Summary: GAO reviewed the Urban Mass Transportation Administration's (UMTA) grants management practices, focusing on the UMTA Region III: (1) grants recipients' compliance with federal requirements; and (2) oversight of grantees.
GAO found that: (1) Region III grantees did not have effective financial, technical, and other management systems to ensure compliance with federal requirements or prevent the misuse of funds; (2) between 1988 and 1990, the UMTA Office of the Inspector General questioned $61.5 million of Region III grantees' expenditures and found numerous violations of federal requirements; and (3) grantees' noncompliant and questionable activities included rebudgeting of grants to other projects, failure to complete projects, and questionable expenditures. GAO also found that: (1) Region III reported that limited staff resources precluded closer grantee oversight, since its foremost priority was awarding new grants, not overseeing existing grants; (2) only one-third of grantees submitted required financial and progress reports to UMTA Region III, which did not ensure that it received, reviewed, or acted on reports; (3) UMTA triennial reviews of Region III grantees were too superficial to confirm the adequacy of their management systems; (4) Region III did not effectively use such grant-monitoring tools as procurement reviews, site visits, or single annual audits; (5) UMTA rarely used its enforcement authorities to require grantees to take corrective action; and (6) Region III grantees typically decided themselves whether to continue projects or return misspent funds.
