Motor Carrier Safety: Reincarnating Commercial Vehicle Companies Pose Safety Threat to Motoring Public; Federal Safety Agency Has Initiated Efforts to Prevent Future Occurrences
Published: 2009-07-28T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In 2008, the Federal Motor Carrier Safety Administration (FMCSA) reports that there were about 300 fatalities from bus crashes in the United States. Although bus crashes are relatively rare, they are particularly deadly since many individuals may be involved. FMCSA tries to identify unsafe motor coach carriers and take them off the road. GAO was asked to determine (1) to the extent possible, the number of motor coach carriers registered with FMCSA as new entrants in fiscal years 2007 and 2008 that are substantially related to or in essence the same carriers the agency previously ordered out of service, and (2) what tools FMCSA uses to identify reincarnated carriers. To identify new entrants that were substantially related to carriers placed out of service, we analyzed FMCSA data to find matches on key fields (e.g., ownership, phone numbers, etc.). Our analysis understates the actual number of reincarnated carriers because, among other things, the matching scheme used cannot detect minor spelling changes or other deception efforts. We interviewed FMCSA officials on how the agency identifies reincarnated carriers. GAO is not making any recommendations. In July 2009, GAO briefed FMCSA on our findings and incorporated their comments, as appropriate.
section_title: What GAO Found
paragraphs: Our analysis of FMCSA data for fiscal years 2007 and 2008 identified twenty motor coach companies that likely reincarnated from "out of service" carriers. This represents about 9 percent of the approximately 220 motor coach carriers that FMCSA placed out of service during these two fiscal years. The number of likely reincarnated motor carriers is understated, in part, because our analysis was based on exact matches and also could not identify owners who purposely provided FMCSA deceptive information on the application (e.g., ownership) to hide the reincarnation from the agency. Although the number of reincarnated motor coach carriers that we could identify was small, these companies pose a safety threat to the motoring public. According to FMCSA officials, under registration and enforcement policies up to summer 2008, reincarnation was relatively simple to do and hard to detect. As a result, motor coach carriers known to be safety risks were continuing to operate. According to FMCSA data, five of the twenty bus companies were still in operation as of May 2009. We referred these cases to FMCSA for further investigation. The twenty cases that we identified as likely reincarnations were registered with FMCSA at the time that FMCSA did not have any dedicated controls in place to prevent motor coach carriers from reincarnating. In 2008, FMCSA instituted a process to identify violators by checking applicant information against those of poor-performing carriers. For example, if FMCSA finds a new entrant with a shared owner name or company address for an out-of-service company, the agency will make inquiries to determine if the new applicant is related to the out-of-service carrier. If such a determination is made, FMCSA still faces legal hurdles, such as proving corporate successorship, to deny the company operating authority.

section_title: Letter
paragraphs: On August 8, 2008, a bus carrying a group of people on a religious  pilgrimage crashed in Sherman, Texas, killing 17 people and injuring 15  others. State and federal investigators attributed the accident to the loss of  tread on a recapped tire installed on the bus’s front right steering axle— the use of recapped tires on the steering wheels is a violation of federal  regulations. The driver lost control of the bus, struck a curb, and crashed  through the guardrail of a bridge. The bus fell about 8 feet, landed on its  right side and slid about 24 feet. Twelve passengers died at the scene,  while five others died after being taken to nearby hospitals. The carrier  that operated the bus was the reincarnation of a motor coach company  that had been deemed unsafe and ordered out of service by the Federal  Motor Carrier Safety Administration (FMCSA) 2 months prior to the  accident. The new company registered with FMCSA using the same  physical and mailing addresses as the carrier ordered out of service. At the  time of the crash, the carrier did not have proper operating authority from  FMCSA, because it had not yet designated a process agent or provided  proof of insurance to FMCSA. Thus, specifying a process agent and  providing proof of insurance were the only steps standing in the way of the  new company obtaining operating authority from FMCSA.
According to FMCSA, in 2008 about 300 fatalities occurred nationwide  associated with motor coach carriers. In an attempt to reduce the number  and severity of crashes involving buses, FMCSA seeks to identify unsafe  motor coach carriers and take them off the road. Motor coach carriers  ordered out of service are not supposed to return to the road until FMCSA  determines that safety compliance issues have been resolved.
