Lax Oversight of $10 Billion High Speed Rail Grants
Policy + Politics

Lax Oversight of $10 Billion High Speed Rail Grants


Auditors are flagging the Department of Transportation for lax oversight of the $10 billion in grants going toward high-speed rail projects across the country. 

A new report from the department’s inspector general reveals that the Federal Railroad Administration doesn’t have a sufficient process in place to accurately track all of the grants it awards every year. 

Related: Obama’s $11 Billion High Speed Rail to Nowhere 

So far, the RFA has approved about $5.5 billion in grants for at least 65 projects that either are in the process of being completed or are already finished. Meanwhile, the remainder of the grants will be awarded in the coming years. 

The report said that although agency employees are required to report any potential waste or fraud within the grant program to their managers, it’s up to their managers to pass those suspicions onto the inspector general. Because of this, auditors say they may be overlooking some potential fraud and waste. 

"As a result, FRA cannot be certain that it is appropriately safeguarding federal investments," the auditors said.

On top of that, the RFA workers don’t have any guidelines in place to help them identify when a grant might be considered vulnerable to waste, fraud or abuse.

The report also said that the agency has nothing in place requiring employees to document best practices to identify waste, fraud or abuse among the grants.

Related: Obamanomics 101—A Reckless Risk on High Speed Rail

"Because FRA has not determined its risk tolerance … or setting response strategies when amending grant agreements, the agency may be exposing federal investments to unacceptable levels of risk," the auditors said. The IG recommended that the agency develop guidance to help improve oversight over the grants. DOT officials concurred. 

The federal government has received a barrage of criticism in recent years for management of its high-speed rail projects that seem to be going nowhere fast. Just last year, The New York Times reported that a combination of setbacks and little to no support from states has slowed the projects to a grinding halt.

In August, Congress rejected the Obama administration’s request for an additional $10 billion for high-speed rail. Likewise, three governors canceled their federal funding for the projects—saying they were too expensive.

Now, the latest report on lax oversight of the grants for high-speed rail could further slow the projects’ momentum.

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