Public Transportation: Washington Metro Could Benefit from Clarified Board Roles and Responsibilities, Improved Strategic Planning
Published: 2011-06-30T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Washington Metropolitan Area Transit Authority's (WMATA) public rail transit and bus systems are vital to the national capital region. However, the 35-year-old rail system has experienced safety and reliability problems, including fatal accidents. A 16-member board of directors governs WMATA, setting policies and providing oversight. Recent reports have noted weaknesses in WMATA's governance structure and recommended changing it. GAO assessed WMATA's governance in terms of the board's roles and responsibilities, oversight, and strategic planning. To do so, GAO compiled leading practices from previous GAO work on public and private sector governance, non-GAO transit governance studies, and strategic planning standards; then compared WMATA's approach to those practices. GAO also spoke with six transit agencies selected based on board composition and ridership, among other things.
section_title: What GAO Found
paragraphs: Although some requirements and guidance for board roles and responsibilities are provided in the WMATA compact and board procedures, WMATA board members, officials, and other stakeholders have reported that sometimes the board focuses on management's day-to-day responsibilities rather than higher level board responsibilities such as oversight and strategic planning. This focus may have resulted from, for example, inadequate delineation and documentation of the board's responsibilities as well as inadequate communication among board members. In addition, while leading governance practices state that effective transit boards monitor the effectiveness of the board's organization, structure, and functioning through a regular board selfassessment, WMATA's board does not do so. As a result, the board lacks a key mechanism for regular, ongoing measurement of its performance. In April 2011, the board released draft bylaws that clarify the roles and responsibilities for the board and propose that the board chair coordinate a board selfevaluation. These draft bylaws represent a good first step toward addressing some of the concerns discussed in this report but will need to be adopted and then effectively implemented to achieve their desired effect. The board's oversight role is supported by the board's committee structure, which provides a communication channel for information to reach the board. Past board practices such as infrequent meetings of the Audit and Investigations Subcommittee and the lack of routine briefings on outside safety recommendations may have impaired the ability of the board to use information about areas in need of improvement regarding the operations and finances of the agency. However, given the variety in other transit agencies' practices and the lack of clear criteria on how often audit committees should meet, there is no clear standard against which to measure WMATA's practices. The board's draft bylaws propose changes to the organization of the board's committee structure. WMATA has developed elements of strategic planning over the past 4 years, but the agency's board and management could enhance their strategic focus and long-term planning processes to improve performance. WMATA acknowledged several failed past efforts at strategic planning. WMATA officials said that prior attempts failed due to a lack of management support, employee buy-in, and specific actions to execute the plans; and a focus on tactical versus strategic decision making. WMATA management has developed several elements of strategic planning, such as a mission statement, goals, objectives, and strategies. However, the agency's strategic planning process could benefit from more board and stakeholder involvement, internal and external environmental assessments, longer time frames, program evaluations, and updated performance metrics. In June 2011, the board launched an effort to overhaul its strategic planning process.
section_title: What GAO Recommends
paragraphs: GAO recommends among other things that the WMATA board of directors follow through with its efforts to clarify the roles and responsibilities of the board; conduct a regular self-assessment of the board's effectiveness; and improve its strategic planning process by actions such as increasing the board's involvement in the process and updating the agency's performance metrics. WMATA reviewed a draft of this report and noted that it has taken recent actions that begin to address some issues covered in this report.

section_title: Letter
paragraphs: The Washington Metropolitan Area Transit Authority’s (WMATA) public  rail transit and bus systems are vital to meeting the transportation needs of  the national capital region, accounting for nearly 1.2 million passenger  trips per weekday. However, WMATA’s public rail transit system is 35  years old and has experienced problems related to the safety and  reliability of its services, including fatal accidents, equipment breakdowns,  delays in scheduled service, crowding on trains, and tunnel fires. In  addition, the agency faces challenges in maintaining the aging system  while expanding the system to Dulles International Airport, adding 23  miles and additional riders to the rail transit system. In 2008, WMATA  estimated that it had about $11 billion worth of capital needs over 10  years, or $1.1 billion per year; its capital budget for fiscal year 2011 is  $712.3 million. The agency annually weighs decisions to bridge gaps in its  operating budget by raising fares, cutting service, or requesting additional  contributions from its member jurisdictions.
WMATA is an interstate compact agency, governed by a 16-member board  of directors appointed by its four funding jurisdictions—the federal  government, Maryland, Virginia, and the District of Columbia. The board  sets policies and oversees all of WMATA’s activities, including capital and  operating budgeting, system development and expansion, safety, and  procurement. In 2010, two reports concluded that weaknesses in  WMATA’s governance contributed to the safety and operational reliability  challenges facing the transit system and recommended changes to  WMATA’s governance structure. Our objective was to assess WMATA’s  governance in terms of the board’s roles and responsibilities, oversight,  strategic planning, and governance structure, and identify changes, if any,  that should be made. Specifically, we addressed the following question:  How do roles and responsibilities, oversight, and strategic planning  elements of WMATA’s practices align with leading governance practices?  In addition, we provide information on the appointment of federal  members to WMATA’s board by the General Services Administration  (GSA).
In conducting our work, we focused on WMATA’s governance in terms of  the board’s structure, communication, policies, practices, and  documentation relating to its oversight of management and  implementation of its organizational mission. We analyzed management’s  role in certain areas, such as strategic planning; however, we did not fully  assess the adequacy of management’s role in effectively operating the  agency.
To determine relevant governance practices, we compiled practices from  several sources, including those practices used in previous GAO work on  public and private sector governance and non-GAO studies, reports, and  recommendations concerning the governance of transit agencies, other  similar organizations, and corporations. Additionally, we incorporated  strategic planning practices from the Transit Cooperative Research  Program, previous GAO work, and other sources as appropriate. (For a  full list of sources, see app. I.) We then consolidated and categorized  leading governance practices and recommendations along similar themes,  such as structure, oversight, and strategic planning.
To determine how WMATA’s practices align with these leading governance  practices, we reviewed and compared elements of the composition and  structure of the WMATA board and senior management, communication  between the board and management, policies and other documentation in  place to guide WMATA’s practices, and WMATA’s internal and external  oversight practices to the leading governance and strategic planning  practices that we identified. We conducted semistructured interviews with  WMATA senior management, current board members, local jurisdictions,  oversight agencies, and other groups conducting governance reviews. In  addition, we conducted semistructured interviews with officials from  transit agencies in Atlanta, Boston, Chicago, New York, Philadelphia, and  San Francisco. Respectively, we spoke with the Metropolitan Atlanta  Rapid Transit Authority (MARTA), Massachusetts Bay Transportation  Authority (MBTA), Chicago Transit Authority (CTA), Metropolitan  Transportation Authority (MTA), Southeastern Pennsylvania  Transportation Authority (SEPTA), and Bay Area Rapid Transit (BART).  We chose these transit agencies based on similarities to WMATA along  many characteristics, including size and makeup of the board, annual  ridership, services provided, budget issues, and complexity of the service  area.
We conducted interviews with GSA concerning the appointment of federal  members to WMATA’s board. Appendix I contains a more complete  description of our scope and methodology.
We conducted this performance audit from September 2010 to June 2011  in accordance with generally accepted government auditing standards.  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.
subsections: section_title: Background
paragraphs: WMATA began rail operations in 1976. As of 2011, it operates the nation’s  second largest rail transit system and sixth largest bus system. WMATA  provides service in the District of Columbia, suburban Maryland, and  Northern Virginia. In fiscal year 2011, WMATA based its budget on a  projected ridership on its rail transit and bus systems of 346 million trips.
