Federal Transit Programs: Federal Transit Administration Has Opportunities to Improve Performance Accountability
Published: 2010-11-17T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Public demand and federal funding for transit have grown in recent years, yet most of this funding is not tied to performance. As Congress prepares for reauthorization of the federal surface transportation programs, GAO was asked to report on (1) the extent to which federal transit programs use performance information in making decisions about funding distribution and in evaluating the programs' effectiveness; (2) mechanisms for making these programs more performance based, and strategies for supporting their successful implementation; and (3) how selected U.S. and foreign transit agencies have used performance measurement in their planning and decisions, and their views on the federal role in transit. To do so, GAO analyzed legislation, federal documents, and literature; interviewed federal officials and transit experts; and conducted semistructured interviews with selected transit agencies using criteria that, for U.S. agencies, covered a variety of regions and population sizes and, for foreign agencies, multiple transit modes and English language capability.
section_title: What GAO Found
paragraphs: Some federal transit programs distribute funds based partly on performance, but opportunities to improve grant recipients' performance accountability remain. Of the eight transit programs GAO reviewed--which represent 97 percent of total federal transit grants in fiscal year 2010 (excluding funds provided under the American Recovery and Reinvestment Act)--two are generally funded by congressional direction, while the remaining six are funded through legislatively defined grant formulas. Federal funding for the two nonformula programs GAO reviewed--the New Starts Program and the Bus and Bus Related Equipment and Facilities Program--is awarded in part according to performance. A small percentage of federal transit funding for the six formula programs is apportioned based on performance--according to GAO's analysis, about 5 percent, on average, of fiscal year 2010 funding. FTA does not, in general, analyze fully or use the performance data it collects from transit agencies to evaluate the effectiveness of its transit grant programs; thus, FTA is missing a valuable opportunity to evaluate the end results of its program activities and programs' funding formulas. GAO identified three performance accountability mechanisms for making federal transit programs more performance based, including providing financial rewards or penalties/sanctions, increasing or decreasing program flexibility as a performance incentive, and recognizing entities that achieve certain performance goals. These mechanisms have both potential advantages--most notably, they can encourage improved performance and help agencies make sound decisions when allocating limited funds--and potential disadvantages that can produce inequitable results or burden transit agencies with requirements to gather, maintain, and analyze data. GAO also identified several key strategies that can support the use of these mechanisms and mitigate their disadvantages, such as ensuring that mechanisms are of sufficient value and that appropriate measures are selected, among others. However, without FTA analysis of the appropriateness, feasibility, and potential impact of using various transit performance mechanisms, Congress may lack information to determine whether and how these mechanisms could be used to make transit funding more performance based as it prepares for the upcoming surface transportation reauthorization. Transit agencies that GAO interviewed use performance measurement to varying degrees, but they face challenges in linking performance with planning and decision making. All of these agencies measure performance in certain categories, such as ridership and on-time performance, but the extent to which they measure it in others--such as environmental impact, energy usage, and economic development--varies widely. Transit agency officials reported that measuring performance presents challenges, in part because it can be difficult to obtain relevant data and develop a sound methodology. They also said that linking performance to planning and decision making is challenging because of either limited funding or political priorities. These transit agencies and other experts suggested a variety of changes to the federal role in transit, including increasing investment in existing transit infrastructure; developing federal transit program goals that generally address broader issues, such as encouraging a shift from automobiles to public transit; and promoting livable communities around transit systems. The Federal Transit Administration (FTA) should (1) report to Congress on options for adding performance accountability mechanisms to transit programs to ensure efficient and effective federal transit programs and (2) further analyze and use transit agency data, when applicable, for evaluating federal transit program performance. DOT reviewed a draft of this report, provided technical clarifications, and said it would consider our recommendations.

section_title: Letter
paragraphs: Public transit systems provide an important source of mobility for many  Americans while also helping to alleviate traffic congestion and provide  environmental benefits. From 1999 to 2009, ridership on transit systems in  the United States grew nearly 16 percent to reach about 10.25 billion, and  despite the recent economic recession, demand for public transit has  remained near record levels, reaching a peak of 10.4 billion passenger trips  in 2008. Recent economic pressures have, however, contributed to flat or  reduced funding for many transit agencies, as well as service cuts and  higher fares. With demand for transit service near record levels, the  federal investment in transit needs to be accompanied by strong  performance accountability to ensure that funds are being used efficiently  and effectively. We have previously raised concerns about the lack of  performance accountability in federal transportation programs, including  transit, and have called for steps to enhance the accountability of federal  investments in transportation infrastructure.
The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A  Legacy for Users (SAFETEA-LU), enacted in August 2005, authorized over  $286 billion for federal surface transportation programs from fiscal years  2005 through 2009, including more than $52 billion for federal transit  programs, a 46 percent increase over the previous funding authorization  for transit programs. The Surface Transportation Extension Act of 2010  extended the funding authorization for SAFETEA-LU programs through  December 31, 2010. Congress and the administration are currently  debating reauthorization of the entire surface transportation program,  including transit programs. In preparation for this reauthorization, the  Department of Transportation (DOT) recently conducted a series of  “listening sessions” with key stakeholders and interested citizens to obtain  their views. DOT plans to issue a detailed proposal for a surface  transportation reauthorization bill in February 2011.
While federal funding for transit has increased significantly in recent  years, most of this spending is not explicitly linked to performance. In  light of this, you asked us to examine ways to make federal transit  programs more performance based. Accordingly, this report addresses the  following questions: (1) To what extent do federal transit programs use  performance information in making decisions about distributing funds and  in evaluating the effectiveness of transit programs? (2) What mechanisms  exist for making federal transit programs more performance based,  including their potential advantages and disadvantages, and what  strategies exist for supporting their successful implementation? (3) How  have selected U.S. and foreign transit agencies incorporated performance  measurement into their planning and decision making, and what are these  agencies’ views on the federal role in transit?
