ORGANIZATIONAL EXCELLENCE
DOT Performance Goal: Achieve strategic management of human capital, electronic government (E-Gov), competitive sourcing, improved financial performance, and budget and performance integration goals.
This funding request contributes to the DOT Organizational Excellence strategic objective to implement the reform initiatives in the President’s Management Agenda (PMA).
| STRATEGIC GOALS &OUTCOMES by Performance Measure |
FY 2007 ENACTED | FY 2008 ENACTED | FY 2009 REQUEST |
|---|---|---|---|
| 6. ORGANIZATIONAL EXCELLENCE STRATEGIC GOAL | |||
| Fulfill President's Management Agenda | |||
| a. Other. | 437,766 | 443,742 | 413,552 |
| Subtotal, Performance Outcome | 437,766 | 443,742 | 413,552 |
| Financial Stewardship | |||
| a. Percent of major Federally funded transportaion infrastructure projects with less than 2 percent annual growth in the project completion milestones as reported in the financial plan. | 43,777 | 44,374 | 41,355 |
| b. Percent of finance plan cost estimates for major Federally funded transportaion infrastructure projects with less than 2 percent annual growth in the project completion milestones as reported in the financial plan. | 43,776 | 44,374 | 41,355 |
| c. Other. | |||
| Subtotal, Performance Outcome | 87,553 | 88,748 | 82,710 |
| Total —Organizational excellence Strategic Goal | 525,319 | 532,490 | 496,262 |
Strategic Management of Human Capital
The FHWA monitors the Agency’s goals and performance objectives, as stated in the Strategic Implementation Plan and the Administrator’s Accountability Contract with the Transportation Secretary. The performance objectives are cascaded to the performance agreements of Senior Executives, and further to the performance plans of individual employees. Individual performance plans are used as the basis for recognizing and rewarding employee accomplishments. Thus, the FHWA ensures that awards are being used to recognize achievements that advance the Agency’s mission-related goals and performance objectives.
Anticipated FY 2008 Accomplishments
The dollar figures in the paragraphs that follow are keyed to the OMB Standards of Success for Achieving/Maintaining a “Green” status for this PMA initiative.
Human Capital Plan, Succession Planning, Closing Gaps. The FHWA’s Human Capital Plan will be revised to implement a new model for achieving a multidisciplinary workforce. The Agency will strengthen succession planning initiatives by revising supervisory, management, and leadership learning strategies and by establishing a more focused approach on executive development. The FHWA anticipates that significant numbers of employees will be retiring and that an aggressive recruitment program will be needed to replace the retiring workforce and strengthen our core functions, including congestion management and mitigation, structures and materials research and analysis, budget development and execution, transportation management and operations, and safety. While continuing to assess needed skill changes of FHWA employees through workforce planning, the Agency will make continued progress in closing gaps in mission critical occupations (e.g., financial management, engineering, information technology, and human resources).
Initiatives to Achieve a Multidisciplinary Workforce While Continuing our Succession Planning Efforts. The Professional Development Program will be used to recruit, hire, and develop entry-level individuals in mission-critical disciplines (e.g.,financial management). In addition, there will be an increase of new mid-career hires, and recruitment initiatives and incentives will be critical to attracting diverse candidates with the needed multidisciplinary skills. Also, the Agency will implement new initiatives to reduce the under-representation of Hispanic employees and individuals with disabilities.
The FHWA will continue to implement its Diversity Action Plan and create an organizational climate that enables a multidisciplinary workforce to achieve the strategic goals of the Agency. Recommendations from the FHWA Disability Task Force will be implemented. Mediation will be used to address organizational issues when appropriate.
The Agency’s Learning and Development Program will train increasing numbers of employees to ensure continued improvements in stewardship, program oversight, and financial management. A multidisciplinary approach and an emphasis on accountability will be incorporated at all levels of training. Many learning activities will be offered using video and web conferencing technologies. Using a blended approach to learning enables the FHWA to respond more quickly to the learning needs of our employees. In addition, the Agency plans to fund rotational assignments for mid-career hires to ensure that they have the skills needed to successfully administer the various FHWA programs.
