reviews the data, and the 

Recovery Accountability and Transparency Board releases the data on 

www.recovery.gov. FTA also posts the released data from www.recovery.gov for 

its grantees on its Web site to comply with the ARRA Section 1512 requirement to 

do so. However, the information on both www.recovery.gov and FTA’s Web site

underreported MTA’s vendor payment information for the ESA ARRA funds by 

about $19 million. 

Although MTA has now spent all of its ESA ARRA funds, issues with MTA’s 

reporting algorithm and FTA’s data quality checks could reduce the accuracy of 

MTA’s Section 1512 reports going forward. MTA is still responsible for 

submitting Section 1512 reports for its three remaining FTA ARRA grants: 

(1) Metro-North/New York City Transit Fixed Guideway Modernization, 

(2) Fulton Street Transit Center, and (3) LIRR/Metro-North Railroad/New York 

City Transit Formula, which had a total of $106.7 million in unexpended funds 

through March 31, 2013. As required by OMB, MTA must continue to submit 
8

Section 1512 reports for these grants until all ARRA funds are expended or the 

project is completed. 

CONCLUSION

The ESA project, which is designed to provide more efficient transportation 

services for thousands of travelers into Manhattan, received more ARRA New 

Starts funding than any other single transit project in the country. MTA took steps 

to safeguard the materials purchased with ARRA funds and has submitted all 

required ARRA reports. However, more could have been done to ensure that its 

ESA Section 1512 reports contained complete and accurate information. FTA 

needs to work with MTA to improve reporting on any remaining ARRA funds and 

make targeted improvements to its own data quality reviews, so that Congress and 

the public have access to more accurate ARRA-related information.

RECOMMENDATIONS

We recommend that the Federal Transit Administrator:

1. Identify and validate the steps MTA plans to take to improve the accuracy of 

the vendor payment data in its Section 1512 reports to prevent future 

omissions; and

2. Perform an additional data quality check when reviewing the final report for 

each of MTA’s three remaining FTA ARRA grants to compare total vendor 

payment and subaward amounts with the total amount expended.

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

We provided FTA with our draft report on April 16, 2013. FTA provided its 

formal response on May 28, 2013. FTA’s formal response is included in its 

entirety as an appendix to this report. FTA fully concurred with our two 

recommendations and provided appropriate planned actions and target dates for 

their completion. FTA’s planned actions are responsive to our recommendations,

and we consider the two recommendations resolved but open pending completion 

of all planned actions.

ACTIONS REQUIRED

FTA’s planned actions for our two recommendations are responsive. In

accordance with follow-up provisions in Department of Transportation Order 

8000.1C, we request that FTA provide our office with documentation 
9

demonstrating completion of its planned actions within 30 days of completion. 

Both recommendations will remain open pending receipt of this documentation.

We appreciate the courtesies and cooperation of FTA representatives during this 

audit. If you have any questions concerning this report, please call me at (202) 

366-5630 or Anthony Zakel, Program Director, at (202) 366-0202.

#

cc: FTA Audit Liaison (TBP-30)

DOT Audit Liaison (M-1)
10

Exhibit A. Scope and Methodology

EXHIBIT A. SCOPE AND METHODOLOGY

We conducted our work from June 2012 through April 2013 in accordance with 

generally accepted Government auditing standards as prescribed by the 

Comptroller General of the United States. Those standards require that we plan 

and perform the audit to obtain sufficient, appropriate evidence to provide a 

reasonable basis for our findings and conclusions based on our audit objectives. 

We believe that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

To assess whether MTA has sufficient controls to safeguard the materials 

purchased with ARRA funds, we obtained a statistically selected sample of nearly 

$14.4 million (75 percent) of materials that were pre-purchased using ARRA 

funds. With the exception of very large materials such as rails, the pre-purchased 

materials were stored in the MTA LIRR’s ESA warehouse in Glendale (Queens), 

NY. Our sample included about $3.5 million in rails that LIRR stored along its 

right of way. Due to the dangers of physically inspecting this area, we confirmed 

the presence of the rail but did not count individual rails. We performed a physical 

inventory on the about $10.8 million of materials in the sample that were stored in 

the ESA warehouse—approximately 57 percent of the materials purchased with 

the ARRA funds. We inventoried these materials because we determined these 

materials are susceptible to fraud, waste, or abuse. 

