MANAGEMENT DISCUSSION AND ANALYSIS
Mission, Organization, and Structure
The mission of the Department of Transportation (DOT), a cabinet-level executive department of the United States government, is to develop and coordinate policies that will provide an efficient and economical national transportation system, with due regard for need, the environment, and national defense. It is the primary agency in the Federal government with the responsibility for shaping and administering policies and programs to protect and enhance the safety, adequacy, and efficiency of the transportation system and services. The Department consists of the Office of the Secretary and nine individual Operating Administrations (OA). The Department's structure is illustrated below.
Four[1] of the nine OAs represent the principle components of the HTF reporting entity. They are (1) Federal Highway Administration (FHWA), (2) Federal Transit Administration (FTA), (3) Federal Motor Carrier Safety Administration (FMCSA), and (4) National Highway Traffic Safety Administration (NHTSA). The Highway Revenue Act of 1956 established the HTF to ensure a dependable source of financing for the National System of Interstate and Defense Highways. Initially created to support the construction of the Interstate Highway system; the HTF now funds a wide range of transportation-related projects in support of the country's changing needs. Today, the HTF contributes to the future by providing funding for the improvement of the Nation's roads. Its funds help improve transit systems and the urban traveler's mobility. The HTF funds are also used to reduce deaths and property loss from highway and other surface transportation accidents.
The Safe, Accountable, Flexible, and Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), signed by the President on August 10, 2005, is the most recent authorization act applicable to the HTF. SAFETEA-LU provides $286.4 billion in funding and contains a host of provisions designed to improve and maintain the transportation infrastructure in the United States, specifically the highways and interstate road systems. Each fiscal year (FY), Congress authorizes transfers from the HTF to fund the OAs and/or certain agency programs within the Department of Transportation (Department). The mission of the four OAs is described below.
The HTF is funded from excise taxes on motor fuels, tires, truck-related items, and use taxes paid by commercial users. The Department of the Treasury is responsible for depositing excise and use taxes into the HTF. The funds held by Treasury are considered the HTF Corpus and any funds not needed for expenditures are held in non-interest bearing Treasury non-marketable securities. When funds are transferred from Treasury to an HTF agency's appropriation, they are still considered part of the HTF, but are no longer a part of the Corpus. The Corpus is made up of two accounts, the Highway Account (HA) and the Mass Transit Account (MTA), which were established by the Highway Revenue Act of 1982. The HA is used to provide funding for FHWA, FMCSA, and NHTSA. The MTA is used to fund FTA. The following diagram illustrates the HTF account structure.
Prior to FY 2006, all FTA accounts were funded from two sources. FTA received approximately 80 percent of its funds from the Mass Transit Account and 20 percent from direct appropriation from Treasury. Direct appropriations to FTA from Treasury were obligated and outlayed out of the FTA's general fund accounts, which are not included in the HTF financial statements. In FY 2006, as a result of SAFETEA-LU, a larger trust fund account was created containing all of FTA's formula and bus grant-related programs. This trust fund is now 100 percent funded by the HTF, therefore included in the HTF financial statements.
Primarily, the individual OAs manage the HTF activities. The Department's Office of Budget and Program Performance provides budget oversight.
The HTF services all 50 states and 4 territories and the District of Columbia. Each OA receiving HTF funding provides financial support through grants to states and other municipal governments according to formulas established by law and/or based on competition.
President's Management Agenda
In FY 2002, President George W. Bush identified his Administration's strategy for improving the management and performance of the Federal government. The President's Management Agenda (PMA) included five core government-wide goals. In additional to the five core requirements, two additional initiatives were added. They are: (1) Real Property Asset Management and (2) Eliminating Improper Payments. The Department uses strategic and performance planning to ensure the organization achieves its objectives and goals and is committed to embodying the President's goals of a citizen-centered, results based, and market-oriented government.
The Department's PMA goals for FY 2006 included:
Strategic Management of Human Capital
This goal focuses on long-term management of
the Federal workforce and fostering a citizen-centered, results-based
government that is organized to be agile, lean, and capable of making timely
decisions.
Competitive Sourcing
This goal uses competitive sourcing as a key
tool for achieving an efficient and effective competition between public and
private sources to deliver Federal agencies' commercial work, thereby providing
the highest quality and the most economical service to Americans.
Financial Performance
Improved financial performance is key to
ensuring that agencies have accurate and reliable data for budget and policy
decisions. Ensuring accurate and timely payments and improving accountability
to the American people through audited financial statements are other cornerstones
of this goal.
Expanded Electronic Government (E-Gov)
Expanding the use of the Internet to empower
citizens will ensure that Federal programs are delivered at lower cost and can
meet the high public demand for information and services. This will also make
the Federal government more transparent and accountable.
Budget and Performance Integration
This goal focuses on regular, systematic
measurement and accountability for program performance compared to
pre-established goals as the means for Federal agencies to focus on results
rather than process.
The details of the Department's accomplishments and goals, as they relate to the PMA are discussed in this section. This section also specifically addresses Real Property Asset Management and Eliminating Improper Payment, two PMA initiatives the Department is directly responsible for accomplishing.
PMA Goal: Strategic Management of Human Capital
The entire Federal government faces an impending wave of highly competent Federal employee retirements, which will create a large-scale strategic human resource planning issue. The Department must plan now to maintain required levels of experience, competencies, and knowledge in its workforce. Succession planning, as well as managing and maintaining adequate institutional knowledge, will be crucial for the Department's ability to carry out its functions during this period of high workforce turnover.