The Agency’s other accomplishments will include the implementation of the new Federal-aid Academy which is designed to foster improved stewardship and oversight of Federal-aid programs in accordance with requirements of SAFETEA-LU, the new Leadership Academy for new mid-career managers, and acquisition training. Implementation of changes to acquisition training requirements will call for additional FHWA resources. The number of individuals affected by this change has increased; at the same time, the number of training hours has increased as well. Without additional funding, the impact of this change may require a reprioritization of learning and development activities.
The Agency will launch improved learning activities with an emphasis on just-in-time delivery and reinforce learning at regular intervals during the initial two years of supervisory tenure, to ensure that supervisors can effectively manage performance while operating in a continually changing environment. The Agency will continue to enhance current supervisor skills and focus greater attention on the skills needed to effectively manage performance when supervising staff that telecommute, are employed in shared positions, or work in alternative duty locations.
The FHWA plans to implement recommendations for pilot field organizational alignments that lead to increased organizational flexibility to respond to changes in Agency mission and funds will be used for telework sites and related training for employees and managers in remote worksites.
Improving performance management skills will also be a high priority item. The FHWA and OPM employee survey results indicate there is a strong need to provide training for supervisors and employees. Both supervisors and employees will receive additional training on how to improve metrics in performance standards, how to hold employees accountable for achieving organizational goals, and how to deal with performance problems.
Also, feedback from OPM on the FHWA’s Performance Appraisal Assessment Tool will be addressed. The FHWA will ensure that awards are used to recognize achievements that advance our goals and objectives. The FHWA will carefully monitor that these goals and objectives, as stated in the Agency’s Performance Plan and the Administrator’s Performance Agreement with the Secretary, are cascaded down to Senior Executives’ performance objectives and to the performance plans of individual employees, and are used as the basis for recognizing and rewarding employee accomplishments. The Agency has requested GOE funds for its employee recognition and awards budget to support the strengthening of the performance culture in the FHWA.
The FHWA will continue to implement its Employee Survey Action Plan (which also includes actions to address Human Capital Survey (HCS) and Diversity Management Council recommendations) and create an organizational climate that enables its workforce to achieve the strategic goals of the Agency. New approaches will be used to address low-scoring and/or downward trending items. The Agency will implement new initiatives to improve employee satisfaction. In addition, action items by the FHWA Human Resources Management Committee (HRMC) will be implemented.
Implementing the OPM Hiring Model. Under the OPM 45-day hiring model, the measurement of success has changed to “percentage selected within 45 days.” The goal for FY 2008 is for selecting officials to sign the certificate within 45 days of the announcement closing in 65 percent of the cases. For the SES, the FHWA has developed a guideline to assist selecting officials in making selections and clearing the ERRC within 75 days.
Accountability Reviews. The FHWA is participating in Department-wide accountability reviews. In 2008, the FHWA will implement improvements and corrective actions identified in the accountability reviews of the employee recognition system. It will conduct an accountability review of selected staffing and recruitment programs. Further accountability review activity will be coordinated with the DOT Accountability Review Program Plan.
Background Investigations. Homeland Security Presidential Directive-12 (HSPD-12) requires that all Federal employees have at a minimum a basic background investigation on file, and many employees need to have their clearances updated.
FY 2009 Performance Budget Request
Human Capital Plan, Succession Planning, Closing Gaps. The FHWA’s Human Capital Plan will be modified to reflect new organizational approaches for implementing the Federal-aid Highway Program. The Succession Plan will be implemented to ensure its workforce has depth in leadership skills to replace retiring employees. The FHWA anticipates that significant numbers of employees will be retiring and that an aggressive recruitment program will be needed to replace the retiring workforce and strengthen our core functions, including congestion management and mitigation, structures and materials research and analysis, budget development and execution, transportation management and operations, and safety. While continuing to assess needed skill change of FHWA employees through workforce planning, the Agency will make continued progress in closing gaps in mission critical occupations (e.g., financial management, engineering, and government wide information technology and human resources).
The Professional Development Program will be used to recruit, hire, and develop the increasing number of entry-level individuals in mission-critical disciplines, (e.g., financial management). The funding will support individuals needed to fill FTE positions in Headquarters, and the increasing number of individuals needed to fill FTE positions in Division Offices.
Recruitment incentives will be critical to attracting new mid-career hires with the requisite multidisciplinary skills. With the increasing number of retirements and vacancies agency-wide, continuous efforts need to be made to attract a diverse workforce through various recruitment sources such as advertisements, print media, web sites, etc.
