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Tools & Programs:
Improving Federal-aid Financial Management

Submissions Due June 28, 2012

In the mid-1990s, FHWA implemented a broad-based effort to test and evaluate innovative strategies for state DOTs to get the most from Federal highway grants.  Designated officially as the "Test and Evaluation Project TE-045," this effort advanced many financial management tools that are now standard, such as advance construction, flexible matching, and toll credits.

With the current strain on highway funding, FHWA seeking ideas for improving grant assistance through a renewed test and evaluation of innovative financial management practices.  FHWA has recently approved alternative cost recovery approaches that will allow California to hire nine additional oversight engineers for local public agency projects.  It has also allowed Vermont to recover the costs of administering Emergency Relief funds that are being used to rebuild roads destroyed by Tropical Storm Irene.  In both cases, the test program allowed state DOTs to use federal funds for overhead costs without developing a complex "indirect cost allocation plan" (ICAP).  With this expedited approval, Vermont and California were able to begin billing FHWA for these additional administrative costs sooner.

By testing methods that are more flexible yet fully consistent with Federal Cost principals, FHWA has allowed these states to use scarce funds more effectively.  The Office of Innovative Program Delivery in partnership with the office of the Chief Financial Officer is encouraging state DOTs and Division offices to review current financial management practices and identify opportunity to test innovation in financial management.  These tests must focus on policy, guidance and regulation within the Federal-aid program.  Through sharing successful approaches taken by some states, the program will help all state DOTs pursue new financial flexibilities.

May 23, 2012 Webinar

Improving Financial Management Presentation: web | Download PDF [243 kb]

Transcript: web | Download PDF [745 kb]

Audio: https://connectdot.connectsolutions.com/p1cll13ab4x/.  

Submission Form Due June 28, 2012

Submission Form: Download Word [121 kb] | Download PDF [224 kb]

Other materials

Action Memorandum from the Administrator: web | Download PDF [125 kb]

DOT Press Release on CA and VT Innovation: web | Download PDF [43 kb]

Projects

California Department of Transportation

Application: Download PDF [1.73 MB]

Approval Memo: web | Download PDF [200 kb]

Vermont Agency of Transportation

Application: Download PDF [651 mb]

Approval Memo: web | Download PDF [252 kb]