The Committee is concerned that unscrupulous owners may attempt to  evade the out-of-service orders by closing down and reopening as new bus  companies, a practice known as “morphing” or “reincarnating.” To  address the serious safety concerns of reincarnating motor coach carriers,  you asked us to determine (1) to the extent possible, the number of motor  coach carriers registered with FMCSA as new entrants in fiscal years 2007  and 2008 that are substantially related to or in essence the same carriers  the agency ordered out of service, and (2) what tools FMCSA uses to  identify reincarnated carriers.
To identify new entrants that registered with FMCSA and were  substantially related to motor coach carriers ordered out of service, we  analyzed FMCSA data to find exact matches on key fields (i.e., company  name, owner/officer name, address, phone number, cell phone number,  fax number, vehicle identification number, and driver names). Our  analysis understates the actual number of reincarnated motor coach  carriers since the matching scheme used cannot detect minor spelling  changes or other deception efforts, such as changing the company’s name,  address, and ownership. In addition, our analysis is understated because  FMCSA only provided us data on vehicles and drivers when an accident or  inspection took place, and thus the data does not include the entire  population of vehicles or drivers for either new entrants or out-of-service  carriers. Our analysis also could not identify all reincarnated motor coach  carriers where the owners purposely provided FMCSA bogus information  on the application (e.g., ownership) to hide the reincarnation from  FMCSA. For the motor coach carriers identified, we interviewed, if  possible, the owners to validate whether the company had reincarnated.
To determine the tools FMCSA uses to identify reincarnated motor coach  carriers, we interviewed FMSCA officials on the process that the agency  uses to identify potentially reincarnating carriers. We also obtained and  examined policies and other FMCSA documentation to obtain an  understanding of the design of its motor carrier enrollment process. We  did not perform any tests of the controls and therefore cannot make a  conclusion on the effectiveness of any controls in place or whether they  have reduced the number of reincarnated carriers. For more details on our  methodology, see appendix I.
We conducted the work for this investigation from November 2008  through July 2009 in accordance with quality standards for investigations  as set forth by the Council of the Inspectors General on Integrity and  Efficiency.
subsections: section_title: Background
paragraphs: FMCSA’s primary mission is to reduce the number and severity of crashes  involving large commercial trucks and buses conducting interstate  commerce. It carries out this mission in the following ways: issuing,  administering, and enforcing federal motor carrier safety and hazardous  materials regulations; and gathering and analyzing data on motor carriers,  drivers, and vehicles, among other things. FMCSA also takes enforcement  actions and funds and oversees enforcement activities at the state level  through Motor Carrier Safety Assistance Program grants.
For-hire motor carriers are required to register with FMCSA and obtain  federal operating authority before operating in interstate commerce.  Applicants for passenger carrier operating authority must submit certain  information to FMCSA, including contact information and U.S.  Department of Transportation (DOT) number, and must certify that they  have in place mandated safety procedures. After publication of the  applicant’s information in the FMCSA Register, a 10-calendar-day period  begins in which anyone can challenge the application. Within 90 days of  the publication, the carrier’s insurance company must file proof of the  carrier’s insurance with FMCSA. Applicants must also designate a process  agent, a representative upon whom court orders may be served in any  legal proceeding. After FMCSA has approved the application, insurance,  and process agent filings, and the protest period has ended without any  protests, applicants are issued operating authority.
FMCSA ensures that carriers, including motor coach carriers, comply with  safety regulations primarily through compliance reviews of carriers  already in the industry and safety audits of carriers that have recently  started operations. Compliance reviews and safety audits help FMCSA  determine whether carriers are complying with its safety regulations and,  if not, to take enforcement action against them, including placing carriers  out of service. FMCSA makes its compliance determination based on  performance in six areas: one area is the carrier’s crash rate, and the other  five areas involve the carrier’s compliance with regulations, such as  insurance coverage, driver qualifications, and vehicle maintenance and  inspections.