The rail transit system consists of 106.3 route miles and 86 passenger  stations and a fleet of over 1,100 rail cars. A planned expansion of the rail  transit system will add 11 stations and extend the system 23 miles in  Northern Virginia, providing service to Dulles International Airport and  Loudoun County, Virginia. (Figure 1 shows WMATA’s rail transit route  system and proposed fiscal year 2011 jurisdictional subsidies.) WMATA’s  Metrobus service operates 320 routes on 135 lines throughout the Metro  region, utilizing 12,000 bus stops and 2,398 shelters. In addition, WMATA  offers a shared-ride, door-to-door paratransit service for people whose  disability prevents them from using bus or rail transit. The paratransit  system operates a fleet of over 600 vehicles and is expected to provide 2.7  million passenger trips in fiscal year 2011. WMATA is also the single  largest escalator/elevator operator in North America operating 589  escalators and 271 elevators.
WMATA’s funding comes from rider fares and parking and a variety of  federal, state, and local sources including grants from the federal  government and annual contributions by each of the local jurisdictions  that WMATA serves. (See fig. 1.) WMATA’s fiscal year 2011 budget totals  about $2.2 billion. Of the total amount, about 33 percent, or $712.3 million,  is for capital improvements and about 63 percent, or $1.45 billion, is for  operating expenses.
subsections: section_title: WMATA’s Governance Structure
paragraphs: WMATA was created in 1967 by an interstate compact—matching  legislation passed by Virginia, Maryland, the District of Columbia, and the  U.S. Congress—that describes its high-level purpose, powers, general  structure, funding, and authorities. The compact, as amended, creates a  16-member board of directors (8 voting and 8 alternate members) to  govern WMATA and designates an appointing authority for each signatory  to appoint 2 voting members and 2 alternate members to the board. (See  table 1.) As of June 2011, GSA—which is responsible for selecting the  board members representing the federal government—had appointed 2  voting members and 1 alternate, but had not appointed a second alternate.  The District of Columbia also has a single vacancy for an alternate  member, leaving board membership at 14. Nine of the 14 active members,  including 7 voting members were appointed between January 2010 and  May 2011. Also, according to the compact, the board must elect a chair at  the beginning of every year. The chair has historically rotated between the  three local jurisdictions each year; however, beginning in January 2011,  board procedures allow for anyone to be elected chair, including the  previous year’s chair or a federal board member.
The compact also provides the board with broad policy-making authority,  specifically in the areas of planning, budgeting, and financing. To help  carry out these functions, the board has established committees, such as  safety and security, customer service and operations, and finance and  administration. (See fig. 2.) WMATA board procedures allow that alternate  board members can vote in committee meetings, but can only vote in full  board meetings in the absence of “their” voting member.
In addition, the board is responsible for appointing a general  manager/chief executive officer (GM/CEO) and executive leadership team  to manage day-to-day operations and to develop policies and procedures,  draft a budget, and conduct all other tasks related to operating and  maintaining the transit system. Figure 3 shows the organization of  WMATA’s executive leadership.
section_title: Studies Have Recommended Changes to WMATA’s Governance
paragraphs: Three reports issued in 2010 identified weaknesses in WMATA’s  management and board oversight and called for change in WMATA’s  governance structure and procedures. The Riders’ Advisory Council  (RAC) and the Greater Washington Board of Trade and Metropolitan  Washington Council of Governments sponsored Task Force (Governance  Task Force) both issued reports critiquing WMATA’s board and  management. Examples of recommendations from both reports include:  (1) board roles and responsibilities should be more clearly defined and (2)  the board should redefine the general manager position as WMATA’s chief  executive officer and that person should oversee WMATA’s daily  management. (See app. II for additional information on the  recommendations made by these reports.) In addition, a National  Transportation Safety Board (NTSB) report on a fatal June 2009 accident  discussed how shortcomings in WMATA’s internal communications,  recognition of hazards, assessment of risk from those hazards, and  implementation of corrective actions are evidence of the absence of a  safety culture within the organization. The report partially attributes this  situation to WMATA’s governance due to inadequate or deficient oversight  by the board.
section_title: Stakeholders Believe Inadequate Delineation, Documentation, Communication, and Self-Assessment of the Board’s Responsibilities Have Led to Occasional Lack of Strategic Focus
paragraphs: WMATA board members, officials, and other stakeholders have reported  that the board sometimes focuses on management’s day-to-day  responsibilities rather than higher level board responsibilities such as  policy, oversight, and strategic planning. This lack of strategic focus may  have resulted from inadequate delineation and documentation of the  board’s responsibilities, as well as inadequate communication among  board members.
Governance practices based on previous GAO work and other relevant  studies state that an effective transit board:  focuses on policy making, principally specific elements such as guidance  and strategic issues as well as oversight and monitoring of management  and performance;   clearly defines and formally documents its roles and responsibilities and  has a clear view of its role in relationship to that of management. All  activities, such as meetings and agenda items, should focus members on  policy making and away from day-to-day management issues;    delegates day-to-day management of the agency to the GM/CEO and other  informs and educates its members and provides orientation to new board  members; and   acts as a cohesive group, eliminating personal agendas.
Current and former board members and senior officials with whom we  spoke believed that the WMATA board and individual board members  have sometimes focused on the day-to-day operations of the transit agency  and become involved in areas that should be the responsibilities of  management. Specific cited examples of board involvement in  management’s responsibilities include hiring and firing employees beyond  senior management; approval of a minor personnel policy; and  involvement and debate of specific detailed decisions such as station tiles,  bicycle facilities, and transit car seat colors.
Consistent with leading governance practices, WMATA board procedures  state, “No Member individually shall direct or supervise the GM/CEO or  any WMATA employee or contractor managers.” However, WMATA  officials told us that rather than acting as a cohesive group, individual  board members had directed staff to make changes to presentations prior  to board meetings. These officials also reported that some individual  board members had what they believed to be excessive contact with  midlevel managers requesting specific information rather than working  through established channels such as the board chairman, GM/CEO, or  other senior management.
Several board members and WMATA officials also commented that the  frequency of board meetings can be inefficient and symptomatic of a lack  of a strategic focus by the board. Several board members believed that the  board meets too often, which can be an indication that it is too involved in  running the agency. Officials and board members also stated that  preparing for board activities—while important—can reduce the time staff  have available to conduct day-to-day operations and analysis, or monitor  and improve the performance of the transit system. Between April 30,  2010, and May 1, 2011, the WMATA board met 84 times—17 board  meetings and 67 committee meetings or executive sessions. By  comparison, the WMATA board met more frequently than five of the six  transit agencies we visited. Only New York’s MTA—which carries  approximately 8 times the number of daily riders—met more frequently.  (See fig. 4.) (Additional information comparing the six transit agencies  with WMATA is found in app. III.)
Board members and stakeholders, such as RAC and the Governance Task  Force, told us that the lack of strategic focus by the board may be in part  attributed to inadequate delineation and documentation of board roles,  inadequate communication among board members, and other factors.  Roles and responsibilities for the board are delineated in two primary  documents: the compact and board procedures. As mentioned earlier, the  compact provides the board with specific tasks and authorities such as  developing a mass transit plan, capital and current expense budgets, and a  financing plan; selecting a GM/CEO, an independent auditor, and an audit  committee; and adhering to legal requirements such as the Davis-Bacon  Act. The compact also states that “subject to policy direction by the  board,” the GM/CEO “shall be responsible for all activities” of WMATA. In  addition, board procedures further delineate that the board “determines  agency policy and provides oversight for the funding, operation and  expansion of safe, reliable, and effective transit service within the Transit  Zone.”
Although the compact and board procedures provide some guidance, there  is a perception among WMATA officials, some board members, and other  stakeholders that the described roles and responsibilities are too broad  and not clearly defined. The Governance Task Force found that “the lack  of delineation of responsibilities has created an environment where there  is no clear understanding of who is accountable for issues such as day-to- day management, communication, operations, and safety.” In addition,  some board members we spoke with told us that while the existing  documentation generally provides clarity, it should be improved. For  example, throughout the history of WMATA, the board has made specific  delegations of authority to the GM/CEO covering such issues as  procurements and personnel policies. However, according to board  members and WMATA’s general counsel, these delegations—and other  board resolutions—are not organized or readily accessible to the board.