To assess whether FTA ensured that MTA met ARRA certification and reporting 

requirements for ESA, we reviewed ARRA regulations and guidance, evaluated 

MTA’s ARRA certifications and reports, and assessed FTA’s oversight of those 

reports. We also interviewed FTA Headquarters and Region II officials and MTA 

officials. 
11

Exhibit B. Additional Background Information

EXHIBIT B. ADDITIONAL BACKGROUND INFORMATION

MTA received $195.4 million in ARRA New Starts funds for the ESA project. 

The funding was awarded for six activities, as shown in table 1. 

Table 1. ESA ARRA New Starts Grant Budget

Grant activity FTA funding Total eligible costa

Advanced procurement materials

1 Advanced procurement materials for Harold Interlocking $ 2,522,192 $ 6,005,219

2 Advanced procurement materials for third-party systems 16,531,307 39,360,255

Subtotal for advanced procurement materials b 19,053,499 45,365,474

Other activities

3 Queens bored tunnels 139,031,054 331,024,414

4 44 St. vent structure and 245 Park Ave. entrance 3,596,834 8,563,890

5 Harold Interlocking structures, part 2 2,065,559 4,917,998

6 Madison Yard demolition and site clearance 31,663,054 75,388,224

Subtotal for other activities 176,356,501 419,894,526

Totals $195,410,000 $465,260,000

a MTA was required to provide almost $270 million in non-Federal funds to match the ARRA funds (the difference 

between the FTA funding and total eligible cost columns). MTA’s match was 42 percent of the total eligible cost. 

Through March 30, 2013, MTA had provided about $187 million (40 percent) of its required match.

b We performed a physical inventory on a sample of about $10.8 million (approximately 57 percent) of the $19,053,499 

in materials that MTA procured in advance using ARRA funds.

Source: FTA’s Transportation Electronic Award Management system

ARRA established key requirements for recipients, and OMB and FTA provided 

related guidance. FTA also established oversight processes. For example:

• ARRA Section 1511 requires that, for funds made available to State or local 

governments, the chief executive must certify that each ARRA investment has 

received the full review and vetting required by law and that the chief 

executive accepts responsibility that it is an appropriate use of taxpayer dollars. 

Accordingly, FTA guidance states that grantees should include the statements 

that (1) the project(s) have “received the full review and vetting required by 

law” and that (2) the appropriate official “accepts responsibility” that the 

project(s) are “an appropriate use of taxpayer (ARRA) dollars.” FTA guidance 

also states that the certification must provide a description of the project(s), 

total funding, and ARRA funding.

• ARRA Section 1512 requires recipients to submit quarterly reports on their 

use of ARRA funds. These quarterly reports must include the name, 

description, evaluation of the completion status, estimate of the number of jobs 

created and retained, and detailed information on any subcontracts or subgrants 
12