Carriers are assigned one of three Carrier Safety Ratings based on their  compliance with the Federal Motor Carrier Safety Regulations (FMCSR).  These ratings include “satisfactory,” for a motor carrier that has in place  and functioning adequate safety management controls to meet federal  safety fitness standards; “conditional,” for a motor carrier that does not  have adequate safety management controls in place to ensure compliance  with the safety fitness standard, that could result in a violation of federal  safety regulations; or “unsatisfactory,” for a motor carrier that does not  have adequate safety management controls in place to ensure compliance  with the safety fitness standard, which has resulted in a violation of  federal safety regulations.
Carriers receiving an unsatisfactory rating have either 45 days (for carriers  transporting hazardous materials in quantities that require placarding or  transporting passengers) or 60 days (for all other carriers) to address the  safety concerns. If a carrier fails to demonstrate it has taken corrective  action acceptable to FMCSA, FMCSA will revoke its new entrant  registration and issue an out-of-service order, which prohibits the carrier  from operating until the violations are corrected. Further fines are  assessed if it is discovered that it is operating despite the out-of-service  order.
Federal law requires new carriers to undergo a new-entrant safety audit  within 18 months of when the company begins to operate. Carriers are  then monitored on an ongoing basis using various controls that include but  are not limited to annual vehicle inspections and driver qualification  regulations. However, FMCSA may suspend a company or vehicle’s  operation at any time by ordering it out of service if it determines that an  imminent safety hazard exists. (An imminent hazard means any condition  of vehicle, employee, or commercial motor vehicle operations which  substantially increases the likelihood of serious injury or death if not  discontinued immediately.) In addition, FMCSA orders carriers out of  service for failure to pay civil penalties levied by FMCSA, failing to take  required corrective actions related to prior compliance reviews, or failing  to schedule a safety audit. Out-of-service carriers are supposed to cease  operations and not resume operations until FMCSA determines that they  have corrected the conditions that rendered them out of service. If a  carrier fails to comply with or disregards an out-of-service order, FMCSA  may assess a civil monetary penalty each time a vehicle is operated in  violation of the order.
FMCSA and state law enforcement agencies use several methods to ensure  that carriers ordered out of service, including motor coach companies, do  not continue to operate. For example, FMCSA and its state partners  monitor data on roadside inspections, moving violations, and crashes to  identify carriers that may be violating an out-of-service order. FMCSA will  visit some suspect carriers that it identifies by monitoring crash and  inspection data to determine whether those carriers violated their orders.  Also, recently, the Commercial Vehicle Safety Alliance began to require  checking for carriers operating under an out-of-service order during  roadside inspections and to take enforcement action against any that are.  However, given the large size of the industry, the nation’s extensive road  network, and the relatively small size of federal and state enforcement  staffs, it is difficult to catch motor coach carriers that are violating out-of- service orders. In addition, some carriers change their identities by  changing their names and obtaining new DOT numbers—these carriers  are generally referred to as reincarnating carriers—to avoid being caught.
section_title: Reincarnated Motor Carriers Exist
paragraphs: Our analysis of FMCSA data for fiscal years 2007 and 2008 identified 20  motor coach companies that likely reincarnated from “out-of-service”  carriers. This represents about 9 percent of the approximately 220 motor  coach carriers that FMCSA ordered out of service for those fiscal years.  The analysis was based on two or more exact matches of data for the new  entrant with the data for the out-of-service carriers on the following  categories: company name, owner/officer name, address, phone number,  cell phone number, fax number, vehicle identification number, and driver  names. These 20 motor coach companies registered with FMCSA before  FMCSA developed processes specifically for detecting reincarnated bus  companies that were established subsequent to the Sherman, Texas, crash  (see next section). The number of potential reincarnated motor coach  carriers is understated because (1) our analysis was based on exact  matches, so it could not find links if abbreviations were used or typos  occurred in the data, (2) FMCSA only provided us data on vehicles and  drivers when an accident or inspection took place, and thus the provided  FMCSA data does not include the entire population of vehicles or drivers  for either new entrants or out-of-service carriers, and (3) our analysis  could not identify owners who purposely provided FMCSA bogus or  otherwise deceptive information on the application (e.g., ownership) to  hide the reincarnation from the agency. Although the number of  reincarnated motor coach carriers that we could identify was relatively  small, the threat these operators pose to the public has proven deadly.  According to FMCSA officials, registration and enforcement policies at the  time of the Sherman, Texas, crash, reincarnation was relatively simple to  do and hard to detect. As a result, motor coach carriers known to be safety  risks were continuing to operate, such as the company that was involved  in the bus crash in Sherman, Texas.