Inadequate board communication including failure to orient, inform, and  educate new and existing board members has also contributed to the lack  of a strategic focus of the board, according to board members. For  example, in the past, orientation for new board members has been  informal, driven primarily through the initiative of the new board members  themselves. In comparison, officials at four of the six transit agencies we  visited told us that they provide a formal orientation for new board  members. For example, as a result of MARTA’s orientation process, a  MARTA official stated that roles and responsibilities for the board are  clear and well-defined. Their orientation includes (1) presentations by the  senior executive team on subjects such as the MARTA Act and its specific  criteria and allowances as well as the bylaws, (2) discussion of the roles  and responsibilities of board members, (3) an explanation of meeting  structure, and (4) a tour of key facilities. In contrast, at WMATA, we  observed that current efforts to inform and educate board members, such  as discussion during meetings, have not consistently proven to be effective  in informing board members of their role relative to management’s role in  day-to-day operations.
Other factors might have also contributed to the lack of a strategic focus  for the board. For example, in the past, WMATA’s board procedures were  subject to change by the annually rotated chairperson. One senior WMATA  manager told us that each time the procedures change it takes time for the  board members to adjust. In addition, the Congressional Research Service  noted that the model of the WMATA board—which is closer to a public  utility model than a private sector model—requires action in decisions  such as fare setting, route selection, and frequency of service  determinations that are normally viewed as day-to-day decisions in the  private sector. The WMATA compact delineates that the board should  develop and adopt a mass transit plan that includes specific elements such  as routes, schedules, and fares. In contrast, officials at SEPTA told us that,  although the SEPTA board also plays a role in approving budgets, service  plans, and some procurements, SEPTA’s enabling legislation articulates  that the board’s focus is to be on long-term planning and policy rather than  the day-to-day administration of the agency’s business.
Additionally, WMATA’s board does not conduct a self-assessment.  According to leading governance practices, effective transit boards  monitor their progress on an annual basis and conduct a thorough self- assessment every 3 to 5 years. Such an assessment would not only  evaluate progress in terms of the transit system’s performance, but also  evaluate the effectiveness of the board’s organization, structure, and  functioning, and its impact on performance. The WMATA board does not  do this type of an assessment; two board members with whom we spoke  pointed out that the only form of board assessment is the replacement of  board members by their appointing authorities. As a result, the board is  lacking a key mechanism for regular, ongoing measurement of its  performance. By comparison, New York’s MTA board is required by law to  complete an annual board self-assessment whereby the board as a whole  and each of the committees, individually, assesses its effectiveness. In  addition, MTA’s Office of Inspector General (OIG) has statutory authority  that makes it permissible for it to audit and investigate the board of  directors, or its members if the need arises; past oversight efforts have  included reviewing the board’s oversight of MTA capital mega-projects.  MTA’s Inspector General told us that the ability to use such a broad,  general authority in this manner is an important oversight mechanism for  MTA. By comparison, the WMATA board has not adopted procedures to  allow the WMATA OIG to investigate claims against the board, including  alleged wrongdoing by board members or alleged instances of the board  not following procedures or protocols.
Some WMATA board members agreed that the board should focus on  policy making and should have a role in setting goals, strategic planning,  budgeting, oversight, and monitoring performance. Specifically, these  board members commented that the board should be more focused on  setting and evaluating performance metrics based on a strong strategic  planning process, an area that has been lacking in the past. Starting in  December 2010, the board and management began taking steps to further  identify and delineate roles and responsibilities including the  establishment of the Governance Committee. Additionally, in April 2011,  the board released draft bylaws intended to be permanent and amendable  only by a majority vote of the board. If adopted and then effectively  implemented, the draft bylaws would address some of the issues described  above. For example, the draft bylaws    assign roles and responsibilities for the board, board members, and the  chair and mandate an orientation program, a self-evaluation of the board,  and standardization of communication procedures and conduits. require the board to act as a cohesive group, focusing on policy making,  strategic planning, and oversight, as well as its specific roles in creating  and adopting a budget, determining a fare structure and service levels, and  developing a business plan.   clarify that the GM/CEO has been delegated the authority and is primarily  responsible for the overall administration and operation of WMATA  subject to policy direction and oversight from the board.
In addition, the board has requested that WMATA’s general counsel  organize and catalog board resolutions that delegate authority to the  GM/CEO. The board has also organized a new, more formal, orientation  program for new board members and plans to draft amended board  procedures and a revised code of ethics.
section_title: WMATA’s Board Is Structured to Receive Information That Could Facilitate More Effective Oversight of the System
paragraphs: To help carry out its role as an oversight body, WMATA’s board is  structured to have access to information that could help facilitate effective  oversight of management and the agency’s operations. According to  leading governance practices, a board needs to have an effective oversight  process, supported by timely and accurate information and clear  communication channels. The types of oversight information available to  the board are important because they can provide the board with  understanding about areas in need of attention and improvement  regarding the operations and finances of the agency. However, past board  practices such as infrequent meetings of the Audit and Investigations  Subcommittee and the lack of routine briefings on the status of  recommendations from outside parties may have impaired the ability of  the board to use this information to effectively carry out its oversight role.
The board receives or has access to several key sources of information  related to finance, operations, and safety that could facilitate effective  oversight. For example, in 2006, WMATA established the OIG to conduct  and supervise audits, program evaluations, and investigations. The  inspector general is appointed by the board and reports directly to it. The  board also receives information that could facilitate effective board  monitoring and oversight from two important external entities. At the  federal level, the Federal Transit Administration (FTA) conducts a  triennial review, a procurement systems review, and a financial  management review. In the most recent series of these reviews, in 2007  and 2008, FTA recommended improvements in several areas, including  preventative maintenance; internal controls related to real property,  facilities, and equipment; procurement policies and procedures; and  WMATA’s cost allocation plan and grant budget accounting. FTA officials  stated that these types of findings and recommendations were typical of  those found at other transit agencies.
Additionally, the Tri-state Oversight Committee was created in 1997 by  state-level agencies in Virginia and Maryland and the District of Columbia  to jointly oversee rail safety and security at WMATA. In 2007, the  committee made several findings and observations, many of which dealt  with updating agency documentation or policies, such as the system safety  program plan. More recently, in 2010, the committee reported that  WMATA has worked to resolve outstanding safety issues and findings from  previous internal and external safety reviews and investigations.  Additionally, there are other mechanisms for the board to obtain relevant  information from stakeholders, including RAC, the Jurisdictional  Coordinating Committee (JCC), and a regular public comment period  during board meetings.
Internally, the board’s six committees provide procedures and  communication channels to facilitate the flow of guidance and oversight  information to the board in areas such as finance, safety, security, and  customer service. For example, one of the board’s key governance areas is  its responsibility to annually adopt a capital budget for the agency. The  Finance and Administration Committee—with its overall responsibility for  monitoring the financial integrity and viability of WMATA—recommends  capital and operating budget approval to the board, monitors capital and  operating budget implementation and management, develops budget  preparation guidance, and recommends proposed budgetary changes to  the board. Additionally, the committee recommends policies for fare  setting and oversees the operation and development of fare collection  mechanisms, among other things.
The Audits and Investigations Subcommittee, which is part of the Finance  and Administration Committee, serves as the main avenue for information  that can be used to facilitate the board’s oversight of financial reporting  and audit processes—including the financial reporting and related audits  and OIG reports—which are reported or otherwise available to the board.  According to the subcommittee chair, the subcommittee provides input,  along with management, into an internal audit plan developed by the OIG  each year prior to the adoption of the annual budget and uses the OIG’s  quarterly reports to monitor the status of corrective actions taken by  WMATA on outstanding OIG recommendations. The subcommittee chair  also noted that the subcommittee uses an independent auditor’s report on  WMATA’s financial statements and single audit report to facilitate its  oversight of the quality and integrity of WMATA’s internal controls,  compliance systems and accounting, auditing, and financial reporting  processes. Furthermore, the subcommittee chair explained that the board  also uses this information to monitor the status of corrective actions taken  on past recommendations made by the external auditor.