Exhibit B. Additional Background Information

awarded. OMB guidance on implementing ARRA Section 1512 requires 

reviews for data quality (i.e., accuracy, completeness, and timely reporting of 

information) intended to emphasize the avoidance of two key data problems—

material omissions and significant reporting errors. The reports are made public 

using the following process: after a recipient reports its data on 

www.FederalReporting.gov, the Federal agency that awarded the grant reviews 

the data, and the Recovery Accountability and Transparency Board releases the 

data on www.recovery.gov. Section 1512 also requires Federal agencies to post 

the recipient report information on a Web site each quarter.
13

Exhibit C. Major Contributors to This Report

EXHIBIT C. MAJOR CONTRIBUTORS TO THIS REPORT

Name Title

Anthony Zakel Program Director

George Lavanco Project Manager

Tiffany Mostert Senior Analyst

Michael Dzandza Auditor

Rosa Scalice Auditor

Joseph Tschurilow Auditor

Petra Swartzlander Statistician

Megha P. Joshipura Statistician

Amy Berks Senior Counsel

Christina Lee Writer-Editor
14

APPENDIX. AGENCY COMMENTS

APPENDIX. AGENCY COMMENTS

Memorandum

U.S. Department

of Transportation

Federal Transit

Administration

Subject: INFORMATION: Management Response to the Office 

of Inspector General Draft Report on FTA’s East Side 

Access (ESA) ARRA Reporting 

Date: May 28, 2013

From: Peter M. Rogoff

Administrator

Reply to

Attn. of: Dominique Paukowits 

(202) 366-5152

To: Calvin L. Scovel III

Inspector General

FTA has established and implemented robust oversight measures to ensure recipients of 

the American Recovery and Reinvestment Act (ARRA) met reporting requirements under 

Section 1512. These requirements placed unprecedented expectations on FTA to ensure 

that its grant and contract recipients provide timely, complete, and accurate information 

on the projects funded under ARRA. To respond to these challenges, FTA offered 

unparalleled customer service, engaged in cycles of learning and refinement to improve 

its work processes, and produced results for timely and accurate reports that place it in 

the Federal government’s top echelon, when FTA’s results are compared with other 

agencies. 

To ensure agencies complied with 1512 reporting, FTA educated over 600 grant 

recipients on reporting requirements and the use of the reporting systems. FTA ensured 

that over 900 reports were submitted within a narrow window of time and contained 

accurate data and transparent narrative information. As a result, since the beginning of 

the Section 1512 reporting process in 2009, over 95% of all FTA grantee reports have 

been submitted by the deadline for each reporting period. 

FTA has also made a concerted effort to identify errors or potential errors in Section 1512 

reports and to reach out to our recipients to request that they correct mistakes. These 

efforts led to a reduction in the error rate over time, with errors or likely errors declining 

65 percent from an already low 1.02 per report in the first reports submitted in October 

2009 to 0.35 errors per report in the 4th quarter of 2012. As a result, FTA’s transit capital 

assistance grant program consistently ranks in the top 10 out of over 200 Federal 

governmental ARRA programs in terms of the number of corrections made to Section 

1512 reports, according to www.recovery.gov. 
15

APPENDIX. AGENCY COMMENTS

RECOMMENDATIONS AND RESPONSE

Recommendation #:1 FTA should identify and validate the steps MTA plans to 

take to improve the accuracy of vendor payment data in its Section 1512 reports to 

prevent future omissions.

Response: Concur. FTA will request that MTA provide information to ensure that 

the agency has procedures in place to avoid under-reporting vendor payments in their 

Section 1512 reports. FTA will request that MTA provide us with this information by 

June 30, 2013, which is prior to the start of the next Section 1512 reporting period. 

FTA will validate that MTA has taken sufficient steps to avoid under-reporting of 

vendor payments by implementing our response to recommendation #2 (see below). 

Recommendation #:2 FTA should perform an additional data quality check when 

reviewing the final report for each of MTA’s three remaining FTA ARRA grants to 

compare total vendor payment and subaward amounts with the total amount 

expended.

Response: Concur. FTA will review the Section 1512 reports submitted for MTA’s 

three remaining open ARRA grants and perform a data quality check that compares 

the sum of the vendor payments reported and the subrecipient payments reported to 

the total expenditures reported. If the sum of vendor payments and subrecipient 

payments do not equal the total expenditures reported, FTA will enter a comment into 

the MTA’s Section 1512 report via www.federalreporting.gov to note the discrepancy 

and request that MTA follow up to confirm whether the discrepancy is the result of 

vendor payments being under-reported or whether there is some other reason for the 

discrepancy. MTA will be expected to either update the data provided in their 1512 

report or provide a response to FTA explaining the cause of the discrepancy.

FTA will implement this additional data quality check and communication with MTA 

on a quarterly basis beginning with the next Section 1512 Federal Agency review 

period which takes place from July 14-29, 2013. 

We appreciate this opportunity to offer additional perspective on the OIG draft report. 

We also appreciate the courtesies of the OIG staff in conducting this review. Please 

contact Henrika Buchanan-Smith at 202-366-4020 with any questions or requests for 

additional assistance.