The FHWA will implement actions necessary to change the skills mix of the financial management workforce. The Agency’s Learning and Development Program will train increasing numbers of employees in stewardship, program oversight, and financial management including the implementation of the new Federal-aid Academy which is designed to foster improved stewardship and oversight of Federal-aid programs in accordance with requirement under SAFETEA-LU, the new Leadership Academy for new mid-career managers, and acquisition training. A multidisciplinary approach and an emphasis on accountability will be incorporated at all levels of training. The Agency will continue to fund rotational assignments for mid-career hires to ensure that they have the skills needed to perform on the job.
The Agency will continue our efforts to support a learning environment that supports new supervisors with the information and skills they will need immediately in their new supervisory role and then by providing additional training in regular installments through the first two years of their supervisory tenure. Managing employee performance will continue to be a high priority item in 2009. The Agency will continue to enhance current supervisor skills and focus on managing performance under flexible work arrangements such as teleworking, shared positions, and alternative duty locations. The Agency will also continue to fund rotational assignments for mid-career hires to ensure that they have the skills needed to perform on the job. Numerous training programs will be offered using video and web-conferencing, or other e-learning technologies. Additional funding is necessary to develop and/or convert instructor-led courses to an e-learning environment.
Employee survey results indicate employees do not have sufficient training to meet their immediate work and career needs. The Agency plans to build the training program so that critical multidisciplinary training needs are addressed. Continued implementation of changes to acquisition training requirements will require additional FHWA resources. The number of individuals affected by this change has increased; at the same time, the number of training hours has increased as the well. Without additional funding resources, the impact of this change may require a reprioritization of learning and development activities.
The FHWA will evaluate the pilot field realignments to identify issues and make changes to increase organizational effectiveness for teleworking sites and related training for employees and managers in flexible work arrangements such as shared positions are alternative duty locations.
The FHWA will carefully monitor to ensure the Agency’s goals and objectives, as stated in the Agency’s Performance Plan and the Administrator’s Performance Agreement with the Secretary, are cascaded down to Senior Executives’ performance objectives and to the performance plans of individual employees, and are used as the basis for recognizing and rewarding employee accomplishments. The Agency’s focus on pay-for-performance will be results-driven, producing a distribution of pay adjustments and awards based on individual contribution, organizational performance, and/or team performance. Follow-up assessments will be conducted to measure the effectiveness of program improvements implemented as a result of previous Accountability Reviews.
The Agency also plans to ensure that awards are used to recognize achievements that advance the Agency’s goals and objectives. The Agency request includes funding for employee recognition and awards funding to support this strengthening of the performance culture in the FHWA.
The FHWA will continue to implement its Employee Survey Action Plan (which also includes actions to address Human Capital Survey (HCS) and Diversity Management Council recommendations) and create an organizational climate that enables its workforce to achieve the strategic goals of the Agency. New approaches will be used to address low-scoring and/or downward trending items. The Agency will implement new initiatives to improve employee satisfaction. In addition, action items by the FHWA Human Resources Management Committee (HRMC) will be implemented.
The FHWA will continue to implement its Diversity Action Plan and create an organizational climate that enables a multidisciplinary workforce to achieve the strategic goals of the Agency. Mediation will be used to address organizational issues when appropriate.
Under the OPM 45-day hiring model, the measurement of success has changed to percentage selected within 45 days. The goal for FY 2008 is for selecting officials to sign the certificate within 45 days of the announcement closing in 65 percent of the cases. If the measurement for success changes for FY 2009, the FHWA will make any changes necessary to work toward achieving the new goal. For the SES, the FHWA has developed a guideline to assist selecting officials in making selections and clearing the ERRC within 75 days.
The FHWA will continue to integrate into our business processes additional components of an accountability system that provides consistent means to monitor and analyze Agency performance on all aspects of human capital management policies, programs, and activities, which must themselves support mission accomplishment and be effective, efficient, and in compliance with merit system principles. This includes greater integration and enhancement of current systems, to provide for greater customer service response and focus, greater system integration between the training system (eLMS) and other personnel systems such as Hiring Management and the Federal Personnel and Payroll System (FPPS), and enhanced management-automated tools to improve overall processes.