The board’s Audits and Investigations Subcommittee is the board’s main  channel for audit information and provides the opportunity for financial  oversight information to reach the board. However, the subcommittee has  met relatively infrequently. The subcommittee met once in 2008 and twice  in both 2009 and 2010—including meeting with the OIG to discuss safety  and investigative matters and to discuss and accept the external auditor’s  annually required report on the audit of WMATA’s financial statements.  Additionally, the current placement of the subcommittee within a full  committee differs from other transit agency practices. By comparison,  some transit agencies we visited had an audit committee that met more  often and had the audit and financial reporting function elevated to a  committee. For example, the audit committees at SEPTA and New York’s  MTA met four and seven times, respectively, over the last year; while  Boston’s MBTA met less often. However, given the variety in other transit  agencies’ practices and the lack of clear criteria on how often audit  committees should meet, there is no clear standard against which to  measure WMATA’s practices.
According to the board procedures, the Safety and Security Committee is  responsible for providing safety and security policy direction; oversight to  assure that all facilities, equipment, and operations of the transit system  are safe and secure; and safety and security goals for the GM/CEO and the  agency. To carry out its duties, the committee reviews WMATA’s system  safety program plan for consistency with safety goals and receives  periodic reports from the Tri-State Oversight Committee. It also works  with FTA and NTSB, as appropriate, to review the status of WMATA safety  with the goal of assuring that all safety recommendations from any  internal or external safety review or investigation are handled  expeditiously and effectively. The committee has met regularly since  October 2010, according to the agency.
A 2010 report by NTSB highlighted problems with the flow of safety  oversight information. That report states that the WMATA board  chairman told NTSB that prior to the June 2009 accident the board did not  receive routine briefings on safety recommendations or corrective action  plans; rather the board counted on the GM/CEO to identify relevant issues  that required the board’s attention. In response, NTSB recommended that  the board evaluate actions taken in response to recommendations and  corrective action plans from NTSB, FTA, and the Tri-State Oversight  Committee. WMATA has several offices, including the OIG, tasked with  internal and external recommendation tracking. The Safety and Security  Committee receives regular reports from the agency’s Chief Safety Officer  and Chief of Police on the status of the responsiveness of the agency to  internal and external safety findings, including the status of corrective  action plans, as well as any significant accidents or incidents. WMATA  officials told us that they are developing an updated safety  recommendation tracking system, and NTSB has closed this  recommendation as implemented. Additionally, NTSB concluded that,  before the June 2009 accident, the board did not exercise oversight  responsibility for the safety of the WMATA system, leading it to  recommend that the board elevate its safety oversight role by developing a  policy statement to explicitly and publicly assume the responsibility for  continual oversight of system safety. WMATA has implemented this  recommendation.
The board’s other committees have additional oversight responsibilities.  For example, the Customer Service and Operations Committee is  responsible for overseeing transit system performance and service  standards; the quality of operations programs and procedures; and  customer service, communication, and outreach activities, including  public and media relations. The objective of the committee is to help  ensure that WMATA operational activities and programs are designed to  provide reliable, effective and clean transit service, responsive to  customer needs. The Policy, Program Development and Intergovernmental  Relations Committee is responsible for coordination of regional planning  issues and planning for transit service, access, and system expansion,  among other things.
As mentioned earlier, in April 2011, the recently created Governance  Committee released draft bylaws which, if adopted, would elevate the  Audits and Investigations Subcommittee to a full committee, streamline  board communications by standardizing communication procedures and  channels, and formalize the board’s relationship with advisory committees  such as JCC and RAC.
While there is no single approach to best support all transit agency  oversight, officials at MTA noted that they also used additional ways to  support their oversight functions that they believed had benefits. For  example, officials told us that, pursuant to state statute, the agency uses  an independent engineer to evaluate key technical or capital-intensive  projects, assess risk, and act as a control on those projects. One WMATA  board member indicated a desire to have access to independent expertise  for consultation, noting that such resources could improve the board’s  effectiveness.
Additionally, the Governance Task Force and RAC have recommended  that WMATA change elements of its board structure—such as increasing  the size of the board and changing the role of alternates—to improve its  governance. Our analysis, however, indicates that most of the  recommended changes have trade-offs—there are both benefits and  drawbacks to them. We compared the various recommendations to  leading governance practices, approaches taken by other transit agencies,  and the views of board members and stakeholders. Board members and  stakeholders indicated that proposed changes to the board’s structure and  processes—such as eliminating alternate board members, changing the  size of the board, or eliminating the jurisdictional veto—have trade-offs,  and we did not find consistent support among leading governance  practices or other transit agencies that these changes would improve  governance. Some other proposed changes such as uniform compensation  and coordinated board member appointments will require action by the  three jurisdictions. To accomplish that task, the Governance Task Force  recommended that the signatories and the appointing authorities form a  WMATA Governance Commission to make improvements to the  authority’s governance structure and hold the board accountable for its  performance. Such an additional oversight body could help facilitate  coordination among the jurisdictions. However, we did not identify  governance leading practices, or find other transit agencies with a  comparable oversight board over a board of directors. Furthermore, such  a commission was viewed by some stakeholders we spoke with as  redundant because it would be comprised of most of the same  membership that is responsible for appointing the board of directors.  Appendix II discusses selected recommendations in more detail.
section_title: WMATA Has Made Progress, but Does Not Fully Address All Elements of Sound Strategic Planning
subsections: section_title: WMATA Has Established Some Strategic Planning Elements
paragraphs: WMATA has developed elements of strategic planning over the past 4  years, but the agency’s board and management could improve their  strategic focus and long-term planning processes. Leading organizations  that we have analyzed use strategic planning to articulate a comprehensive  mission as well as to identify and achieve long-range goals and objectives  for all levels of the organization. While strategic planning practices may  vary among organizations according to agency-specific needs and  missions, according to leading strategic planning practices we identified,  effective strategic planning generally includes a mission statement, long- term goals and objectives, and strategies to achieve the goals; covers the  major functions and operations of an agency; and establishes a multiyear  time frame and performance metrics for gauging progress. According to  the literature, the process for strategic planning should also include  assessing the organization’s external and internal environments,  conducting a stakeholder analysis and involving the board and key  stakeholders in the strategic planning process, identifying key strategic  issues facing the organization, developing a process for implementing and  managing these issues, and reassessing the strategic planning process.
WMATA has not succeeded in past attempts at strategic planning. WMATA  officials acknowledged several failed efforts at strategic planning, which  they said occurred because of a lack of management support and  employee buy-in, a lack of specific actions to execute the plans, and a  focus on tactical versus strategic decision making.
According to a senior WMATA official, however, the agency is in the  process of developing a strategic planning and performance management  system, which consists of a strategic framework, a GM/CEO’s annual  execution plan, and internal departmental execution plans. The strategic  framework is a one-page document, available on WMATA’s Web site,  which outlines the agency’s mission statement, along with 5 goals and 12  objectives. The agency’s departmental execution plans are internal  documents—not available on the Web site—that identify actions,  measures, targets, and responsibility for meeting WMATA’s strategic goals  and objectives. The final component of WMATA’s strategic planning  system is the GM/CEO’s execution plan, which a senior WMATA official  told us identifies annual safety, operational, and financial performance  measures and targets. According to a senior WMATA official, as of May  2011, this document was being reviewed by the board. It was not made  available to us.
