State Management Review Overview, process, and program updates Scott Giering Sherry Snyder

2 Overview Description of Program Oversight Review Programs State Management Review: Overview and Process State Management Review: Common Findings Program Updates

3 Overview Description of Program Oversight review programs State Management Review: Overview and Process State Management Review: Common Findings Program Updates

4 What is Program Oversight? Program Oversight reviews, confirms, and promotes compliance with Federal grant requirements. Fiduciary responsibility to prevent and identify improper payments and to ensure every dollar counts toward improving public transit. Comprehensive Reviews (Triennial & State Management) o Conducted every three years o Forward looking instead of reactive o Assess management practices and program implementation Specialized Reviews o Conducted at FTA’s discretion o Focused on specific areas of Federal compliance

5 Comprehensive Reviews Triennial Review Mandated by Congress in Assesses how recipients of Urbanized Area Formula Program funds meet Federal requirements in a baseline review of 17 areas. New process: o A more proactive, risk-based approach o Enhanced review modules, when needed, to address high-risk oversight areas of: Technical Capacity Financial Capacity Financial Management Procurement Maintenance Americans with Disabilities Act Disadvantaged Business Enterprise Title VI of the Civil Rights Act

6 State Management Review Assesses compliance with 49 USC chapter 53 Assesses management practices and program implementation, ensuring that programs are administered in accordance with Federal Transit Law provisions and are meeting program objectives. Focuses primarily on recipients of 5311, Non-urbanized Area Formula Program, and incorporates questions regarding: 5305 – Metropolitan & State Planning 5309 – Capital Investment 5310 – Enhanced Mobility of Seniors and Individuals with Disabilities 5316 – Job Access & Reverse Commute 5317 – New Freedom 5339 – Bus & Bus Facilities American Reinvestment & Recovery Act Comprehensive Reviews

7 Specialized Reviews Financial Management Oversight Reviews Assesses compliance with the Common Rule, 49 CFR Part and External, independent assessment for FTA, in accordance with established public accounting standards, on the effectiveness of the grantee's internal control environment for the management of Federal funds. Procurement System Review Assesses compliance with the Common Rule, 49 CFR Parts 18 & 19. Assesses procurement policy and processes to determine if FTA grantees are meeting Federal procurement requirements. Civil Rights Compliance Reviews (Four Review Programs) ADA - Assesses compliance with the Americans with Disabilities Act of Disadvantaged Business Enterprise - Assesses compliance with 49 CFR Part 26. Equal Employment Opportunity - Assesses compliance with 49 USC 5332(b). Title VI of the Civil Rights Act - Assesses compliance with 49 CFR Part 21.

Average Annual Program Oversight Reviews 8 Chart labels indicate average # reviews/FY and average % of all reviews/FY

9 Annual Program Oversight Lifecycle FTA established a comprehensive annual lifecycle approach to synergize program oversight activities. Establishes a consistent schedule on which grantees, FTA, and oversight contractors can rely. Interconnectivity of oversight activities promotes the use of consistent standard operating procedures across reviews. Allows FTA to better coordinate all program oversight reviews to avoid overlap, conflicts, and overburdening grantees.

10 Review Material Update w/ FTA Subject Matter Experts Information Requests Sent to Grantees Grantee Workshops Schedule De-Confliction On-Site Reviews Report Development & Issuance Annual Program Oversight Lifecycle

11 Overview Description of Program Oversight review programs State Management Review: Overview and Process State Management Review: Common Findings Program Updates

12 Super Circular Took effect December 26, 2014 Supersedes A-21, A-87, A-89, A-102, A-110, A-122, and A-133 US DOT implementing regulation to replace 49 CFR Parts 18 and 19, 2 CFR Part 1200 Will require updated FTA circulars implementing regulation(s)

13 Covers all Federal grant recipients Offers specific latitude for States to follow their own procedures in: – Financial management – Equipment management – Procurement 49 CFR Part 18 (Common Rule)

14 State program circulars – Are self-contained – Take precedence over FTA C FTA C applies where state program circulars are silent Program Guidance

15 1.Program Management 2.Grant Administration 3.Project Management 4.Financial Management And Capacity 5.Procurement 6.Disadvantaged Business Enterprise 7.Asset Management 8.Charter Bus 9.School Bus 10.Americans With Disabilities Act 11.Title VI 12.Equal Employment Opportunity 13.Drug Free Workplace Act/Drug And Alcohol Programs Review Areas

16 State’s compliance directly – Emphasis on content and implementation of State Management Plans – Management/administration/oversight of subrecipients’ direct operation or contract for service Subrecipients’ compliance indirectly State Management Review

17 State Management Review Process 7 Basic Steps Pre-Review (FTA and Contractor): Review grantee historical information Overview current status Answer questions in Grantee Information Request package Contact grantee regarding site visit dates Prepare and send information request to grantee Pre- Review Review Package Site VisitFindings Summary Draft Report Final Report Corrective Actions

18 7 Basic Steps Infromation request must be returned to the reviewer within 40 business days: Grantee profile Questions in 13 areas List of requested documents Preliminary site visit schedule State Management Review Process Pre- Review Review Package Site VisitFindings Summary Draft Report Final Report Corrective Actions