The FHWA will participate in Department-wide accountability reviews. The FHWA will continue to implement improvements and corrective actions identified in the accountability reviews of the selected staffing and recruitment programs. Further accountability review activity will be coordinated with the DOT Accountability Review Program Plan.
Under the implementation of HSPD-12, there are new and more rigorous background investigations required on all new Federal employees and contractors working for the FHWA. As a result, individuals need security clearances and many employees need to have their clearances updated. The Agency requests that funds be allocated for personnel security area. These funds will assist with finalizing the appropriate clearances for employees that are selected for positions that have higher-level clearance requirements.
Electronic Government (E-Gov)
Anticipated FY 2008 Accomplishments
The FHWA will begin the implementation of best practices arising from the information technology (IT) field study, support E-Gov initiatives through contributions and participation, and continue to support the Department in its Lines of Business and Smartbuy initiatives and its IT efforts such as infrastructure consolidation, use of enterprise licenses, and lowering IT-related costs.
The FHWA will continue to lead a departmental E-Gov subcommittee working on crosscutting IT initiatives. The Director of the Office of Information and Management Services co-chairs the DOT E-Gov Subcommittee. The subcommittee meets regularly throughout the year to discuss the E-Gov scorecard and strategies for “getting to green.”
The FHWA will continue to expand its Enterprise Architecture (EA) by identifying and developing a target architecture for one or more business areas, implement governance processes, and build-out and utilize the transition strategy and sequencing plan. We will continue to work with our EA extended core team, comprised of Headquarters and field office representatives, to identify new business improvement opportunities and to collect and validate information for the EA information repository. We will continue to educate Headquarters and field offices on the uses and benefits of EA, such as enhanced decision-making and long-range planning. In addition, the recently implemented Business Need Request process will integrate EA and capital planning, ensuring that investments are driven by a specific business need. Also, a board will ensure that enterprise-wide solutions are considered to achieve better return-on-investment and review investments annually, as part of the capital planning process, to ensure continuity and consistency with the target architecture.
FY 2009 Performance Budget Request
The FHWA will continue to co-chair a departmental E-Gov subcommittee working on crosscutting IT initiatives.
The FHWA will continue to refine and use its EA to guide IT investments in support of the DOTs and the FHWA’s strategic goals and expand the target architecture by adding one or more business areas. Some of the areas that we will be focusing on will include streamlining business processes, ensuring business and information technology alignment, increasing information/knowledge sharing, and expanding reuse. In addition, the FHWA will continue to ensure the integration of EA and capital planning.
The FHWA will continue to improve and refine management of the FHWA IT portfolio. In particular, we will establish standards for the maintenance of all documentation concerning the business cases, construct an easily retrievable storage area for our electronic project data, and update the outlays on a yearly basis for past budget years.
To enhance IT security, we will implement the provisions of Homeland Security Presidential Directive - 12 (HSPD-12) applicable to FY 2009. We will also continue the consolidation of IT infrastructure in FHWA field offices.
The FHWA will support E-Gov initiatives through contributions and participation; continue to support the Department in its Lines of Business and Smartbuy initiatives and its IT efforts such as infrastructure consolidation, use of enterprise licenses, and lowering IT-related costs.
The Exhibit 300 for FHWA is posted at the following web site: http://www.dot.gov/exhibit300/
Competitive Sourcing
The FHWA remains fully committed to implementing competitive sourcing strategies, as appropriate, to achieve objectives of the President’s Management Agenda.
Anticipated FY 2008 Accomplishments
As in our 2005 and 2006 Federal Activities Inventory Reform (FAIR) Act submissions, our recent 2007 inventory was based on identification of the “functions and activities” for which the FHWA is responsible. Our approach in 2005 to examine all of our work at the activity level resulted in a solid baseline that continues to require only minor adjustments from year-to-year. We believe that development of the annual FAIR Act inventory provides a resource to support the Department’s human capital/workforce planning processes, while also helping our Agency to achieve its organizational goals. In this regard, we are prepared to be active participants in Departmental planning initiatives that may offer a potential for added cross-modal efficiency.
The use of contractor support is a well-established business practice of our Agency that continues to serve us well. The FHWA’s reliance upon a contractor workforce to contribute to accomplishment of critical work signifies a continuing commitment to the efficient integration of public and private sector talent to assure the best use of taxpayer dollars. Competitive sourcing is a tool that we will continue to consider and apply in our effort to reduce operational costs and incorporate the best and most effective business practices.