Five of the reincarnated carriers we identified were still operating as of  May 2009. Our investigation found one of them had not received a safety  evaluation and two carriers had been given a conditional rating after the  agency determined its safety management controls were inadequate. The  remaining two motor coach carriers were deemed satisfactory in a FMCSA  compliance review because FMCSA inspectors were likely not aware of  the potential reincarnations. We referred all five companies to FMCSA for  further investigation. Based on our review of FMCSA data, we found that  the agency already identified six of the 20 reincarnated motor coach  carriers and ordered them out of service. The agency discovered them  while performing a crash investigation (as in the case of the bus accident  in Sherman, Texas), compliance reviews, or other processes. In addition,  new carriers are subject to a safety audit within 18 months.
Several of the reincarnated carriers we identified were small businesses  located in states neighboring Mexico and making trips across the border.  Our investigation also determined that all of the reincarnated motor coach  carriers we identified were directly related to companies that received  fines for safety problems shortly before being ordered out of service.  Based on our analysis of the FMCSA data, we believe they reincarnated to  avoid paying these fines and continue their livelihood. For example, we  found instances where carriers continued to operate despite being ordered  out of service for failure to pay their fines. In fact, one carrier was  operating for several months after being placed out of service. We believe  that these carriers reincarnated into new companies to evade fines and  avoid performing the necessary corrective actions.
We attempted to contact the owners to ask why they reincarnated but  were unable to reach many of them. For the six owners that we did  interview none said that they had shut down their old companies and  opened new ones to evade the out-of-service orders.
Table 1 summarizes information on 10 of the 20 cases that we investigated.  Appendix II provides details on 10 others we examined. Appendix III  provides a summary of the key data elements that matched on the new  entrants that were substantially related to out-of-service carriers.
The following narratives provide detailed information on three of the more  egregious cases we examined.
Case 1: The owner of a Houston motor coach company registered a new  carrier with the same phone number, fax number, and cell phone number  as the old one. The new company started in March 2007, 8 months before  FMCSA ordered the old company out of service. The two companies  appear to have operated simultaneously for a period of time. Six days after  the new company was formed, a motor coach carrying 16 passengers  operated by the old company was stopped and inspected on the United  States–Mexico border at Laredo, Texas. The old company was charged  with five violations, including “Operating without required operating  authority.” The old company owes $2,000 in fines. Our investigators  contacted one of the owner’s daughters. She stated that her mother was  arrested for possessing drugs when she crossed the border from Mexico  into the United States, and that her mother subsequently opened another  bus company using another daughter’s name. The daughter said she was  not involved with the bus company. In 2008, the new carrier’s new entrant  registration was revoked and the owner was convicted of cocaine  possession.
Case 2: The owner of a New York motor coach company located at a  church registered a new carrier using the same fax number, driver, and  vehicle as the old one. FMCSA conducted a compliance review for the old  company on May 30, 2007. Five safety violations were identified, including  one “Acute” violation for “Failure to implement an alcohol and/or  controlled substances testing program.” The old company, which was  ordered out of service in October 2007 for failing to pay a fine, still has  $2,000 in outstanding fines as of May 2009. On August 9, 2007,  approximately 2 months prior to FMCSA ordering the old company out of  service, a new carrier was established with the same company officer  name and fax number as the old carrier. The location of the old carrier  was a school, which was associated with (and located next door to) the  church. The owner of the new company claimed that the old company  belonged to his father, not him, and that it was a “completely different  business from his own.” FMCSA records clearly show that this is not the  case. The new owner is listed as “Vice President” of the old company, and  “President” of the new company. The owner of the new company is also  cited as being present during the Compliance Review conducted on May  30, 2007. The new company registered with FMCSA in August 2007 and  FMCSA has not conducted a new-entrant safety audit of the new carrier as  of July 2009, exceeding FMCSA’s internal goal of 9 months.