19 State Management Review Process 7 Basic Steps Site Visit (4-5 days depending on size and complexity) Prior to site visit, annotated information request sent to grantee along with additional questions or requests for information Entrance conference 13 areas reviewed Subrecipient site visits - Facilities toured, bus(es) inspected and equipment records sampled, informally discuss compliance with FTA requirements, review procurement file, maintenance records, back-up documentation for invoice to State, Title VI notice, and drug and alcohol policy Exit conference State Management Review Process Pre- Review Review Package Site VisitFindings Summary Draft Report Final Report Corrective Actions

20 State Management Review Process 7 Basic Steps Exit Conference: Preliminary list of findings and corrective actions provided Realistic corrective action deadlines discussed State Management Review Process Pre- Review Review Package Site VisitFindings Summary Draft Report Final Report Corrective Actions

21 State Management Review Process 7 Basic Steps Draft Report Issued within 21 business days of exit conference Grantee asked to check for accuracy and comment within 10 business days State Management Review Process Pre- Review Review Package Site VisitFindings Summary Draft Report Final Report Corrective Actions

22 State Management Review Process 7 Basic Steps Final Report Issued by FTA within 14 business days of grantee’s response Includes final determination of findings, corrective actions, and closed finding s State Management Review Process Pre- Review Review Package Site VisitFindings Summary Draft Report Final Report Corrective Actions

23 State Management Review Process 7 Basic Steps Corrective Actions Submit corrective actions by due date or earlier State Management Review Process Pre- Review Review Package Site VisitFindings Summary Draft Report Final Report Corrective Actions

24 Getting Ready for Your Review Send requested documents Ensure staff availability Ensure staff and/or documentation from other offices are available Work with FTA/contractor to select subrecipients

25 After Your Review Implement corrective actions Submit documentation to FTA regional office Use the regional office as a technical resource

26 FY16 SMR Highlights 17 planned reviews o 4 combined SMR/TR reviews o Grantee information requests sent out in early Fall 2015 o Site visits to begin in early Spring SMR workshops (October – December 2015) o Atlanta, GA o Baltimore, MD (joint SMR/TR workshop) o Boston, MA o Chicago, IL o Dallas, TX o Denver, CO o Sacramento, CA o Seattle, WA

27 Resources State Management Review Workbook FTA website National RTAP MTAP/AASHTO CTAA/APTA TRB/NCHRP

28 Overview Description of Program Oversight review programs State Management Review: Overview and Process State Management Review: Common Findings Program Updates

Most Frequent Areas with Findings (FY12-14 SMRs) Review Area# of Findings% of All Findings Program Management6617 % Procurement5314 % Grant Administration5113 % Disadvantaged Business Enterprise5113 % Title VI339 % Asset Management339 % Americans with Disabilities Act308 % Financial Management236 % All Others (6 Areas)*3810 % Total378 Does not equal100% due to rounding * Drug and Alcohol Program, Equal Employment Opportunity, Lobbying, Charter Bus, Drug-Free Workplace, Project Management

Top SMR Findings FY12-FY14 For Internal Discussion Purposes Only Review AreaProgram Management# of Findings Program ManagementState Management Plan out of date/incomplete23 Grant AdministrationIncorrect Federal Financial Reporting16 Title VIInsufficient oversight of Title VI14 Procurement No verification that excluded parties are not participating 13 Grant AdministrationInactive grants / untimely grant closeouts12 Program ManagementInadequate oversight system11 ProcurementInsufficient oversight of procurement9 Grant AdministrationFFATA reporting deficiencies9 Asset Management Inadequate oversight of contracted or subrecipient maintenance activities 9 DBE DBE goal achievement analysis not completed or not submitted 8

31 Overview Description of Program Oversight review programs State Management Review common findings Program Updates

Grantees Receiving Multiple Reviews* # of Grantees *Excludes Drug & Alcohol Compliance Audits, which will be incorporated into the process in FY16.

33 Oversight Process Improvement Enhance the consistency, effectiveness, and efficiency of grantee program oversight. Forward-looking instead of reactive Ask the “right” questions Enhanced Review Modules in the Triennial Review improve our ability to rapidly address areas of concern to help grantees get out ahead of problems Focus closely on findings in high risk areas and reduce repeat findings in these areas through targeted technical assistance Decrease the need for multiple reviews of a grantee within a fiscal year

34 Increase information sharing Provide clear and concise overviews of FTA’s oversight programs and programmatic changes Generate and share trend reports on major issues and findings among grantees and highlight grantee best practices Leverage FTA presence at regional and national conferences Publicize and clarify the results of reviews of the FTA o Findings from the OIG, GAO, NTSB, and others o Recommendations and corrective actions Explain the impacts for grantees of oversight program changes and audit recommendations Oversight Initiatives

35 Enhance education, training opportunities, and assistance for grantees Identify and implement new, interactive approaches to traditional grantee workshops: o Webinars and web-based training o Greater involvement of grantees in oversight workshops Promote and expand the training and technical assistance provided by the FTA to grantees Continue efforts of HQ and regional staff to improve nationwide consistency in oversight review processes Oversight Initiatives