WMATA has developed several elements of effective strategic planning  through its strategic framework and execution plans, such as a mission  statement, goals, objectives, strategies, and metrics. The agency’s strategic  framework includes a mission statement for the agency, which was  approved by the board, along with goals and objectives for the programs  and operations of the agency. WMATA also has developed some processes  for implementing and managing its strategic issues through departmental  execution plans. These plans contain strategies for key actions that are  linked to the strategic goals and objectives. WMATA has also linked the  prioritization of its capital needs to its strategic goals and objectives, as  part of aligning its activities to support the agency’s goals. Furthermore,  the departmental execution plans also include performance metrics and  targets for tracking progress on the agency’s key actions for achieving its  goals and objectives, some of which are publicly available and regularly  reported to the board.
section_title: WMATA’s Strategic Planning Process Lacks Board and Stakeholder Awareness and Involvement
paragraphs: WMATA’s strategic planning and performance management system does  not include some strategic planning elements of leading organizations that  we have studied, such as stakeholder awareness and involvement,  environmental assessments, a long-term time frame and regular updating,  program evaluations, and up-to-date performance metrics. Specifically:  Board and stakeholder awareness and involvement are lacking.  According to strategic planning practices we identified, a strategic  planning process at a transit agency should be driven by the board, as part  of its role in setting the direction and priorities of the organization. Board  involvement in the strategic planning process allows the board to help the  system identify and maintain focus on strategic priorities. Board  leadership can also help implementation of strategic actions proceed more  effectively by providing support from an agency’s highest level.  Furthermore, boards can help an agency identify and assess external  opportunities and challenges as part of their responsibility for relating an  organization to its external environment. Several other major transit  agencies we studied use board-driven strategic planning processes to  establish the direction of the agency. For example, the strategic goals and  plan for San Francisco’s BART are formally adopted by the agency’s board  and serve as the guiding document for the agency’s budget process.
WMATA’s strategic framework was not developed with board input and  did not include a process to identify priorities and direction from the  board. For example, several WMATA board members told us that the  board has not been involved in strategic planning. Some board members  also were not aware of the agency’s strategic planning efforts, as several  members told us they were not clear on the nature of WMATA’s strategic  planning process or if the agency had a strategic plan at all. As discussed  earlier, the board’s documented roles and responsibilities also do not  delineate a role for the board in strategic planning. Board members  expressed an interest in being more involved in strategic planning and  setting the direction of the agency. WMATA’s Governance Committee has  also cited strategic planning as an upcoming task for the board. A senior  WMATA official also told us the board is in the process of reviewing and  approving the GM/CEO’s 2011 execution plan. However, without prior  board involvement, WMATA’s strategic planning process may not  appropriately reflect the views of parties potentially affected by or  interested in the agency’s activities.
WMATA has also not fully communicated its strategic planning process to  some of its internal stakeholders. Strategic planning processes can be  important tools for communicating an organization’s intentions internally  and ensuring the entire organization is moving in the same direction,  according to strategic planning practices we identified. Further, a strategic  planning process that affects an entire organization should involve an  organization’s key decision makers. WMATA’s strategic plans have not  been communicated to all key decision makers. For example, a senior  WMATA official noted that the agency’s strategic planning efforts did not  account for workforce attrition and he was unaware of the internal  execution plan for WMATA’s Human Resources department, which  includes actions to identify retirement forecasts for employees. Without  good communication, WMATA cannot ensure its strategic planning  process fully articulates the agency’s mission, goals, and objectives to its  internal stakeholders.
A lack of transparency also exists among some external stakeholders,  such as the jurisdictions and the general public, in terms of understanding  the agency’s strategic actions, priorities, and vision. According to strategic  planning practices we identified, stakeholder analysis and involvement are  important aspects of an effective strategic planning process. A  stakeholder analysis can help an organization identify and incorporate the  various criteria their external stakeholders use to judge the organization  and how the organization is performing against those criteria. A senior  WMATA official told us that JCC, which consists of representatives from  the three local jurisdictions, was consulted on the agency’s strategic goals,  performance measures, and reporting, but some officials from the  jurisdictions told us they were not aware of the agency’s strategic planning  efforts and did not believe the agency engaged in any strategic planning.  Such awareness may be hindered because, of the three components of  WMATA’s strategic planning process, only the one-page strategic  framework is publicly available. More publicly available information on  WMATA’s strategic planning process could improve awareness of the  agency’s efforts and challenges among external stakeholders. In  commenting on a draft of this report, WMATA noted that in June 2011 it  launched a new strategic planning initiative that will include input from  external stakeholders.
Senior officials at several transit agencies told us or have stated publicly  that stakeholder involvement and awareness of their strategic planning  efforts have created greater external understanding and support for the  agency and helped regional stakeholders understand their decisions and  needs. For example, officials with New York’s MTA told us that regional  stakeholder awareness of the agency’s strategic planning efforts and  future needs have increased stakeholder buy-in for the agency’s planning.  Research on transit agency strategic planning has also shown that  stakeholder awareness of strategic planning can help define the agency’s  core role and responsibilities to the community. Additionally, if an  organization does not understand and effectively meet its stakeholders’  performance criteria, then the agency may not satisfy its stakeholders and  could receive less support from them.
Internal and external environmental factors that could affect goals are  not clearly assessed. WMATA’s strategic planning and performance  management system does not clearly state key internal and external risk  factors that could significantly affect the achievement of its goals and  objectives. We have previously reported that for strategic planning to be  done well, organizations must assess their internal and external  environments. An agency should study its internal environment to  identify strengths and weaknesses of the organization. Organizations  should also identify external opportunities and challenges, as many  external forces that fall beyond an organization’s influence can affect its  chances for success. Some of the external factors that may be identified in  these assessments could be economic, demographic, social, or  environmental and may be stable, predictable, or variable. Other transit  agencies we studied take into account factors that may affect the  achievement of their goals. For example, the strategic plan for SEPTA in  Philadelphia includes an analysis of the internal and external factors, such  as a potential loss of dedicated funding and unfunded mandates for the  agency, that could impact the agency’s strategic objectives. SEPTA’s plan  states that this assessment helps the agency identify the strengths,  weaknesses, opportunities, and threats to the agency from its  environment.
While WMATA has taken into account threats to its capital program by  assessing the potential risks for the delivery of its capital projects, it has  not conducted an external environment assessment for the rest of its  strategic planning and performance management system, though a  WMATA official told us the agency has plans to do so in the future.
Without such assessments, WMATA may not be able to respond effectively  to changes in its environment.
Time frame and updating of strategic plan are unclear. WMATA’s  strategic planning efforts do not clearly establish a long-term, multiyear  outlook and do not include a schedule for updating or revising the  agency’s strategic goals, objectives, and strategies. While strategic  planning practices we identified vary on prescribing a specific time frame  necessary for strategic plans, the ones that did identify a time frame state  that strategic planning efforts should look at least 4-6 years into the future.  Several other transit agencies, such as BART and MTA, have multiyear  plans and regularly update their strategic plans. For example, MTA  officials told us they plan 4 and 5 years into the future and annually review  the agency’s priorities. MTA officials said this process helps the agency’s  board focus on long-term issues and avoid short-sighted decisions. In  commenting on a draft of this report, WMATA noted that its new strategic  planning process will develop a multiyear vision and multiyear business  and operational plans.
WMATA uses a 10-year plan for its capital program linked to the agency’s  strategic goals and objectives. But it is not clear from our review of the  strategic framework or departmental execution plans if WMATA planned  several years into the future for all of its major operations and  departments. For example, WMATA does not include any multiyear goals  or actions in its departmental execution plans that extend beyond fiscal  year 2012. In addition, WMATA officials told us that, as a result of  insufficient long-term planning, priorities such as new technology, staff,  and capital needs are approved—and sometimes underfunded—during the  annual budget process rather than planned for strategically. In terms of  regular updating, senior WMATA officials told us that the GM/CEO’s  execution plan will include performance metrics and targets the board will  annually review. The agency’s strategic framework and departmental  execution plans do not include procedures for regular review and update.  Ensuring a multiyear time frame and regular updating of the agency’s  strategic planning system can encourage the board and staff to have a  more long-range view in decision making and priority setting.
Long-term planning and regular updating could help WMATA address  some problems with the transit system. According to senior WMATA  officials, board members, and other stakeholders, WMATA has historically  concentrated on system expansion and has not sufficiently focused on the  long-term maintenance of the system. The agency has well-documented  maintenance issues, such as problems with the system’s escalators  breaking down frequently. Additionally, WMATA’s GM/CEO has stated  publicly that the agency lacks a long-term, systematic plan for its track  rebuilding program and is unable to plan major track maintenance for  more than 6 months in advance. One WMATA official told us that certain  maintenance projects and technological upgrades undergo an inefficient  and lengthy process from conception to implementation.