Case 3: The owner of a Los Angeles motor coach company registered a  new carrier using the same social security number, business name, phone  number, fax number, and company officer as the old one. FMCSA  conducted a compliance review on the old company in December 2006,  resulting in an “Unsatisfactory” safety rating. The review cited 11 safety  violations, including one “Acute” violation for “Failure to implement an  alcohol and/or controlled substances testing program” and four “Critical”  violations for failure to maintain driver and vehicle records. Since the old  company did not take the necessary steps to fix the violations within 45  days, it was ordered out of service in February 2007. A month later a motor  coach operated by the old company was inspected in Douglas, Arizona.  The company was charged with operating a commercial motor vehicle  after the effective date of an “unsatisfactory” rating and fined $5,620.
The same owner started the new company in June 2008. FMCSA  conducted a compliance review on the new carrier and gave it a  “satisfactory” safety rating in October 2008. FMCSA officials stated that  they were not aware of any affiliation with the previous company. Our  investigators visited the place of business of the new carrier, which was  being run out of a retail store. Although the old carrier was out of service,  several brochures and business cards for the old carrier were displayed on  the store’s counter, showing the same phone number as the new company.  We attempted to contact the owner, but the business representative stated  that the owner was currently in Mexico as the driver on a bus tour and  could not be contacted. A week after our interview, unrelated to our  investigation, FMCSA revoked the new company’s authority due to lack of  insurance.
section_title: Tools FMCSA Uses to Identify Reincarnated Carriers and Their Limitations
subsections: section_title: Passenger Carrier Vetting Process
paragraphs: Prior to the August 2008 crash in Sherman, Texas, FMCSA did not have a  dedicated processe to identify and prevent motor coach carriers from  reincarnating. At that time, an out-of-service carrier could easily apply  online for a new DOT number and operating authority. In the application,  the owner could include the same business name, address, phone  number(s), and company officer(s) that already existed under the out-of- service DOT carrier. FMCSA did not have a process to identify these  situations, and, thus, FMCSA would have granted the new entrant  operating authority upon submission of the appropriate registration data.
Subsequent to the Sherman crash, FMCSA established the Passenger  Carrier Vetting Process (PCVP), which requires the review of each new  application for the potential of being a reincarnation. Under this process,  FMCSA executes a computer matching process to compare information  contained in the motor coach carrier’s application to data of poor- performing motor coach carriers dating back to 2003. Specifically, it  performs an exact match on the application with fields in nine categories  across various FMCSA databases. This produces a list of suspect carriers  and the number of matches in each category, which serve as indicators for  further investigation. FMCSA officials stated that they have begun to  enhance the computer-matching portion of the PCVP process. Specifically,  the system will also be able to match fields that are close, but not  necessarily exact matches of each other. For instance, “John P. Smith Jr.”  would match “John Smith,” and “Maple Ln.” would match “Maple Lane.”  This enhancement should improve its ability to detect those carriers  attempting to disguise their prior registration.
In addition to the computer matching, FMCSA Headquarters personnel  receive and review each new carrier application for completeness and  accuracy. It reviews the application for any red flags or evidence the  company is a potentially unsafe reincarnated motor coach carrier. For  example, the FMCSA staff check secretaries of state databases for the  articles of incorporation to identify undisclosed owners. If the computer- matching process or FMCSA Division Office review identifies any  suspected motor coach carriers attempting to reincarnate, FMCSA sends a  Verification Inquiry letter to the applicant requesting clarification. If the  carrier does not respond to the Verification Inquiry Letter within 20 days,  the application will be dismissed. If the response to the letter shows the  applicant is attempting to reincarnate, FMCSA issues a Show Cause Order  stating that the application for authority will be denied unless the carrier  can present evidence to the contrary. If the application is not completed,  FMCSA dismisses the application and thus no authority is given.