To address the first objective, we reviewed 8 of the 18 federal transit  programs. These 8 programs account for nearly 97 percent of all Federal  Transit Administration (FTA) grant funds, excluding funds provided under  the American Recovery and Reinvestment Act. We analyzed pertinent  federal legislation and reports, including SAFETEA-LU, the Government  Performance and Results Act of 1993 (GPRA),  and FTA documents on  grants programs that distribute transit funds. We interviewed FTA officials  to determine the extent to which performance measurement/outcomes are  factors in funding formulas and decisions. We also compared FTA’s  practices with performance system criteria found in GPRA, Transportation  Research Board (TRB) reports, and other sources. To simulate incentive  tier apportionments for formula programs, we analyzed FTA  apportionment documents and National Transit Database (NTD) data. To  address the second objective, we reviewed and synthesized literature— including GAO, FTA, TRB, and other transportation reports—and  interviewed transit agency officials and industry experts to describe what  mechanisms exist for making federal transit programs more performance  based, the advantages and disadvantages of those mechanisms, and the  strategies that exist for overcoming disadvantages. Finally, to describe  how selected U.S. and foreign transit agencies incorporate performance  measurement into their planning and decision making and their views on  the federal role in transit, we conducted semistructured interviews with 10  U.S. transit agencies, selected to ensure geographic distribution and  variation in the size of the population served, as well as 2 foreign transit  agencies, selected, in part, based on the number of transportation modes  offered by their system. The information we gathered from these agencies,  however, cannot be generalized across all U.S. or foreign transit agencies.  We also conducted interviews with industry experts to obtain their views  on how transit agencies incorporate performance measurement into  funding and strategic decisions.
We conducted this performance audit from November 2009 through  November 2010 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. See appendix I for  more information about our scope and methodology.
subsections: section_title: Background
subsections: section_title: Federal Transit Programs
paragraphs: Federal transit funds are distributed to recipients by formula, through  specific designations within the legislation, or on a discretionary basis  through individual grant programs. FTA administers its programs  according to the programmatic framework for the nation’s transportation  infrastructure specified in SAFETEA-LU. FTA works in partnership with  the states and other grant recipients to administer federal transit  programs, providing financial assistance, policy direction, technical  expertise, and some oversight. State and local governments are ultimately  responsible for executing most federal transit programs by matching and  distributing federal funds and by planning, selecting, and supervising  infrastructure projects and safety programs—all in accordance with  federal requirements. The eight federal transit programs we reviewed,  which represent 97 percent of FTA’s total fiscal year 2010 grant funds  (excluding funds provided under the American Recovery and  Reinvestment Act) and their respective goals are as follows:    The Urbanized Area Formula Grant Program makes funding available  to urbanized areas and to states for public transportation capital projects  and operating assistance for equipment and facilities in urbanized areas  and for transportation-related planning. Funds are allocated based on a  multitiered formula, which separates urban areas with populations under  200,000 from those with populations of 200,000 or more. Funds are first  apportioned based on a formula provided in law to designated recipients  (typically metropolitan planning organizations  or a state or regional  authority that is responsible for capital projects and for financing and  directly providing public transportation). Designated recipients allocate  the apportionment among eligible transit service providers in the  urbanized area, and then transit providers may submit grant applications  to FTA.
The Nonurbanized Area Formula Grant Program provides funding to  states and Indian tribes for the purpose of supporting public  transportation capital projects and operating costs for equipment and  facilities in rural areas with populations of less than 50,000. Funds are first  apportioned to states and Indian tribes based on a formula provided in  law, then states and Indian tribes may submit applications to FTA. Grant  recipients may allocate funds to state or local governmental authorities, or  an operator of public transportation or intercity bus service.
The Fixed-Guideway Modernization Program makes federal resources  available for the purposes of modernizing or improving existing fixed- guideway systems. Funds are first apportioned to urbanized areas  according to a seven-tier formula. Public transit entities (transit authorities  and other state and local governmental authorities) in those urbanized  areas to which the funds are apportioned may submit applications to  FTA.
The Bus and Bus Related Equipment and Facilities Program  provides capital assistance for new and replacement buses, related  equipment, and facilities for expansion and maintenance purposes. The  projects funded by this program are generally determined by Congress.  Funds may be provided only to state and local governmental authorities.  The Bus Testing Facility Program—which has a single facility for testing  new bus models for maintainability, reliability, safety, performance, and  other factors—is also administered under this program.
The New Starts Program provides funds for construction of new fixed- guideway systems or extensions to existing fixed-guideway systems. These  grants are awarded for specific projects by congressional directive based  on FTA recommendations. Funds may be provided only to state and local  governmental authorities.
The New Freedom Program provides funding for capital and operating  expenses for new public transportation services and alternatives beyond  those required by the Americans with Disabilities Act of 1990 that are  designed to assist individuals with disabilities. Funds are first  apportioned to designated recipients and states based on a formula  provided in law. Designated recipients and states to which funds have  been apportioned may submit grant applications to FTA. The recipients  of these grants, in cooperation with the MPO, are responsible for  conducting an areawide competitive solicitation for grant applications  from subrecipients (i.e.: state and local governmental authorities, private  nonprofit organizations, or transit service operators).
The Job Access and Reverse Commute (JARC) Program provides  funding for capital, planning, and operating expenses for projects that  transport low-income individuals to and from jobs and activities related to  employment and for reverse commute projects. Funds are first  apportioned to designated recipients and states based on a formula  provided in law. Designated recipients and states to which the funds have  been apportioned may submit grant applications to FTA. The recipients  of these grants, in cooperation with the MPO, are responsible for  conducting an areawide competitive solicitation for grant applications  from subrecipients (i.e.: state and local governmental authorities, private  nonprofit organizations, or transit service operators).
The Special Needs of Elderly Individuals and Individuals with  Disabilities Program provides funding to states for the purpose of  assisting private nonprofit groups in meeting the transportation needs of  elderly individuals and individuals with disabilities when current  transportation services are unavailable, insufficient, or inappropriate for  meeting these needs. Funds are first apportioned to states based on a  formula administered by the Secretary of Transportation that considers  the number of elderly individuals and individuals with disabilities in each  state. States forward an annual Program of Projects (POP) and grant  applications to FTA. States may allocate apportioned funds to a private  nonprofit organization or a governmental authority.
While most people in the United States travel by motor vehicle, demand  for public transit continues to grow. According to the U.S. Census Bureau,  the number of people who commute to work using public transit grew by  about 1 million from 2005 to 2008 to reach approximately 7.21 million  persons. Annual federal, state, and local investment in transit grew nearly  77 percent between 1997 and 2006 to total almost $31 billion. During the  recent economic recession, however, investment in transit did not keep  pace with demand, according to the American Public Transportation  Association (APTA), a leading industry organization. Moreover, according  to a March 2010 survey conducted by APTA, because of the economic  downturn, more than half of the country’s largest transit agencies have  recently cut service and/or raised fares and many are also facing budget  shortfalls in 2011.