Program evaluations are not systematic. While WMATA does perform  some evaluations that assess the effectiveness of its programs, these  evaluations are not conducted on a regular basis or uniformly across the  agency and the agency’s strategic planning documents do not describe or  identify any program evaluations used for establishing or revising the  agency’s goals and objectives. We have previously reported that program  evaluations can be a potentially critical source of information in assessing  the appropriateness and reasonableness of goals, the effectiveness of  strategies, and the implementation of programs. A systematic evaluation  of how a program was implemented can also provide important  information about the success or failure of a program and suggest ways to  improve it. A senior WMATA official told us that the agency conducts  performance spotlights on areas with negative performance indicators, as  a way of evaluating and identifying the causes and possible solutions to an  indicator’s performance. However, the agency’s strategic planning  documents and comments from a senior official do not describe or identify  any program evaluations used for establishing or revising the agency’s  goals and objectives or for evaluating the progress towards achieving  those goals.
Some performance metrics are outdated and were not developed with  board involvement. WMATA has made significant progress in performance  management, but some weaknesses remain. Strategic planning practices  we identified state that strategic planning processes should be linked to  performance measurement and include metrics for gauging progress  toward the attainment of each of the plan’s long-term goals. This is  necessary for monitoring whether goals are being achieved and if changes  are necessary. To its credit, WMATA created an Office of Performance in  2010 to develop a performance management framework for the agency’s  operations through enhanced performance measurement and reporting.  The office has created a “vital signs” report, which is a scorecard of 12 key  performance indicators for WMATA. The board also receives regular  reports from the office on the agency’s performance. Additionally, the  office has worked to establish consistency throughout the agency by  standardizing the tracking of information for performance measurement.  Further, WMATA’s performance metrics and targets are linked to the  agency’s strategic goals and objectives.
Although WMATA board members and officials indicated that the office is  a good start to improving the performance management of the agency,  some of WMATA’s performance metrics and targets are out of date and the  board has not been fully involved in assessing the metrics and their  criteria. As part of its strategic planning efforts, WMATA has established  performance metrics and targets in its departmental execution plans for  measuring each key action for achieving the agency’s goals and objectives.  Performance metrics and targets need to be updated to anticipate changes  in the agency’s resources and operating environment. Senior WMATA  officials have acknowledged that some of the agency’s performance  metrics and targets are based on data and information that is out of date.
To address this issue, in May 2011, a senior WMATA official told us  management has proposed revised performance targets to the board’s  Customer Service and Operations Committee. According to leading  strategic planning practices, as part of a board’s role in overseeing the  agency and monitoring progress towards the achievement of strategic  goals, a board should review an agency’s performance measures on a  regular basis. For example, BART’s board works with management to  revisit goals and performance metrics on an annual basis. By comparison,  the WMATA board has not conducted a comprehensive assessment of the  criteria used for setting the agency’s performance measures. A senior  WMATA official has told us that the agency’s performance targets will be  reevaluated by the board on an annual basis or if operating conditions  change. Without such review and input from the board, WMATA’s  performance metrics and targets may not reflect the agency’s current  challenges or accurately measure WMATA’s progress towards achieving its  goals and objectives.
section_title: GSA Lacks a Formal Process to Appoint Federal Board Members
paragraphs: As a result of compact changes, WMATA’s board expanded in August 2009  to include two members and two alternates representing the federal  government; as of June 2011, the agency responsible for making the  appointments—GSA—had appointed two federal board members and one  alternate. GSA officials noted the lack of compensation for board  members deters some possible candidates, particularly for alternates. GSA  officials told us they based appointments on the following qualifications:  the appointees must (1) be WMATA riders, (2) be able to serve part-time  and without additional compensation for their service, and (3) possess  transportation experience. Such qualifications do not follow leading  governance practices that call for linking the composition and skill set of a  board to the entity’s particular challenges and strategic vision.  Furthermore, GSA has not developed a documented process for fulfilling  its obligation under the compact to appoint federal board members.  Without documenting the steps and criteria for identifying and screening  candidates and selecting board members, GSA cannot be assured that it is  appointing qualified board members who have knowledge of the federal  interest in WMATA and federal employees who ride the system.
Once federal board members are appointed, GSA officials told us that GSA  does not have a role in providing staff support and providing guidance on  the federal views. By comparison, other WMATA board members are  provided staff support from their appointing jurisdictions. One federal  board member told us that he sometimes coordinates with the U.S.  Department of Transportation on issues; however, the relationship is not  formal.
section_title: Conclusions
paragraphs: WMATA faces challenges in many areas, including projected shortfalls in  meeting long-term capital costs, increases in ridership levels, and plans for  system expansion. In addition, following the fatal June 2009 rail accident,  WMATA board members and management have been tasked by NTSB and  other stakeholders with making WMATA a safer system. However, the  absence of a clear delineation of the board’s roles and responsibilities for  providing oversight of management as well as the absence of a board- driven strategic vision raise concerns about WMATA’s ability to  systematically and effectively confront its many challenges.
WMATA currently has some elements of effective governance in place.  However, board members and WMATA senior officials described a culture  in which there is a lack of clarity about the roles of the board and  individual board members, which has resulted in their overreach into  management responsibilities. Such a culture limits the ability of the board  to provide leadership, direction, and a strategic vision to management.  Without a long-term strategic vision, board members approve priorities  such as new technology and capital needs during the annual budget  process rather than proactively prioritize needs over the long term.
Recent changes in the board, as well as the development of the  Governance Committee and draft bylaws, present an opportunity to better  formalize and document the roles and responsibilities of the board and  management and to collaboratively create and implement a long-term,  strategic vision for WMATA. In addition, regular evaluations by the board  of its own effectiveness relative to WMATA’s performance could help  facilitate understanding by board members of how well the board is  functioning and how to improve board activities and interactions.  Successfully addressing these issues could better position WMATA to  meet the agency’s future challenges.
In addition, GSA, which became responsible for appointing federal  members to WMATA’s board in 2009 as a result of changes to WMATA’s  compact, has subsequently appointed two members and one of two  alternates. Qualifications for appointment include riding WMATA and  possessing transportation experience. Such qualifications, although  important, do not follow leading governance practices that call for a board  to have the skill set to deal with the agency’s particular challenges. In  addition, GSA has not documented a process or specific criteria for  making the appointments and it, therefore, lacks assurance that it appoints  qualified board members.
section_title: Recommendations for Executive Action
paragraphs: In order to improve the strategic focus of WMATA’s board and improve the  agency’s performance, the board of directors working with the GM/CEO  should take the following three actions:  1.  As WMATA takes steps to clarify the roles and responsibilities of the  board and management in its draft bylaws, it needs to ensure that a  clear delineation of the roles and responsibilities of each are adopted  and effectively implemented.  2.  Improve the agency’s strategic planning process by (1) defining and  documenting roles for the board, management, and stakeholders in  strategic planning; (2) ensuring that the strategic plan is sufficiently  long term; (3) ensuring that board-approved strategic goals and  objectives are linked to updated performance measures; (4) including  internal and external assessments and program evaluations; and (5)  reviewing the strategic plan on a regular basis and updating it as  needed. 3.  Conduct a regular assessment of the board’s performance, including  elements such as an evaluation of the effectiveness of the board’s  organization, structure, and functioning, and its impact on  performance.
In addition, we recommend that the Administrator of the General Services  Administration document specific criteria for identifying and selecting  candidates to represent the federal government on WMATA’s board.
section_title: Agency Comments
paragraphs: We provided a draft of this report to WMATA, GSA, the Department of  Transportation, and NTSB for their review and comment. WMATA and  GSA provided written comments, which are reproduced in appendix IV  and appendix V, respectively. WMATA and the Department of  Transportation also provided technical comments, which we incorporated  into the report as appropriate. NTSB had no comments. WMATA  recognized the balance that we have striven for in the report between  areas of concern in WMATA’s recent past and the progress the agency has  recently made on those issues. However, WMATA felt the report could be  strengthened by additional information on WMATA’s recent actions. We  revised the report to include additional WMATA actions, such as launching  a new strategic planning process that will take a multi-year perspective.   GSA agreed, in part, with our recommendation and findings.  GSA  disagreed with our statement that it cannot assure that it is appointing  qualified board members. We acknowledge the effort GSA has taken to  identify and appoint board members; however, past efforts do not assure  that future replacements for existing board members will be qualified and  appointed in a timely manner.
