As one of 10 administrations within the Department of Transportation, FTA provides financial assistance to transit agencies to develop new systems and improve, maintain, and operate existing systems in all 50 states, the District of Columbia, and some U.S. territories. FTA maintains its headquarters in Washington, D.C., with 10 regional offices throughout the continental United States, and employs about 500 of the approximately 60,000 employees of the department. Figure 1 summarizes key information about FTA’s 10 regions, including the total amount and funds for the Urbanized Area Formula Program. In 1994, FTA laid out a common framework for regional and headquarters staff to administer oversight reviews in FTA Order 5400.1. That order, which remains in effect today, describes the process for conducting various oversight reviews and taking corrective actions. In addition, the order established an internal working group called the Oversight Review Council to develop oversight review schedules, coordinate review schedules to avoid unnecessary duplication and overlap, and achieve a comprehensive, uniform, and cohesive approach, among other things. The triennial review provides FTA with a valuable opportunity to routinely evaluate the use of federal funds for about 600 urban area grantees at least once every three years—or about 200 grantees each year. It covers many areas, such as procurement, financial management, and drug and alcohol programs. Appendix II contains FTA’s descriptions of all 23 triennial review areas. FTA also uses a similar, general review to oversee grantees that receive rural area formula funds—a state management review. In addition to the more general triennial and state management reviews, FTA conducts special oversight reviews with a narrowed subject matter focus, such as procurement system reviews, which help ensure that grantees (especially 30 grantees that receive large amounts of federal transit funds) are purchasing buses and trains using competitive bidding practices, as well as special civil rights reviews, which help ensure that grantees are, among other things, providing public transportation to the disabled and adhering to equal employment opportunity practices. Grantees also experience non-FTA reviews, such as single audits that examine grantees’ financial statements, inspector general audits, and various state audits. Table 1 describes FTA’s primary oversight reviews. The triennial review covers 23 triennial review areas, but given the need to review all of these areas, the time constraints (estimated at about 130 hours for each review), and in order to reduce the oversight burden upon grantees, FTA does not conduct an in-depth document review or inspection. For example, FTA normally samples no more than 15 financial records during site visits, conducts a spot check of facility and maintenance records, and may only inspect a few buses and subway cars during the review. However, according to FTA officials, when an area of concern or deficiency is noted, FTA will expand the review to examine these areas more in-depth. Figure 2 summarizes the major steps in the triennial review process. The triennial review also gives FTA an opportunity to provide technical assistance to individual grantees—assistance specifically aimed to help individual grantees resolve specific deficient findings resulting from triennial reviews. FTA also helps grantees prepare for the triennial review by holding annual triennial review workshops throughout the country and offering formal training courses focused on specialized subject areas through the National Transit Institute—a training institute funded by an FTA grant. While officials from both FTA headquarters and regional offices are ultimately responsible for implementing the triennial reviews, they have increasingly relied on contractors since the program was created in the early 1980s. After we reported in 1992 that FTA had not fully utilized contractors for oversight activities, it has, since 1996, used contractors to conduct all triennial reviews. FTA, through its Office of Program Management, awarded multiple-year, firm, fixed-price contracts totaling about $4 million each year to four contractors to conduct the fiscal years’ 2008 through 2012 triennial reviews. To assist contractors with the reviews, FTA developed the Triennial Review Contractors’ Guide. FTA has expanded the contractors’ guide from its original 29 pages to over 200 pages in 2008. The contractors’ guide provides the questions to ask grantees for each of the 23 triennial review areas, a list of grantees’ documents that contractors are to examine, and a method that contractors are to use for determining whether grantees are meeting federal requirements. The contractors’ guide assists contractors with the decision-making process about what constitutes a deficient finding by providing condition statements for the 23 triennial review areas. For example, according to the contractors’ guide, if the grantee has included the lobbying prohibitions clause (that is, the prohibition from using federal funds to lobby for additional federal funds) in its procurement solicitations, then the grantee is not deficient; otherwise, the grantee is deficient. The contractors’ guide also contains suggested corrective actions if a grantee is found deficient, (e.g., the grantee must certify to FTA that it will have subgrantees, contractors, and subcontractors comply with