Transit organizations vary widely in size from large systems with multiple  modes of transportation, such as the New York City Metropolitan Transit  Authority, to smaller organizations, including single-vehicle paratransit  services. The governance structure for these organizations varies and  includes, among others, entities that are units or departments of (1) city,  county, or local governments; (2) state governments; (3) private for-profit  corporations; and (4) university or college systems.
section_title: Performance Accountability
paragraphs: Accountability for performance varies from grant program to grant program.  For the purposes of this report, performance accountability is defined as the  mechanisms by which individuals or organizations are held accountable for  meeting specified performance-related expectations, such as goals.  Performance measurement is the ongoing monitoring and reporting of  program accomplishments, particularly progress toward established goals.  In this report, we have focused on specific mechanisms that are meant to  encourage performance—such as rewards given or penalties imposed.  GPRA requires agencies governmentwide to establish agency and program  goals and performance measures, and to report on their results in achieving  those goals for all their program activities, including grant programs.  Performance measures may address the type or level of program activities  conducted (process-oriented measures), the direct products and services  delivered by a program (output-oriented measures), and/or the results of  those products and services (outcome-oriented measures). Performance  information, for the purposes of this report, refers to data on performance  resulting from performance measurement. To improve both grant  performance and grantee performance accountability, Congress, granting  agencies, and grantees can use performance accountability mechanisms,  which are provisions or specific actions that can be taken at different points  in the grant life cycle.
section_title: Some Federal Transit Programs Distribute Funds Based Partly on Performance, but Opportunities to Improve Grant Recipients’ Performance Accountability Remain
paragraphs: Of the eight SAFETEA-LU transit programs we reviewed, two are generally  funded by congressional direction, while the remaining six are funded  through legislatively defined grant formulas.
subsections: section_title: Funding for Nonformula Programs under SAFETEA-LU, Including New Starts, Is Based Partly on Performance
paragraphs: Funding for the New Starts Program and the Bus and Bus Related  Equipment and Facilities Program—the two non-formula-based SAFETEA- LU programs we reviewed—is based partly on performance.
New Starts is often cited as a model for other federal transportation  programs because its grant evaluation process is used to distinguish  among proposed investments, though GAO and others have also identified  challenges related to the complexity and cost of this process. New Starts  funding is allocated by Congress to specific projects according to FTA’s  recommendations to Congress. FTA’s recommendations are based on  statutorily identified criteria such as projected performance on land use,  cost effectiveness, and other criteria. By necessity, the New Starts  proposed projects are evaluated based on projected performance on the  selected criteria, rather than actual performance, because the projects  have not yet started.
For the Bus and Bus Related Equipment and Facilities Program, funding is  generally directed by Congress, except most recently in fiscal year 2007,  when, according to agency officials, FTA allocated funding in part based  on transit agency performance on ridership and bus load (i.e., actual  ridership as compared with total capacity).
section_title: Only a Small Percentage of Federal Transit Funding for Formula Programs under SAFETEA-LU Is Awarded Based on Performance Considerations
paragraphs: According to our analysis, the SAFETEA-LU formulas require that about 5  percent, on average, of fiscal year 2010 funding be awarded based on  transit agency performance for the six formula programs we reviewed (see  table 1). The remaining grant funding distribution is based on  infrastructure-related factors, such as total route miles and revenue  vehicle miles, or demographic factors, as shown in table 1. Performance  measures include measures of costs per passenger mile or vehicle revenue  miles per capita because they measure agencies’ activities against  capacity, demand, or costs. To illustrate this, using the example of costs  per passenger mile, an agency with low costs that is also providing a low  level of service (i.e., a low number of passenger miles) is not performing as  well as an agency with comparable population and population density that  is able to provide a high number of passenger miles while keeping costs  per passenger mile low.
One of the six formula grant programs we reviewed—the Urbanized Area  Formula Grant—bases funding, in part, on performance, per statutory  requirements, while the other five formula programs we reviewed are  funded entirely based on demographic and infrastructure-related factors  as shown in table 1. Under the Urbanized Area Formula Grant Program,  approximately 8 percent of the funding, on average, is apportioned based  on transit agency performance, although the actual percentage of an  individual transit agency’s funding based on performance varies. This  program apportions funds to two groups of agencies, as follows:    For transit agencies in urbanized areas with populations under 200,000,  (small cities), funding is apportioned based mostly on demographic data.  However, urbanized areas may be eligible for additional incentive funding,  which is apportioned in the following way: For each of six performance  measures for which the urbanized area performs above the average  performance of larger urbanized areas, small city urbanized areas may  receive additional funding in the apportionment. In the end, only 1  percent of total funding for this grant program is apportioned in this way.
For urbanized areas with populations of 200,000 or greater, funding is  apportioned in part based on infrastructure-related measures and in part  through an incentive tier measuring passenger miles per dollar of  operating costs. The remaining 7 percent of performance-based funding  for this program is apportioned in this way. However, the incentive for an  agency to change its behavior to increase its grant apportionment is small  compared with its operating costs. GAO’s simulations of the incentive tier  apportionment show that a 10 percent increase in an urbanized area’s  passenger miles (while holding the area’s operating costs and data for all  other urbanized areas constant) typically results in additional funding of  less than 0.5 percent of operating costs for the area. Several aspects of the  design of the transit formula incentive tier contribute to the relatively  small size of the incentive available to a transit agency. First, the overall  level of funding apportioned under the incentive tier is relatively small,  both as a fraction of total federal aid for the Urbanized Area Formula  Grant Program and also as a fraction of current operating expenses.  Second, because all the transit agencies within an urbanized area are  included in the passenger miles and operating costs of the urbanized area,  the incentive apportionment to a single transit agency may be affected by  changes in the behavior of other agencies within the urbanized area.  Additionally, even if a transit agency’s increased performance results in an  increased apportionment amount for the urbanized area, there is no  guarantee that that transit agency will benefit from the increased  apportionment, as the designated recipient is responsible for allocating the  apportioned funds among area agencies. As we discuss later in this  report, when an incentive is not of sufficient value, the expected return  does not outweigh the expected risk or costs, and recipients are not  motivated to pursue the performance improvement.
section_title: Once Grants Are Awarded, FTA Collects Performance Information on the Programs as Required, but Generally Does Not Use Performance Data to Evaluate the Effectiveness of FTA’s Grant Programs
paragraphs: FTA has developed some performance measures and targets related to  DOT’s strategic goals. Some of these strategic goals and performance  measures are related to internal DOT and FTA performance (e.g.,  organizational excellence); others relate to how well DOT and FTA  programs are performing. FTA tracks performance against a set target. For  example, in DOT’s Performance and Accountability Report and FTA’s  budget documents, FTA provides information on the following goals and  measures:    Related to DOT’s safety goal, FTA measures transit fatalities and injuries  per 100 million passenger-miles traveled.
Related to DOT’s reduced congestion goal, FTA measures the average  percentage change in ridership for the 150 largest transit agencies, as well  as the percentage of bus fleets and rail stations compliant with the  Americans with Disability Act of 1990.