We are sending copies of this report to interested congressional  committees, the Secretary of the Department of Transportation, the  Administrator of the General Services Administration, the Chairman of the  National Transportation Safety Board, and the Chairman and GM/CEO of  WMATA. In addition, this 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 or would like to discuss this work,  please contact me at (202) 512-2834 or wised@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. Individuals making key contributions to this  report are listed in appendix VI.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our objective was to assess the Washington Metropolitan Area Transit  Authority’s (WMATA) governance in terms of the board’s roles and  responsibilities, oversight, strategic planning, and governance structure,  and identify changes, if any, that should be made. Specifically, we  addressed the following question: How do roles and responsibilities,  oversight, and strategic planning elements of WMATA’s practices align  with leading governance practices? In addition, we provide information on  the appointment of federal members to WMATA’s board.
For the purpose of this work, we focused on WMATA’s governance in  terms of the board’s structure, communication, policies, practices, and  documentation relating to its oversight of management and carrying out of  its organizational mission. In addition, we analyzed management’s role in  certain areas, such as strategic planning; however, we did not fully assess  the adequacy of management’s role in effectively operating the agency.
We selected leading governance practices relevant to transit agencies from  several sources, including those practices used in previous GAO work on  public and private sector governance challenges at several organizations  and non-GAO studies, reports, and recommendations concerning the  governance of transit agencies, other similar organizations, and  corporations. Additionally, we selected strategic planning practices from  the Transit Cooperative Research Program, previous GAO work, and  other sources as appropriate. We then consolidated and categorized  governance practices and recommendations along similar themes, such as  structure, oversight, and strategic planning (see table 2).
To determine how WMATA’s practices align with these leading governance  practices, we reviewed and compared the composition and structure of  the WMATA board and senior management, communication between the  board and management, policies and other documentation in place to  guide agency practices, and internal and external oversight practices to  the governance and strategic planning practices. We conducted  semistructured interviews with WMATA senior management listed in table  3. We also conducted semistructured interviews with local jurisdictions,  current board members, oversight agencies, and other groups conducting  governance reviews. In addition, we conducted semistructured interviews  with officials from transit agencies and other stakeholder groups—such as  metropolitan planning organizations—in Atlanta, Boston, Chicago, New  York, Philadelphia, and San Francisco. We chose these agencies based on  similarities to WMATA along characteristics, such as size and makeup of  the board, annual ridership, services provided, budget issues, and  complexity of the service area.
We conducted this performance audit from September 2010 to June 2011  in accordance with generally accepted government auditing standards.  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.
section_title: Appendix II: Discussion of Recommendations Concerning WMATA Board Structural Changes
paragraphs: This appendix provides additional discussion of selected  recommendations from the Metropolitan Washington Council of  Governments and Greater Washington Board of Trade sponsored Task  Force (Governance Task Force) and includes the Riders’ Advisory Council  (RAC) response or related recommendation, when applicable.
subsections: section_title: Size and Makeup of the WMATA Board
subsections: section_title: Current Arrangement
paragraphs: The WMATA compact provides that the authority shall be governed by a  board with 8 board members, 2 appointed by each signatory, and 2 from  the federal government. In addition, each signatory and the federal  government should appoint 2 alternate board members. The total  membership of the board is 16, including board members and alternate  board members. The WMATA board procedures allow that alternate board  members can vote in committee meetings and attend and participate in full  board meetings, but can only vote in absence of “their” voting member.
section_title: Governance Task Force Recommendation
paragraphs: The role of alternate members of WMATA’s board is greater than that  envisaged by the compact, and it is unusual to have alternate members on  a transit board. Therefore, WMATA should “eliminate the role of alternates  and increase the number of primary members from two to three for each  Appointing Authority, resulting in a 12-member Board, with one member  appointed by the Chief Executive of each Signatory.”
section_title: Leading Governance Practice and Other Transit Agencies
paragraphs: According to some corporate governance guidelines, boards should have  no fewer than 5 members and no more than 15. Other transit agencies we  visited ranged in size from 5 to 17 voting members (see table 4).
WMATA’s use of alternate board members is unique among the transit  agencies we visited. We did not find leading governance practices on the  use of alternates or nonvoting board members.
section_title: Discussion
paragraphs: WMATA’s 8 voting member board compares with private sector corporate  governance guidelines; however, including alternates, WMATA’s board is  among the largest boards that we reviewed, and larger than the size  recommended by corporate governance guidelines. A 12-member board  with no alternates, as recommended, would align with corporate  governance guidelines. In addition, eliminating alternates would create a  board comparable with four of the six transit agencies we visited. While  the Governance Task Force report recommended a change in the role of  alternates and number of primary board members, the report did not find  the current size of the board a problem. RAC also commented that the  current size of the board functions well and alternates provide for  representation for more riders. Eliminating the role of alternates and  increasing the number of primary members as recommended are changes  that would require a compact amendment.
Board members and stakeholders told us that there are trade-offs to  changing the size of the board. One board member offered that the current  size of the board is structurally weak and can make consensus-building  more difficult. However, another board member noted that the extension  of the rail system to Loudoun County will add another jurisdiction to the  rail service area. Therefore, reducing the size of the board would make it  difficult to envelop the additional jurisdiction.
Board members varied in their views on the role of alternates. Several  board members commented that if the board has alternates—as currently  required by the compact—then those board members should be active and  informed on board business, and the current role of the alternates  provides that opportunity and can be a good way to learn about the  authority. Other board members commented that alternates bring  knowledge and value to the board and that alternates allow committee  work to be distributed among more members. However, two board  members believed that the time and commitment needed to be an  alternate is too high given that alternates cannot vote in board meetings.  Two others suggested that the compact be changed to allow alternates to  become voting members. Staff from each appointing authority told us that  board positions can be hard to fill. Staff from the General Services  Administration (GSA) further stated that filling alternate positions, in  particular, can be difficult.
section_title: Coordinated Appointing Process
subsections: section_title: Current Arrangement
paragraphs: The WMATA compact provides that board members shall be appointed by  the Northern Virginia Transportation Commission, for Virginia; by the  Council of the District of Columbia, for the District of Columbia; and by  the Washington Suburban Transit Commission, for Maryland. Federal  board members are appointed by GSA. The WMATA compact does not  have any specific requirements for board members, except that one of the  federal board members must be a regular rider of the transit system. There  is no requirement that jurisdictions coordinate on board appointments.
section_title: Governance Task Force Recommendation
paragraphs: There are no criteria or procedures in the current appointment process to  ensure the WMATA board collectively has the balance of attributes it  needs to perform effectively. Therefore, jurisdictions should have a  “coordinated process for appointing a board with the right balance of  attributes to serve WMATA and the region.”
section_title: Leading Governance Practice and Other Transit Agencies
paragraphs: Leading governance practices state that an effective transit board is  balanced along several dimensions and that it is important to have board  members who are political, as well as those with business, financial, legal,  and marketing backgrounds.
Requirements for balance of experience on boards at transit agencies we  visited or spoke with vary, but some have legislative or procedural  requirements for expertise on their boards. For example:  In Boston, MBTA’s enabling legislation requires that among its board of  directors, two shall be experts in public or private transportation finance;  two shall have practical experience in transportation planning and policy;  and one shall be a registered civil engineer with at least 10 years  experience.
In New York, beginning in June 2009, newly appointed MTA board  members were required to have experience in one or more of the  following areas: transportation, public administration, business  management, finance, accounting, law, engineering, land use, urban and  regional planning, management of large capital projects, labor relations, or  have experience in some other area of activity central to the mission of the  authority. Additionally, geographic representation requirements apply.