After the carrier is approved to operate, FMCSA requires all new carriers,  including motor coach carriers, to undergo a safety audit within 18 months  of approval. During this review, FMCSA should identify whether the new  motor coach company is a reincarnation of a prior carrier. Although we  did not specifically evaluate the effectiveness of the new-entrant audit  process, we found two cases where FMCSA did not identify new motor  coach carriers as reincarnations of companies it had ordered out of  service and after the PCVP went into effect. Because we did not evaluate  the effectiveness of the new-entry safety audit and the PCVP, we do not  know the extent to which reincarnated carriers are still able to avoid  FMCSA detection when registering to operate with the agency.
section_title: Performance and Registration Information Systems Management (PRISM)
paragraphs: GAO recently reported that PRISM provides up-to-date information on  the safety status of the carrier responsible for the safety of a commercial  vehicle prior to issuing or renewing vehicle registrations. PRISM generates  a daily list of vehicles registered in the state that are associated with  carriers that have just been ordered out of service by FMCSA. It is a tool  that can be used by state personnel. PRISM’s innovation is that it is  designed to associate vehicle identification numbers with out-of-service  carriers to prevent the carrier from registering or reregistering its vehicles.
Although PRISM is a potential deterrent to a carrier wishing to  reincarnate, only 25 states have implemented the system to the extent that  they can automatically identify out-of-service carriers and then deny,  suspend, or revoke their vehicle registrations. Another limitation to  PRISM’s effectiveness is that it only includes vehicles that register under a  protocol known as the International Registration Plan (IRP)—which  pertains only to carriers involved in interstate commerce. Charter buses  are exempt from IRP (interstate) registration and thus not subject to  PRISM. Furthermore, vehicles are not checked at registration since  companies are not required to supply this information on their application  to FMCSA.
section_title: Legal Impediments to the Denial or Revocation of Reincarnated Carriers’ Operating Authority
paragraphs: FMCSA’s duty and authority to deny operating authority registration to  persons not meeting statutory requirements is provided by statute. A  person applying for registration must demonstrate that he or she is willing  and able to comply with the safety regulations, other applicable  regulations of the Secretary, and the safety fitness requirements.  Complexities regarding the application of State laws on corporate  successorship may, in certain instances, affect the agency’s ability to deny  operating authority to or pursue enforcement against unsafe reincarnated  motor carriers under these statutory provisions. The complexities include  the legal standard that must be met to hold a newly formed corporation  liable for civil penalties assessed against its corporate predecessor.
The facts necessary to satisfy the legal standard—whether under federal  or State law—require documentation outside the normal compliance  review processes. FMCSA uses a detailed Field Worksheet which lists  types of evidence that would be needed, including company contact  information, documentation on management and administrative  personnel, business assets, tax records, insurance, payroll, drivers,  vehicles, customer lists, advertising and promotional materials, corporate  charters, and information on the corporate acquisition or merger at issue.  This labor intensive investigative process is not undertaken unless strong  preliminary evidence indicates that the new company is a reincarnation of  a former motor carrier against which enforcement was taken and that the  reincarnation was for the purpose of evading enforcement action or  violation history of the predecessor company.
In order to make it easier for FMCSA to place a reincarnated carrier out of  service, the Highways and Transit Subcommittee of the Committee on  Transportation and Infrastructure of the House of Representatives  approved legislation on June 24, 2009, that would impose a uniform federal  standard and would authorize FMCSA to deny or revoke operating  authority from a carrier who failed to disclose a relationship with a prior  carrier. The legislation would also authorize FMCSA, in certain cases, to  impose civil penalties against a reincarnated motor carrier that were  originally imposed against a related motor carrier.
section_title: Corrective Action Briefing
paragraphs: We briefed U.S. Department of Transportation (DOT) officials on the  results of our investigation. They agreed that reincarnation of motor coach  carriers is an important concern but stated that there are legitimate  reasons for motor coach carriers to transfer ownership or reincorporate,  or both, such as divorce, death, relocation, or new business opportunities.  DOT officials stated that they established the PCVP to identify and attempt  to prevent reincarnated carriers from receiving approval for operating  authority. DOT officials stated that the PCVP is also used for household  goods carriers and that they hope to use the process for other types of  carriers if they obtain the resources to support this process. However,  DOT officials stated that even if DOT has identified a carrier as a  reincarnation, DOT must still prove that the new carrier is the corporate  successor to the old carrier in order to deny or revoke the operating  authority of the new carrier. DOT officials stated that this standard differs  between states and that certain states require a very high standard of  proof. As such, this determination is labor-intensive and requires  documentation outside the normal compliance review process. DOT  officials also provided technical comments to the report, which we  addressed, as appropriate.