Planned accomplishments include: (1) continuing to align our human capital management strategies with competitive sourcing; (2) participating in OST cross-cutting reviews of Departmental operations where the FHWA has an FTE presence; and (3)continuing to train Agency employees who may be involved in the competitive sourcing process, to ensure they have the necessary skills and qualification to fulfill their roles and assignments.
We are also benefiting from an improved process for developing our annual FAIR Act commercial and inherently governmental inventories, as well as the strengthened relationship between our workforce planning and competitive sourcing programs.
FY 2009 Performance Budget Request
The FY 2009 plan reflects our continuing commitment to assisting the Department in achieving the objectives established for this important initiative of the President’s Management Agenda. We plan to actively participate in planning and decisions that may lead to future reviews of functional areas determined to offer the greatest potential for cross-modal efficiency and attention.
Financial Performance
Performance measures
Percent of major Federally funded transportation infrastructure projects with less than 2 percent annual growth in the project completion milestone as reported in the finance plan (target is 90 percent in 2011).
| 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | |
|---|---|---|---|---|---|---|
| Target | N/T | N/T | N/T | N/T | 90% | 90% |
| Actual | 50% | 83% | 86% | 85% |
Percent of finance plan cost estimates for major Federally funded transportation infrastructure projects with less than 2 percent annual growth (target is 90 percent in 2011).
| 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | |
|---|---|---|---|---|---|---|
| Target | N/T | N/T | N/T | N/T | 90% | 90% |
| Actual | 75% | 83% | 86% | 85% |
The resources included in the budget submission will enable the FHWA to improve major project oversight and program stewardship, improve program delivery through the development of program guidance, technical assistance, tools and training.
Performance Issue
With the completion of the fiscal year 2007 audit of the Highway Trust Fund (HTF), grants financial management oversight was removed as a material weakness, where it had been reported for the past three audits.
Program oversight and program stewardship are critical and ongoing strategic objectives for the FHWA. In this regard, the FHWA must continue to focus its resources on activities that ensure that every Federal dollar is well spent and that program operations and processes are efficient and streamlined. Monitoring the cost, schedule, and performance of Federal-aid transportation infrastructure projects, especially major projects (those costing over $500 million) are critical to identify problems and initiate action to mitigate risks.
In 2000, the FHWA began monitoring project cost and schedules on major projects by reviewing and approving project Finance Plans and annual updates. SAFETEA-LU lowered the monetary threshold for classification as a Major Project from $1 billion to $500 million and Project Management Plans were made mandatory for all major projects. The impact of the lowered monetary threshold immediately increased the number of Major Projects from 21 to 37. At the end of FY 2007, the FHWA was monitoring about 50 active major projects. In addition, more than 150 potential Major Projects were in the planning or environmental review stages.
Anticipated FY 2008 Accomplishments
By the end of 2008, the FHWA will have completed two full years under the Financial Integrity Review and Evaluation (FIRE) Program. Training will continue to be provided to the Federal-aid Division Office Administrators and Financial Managers regarding the objectives of the oversight program and techniques for achieving them. As this review and oversight program continues with the Federal-aid program, we will incorporate best practices from both Federal-aid and Federal Lands Highway organizations into an expanded agency-wide program. It will include reviews of financial processes, financial transactions, and funds management activities, along with external audit coordination, and evaluations of the key internal administrative processes.
A National Lessons Learned Program will be developed and cost estimating training will be continued. In addition, staff plans to complete the risk roll-up report on the second round of agency-wide risk management initiative; and develop guidance for improving program management practices in the agency. Both of these activities are follow-up actions from the recent Highway Infrastructure PART.
FY 2009 Performance Budget Request
The FHWA will continue implementation of the FIRE program and ongoing efforts to improve financial stewardship and oversight.
The FHWA will deliver a “National Lessons Learned” Program to field offices for major project stewardship and oversight. Also, training on cost estimation for major projects has been developed and will be provided to select States. The training presents fundamental concepts to be used for major project cost estimate validations that will assist in ensuring that major project cost estimates are accurate and complete throughout the project development process. The FHWA will continue to support project management training for Major Project oversight managers and employees actively involved in the projects. The training will help ensure that the project management plans required for major projects are consistent with Agency guidance.