In Chicago, CTA board members cannot hold government (local, state,  federal) office; rather, they must come from the local private sector and  community.
In San Francisco, BART board members are directly elected based on  geographic regions.
section_title: Discussion
paragraphs: Despite the lack of requirements, WMATA’s board includes members with  diverse backgrounds or experience in transit, local and federal  government, business, and nonprofit organizations. In addition, the  jurisdictional nature of the appointing process ensures geographically  diverse representation.
Several current WMATA board members agreed that having a mix of  expertise on the board is beneficial; however, the board members  disagreed about whether expertise requirements were beneficial, or even  possible. One board member told us that the current board has as much  transit expertise as it has ever had, while another pointed out that board  members with transit expertise tend to get too involved in operations.
section_title: Jurisdictional Veto
subsections: section_title: Current Arrangement
paragraphs: Under the WMATA compact, if both voting members from the same  jurisdiction vote against an action, this would constitute a jurisdictional  veto.
section_title: Governance Task Force Recommendation
paragraphs: The Governance Task Force found that the threat of using the veto has  sometimes acted as an impediment to making the best regional decisions.  Therefore, the board should “limit use of the  veto to  matters relating to the budget or system expansion.” Additionally, “the  signatories should determine the appropriate role of the veto in WMATA’s  decision-making process and give serious consideration to eliminating it  entirely.”
section_title: Leading Governance Practice and Other Transit Agencies
paragraphs: We were unable to find clear leading governance practices related to a  jurisdictional veto and none of the other transit agencies we visited use a  similar veto.
section_title: Discussion
paragraphs: WMATA board members we spoke with had varied views of the current  and future role of the jurisdictional veto. These views include that the  jurisdictional veto is:    helpful, because the threat of a veto can force consensus;    necessary to protect jurisdictions;  redundant, because a jurisdiction could also withhold funding as a “de  facto” veto;   should be limited to route planning and budget issues; and    should be eliminated.
WMATA’s General Counsel pointed out that the compact provides for  limited exceptions to the use of the veto. One such exception is for the  mass transit plan, which serves as the plan for system expansion.  However, in this case, a jurisdiction could later decline to approve  operational funding for the system expansion, so the region has always  moved by consensus on system expansion, even though the jurisdictional  veto does not apply to approving a plan for system expansion or a plan of  finance for the system expansion.
RAC, in its report, differed from the Governance Task Force’s  recommendations, commenting that while “the veto may rankle and  appear to create the opportunity for ‘gridlock,’ WMATA is above all else a  cooperative endeavor between three signatories with their own interests.  It must ensure that no one is put at a disadvantage to ensure ongoing  support from leaders and residents of all three. Messy as it is, the veto is  necessary and should stay.” The elimination of the jurisdictional veto  would require a compact change.
section_title: Role of the Chairperson
subsections: section_title: Current Arrangement
paragraphs: According to the compact, the board must elect a chair at the beginning of  every year. The board recently changed its procedures to end a policy that  required the chair to rotate between jurisdictions every year.
section_title: Governance Task Force Recommendation
paragraphs: A term length of 1 year is too short for the chair to assume true leadership.  Therefore, “the board should increase the term length of the chair from  one to two years.” In addition, responsibilities should be clearly defined to  ensure “the chair has sufficient authority to assume a true leadership role.”
section_title: Leading Governance Practice and Other Transit Agencies
paragraphs: Leading governance practices state that a strong chairperson is essential  for an effective transit board and note that it is the chair’s role to lead and  motivate the board in achievement of the transit system’s mission,  strategic goals, and performance. Practices at other transit agencies  vary—for example, MARTA has similar rotations among jurisdictions,  although they are not required by legislation or procedures. Other transit  agencies have structures allowing for stronger chairs. For example,  officials at SEPTA told us that the SEPTA board has a strong chair, who  helps organize board activities, creates a clear chain of command within  the board, and helps ensure communication with management and  dissemination of information to board members.
section_title: Discussion
paragraphs: Board members had differing views on chair rotation and the role of the  chair including comments that (1) the change to a longer term  chairmanship will have little impact, (2) the current role of the chair is not  a strong position, and (3) that it is most important that the chair think  regionally. However, two board members, respectively, commented that a  stronger, or longer-term, chair will lead to improvements. Three other  board members, respectively, told us that the annual rotation did not make  sense, resulted in a lost sense of responsibilities, and the practice needs to  be changed.
The board recently updated procedures to eliminate the need to rotate the  chairmanship. However, the compact requires that a chair be elected each  year. The compact does not require that the chair be a different board  member each year; however, a compact change would be required to  lengthen the term of the chair. Board procedures or other board-approved  documentation could be adjusted to strengthen the role of the chair.
RAC made a similar recommendation, writing that “the Board chair should  no longer automatically rotate. Instead, Board members should elect the  best chair each year. Reelection of capable chairs is encouraged for  continuity.”
section_title: Compensation Policy
subsections: section_title: Current Arrangement
paragraphs: The WMATA compact states that “members of the board and alternates  shall serve without compensation but may be reimbursed for necessary  expenses incurred as an incident to the performance of their duties.”  However, some board members receive some remuneration by their  appointing jurisdiction.
section_title: Governance Task Force Recommendation
paragraphs: The lack of consistency among the appointing authorities as regards  compensation arrangements is illogical and runs contrary to the spirit of  regional cooperation. Therefore, “a uniform compensation policy” should  be developed “for all members of the WMATA board.”
section_title: Leading Governance Practice and Other Transit Agencies
paragraphs: Leading governance practices state that boards should have uniform  compensation policies. The majority of transit boards are voluntary and  members either are not compensated or receive a modest per diem.
section_title: Discussion
paragraphs: Board members we spoke with had varying perspectives on the issue of  compensation. Several board members commented either that financial  support for service on the board should be uniform, or that board  members should receive no support, or both. However, some board  members that receive support told us that the stipend they receive helps  offset the expenses of participating on the board.
section_title: Governance Commission
subsections: section_title: Current Situation
paragraphs: The WMATA board currently has no fixed oversight body, other than the  jurisdictional appointing authorities that can change board members.
section_title: Governance Task Force Recommendation
paragraphs: WMATA’s signatories and appointing authorities do not meet, and they  have never agreed to uniform expectations or role descriptions for their  board members. This has resulted in a lack of clear delineation of  responsibilities among WMATA’s governing entities. Therefore, “the  Signatories and the Appointing Authorities should come together to form a  WMATA Governance Commission, to make improvements to the  authority’s governance structure and hold the board accountable for its  performance. The Commission would be responsible for undertaking  several of the Governance Task Force recommendations.”
section_title: Leading Governance Practice and Other Transit Agencies
paragraphs: We did not identify governance leading practices or find other transit  agencies with a comparable oversight board over a board of directors.  Among the transit agencies we visited, Boston MBTA is part of the state  government. Other transit agencies we visited, such as San Francisco  BART and Chicago CTA, are independent agencies with varying degrees of  accountability to other local agencies.
section_title: Discussion
paragraphs: Many of the board members we spoke with were unclear about the  purpose of the governance commission, concerned about its purpose, or  generally disapproved of the concept.
Staff from the Governance Task Force told us that the proposed  governance commission was not designed to be an additional level of  bureaucracy, rather a forum for key stakeholders to gather and discuss  issues. A governance commission could fill an existing gap in  accountability and oversight over board members. However, such a  commission could be viewed as redundant because it would be comprised  of most of the same membership that is responsible for appointing the  board of directors.
section_title: Appendix III: Comparison of Selected Transit Agencies to WMATA
paragraphs: Tables 5 through 11 include data on the transit agencies we visited or  spoke with and show how those agencies compare to WMATA across  several data points, including ridership and budget.
section_title: Appendix IV: Comments from the Washington Metropolitan Area Transit Authority
section_title: Appendix V: Comments from the General Services Administration
section_title: Appendix VI: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Teresa Spisak (Assistant Director),  Matthew LaTour, Jessica Evans, Colin Fallon, William King, Susan Sachs,  and Mindi Weisenbloom made key contributions to this report.