Also related to DOT’s reduced congestion goal, FTA measures the number  of jobs made accessible by the JARC program.
In addition to measuring and reporting performance in these areas, FTA has  implemented several initiatives aimed at improving grantee performance.  For instance, FTA’s Transit State of Good Repair program, which focuses on  ensuring that local transit systems are maintained in a state of good repair,  initiated a national discussion about the condition of the nation’s  infrastructure as an issue posing pressing challenges for most of the nation’s  transit systems. The goals of this initiative are to raise awareness of state of  good repair issues throughout the industry, bring stakeholders together to  assess and measure the scope of maintenance problems, and explore  creative approaches to financing necessary repairs and upgrades for aging  transportation assets. Additionally, FTA recognizes high-performing transit  agencies with nonfinancial awards through various programs. For example,  through 2008, FTA recognized transit agencies that experienced significant  increases in public transportation ridership. The program was suspended in  2009 in response to the overall trend of decreasing ridership.
FTA also collects performance data from about 2,000 transit agencies through  the National Transit Database (NTD) and other reporting requirements.  The reporting requirements vary somewhat by program, as follows:    Recipients of Urbanized Area Formula Grants and Nonurbanized Area  Formula Grants are required to submit information on performance and  other information to the National Transit Database. This includes  information on ridership, vehicle revenue miles, vehicle information (such  as the age and type of the vehicle), and financial information, among other  categories.
Recipients of several other transit grants are required to report  performance information specific to the goals of the program to help FTA  fulfill its obligations under GPRA. For example, recipients of the Special  Needs of Elderly Individuals and Individuals with Disabilities grants are  required to report data on gaps in service filled and rides provided for  elderly individuals or individuals with disabilities as a result of the grant.  JARC recipients are required to report information on the number of jobs  made accessible and the number of rides provided as a result of JARC  funding. Recipients of the New Freedom grant program are required to  report on services and rides provided to individuals with disabilities and  changes made to infrastructure, technology, or vehicles that affect the  availability of transportation services as a result of the New Freedom  projects implemented in the current reporting year.
FTA has set targets for some broad goals and has some initiatives aimed at  increasing grantee performance, but does not, in general, use the  performance data it collects to evaluate the effectiveness of its grant  programs. FTA officials stated that FTA’s strategic goals and objectives  are generally determined based on their relationship to DOT’s strategic  goals as well as the priorities of senior FTA officials. We have previously  reported that agencies can use performance information to, among other  things, identify problems or weaknesses in programs, to try to identify  factors causing the problems, and to modify a service or process to try to  address problems. FTA officials use collected performance data to track  overall program trends and performance on a national level, but not to  determine the link between specific FTA program activities and changes in  performance. For example, FTA reports performance statistics to  Congress through its biennial report, Status of the Nation’s Highways,  Bridges, and Transit: Conditions and Performance. This report  includes the change over time for statistics such as average operating  speed, vehicle use statistics, frequency and reliability of services,  condition of transit assets and infrastructure, and safety, among others.  However, FTA does not explore the potential reasons for a change in  performance over time. Similarly, FTA officials stated that FTA does not  conduct analysis of changes in transit agency performance or set targets  for the measures that are incentivized in grant formulas to determine what  effect incentives have on transit agency performance (i.e., the extent to  which the incentive funding is having the desired outcome). As a result,  FTA is missing a valuable opportunity to evaluate the end results of its  program activities and SAFETEA-LU funding formulas. Information on the  effectiveness of formula incentive programs, in particular, is necessary for  determining how and when to make changes to funding mechanisms in the  future.
section_title: Performance Accountability Mechanisms Can Improve Performance of Transit Agencies, and although They Potentially Present Disadvantages, Most of These Can Be Mitigated by Following Key Strategies
subsections: section_title: Potential Advantages of Using Performance Accountability Mechanisms Are Encouraging Good Performance, Deterring Poor Performance, and Helping Agencies Allocate Limited Funds
paragraphs: Through our literature review, we identified major financial and  nonfinancial mechanisms for making federal transit programs more  performance based. Tables 2 and 3 describe the three types of mechanisms  we found and their potential advantages and provide examples of how  various federal and state agencies or programs use them.
In short, these mechanisms create a link between performance and  benefits by either rewarding good performance or penalizing poor  performance. However, the extent to which a reward or penalty motivates  performance depends on its importance to the agency—if a financial  reward or penalty is too small, for example, it may not affect behavior. At  the same time, a reward that is too small to influence a large agency may  be significant to a smaller agency.
section_title: Potential Disadvantages to Using Performance Mechanisms Are That They Can Burden Transit Agencies, Produce Inequitable Results, and Raise Other Concerns
paragraphs: Our literature review found not only advantages associated with  performance accountability mechanisms but some potential downsides  and concerns as well.
Most notably, to demonstrate that an incentive has been achieved or that a  penalty is not warranted, agencies have to gather, maintain, and  analyze data, and these tasks require resources. Therefore, to the  extent possible, the measure on which an incentive or penalty is awarded  or assessed should be based on readily available information, or  information that could be readily obtained. If not, it could place a burden  on the agency’s resources.
Additionally, when penalizing organizations for not meeting requirements,  there are concerns that (1) an organization may be penalized before  it has a chance to address its performance problems, and (2) a  punitive approach to performance accountability may be taken  rather than a constructive approach. For example, even if penalties  are employed to promote performance accountability, there should be a  constructive, collaborative approach to performance improvement that  both precedes and follows the penalty.
Our literature review also identified other disadvantages that relate  specifically to implementing financial performance accountability  mechanisms. These include the following:    The zero-sum nature of performance-based allocations, particularly  under constrained resources, can cause inequity, as programs can  improve and still receive nothing. For example, all recipients might  improve their performance, so that those improving the least might not be  rewarded. Also, under resource constraints, performance-based  allocations are not likely to provide a meaningful incentive to improve  performance or may not be possible. For instance, a basic reason behind  tying the allocation of funding to performance is that this will provide an  incentive for funding recipients to perform better (to either generate  additional funds or avoid financial penalties). However, according to a  2004 study on the use of performance standards and measures for public  transportation systems, there is not much evidence that the various  formulas used to fund transit agencies actually produce this result. One  reason is that even if a single transit system were to make significant  performance improvements, the current apportionment formulas do not  result in much of a funding change from year to year (in part because of  the fact that the change in one system is but a small fraction of the  statewide or nationwide numbers that feed into the formulas).