The FHWA will continue to implement the next iteration of an agency-wide risk management initiative. A training course on risk management practices has been developed and will be provided to FHWA employees and its State and local partners. The FHWA will continue to develop strategies for improving program management practices in the agency.
Management Challenge: Getting the Most for Every Taxpayer Dollar Invested in Highway and Transit Projects.
1. Actions by the FHWA and the States Are Needed To Provide Oversight of Highway Funds to Ensure Projects Are Delivered On Time, Within Budget, and Free From Fraud.
Ensure major project cost estimates and schedule milestones are credible.
In a 2003 Report to Congress, the FHWA outlined its efforts to develop a more multi-disciplinary approach towards project management and oversight activities. During the past three years, the Agency has addressed four key areas: 1) Optimizing the use of internal staffing; 2) Effective recruitment of project managers; 3) Increased training for existing and new staff; and 4) Implementing specific stewardship and oversight initiatives, including the development of Project Management Plans and an Agency-wide risk management approach.
Optimizing the use of internal staffing. In FY 2006, the FHWA continued a program to transition Agency employees from the traditional role of reviewing and approving highway engineering project level actions to an emerging role of ensuring the effectiveness of State department of transportation processes in areas that are major project drivers such as financing, controlling project level costs, schedule performance, transportation planning, maintaining funds accountability, and providing greater oversight of higher level management and financial issues (see discussion below).
The FHWA also initiated an effort in FY 2005 to develop a more formal, documented approach to Project Delivery Oversight. Each Division Office was directed to survey their respective data systems that contain the project cost and schedule management elements.
Effective recruitment of project managers. Since major projects require more project-focused effort, FHWA Divisions with major projects are establishing a Project Oversight Manager position. The duties of a Project Oversight Manager will include ensuring that cost estimates and schedule milestones are credible. Specifically, this guidance requires actions at major project milestones. Prior to the release of the Final Environmental Impact Statement or Environmental Assessment for a major project, the State DOT or Metropolitan Planning Organization is required to conduct an independent and unbiased validation of the cost estimate for the preferred alternative. The validation is a rigorous review of the cost estimate and schedule to ensure that it is reasonable and logical. The FHWA will then review the results of that validation to verify that the estimate includes all costs and that project uncertainties and risks have been accounted for. This validation and review process will be repeated prior to the initial financial plan and whenever major project financial plan annual updates show an increase of more than 5 percent or a schedule slippage of more than 6 months. The FHWA will conduct appropriate cost estimate reviews at critical stages throughout the timeline of the project. These project reviews will ensure that the cost estimates are consistent with the FHWA Cost Estimating Guidance that is part of the FHWA Major Project Guidance.
While continuing to assess needed skill change of FHWA employees through workforce planning, the Agency continues to make progress in closing gaps in mission critical occupations and continuing the shift to a multidisciplinary workforce. The Agency expects that the cultural shift to an organization committed to project oversight and effective financial management will be fully operational in FY 2007. The Professional Development Program is being used to hire individuals in critical disciplines, including financial management. Recruitment incentives will be critical to attracting individuals with the needed multidisciplinary skills.
Increased training for existing and new staff. The FHWA will continue its effort to develop a multidisciplinary workforce. The FHWA delivered training to support implementation of a more comprehensive financial management program, cost estimating, risk management, project management and process review. In the areas of financial management, the FHWA is committed to narrowing the skill gaps identified in Department-wide assessments. We have identified areas of improvement, developed a strategy for closing the gaps and rewritten position descriptions to better identify financial management job duties and responsibilities. The FHWA is also addressing skill gaps by changing the mix of new hires to a multidisciplinary focus that includes positions other than civil engineering. Finally, the FHWA assessed and evaluated positions in the 810 (Engineering) job series to determine whether the function reflects the appropriate classification series and made recommendations for appropriate classification.
Implementing specific stewardship and oversight initiatives. The FHWA’s stewardship and oversight role was strengthened in SAFETEA-LU legislation passed in 2005. The legislation requires the FHWA conduct an annual review of the State department of transportation financial management systems and project delivery systems, develop minimum standards for estimating project costs and periodically evaluate State practices in these areas. It also places requirements for a Project Management Plan and Financial Plan on all Major projects of $500 million or more, and requires each State to provide a value engineering analysis on each Federal aid project with a total cost of $25 million or more, a bridge project of $20 million or more, and other designated projects. In January 2007, the FHWA issued final Major Project Guidance to expand the FHWA oversight role and optimize its positive influence in the management of major projects.
