OIG Faults FRA Oversight of California High-Speed

The Office of Inspector General of the U.S. Department of Transportation has issued a report concluding that the Federal Railroad Administration missed opportunities to better assess and mitigate the federal government’s risks in the agency’s oversight of the California high-speed rail project.

The report was requested by the former chair of the House Committee on Transportation and Infrastructure’s Subcommittee on Railroads, Pipelines and Hazardous Materials.

The DOT Inspector General reviewed FRA’s risk mitigation and oversight of the project’s expenditures.

The OIG said the objectives of the audit were to assess FRA’s risk analysis, assessment and mitigation efforts, particularly regarding the availability of nonfederal matching funds, business plans and financial reporting; and procedures for determining whether federal funds expended complied with applicable federal laws and regulations.

In a news release, the OIG said that due to the significant amount of HSIPR funds dedicated to California, the audit focused on FRA’s cooperative agreements with the California High-Speed Rail Authority, which manages the state’s high-speed rail program.

The audit found that although the FRA took numerous actions to oversee the CHSRA agreement, the agency missed opportunities to better assess and mitigate federal risks.

The OIG made four recommendations to improve FRA’s assessment and mitigation of risks, documentation of decisions, and processes for overseeing expenditures. FRA concurred with three recommendations and partially concurred with one.

The OIG considers all four recommendations resolved but open pending completion of planned actions.

The FRA administers the federal High-Speed Intercity Passenger Rail (HSIPR) discretionary grant program.

Between 2009 and 2011, Congress appropriated $10.2 billion for the program. As of April 2019, the FRA had disbursed $8.5 billion of those funds, with 35.5 percent dedicated to developing the high-speed rail corridor in California.

In May 2019, the FRA formally canceled nearly $929 million in previously awarded federal funds to California’s high-speed rail program and said it would consider options to get the $2.5 billion in federal funds that the state has already received for the project return to the federal treasury.

California has sued the FRA for canceling the grant.

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