As agreed with your office, unless you announce the contents of this  report earlier, we will not distribute it until 3 days after its issue date. At  that time, we will send copies of this report to the Secretary of  Transportation and other interested parties. In addition, the report will be  available at no charge on GAO’s Web site at http://www.gao.gov.
If you or your staff have any questions regarding this report, please  contact me at (202) 512-6722 or kutzg@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on the   last page of this report. GAO staff who made key contributions to this  report are listed in appendix IV.
section_title: Appendix I: Scope and Methodology
paragraphs: To identify new entrants that were substantially related to motor carriers  ordered out of service, we obtained and analyzed information from the  following DOT databases: the Motor Carrier Management Information  System (MCMIS), the Licensing & Insurance (L&I) system, and the  Enforcement Management Information System (EMIS) as of December  2008. We identified new motor coach operators as those that had a New  Entrant Program entry date of October 1, 2006, or later. We identified out- of-service motor carriers as those with an active, nonrescinded out-of- service order in place and who had been ordered off the road for reasons  other than failure to make contact with DOT while in the New Entrant  Program. We matched the new entrant carriers with those that were  ordered out of service on the following key fields: company name,  owner/officer name, address, phone number, cell phone number, fax  number, vehicle identification number, and driver names. For the motor  coach carriers identified, we interviewed, if possible, the owners to  validate whether the company had reincarnated and, if possible, determine  the reason for the reincarnation.
Our analysis understates the actual number of reincarnated carriers  because the matching scheme used cannot detect even minor changes in  spelling, addresses, or owner names. In addition, the number is  understated because FMCSA only provided us data on vehicles and drivers  when an accident or inspection took place, and thus the provided FMCSA  data does not include the entire population of vehicles or drivers for either  new entrants or out-of-service carriers. Our analysis also could not identify  all reincarnated carriers where the owners purposely provided FMCSA  bogus or deceptive information on the application (e.g., ownership) to  hide the reincarnation from FMCSA.
To determine the tools FMCSA uses to identify reincarnated carriers, we  interviewed FMSCA officials on the process that the agency uses to  attempt to identify potentially reincarnating carriers. We also obtained and  examined policies and other FMCSA documentation to obtain an  understanding of the design of its motor carrier enrollment process. We  did not perform any tests of the controls and therefore cannot make  conclusions on its effectiveness.
subsections: section_title: Data Reliability
paragraphs: To determine the reliability of DOT’s databases, we reviewed the system  documentation and performed testing on the validity of the data. We  performed electronic testing of the data including verifying the  completeness of the carrier data against numbers published by DOT. We  discussed the sources of the different data types with DOT officials and  discussed their ongoing quality-control initiatives. Based on our review of  agency documents and our own testing, we concluded that the data  elements used for this report were sufficiently reliable for our purposes.
We conducted the work for this investigation from November 2008  through July 2009 in accordance with quality standards for investigations  as set forth by the Council of the Inspectors General on Integrity and  Efficiency.
section_title: Appendix II: Reincarnated Motor Coach Carriers
paragraphs: In the body of the report, we provide detailed information on 10  reincarnated carriers. Table 2 below provides detailed information on the  other 10 motor coach carriers that we investigated and determined were  potential reincarnations. The cases were primarily identified by two or  more exact matches of FMCSA data for new entrants and for out-of- service carriers in the following categories: company name, owner/officer  name, address, phone number, cell phone number, fax number, vehicle  identification number, and driver names.
section_title: Appendix III: Summary of Reincarnated Motor Coach Carriers
paragraphs: As stated earlier, we identified 20 new entrants that were substantially  related to motor carriers ordered out of service. We identified these new  entrant carriers by matching them with those that were ordered out of  service on the following key fields: company name, owner/officer name,  address, phone number, cell phone number, fax number, vehicle  identification number, and driver names. Table 3 below provides the fields  that were matched between the new entrant and the carrier that was  ordered out of service.
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: GAO staff who made major contributions to this report include Matthew  Valenta, Assistant Director; John Ahern; Donald Brown; John Cooney;  Paul Desaulniers; Eric Eskew; Timothy Hurley; Steve Martin; Vicki  McClure; Sandra Moore; Andrew O’Connell; Anthony Paras; Philip Reiff;  and Ramon Rodriguez.