The responsibility for FHWA stewardship/oversight includes monitoring and tracking the cost and schedule elements of a project, as defined in the environmental process, from the design phase to construction completion. Initial Finance Plans are required for all Major Projects prior to beginning construction. Through July 2007, the FHWA was monitoring financial plans or their annual updates for 20 major projects. Of these Major projects that have reached the Financial Plan stage, 17 of 20, or 85 percent, were currently on or within allowable budget variances (current cost estimates have not yet been received for 2 new projects). In addition, 16 of 20 projects, or 80 percent, were within the forecasted schedule completion variance. The FHWA is now measuring the performance of major projects in meeting the budget and schedule forecasts by comparing progress on an annual basis. The change on an annual basis gives a more accurate measure of current performance compared to the initial measurement based on a 10 percent variance from the initial cost estimate and scheduled completion date. The current goal is for no more than 2 percent annual growth for budget and schedule measures in 90 percent of all active major projects that have reached the Financial Plan stage.
Free up idle funds for other infrastructure expansion and preservation projects.
The FHWA and State departments of transportation will continue efforts that led to the elimination of a grants management material weakness from the agency’s FY 2006 financial statement audit report. This includes senior leadership involvement at the State and Federal levels in monitoring inactive obligations. The FIRE program has provided a framework for consistently carrying out oversight and stewardship responsibilities, including documenting and reporting the results of these efforts in a standard format.
The performance data shown here demonstrates the results of the sustained focus on inactive funds management:
Continually reduced obligations in inactive projects, as a percent of total Federal-aid apportionments, FY 2006-FY 2007. [Note: For all large projects greater than $500,000 and inactive for 1 year or more.]
| Fiscal Year | FY 2006 | FY 2007 |
|---|---|---|
| Target | 5.0% | 5.0% |
| Actual | 7.7% | 7.1% |
Continually reduced obligations in inactive projects, as a percent of all active or open Federal-aid projects, FY 2006-FY 2007. [Note: For all large projects greater than $500,000 and inactive for 1 year or more.]
| Fiscal Year | FY 2006 | FY 2007 |
|---|---|---|
| Target | 1.0% | 1.0% |
| Actual | 1.0% | 1.0% |
Develop a process to effectively detect improper payments and stop wasteful spending by grantees.
The FHWA integrated improper payments testing and assessment methodology into its normal grant testing procedures. After two successful years of testing, the agency’s improper payment rate has remained constant at 0.2 percent of total program payments, well below the OMB threshold for significant improper payments at 2.5 percent.
Clean up unreliable data and generate reliable financial statements.
In FY 2008 the FHWA will consolidate and incorporate all Federal Managers Financial Integrity Act (FMFIA) programs within the agency under a single, FHWA-wide FIRE program, covering the Federal-aid and Federal Land Divisions and all other FHWA organizations.
The FHWA continued the improved financial statement preparation processes and procedures that were implemented late last year. Financial and budget execution business processes were further enhanced to minimize data entry errors and streamline financial operations. Data from legacy financial systems were reconciled. The financial management material weakness reported in the FY 2005 audit was resolved in FY 2006.
Make certain Statewide Transportation Improvement Programs (STIP) do not make misleading promises of what can realistically be accomplished.
In the past five years, fiscal constraint issues have arisen in at least 10 states and several metropolitan areas. Some have raised concerns about whether the FHWA and FTA have been applying fiscal constraint adequately and consistently across the country. In response to these recent issues and the need for consistency, the FHWA and FTA issued interim guidance, references, and worksheets that are intended to be a tool to assist FHWA and FTA field offices in fulfilling current law requirements for fiscal constraint. This guidance was developed in close consultation with over 20 FHWA/FTA field staff to ensure it was informed by the knowledge and experience of those who are most familiar with day-to-day planning and programming of states and MPOs.
Redouble efforts to develop a multidisciplinary workforce.