Well-funded grant recipients, with the staff and resources to  implement more sweeping changes, may be rewarded at the  expense of poorly funded ones that may have more pressing  operational concerns. Moreover, for poorly funded recipients, the  amount of improvements required may not be realistically attainable  through changes within the recipients’ control. For example, according to  the previously mentioned study done in 2004, some transit agencies would  like to see an increase in the funding provided from local, as opposed to  state and federal, sources. However, a funding stream that includes a  requirement for contribution of local dollars could be particularly difficult  to accomplish for rural systems with limited revenue or for systems where  local leaders do not support a contribution of local dollars. This could  result in a transit system being penalized financially for a decision made  outside its control, with an ensuing decline in service quality. To be fair,  factors well beyond the control of the transit agency are often drivers of  performance (e.g., local economic problems leading to a drop in  employment that in turn leads to a drop in ridership).
Grant recipients may be charged with meeting conflicting goals. For  example, if an important local goal for a transit agency is to increase  geographic service coverage, the achievement of this goal might have  negative impacts on performance as commonly defined—efficiency and/or  effectiveness. For a transit system that wants to develop new evening or  weekend service, generally such service will be less productive than  weekday service. Performance-based funding is likely to provide a  disincentive for providing such service.
If not designed correctly, performance mechanisms can introduce  perverse incentives. For example, regarding a federal employment  program that has used incentive awards—the Workforce Investment Act’s  Title I-B Program for Dislocated Workers—we reported in 2009 that local  agency officials receiving grants under the program may be reluctant to  provide services to job seekers that are less likely to find and maintain a  job, because the incentive award is tied to achieving performance levels in  placement and retention. This is contrary to the program’s objective,  which is to assist all job seekers in obtaining employment.
Finally, when considering the use of performance accountability  mechanisms for transit agencies, DOT officials noted that transit grant  recipients operate within the context of their local, state, and regional  government structures and funding sources. Therefore, some changes may  need to be enacted by other organizations to improve transit service, and it  may be appropriate to provide incentives to these other government  structures as well.
section_title: Key Strategies Can Help Overcome Some Disadvantages of Performance Accountability Mechanisms and Help Ensure Successful Implementation of Those Mechanisms
paragraphs: Our earlier work discusses how five key strategies collectively facilitate  the effective selection, design, and implementation of performance  accountability mechanisms. They are as follows:  1.  Ensure mechanisms are of sufficient value. The value of the rewards  and penalties—whether financial or nonfinancial—and the cost of  improved performance are adequate to motivate desired behaviors and  provide a meaningful return to both the grantor and the grantee.  2.  Periodically renegotiate and revise mechanisms and measures. Provide  for and use the flexibility to reevaluate performance accountability  mechanisms and associated performance measures at regular,  scheduled intervals and allow time to learn from each cycle to improve  performance.  3.  Ensure appropriate measures are selected. Measures should represent  performance that is within the grantee’s sphere of influence, and can  reasonably be achieved and evaluated within the specified time frame,  and should be tested over time to minimize the potential for  unintended consequences and perverse incentives. Additionally,  performance data should be tested and validated to make sure they are  credible, reliable, and valid. Absent these attributes, organizations lack  the basis for sound decisions about rewards and penalties.  4.  Ensure grantor and grantee technical capacity. Grantors and grantees  should have the necessary knowledge about performance  accountability mechanisms and the ability to effectively implement  them.  5.  Ensure phased implementation. Allow time to design, test, and revise  measurement systems before linking them to accountability  mechanisms.
These five key strategies can help mitigate the disadvantages we have  previously discussed related to using performance accountability  mechanisms, as shown in table 4.
Some of these strategies address multiple disadvantages. For example,  table 4 shows that ensuring appropriate measures are selected could  mitigate four of the six disadvantages. In addition, we found in our  literature review that to ensure financial stability, many sources advocated  for providing transit agencies with a baseline funding amount that would  enable grantees to know the minimum (or a baseline amount) that they  would receive each year, and then providing additional funds that would  be based on performance. Although not a key strategy, this more specific  option would help address the following three disadvantages: the zero-sum  nature of performance-based allocations, well-funded grant recipients  being rewarded at the expense of poorly funded ones, and grant recipients  being charged with meeting conflicting goals.
section_title: Appropriateness of and Success in Using Performance Accountability Mechanisms Depend on Program Goals, but Little Is Known about Using These Mechanisms in Transit Programs
paragraphs: Although performance mechanisms can provide advantages, and the  disadvantages can be mitigated, they are still not suitable for all programs.  As previously discussed, the eight federal transit programs that we  reviewed are designed to accomplish different goals, and the use of  performance accountability mechanisms is better suited to some than to  others. For example, discretionary grant programs such as New Starts,  which are designed to award funds to the best potential performers, may  be better suited to the use of performance accountability mechanisms,  while formula programs, such as the Urbanized Area Formula Grant  Program and Fixed-Guideway Modernization Program, which are intended  to support the financial stability of transit agencies or distributional equity,  may be less well suited. We have found that performance accountability  mechanisms need to be tailored to specific situations, since not all  mechanisms are appropriate to all situations, and there is no “one-size-fits- all” solution to performance accountability. Furthermore, according to  FTA, transit systems vary in size, resources, and community needs, making  it less productive to judge all systems on a common set of performance  measures or performance accountability mechanisms.
Even though mechanisms are not all appropriate for all situations,  performance accountability mechanisms still hold promise. As we have  described in the previous section of this report, DOT is requiring some  transportation grants to be based on performance, with good results in  some departments. For example, NHTSA used performance information  on alcohol-related injuries and fatalities to target grant funding and  specific program strategies to states with the highest impaired driver rates.  However, DOT has only required transit grants to be minimally based on  performance. Expanding the use of performance accountability  mechanisms in the area of transit could help make transit grants more  performance based. The performance accountability mechanisms  described in this report suggest opportunities for FTA to study their  impact and potentially use them to make transit grants more performance  based—i.e., to identify grantee performance problems, look for solutions,  and make other important management decisions, per leading practices.
Congress also has a role to play in increasing the use of performance  mechanisms in transit, as part of its process of setting national priorities  and allocating the resources to achieve them. Congress has a number of  opportunities to initiate the use of performance mechanisms, such as  when it establishes or reauthorizes a program, during the annual  appropriations process, and during hearings focused on program and  agency operations. Moreover, our 2006 report on performance  accountability mechanisms recommended that the federal Office of  Management and Budget encourage and assist federal agencies in working  with Congress to expand the effective use of performance accountability  mechanisms when federal grant programs are being created or  reauthorized. As noted earlier in this report, Congress and the  administration are currently debating reauthorization of the entire surface  transportation program, including transit programs.
