Department of Transportation (DOT) Inspector General Eric J. Soskin has testified before the House Committee on Transportation and Infrastructure at a hearing focusing on the Federal Government’s response to the COVID-19 pandemic.
COVID-19 has impacted the U.S. transportation industry in myriad ways, and DOT agencies have moved quickly to release the over $106 billion that Congress provided to help workers, families, and businesses deal with the pandemic. Both in 2020 and 2021, the United States has often led the way in supporting its transportation infrastructure during unprecedented challenges. However, Soskin said that the volume of funds and the speed with which they have been made available have presented serious oversight challenges.
His testimony focused on the five risk areas that the Office of Inspector General (OIG) has identified to help DOT promote effective stewardship of this large investment: airport grants management; surface transportation oversight; contract and grant execution; financial management systems; and prevention of fraud, waste, and abuse.
The Federal Aviation Administration (FAA) received over $20 billion to support airports’ continuing operations and replace lost revenue resulting from the sharp decline in passenger traffic and other airport business due to the pandemic. To mitigate the challenges associated with this huge influx of funds, OIG found that the FAA must establish controls to ensure grantees adhere to federal requirements and increase its own reporting transparency. Soskin said the FAA is taking positive steps toward establishing a risk-based oversight approach and has categorized all COVID-related relief grants as “high risk,” thus strengthening its ability to manage these grant funds.
DOT’s surface transportation agencies received about $83 billion in COVID-19 relief funding and also face challenges in overseeing these funds and carrying out normal operations under COVID-19 constraints. Soskin said DOT agencies have started to adjust their oversight approaches to ensure that recipients meet federal requirements and will need to continue to do so.
OIG found that DOT must increase emphasis on how it awards and administers contracts and grants, ensure that individuals making agency or recipient awards have appropriate authority and training, improve procedures to maintain its overall low improper payment rate, and maintain the availability and integrity of its multiple financial management systems. Soskin also underlined that the sheer volume of COVID-19 relief funds and the speed at which they must be disbursed puts them at a higher than usual risk for fraud, waste, and abuse.
“For this reason, we found that it will be critical for all DOT agencies to implement data-quality procedures for tracking and monitoring and to be aware of “red flag” indicators of fraud schemes,” said the Inspector General. “To assist DOT in achieving that end, we are conducting outreach and education efforts to enhance understanding about how to recognize, prevent, and report fraud to the appropriate authorities.”
Since March 2020, OIG’s Office of Investigations has already conducted over 1,200 hours of outreach focusing on education and deterrence related to the Department’s COVID-relief funds. In fact, this year it has almost doubled the hours it spent on COVID-relief outreach a year ago.
Read the full testimony and report at OIG