the lobbying prohibitions requirement.) In another example, if FTA conducted a special procurement system review (see table 1) in the prior two fiscal years or if one is scheduled for the year of the grantee’s triennial review, then a review of the procurement area is not necessary and a notation is made in the triennial review report as “not reviewed.” Subsequently, contractors enter predetermined, deficiency codes into OTRAK that correspond to explanations for any deficient findings, herein called findings. Once entered, FTA regional offices track and monitor the finding until the grantee addresses it. Table 2 shows the four categories FTA uses to document triennial review results. From fiscal years 2000 through 2008, triennial review data show many grantees are not making progress toward meeting federal requirements, as indicated by not consistently reducing grantees’ findings with federal requirements. While FTA uses several tools to help grantees meet more requirements, especially in areas with the greatest number of findings, it could do more to improve grantees’ performance by identifying the underlying causes and by objectively noting the severity of the finding. Our analysis of OTRAK data shows that 51 percent of 424 grantees had mixed results in terms of meeting more triennial review requirements from fiscal years 2000 through 2008, as demonstrated by both increases and decreases in their numbers of findings over three consecutive reviews. Over the same time period, 17 percent of grantees consistently met fewer requirements from one review to the next, as indicated by a consistent increase in the numbers of findings in their triennial reviews. Thirty-one percent of grantees consistently met more federal requirements over time—one of the goals of the triennial review—as demonstrated by a consistent decrease in their numbers of findings over three consecutive reviews. Finally, 1 percent of grantees met the same number of requirements in all three reviews. Figure 3 summarizes the performance in terms of meeting federal requirements for 424 of the approximately 600 current urban area formula fund grantees, as measured by the change in the number of findings in three triennial reviews from fiscal years 2000 fiscal years 2000 through 2008. through 2008. While comparing the change in the numbers of findings over time does not show improvement across all grantees, a different analysis of OTRAK data shows that some grantees averaged fewer than two findings per triennial review, which we identify for this analysis as high-performing grantees. Figure 4 illustrates the range in the average number of findings after three triennial reviews for each of the 424 grantees from fiscal years 2000 s 2000 through 2008. through 2008. This analysis of OTRAK data shows that about 31 of 424 grantees averaged fewer than 2 of 229 possible findings per triennial review. Twenty-six of these grantees provide transportation services to small or medium-sized urban communities, located in various parts of the country. Three of the 10 grantees we interviewed were high-performing grantees. Executives representing these three grantees implemented some management practices that they believe contributed to their high performances. One management practice included linking the job descriptions of pertinent individuals to the triennial review—a practice that grantee executives said contributed to a culture of accountability. Specifically, the controller’s and grants administrator’s job descriptions for the large grantee explicitly required these individuals to be responsible for the triennial review. An assistant director of public works, responsible for managing the transit system of a small grantee, was required to help implement FTA requirements, among other things. In addition, according to the chief executive officer of the medium grantee, the officer set verbal job expectations with managers of zero findings, which the officer believed contributed to the high performance in the triennial review. Another practice implemented by 2 of the 3 high-performing grantees was to initiate external reviews by independent consultants to assess their operations, which contributed to, or is expected to sustain, their high performance. Executives from a large grantee we interviewed attributed their high performance to an external review conducted several years ago that focused on the grantee’s readiness for the triennial review. Despite having zero findings in their last two consecutive triennial reviews, executives from the medium grantee recently completed an external maintenance review that they believe should help them achieve their goal of operating an efficient transit system and that is necessary to remain good stewards of public funding. FTA officials recognize the importance of sharing best practices among grantees. As such, it advocates a grantee mentoring system where regional offices, within resource and budget restraints, initiate, encourage and direct grantees to team with recognized grantee leaders in order to improve grantee performance. FTA officials also indicated that they address mentoring during their triennial review workshops. When we analyzed OTRAK data from fiscal years 2000 through 2008 by area, we found that the 424 grantees had the greatest numbers of findings in five review areas—procurement, drug and alcohol program, maintenance, technical, and satisfactory continuing control areas.