However, without FTA analysis of the appropriateness, feasibility, and  potential impact of using various transit performance mechanisms,  Congress may lack the information needed to identify and implement the  most effective mechanisms and better help transit agencies maximize their  potential. Furthermore, because each mechanism may not be suited to  every program, such analysis may require careful study to ensure the best  link between mechanisms and transit programs.
section_title: Selected Transit Agencies Use Performance Measurement to Varying Degrees and See a Role for the Federal Government in Transit but Cited Challenges in Linking Performance with Planning and Decision Making
subsections: section_title: All Transit Agencies We Interviewed Measure Performance in Some Categories, but the Extent to Which They Measure It in Others Varies Widely
paragraphs: While officials from all 12 of the transit agencies we interviewed told us  they measure performance in certain categories, the extent to which they  measure other categories varied widely (see table 5).
Officials at all 12 transit agencies told us that they measure performance in  the categories of customer satisfaction, ridership, on-time performance,  and safety.
Officials from 7 of the transit agencies told us that they measure  performance in the category of environmental impact and energy use.  Officials from 1 of the agencies told us that they do this by tracking  greenhouse gas emissions from the agency’s fuel consumption based on  methodology published in an FTA report. Officials at 4 other agencies  said that they had studied or planned to study this category, but they do  not regularly measure performance in this category.
Officials from 4 of the transit agencies told us they measure performance  in the category of economic development. According to one of these  officials, to do so the agency tracks the value of property developments  around transit stations. Officials from 4 other agencies told us that while  their agencies do not regularly measure economic development  performance, they had either periodically studied the agency’s economic  impact or were planning to do so. For example, officials from 1 of these  agencies said that they had studied, among other things, the direct and  indirect impact of their agency’s current and planned operations on the  agency’s local economy by tracking factors such as the agency’s capital  investments and procurement of goods and services. However, they do not  regularly measure performance in this category.
The transit agencies we interviewed determined performance measures  based on a variety of factors, including the following:     Officials from all of the U.S. transit agencies said that federal requirements  provide the basis for at least some of their performance measures. These  officials added that their agencies are required to report performance data  to FTA’s NTD and, hence, determine certain measures of performance  based on NTD requirements, as discussed earlier.
Officials from 10 of the transit agencies said that local priorities were used  to determine at least some of their performance measures. For example,  officials from 1 agency said that the local metropolitan planning  organization required that the agency report performance on farebox  recovery, which measures the agency’s recovery of its costs from fares.
Officials from 8 of the transit agencies added that they determined some of  the performance measures based on industry best practices or their  agency’s internal needs, such as measures used to track progress toward  an agency’s strategic goals.
Officials from 4 of the U.S. transit agencies said that state reporting  requirements, such as outlined in state legislation on their agency, also  formed the basis for determining some of their performance measures.
Officials from 2 of the transit agencies noted that public concerns about  various issues led to the development of some performance measures.  Specifically, officials from 1 agency told us that passenger concerns about  their security while using the transit system led the agency to allocate  more funding for its transit police force and to develop and monitor the  agency’s performance on a “customer security index.” Officials from  another said that concern about the status of a new transit development  led the agency to regularly measure and publicize performance  information on the development’s status.
section_title: Challenges to Measuring Performance
paragraphs: Transit agency officials we interviewed cited a variety of challenges  associated with measuring performance. Officials from 8 of the agencies  stated that measuring performance on outcomes was particularly  challenging. For example, officials from 5 of these agencies told us that it  is particularly challenging to determine a method for measuring economic  impact or to obtain relevant data. In particular, officials from 1 agency  added that measuring the agency’s impact on employment generation is  challenging because it is difficult to isolate the agency’s effect on  employment. Similarly, officials from 5 of the transit agencies said it was  challenging to measure environmental impact generally because it was  difficult to determine a method for measuring it or to obtain relevant data.  For example, an official from 1 agency said that it is difficult to measure  how much pollution a bus generates compared with the pollution from  passenger vehicles that the bus is displacing, in part because emissions  from these passenger vehicles can vary widely and relevant data are  difficult to obtain. Moreover, we were told by officials from 7 of the transit  agencies that it is challenging to measure performance because  performance is affected by numerous factors that are out of a transit  agency’s control, like economic conditions or weather. For example, an  official from 1 agency noted that ridership is affected by economic  conditions, such as employment. Officials from another agency also said  that ridership data can be influenced by the elimination of funding for a  route because, according to the officials, the elimination of routes makes it  difficult to measure annual changes in overall ridership. Additionally,  officials from 1 agency told us that some transit systems operate in  environments that an agency has less control over, particularly bus  systems, which can make measuring performance on these systems more  difficult than for dedicated systems like subways. For example, the  officials said that buses, unlike subways, can travel different distances on  any given day, making it difficult to measure performance on a month-to- month basis.
section_title: Performance Measurement Affects Agencies’ Planning and Decision Making, but Other Factors Also Play a Role
paragraphs: Officials from all 12 of the transit agencies we interviewed told us that  they use performance information for agency planning and decision- making purposes. Officials at 9 of the agencies said that performance  information is used in decisions or planning related to funding allocations.  Officials from 1 agency explained that performance-based funding  allocations were critical because they help to inform the agency’s annual  budget process and address problems, such as deterioration of capital  assets, before they can have a negative impact on the agency’s  performance. Officials from 2 transit agencies said that information on  customer satisfaction helped them understand customer perceptions  about their system, which informed decisions and planning regarding  issues like funding allocations and setting of strategic goals. For example,  officials from 1 of these agencies said customer perceptions about the  transit system’s security led the agency to make decisions and plans that  included allocating more funding toward transit police, developing a  customer security performance measure, and setting a strategic goal of  increasing customer security. Similarly, officials from the other transit  agency said that measures of customer satisfaction regarding system  cleanliness led their agency to allocate funding for cleaning the system and  to set a strategic goal associated with system cleanliness.
While performance affects some transit agency decisions and planning,  other factors are also considered. For example:    Funding availability: Officials from half of the transit agencies said that  funding shortfalls made it difficult to link performance measurement to  decisions and planning. For example, officials from 2 of these agencies  said that the recent economic recession had reduced sales tax revenue and  consequently agency funding, resulting in reduced service or plans for  expansion.