The FHWA continued a program to transition FHWA employees from the traditional role of reviewing and approving highway engineering project level actions to a new role of ensuring the effectiveness of State department of transportation processes in areas that are major project drivers. The majority of the positions filled in the FHWA Professional Development Program were by individuals from disciplines other than civil engineering, which is the traditional background. A series of multidisciplinary workshops were held for headquarters and field supervisors and managers. The Agency implemented training that focused on the development of project oversight and financial management, delivered over 30 sessions of a workshop that focuses on process review procedures, and delivered web conference seminars in the financial management area.
2. Enhancing Fraud Prevention Capabilities and Taking Aggressive Action Against Those Who Perpetrate Fraud, Including Motor Fuel Tax Evasion.
With the passage of recent legislation, including SAFETEA-LU, the FHWA recognizes the need to develop and implement a consistent approach to stewardship and oversight throughout the FHWA in support of its evolving oversight mission. In May, the FHWA issued the Stewardship/Oversight Agreement Guidance to define the minimum requirements and to provide a consistent approach to developing future stewardship agreements between the FHWA and the State. A policy memorandum was issued to require each FHWA office to use a risk/benefit analysis to identify appropriate oversight initiatives and allocate personnel resources effectively based on risks and benefits. The FHWA is implementing a two-stage structured risk management initiative. An Interim User Guide to the Risk Management Framework was released to guide offices in conducting the required risk/benefit analyses.
In its relationships with State and local highway agencies, the FHWA continues to stress the use of fraud indicators and reporting procedures and is working with the transportation and highway industry to include the OIG as a resource for reporting allegations of fraud, waste, and abuse on Federal-aid infrastructure construction projects.
The FHWA and the Internal Revenue Service (IRS) continue to work together to address the issue of evasion of motor fuel and other highway use taxes. An enforcement strategy, signed in January by the FHWA Administrator and the IRS Commissioner, focuses on enhancing enforcement efforts through developing and modernizing systems to improve service and enforcement; sharing best practices, lessons learned, and expertise with agencies involved with motor fuel and highway use tax enforcement; conducting outreach and education for stakeholders; and continuing research into finding solutions to the problem of evasion. Additionally, a Memorandum of Understanding identifying program-related responsibilities, accountability requirements, and funding levels, was signed in January 2006.
Performance Improvement
Anticipated FY 2008 Accomplishments
The FHWA will continue efforts to integrate budget and performance by linking strategic goals and objectives.
The FHWA undertakes annual performance-based planning to continually align its goals and objectives with those in the DOT Strategic Plan. The FHWA includes representatives from the Federal Transit Administration and the National Highway Traffic Safety Administration in these planning discussions. Responsibility for achieving some of the DOT performance goals, such as reducing the highway fatality rate, is shared by the FHWA with other DOT modal administrations. In addition, the FHWA is collaborating with other Federal agencies to achieve shared goals and objectives such as improving park roads and bridge condition, freight movement at border crossings, international trade and commerce, environmental streamlining, and transportation security.
The FHWA is in the process of refining the methodology developed for attributing costs to DOT strategic objectives, and to more than one performance goal. Efforts to this end were delayed substantially due to the FY 2007 continuing resolution and the subsequent lack of funding available to FHWA. These refinements will provide the basis for a Managerial Cost Accounting (MCA) model. In FY 2008, the FHWA will continue implementation of the Labor Distribution Reporting (LDR) module in the DOT Consolidated Automated System for Time and Labor Entry (CASTLE).
FY 2009 Performance Budget Request
The FHWA will continue to align program strategies and activities to support the DOT Strategic Objectives, as outlined in the revised DOT Strategic Plan for FY 2006-FY 2011, and continue to develop an annual Strategic Implementation Plan and Accountability Contract to link organizational and managerial performance. To advance the implementation of managerial cost accounting and activity-based budgeting, the current MCA model will be developed to fully map budget accounts and program activities to strategic objectives and performance goals. The FHWA will continue to improve the MCA and unit performance reports.
Limitation on Administrative Expenses
FTE and administrative resources associated with this strategic initiative are as follows:
29 FTE and $4.9 million
Responsible Officials:
Mr. A. Thomas Park, Office of the Chief Financial Officer
Ms. Patricia Prosperi, Associate Administrator for Administration
Ms. Mary Phillips, Associate Administrator for Policy and Governmental Affairs
