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Summary

The Federal Highway Administration (FHWA) is responsible for ensuring that States close out projects timely, a critical step towards the final accounting of States’ use of Federal funds. As part of our the American Recovery and Reinvestment Act of 2009 (ARRA) oversight mandate, we reviewed FHWA’s oversight of ARRA project closeouts and found that the vast majority of ARRA-funded Federal-aid highway and bridge projects have been closed out, but a small percentage of the remaining active projects will not be closed out before ARRA grant funds expire on September 30, 2015. While ARRA does not stipulate a deadline for project closeout, closeouts occurring before the expenditure deadline give States time to use any remaining ARRA funds on legitimate costs for other ARRA projects. Further, while FHWA has efforts underway to improve the Federal-aid project close-out process and address its Program Management Improvement Team review findings, internal control weaknesses persist and act as barriers to timely closeouts of ARRA and other Federal-aid highway projects. For example, FHWA lacks nationwide policy, performance measures, or standard timeframes for project closeout. FHWA concurred with our seven recommendations, which were focused on expediting remaining ARRA project closeouts, reducing the backlog of pending Federal-aid highway project closeouts, and addressing internal control weaknesses.