Political priorities: Officials from half of the transit agencies added that  local political priorities also challenge the agencies’ ability to link  performance to decisions and planning. These officials said that among  other reasons, elected officials can affect decisions and planning for  routes or funding allocation based on political priorities rather than  performance information.
section_title: Transit Agencies and Experts See a Role for the Federal Government in Transit, but See Challenges to Imposing National Performance Measures
paragraphs: Officials from the 12 transit agencies and experts from the five  organizations we interviewed suggested a variety of changes to the federal  role in transit:    Investment in existing transit infrastructure: Officials from 3 of the  transit agencies and experts from two of the organizations suggested that  the federal government address the declining condition of transit agency  infrastructure by focusing on state of good repair needs. Officials from 2 of  these transit agencies and one of the organizations believed that federal  grants for transit too often focused on new capital investments rather than  updating and maintaining existing infrastructure.
Short duration of federal grant funding: Officials from 3 of the transit  agencies stated that the duration of federal transit programs’ grant funding  made it difficult for them to conduct long-term strategic planning.  According to officials from 2 of these agencies, this long-term planning  would benefit if grants were provided for 3- to 5-year periods.
Flexibility in implementing federal transit grants: Some of the transit  agency officials and experts we spoke with stated that the federal  government should provide greater flexibility to transit agencies or local  transportation planning officials to decide how federal grants should be  used. Specifically, officials from 5 of the transit agencies and experts from  three of the organizations told us that federal grants for transit systems  should be less specific to particular modes, such as bus or rail. Officials  from 2 of the transit agencies and experts from three of the organizations  also told us that transit agencies or local transportation planning officials  should have greater autonomy to determine which transportation solution  would be most efficient for their circumstances.
Current SAFETEA-LU programs provide funding for accomplishing goals  such as modernizing or improving existing transit equipment and facilities,  providing capital assistance for new transit systems or expansion to  existing systems, expanding access to elderly persons and persons with  disabilities, and transporting low-income individuals to and from jobs.  During interviews, experts from four of the organizations and officials  from 7 of the transit agencies told us that the federal government should  set goals that reflect broader issues, such as promoting economic  development or improving air quality, in part to address the differences  between transit agencies’ circumstances and priorities. However, officials  from 3 of the agencies and experts from three of the organizations told us  that the goals should address transit-specific issues, such as state of good  repair needs. As discussed earlier, federal transit programs focus on these  issues to some extent. The transit agency officials and transit experts we  interviewed offered a variety of suggestions for consideration in  developing federal transit program goals, including the following:    encourage economic growth and access to jobs;  increase the safety of transit systems;    provide increased mobility for populations, particularly in regions with    encourage modal shift from automobiles to public transit; and    promote livable communities around transit that reduces dependence on  foreign oil, encourage economic growth, and addresses environmental  challenges.
All of the transit agencies and expert organizations we interviewed  foresaw challenges to imposing national performance accountability  mechanisms on transit agencies, some of which we identified earlier in our  review. Officials from 10 of the agencies and experts from three of the  organizations told us that it would be challenging to account for the  varying priorities of transit agencies, such as differences in the size or the  density of the population they serve, or the ways in which they measure  performance. For example, officials from 4 of the agencies noted a lack of  consistency in how performance is measured, which makes it difficult to  compare agencies’ performance. The agency officials and transit experts  cited a variety of other challenges that they said should be considered  when implementing a more performance-based federal transit system,  including the following:    Some transit agencies, particularly in small cities or rural areas, lack  personnel or technical resources to measure performance.
Some federal support should be based on need rather than performance  because of factors that could make it difficult for some agencies to meet  performance goals or maintain performance standards. For example,  officials from 1 of the transit agencies said that if the federal support was  based on performance alone, then areas with smaller populations would  not be positioned as well as agencies in larger, more populated areas to  perform on measures like passengers per mile or recovery of costs from  fares. Experts from one organization added that some funding for transit  agencies should be allocated if there is a risk of decreased performance in  the future in areas such as safety.
For some categories of performance, like economic development, data are  more difficult to obtain or performance is more difficult to measure.
Goals attached to a federal performance mechanism could outweigh the  transit needs or priorities based on local circumstances.
Some of the transit agencies and experts we interviewed provided  suggestions for implementing federal performance accountability  mechanisms that would mitigate some of the challenges they discussed.  For example,    Officials from 1 transit agency suggested that a voluntary pilot program be  implemented to test a rating system that would measure participating  agencies’ median performance over several years on a series of  performance indicators. They said such a system would allow the federal  government to assess how each agency is performing over time, rather  than comparing agencies with differing circumstances or evaluating  agencies based on a single performance measure.
An official from 1 transit agency suggested that the federal government  support the development of a national transit benchmarking system in  which transit agencies could learn best practices from other agencies to  improve their performance, rather than applying national performance  targets that would have to account for the many differences among transit  agencies. The official cited an established benchmarking system in which  transit agencies can confidentially share their performance information  and compare it against that of other agencies in similar groups, including  large subway systems, medium subway systems, and bus systems.
Experts from two of the organizations also told us that the federal  government should offer capacity development opportunities such as  technical assistance to address the lack of resources or potential burden  that some transit agencies could experience with additional federal  requirements for performance measurement.
section_title: Conclusions
paragraphs: In our 2008 report on surface transportation, we recommended that  Congress consider instituting processes to make grantees more  accountable by establishing more performance-based links between  funding and program outcomes. Implementing links between transit  funding and performance through the use of financial performance  accountability mechanisms and other tools and approaches, as outlined in  this report, could help create incentives to local transit agencies to  improve their performance. Although we have identified challenges to  making the federal transit program more performance based, we have also  identified ways to mitigate those challenges—through the use of strategies  for implementing performance accountability mechanisms. As we have  illustrated through examples and through the concerns and suggestions of  local transit agency and expert officials, performance accountability  mechanisms are not one-size-fits-all. Nevertheless, with careful  consideration, the mechanisms and strategies highlighted in this report  can be combined to achieve a more accountable federal transit program  and thus lead to improved outcomes in transit and achievement of federal  goals.
One FTA program, New Starts, is frequently cited as a model for other  federal transportation programs, because of its use of a rigorous and  systematic evaluation process to distinguish among proposed investments  based on projected performance. Other FTA programs have afforded  limited performance accountability, and thus little incentive to ensure  federal transit grants are being used effectively and efficiently. Because of  the lack of incentives of sufficient value to grantees in formula programs,  the federal transit grant system has limited ability to influence the  activities and priorities of local grantees and to ensure that the goals and  priorities of the federal transit program are achieved. Further decreasing  the federal government’s ability to positively affect the performance of  local transit agencies is FTA’s limited analysis of the extent to which  transit grants, current formula incentives, and FTA program activities have  had an effect on transit agency performance. The Government  Performance and Results Act of 1993, as amended, emphasized managing  results and identifying opportunities to improve performance and increase  accountability. By not fully measuring and analyzing the effects of transit  grant programs and FTA program activities on local transit agency  performance, FTA is missing a valuable opportunity to assess both its own  activities and the transit grant programs for needed changes.
As Congress and DOT prepare for the upcoming surface transportation  reauthorization, which includes the reauthorization of all federal transit  programs, the department and FTA have an opportunity to enhance the  performance of transit grant programs by incorporating performance  accountability mechanisms into those programs’ legislative requirements.  Doing so could increase the federal government’s ability to ensure that  federal transit grants are used efficiently and effectively and achieve the  goals established by Congress, keeping in mind the challenges and  strategies for mitigating those challenges that we have identified. Since  little is currently known about applying these mechanisms to the transit  sector, FTA could help fill that knowledge gap by analyzing the feasibility  and potential impacts of options for using such mechanisms in federal  transit programs and report that information to Congress to help inform  the congressional deliberations on the ongoing surface transportation  reauthorization.
section_title: Recommendations for Executive Action
paragraphs: To enhance the performance of federal transit programs, we recommend  that the Secretary of Transportation direct the FTA Administrator to study  and report to Congress on options for adding performance accountability  mechanisms to transit grant programs. FTA should strive to provide such  information in time to be considered during the reauthorization of the  federal transit programs.
To improve FTA’s ability to determine the extent to which transit grants,  current formula incentives, and FTA program activities have had a positive  effect on local transit agency performance—and to the extent that FTA  finds current data sources to be appropriate and reliable for such  purposes—we recommend that the Secretary of Transportation direct the  FTA Administrator to further analyze and use data submitted to FTA by  local transit agencies. As part of this analysis, FTA may want to identify  and evaluate, when applicable,  the extent to which transit grant programs are accomplishing their  established goals,  the areas of performance in which FTA should concentrate its program  activities to increase the performance of local transit agencies and the  federal transit program in general, and  the extent to which formula incentives and other performance  accountability mechanisms have influenced the activities and performance  of local transit agencies.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to DOT for review and comment. DOT  officials provided technical clarifications, which we incorporated into the  report as appropriate, and DOT said it would consider our  recommendations.
We are sending copies of this report to the Secretary of Transportation,  the Administrator of the Federal Transit Administration, and appropriate  congressional committees. This report is also available at no charge on the  GAO Web site at http://www.gao.gov.
If you have any questions about this report, 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.  Major contributors to this report are listed in appendix II.
section_title: Appendix I: Scope and Methodology
paragraphs: To address the first objective, on the extent to which federal transit  programs incorporate performance in funding distribution and evaluating  transit program effectiveness, we selected and reviewed 8 of 18 federal  transit programs that account for nearly 97 percent of all Federal Transit  Administration (FTA) grant funds, excluding funds provided under the  American Recovery and Reinvestment Act. With respect to the  distribution of transit funds in these programs, we analyzed legislation and  FTA documents and interviewed FTA officials to determine the current  factors used to establish the level of grant funding under each of the  transit programs and the extent, if any, to which the funding is linked to  performance. In assessing the extent to which programs are funded based  on performance, we compared the factors used to allocate funding to the  programs against a definition of performance measures, which requires  the measurement of activities against capacity, demand, or costs. To  simulate incentive tier apportionments for the Urbanized Area Formula  Grant Program’s bus tier, we analyzed FTA apportionment documents and  National Transit Database (NTD) data. Concerning the extent to which  performance information is incorporated into efforts to evaluate the  effectiveness of transit programs, we also analyzed FTA documents and  interviewed FTA officials. We relied on criteria found in the Government  Performance and Results Act, Transportation Research Board reports, and  other sources, which indicate, among other things, that performance- based systems should have defined goals and objectives, link performance  measures and program activities, have steps to monitor and report on  performance, integrate performance results into decision making, and  review and update performance systems periodically. We did not assess  NTD or other FTA data to determine its reliability or appropriateness for  use in assessing the performance of the Safe, Accountable, Flexible,  Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU)  transit programs.
To address the second objective, on mechanisms that exist for making  federal transit programs more performance based and strategies for  supporting their successful implementation, we conducted a literature  review to identify pertinent studies and reports and interviewed transit  agency officials and industry experts. We selected studies and reports that  focused on performance accountability mechanisms and general practices  that facilitated the effective use of accountability mechanisms or provided  examples of using performance accountability mechanisms. Our literature  search covered studies published from 2004 onward and was largely  drawn from major electronic databases in transportation, economics, and  other fields (e.g., Transportation Research Information Services, EconLit,  ProQuest, WorldCat, and other databases) and from our past work in  surface transportation and performance measures and management. We  also interviewed transit agency officials (see list of agencies in table 6) and  a variety of industry experts to obtain their views on performance  accountability mechanisms, their advantages and disadvantages, and  strategies for mitigating any disadvantages and for helping support their  successful implementation. We identified industry experts through a  literature review and interviews with officials from FTA. Collectively,  these experts were knowledgeable about the transit issues that we were  addressing. In addition to the literature review, the examples of agencies  or programs where the mechanisms have been proposed for or actually  used were identified from other sources, including our previous work and  interviews with transit agency officials and experts.
To address the third objective, describing how selected U.S. and foreign  transit agencies incorporate performance measurement into their planning  and decision making and their views on the federal role in transit, we  conducted semistructured interviews with 12 transit agencies—10 from  the United States and 2 from foreign countries (see table 6). We identified  transit agencies for our analysis through a literature review and interviews  with officials from FTA and industry organizations. We further narrowed  the list by reviewing the transit agencies’ Web sites for information about  their use of performance measurement to ensure the transit agency would  be able to discuss performance measurement. The 10 U.S. agencies were  selected to ensure geographic distribution and variation in the size of the  population served. To select the 2 foreign transit agencies for our review,  we narrowed the list to include agencies that offer multiple modes of  transit and that were available to speak with us in English. Because the  agencies were selected as a nonprobability sample, the results cannot be  generalized to all transit agencies. However, the information from these  agencies is illustrative of the ways in which transit agencies can  incorporate performance measurement into their planning and decision- making processes. We also conducted interviews with industry experts, as  previously discussed, to obtain their views on the role of the federal  government in transit  We conducted this performance audit from November 2009 through  November 2010 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: GAO Contact and Staff Acknowledgments
subsections: section_title: Acknowledgments
paragraphs: In addition to the contact named above, Rita A. Grieco, Assistant Director;  Elizabeth H. Curda; Dwayne Curry; Robert J. Dinkelmeyer; Katherine E.  Hamer; James Leonard; Amy Rosewarne; Sara Ann W. Moessbauer; and  Mindi G. Weisenbloom made key contributions to this report.