The Human Capital Plan was developed to guide HTF agencies' efforts on strategic alignment of the workforce, workforce planning and deployment, leadership, and knowledge management. The Plan also contains initiatives to help the Department recruit, develop, and retain the diverse talent needed to perform its mission and achieve strategic objectives now and in the future. The following chart outlines some examples of HTF related actions initiated to support the Department's Human Capital Plan as applicable.
1) Strategic Management of Human Capital |
|
|---|---|
| Agency | FY 2006 Accomplishments and/or FY 2007 Planned Actions |
| FHWA | Established internal Council to identify areas of improvement:
|
| FTA |
|
PMA Goal: Competitive Sourcing
Competitive Sourcing is the act of exposing Government activities to competition with the private sector. The process of competition provides an imperative for the public sector to focus on continuous improvement and removing roadblocks to better performance and greater efficiency. The objective is to focus on the most effective and efficient way of accomplishing the agency's mission regardless of whether it is done by civil servants or contractors. The Department's efforts to determine whether current functions can be more efficiently performed by the private sector guides each OA's direction under this PMA initiative. Each HTF OA participated in the Department's Federal Activities Inventory Reform (FAIR) Act assessment, which requires each Federal agency to report inventories of commercial jobs performed by Federal employee by June 30th of each year. The following chart highlights competitive sourcing accomplishments.
| 2) Competitive Sourcing | |
|---|---|
| Agency | FY 2006 Accomplishments and/or FY 2007 Planned Actions |
| FHWA |
|
| FTA |
|
PMA Goal: Financial and Procurement Performance
The President's vision for improving financial performance is that Federal managers have accurate and timely information to manage costs. To meet this vision, the improved financial performance initiative strives to 1) reduce erroneous payments for each program, and 2) ensure Federal financial systems produce accurate and timely information to support operating, budget, and policy decisions. With this initiative, the Federal government looks to provide additional program services while reducing program costs and to provide improved accountability to the American people through audited financial reports.
The Office of the Inspector General (IG) has stated that the Department's ability to achieve its strategic goals of increased mobility, improved safety, and sustained economic growth undoubtedly will be challenged in the face of an unprecedented Federal deficit of about $374 billion. Aggressive oversight is needed to ensure that the over $37 billion annual Federal investment in highway and transit projects is well managed and protected from fraud. Improvements to project oversight and efficiency can have major results. The Department must also ensure successful collection of all tax dollars due to the HTF.
For FY 2006, the HTF received an unqualified opinion on its financial statements. Notwithstanding this success, the audit report identified one material weaknesses and three reportable conditions that the HTF OAs must address for future financial statement audits. During FY 2006, the HTF OAs took significant corrective actions to improve financial management and accountability. The chart below provides financial performance highlights for FY 2006.
| 3) Financial Performance | |
|---|---|
| Agency | FY 2006 Accomplishments and/or FY 2007 Planned Actions |
| FHWA | Ensured major project cost estimates and schedule milestones are credible by:
|
PMA Goal: Expanded E-Government
The E-Government Act of 2002 was implemented to increase efficiency and effectiveness within the Federal government. The Federal government can secure better services at lower cost through E-Gov and can meet high public demand for E-Gov services. This Administration's goal is to champion citizen-centered E-Gov, which will result in a major improvement in the Federal government's value to its citizens. E-Gov accomplishment can be found in the chart below.
| 4) Expanded E-Gov | |
|---|---|
| Agency | FY 2006 Accomplishments and/or FY 2007 Planned Actions |
| FHWA |
|
| FTA |
|
| NHTSA |
|
| FMCSA |
|
PMA Goal: Budget and Performance Integration
This initiative follows through on the President's commitment to build a results-oriented government that funds effective programs and reforms or terminates ineffective programs. Through this integration, budget and performance rely on one another. Agencies are required to submit specific performance measures with budget requests. The chart below provides some of FY 2006 accomplishments in this area.
| 5) Budget and Performance Integration | |
|---|---|
| Agency | FY 2006 Accomplishments and/or FY 2007 Planned Actions |
| FHWA |
|
| FMCSA |
|
| FTA |
|
| NHTSA |
|
PMA Initiative: Federal Real Property Asset Management
It is the policy of the United States to promote the efficient and economical use of America's real property assets and to assure management accountability for implementing Federal real property management reforms. Based on this policy, executive branch departments and agencies shall recognize the importance of real property resources through increased management attention, the establishment of clear goals and objectives, improved policies and levels of accountability, and other appropriate action.
FY 2006 Accomplishments: As an active participant in the Department's Real Property Planning Council, FHWA contributed to the development of a comprehensive three-year rolling timeline to ensure that a Department-wide Asset Management Plan is in-place to monitor progress towards achievement of Federal Real Property Council standards and objectives. The Agency's real property inventory data was validated and incorporated into an automated reporting module that will provide a reliable database for management decision-making. FHWA's owned property portfolio is being integrated into, and aligned with, our strategic planning and budget development processes. Efforts continue toward establishment of a set of credible measures for evaluating the effectiveness and efficiency of Agency performance in managing assigned real property assets.
PMA Initiative: Eliminating Improper Payments
The Improper Payments Information Act of 2002 (IPIA) contains requirements in the areas of improper payment identification and reporting. An improper payment is defined to mean any payment that should not have been made or that was made in an incorrect amount—including overpayments and underpayments—under statutory, contractual, administrative, or other legally applicable requirements. It includes any payment to an ineligible recipient, any payment for an ineligible service, any duplicate payment, payment for services not received, and any payment that does not account for credit for applicable discounts. The FIRE program was revised to include a review of Federal-aid billing transactions that complies with IPIA.
FHWA implemented the improper payments testing and assessment methodology in the normal grant testing procedures. FHWA continued work to derive a nationwide improper payment rate for FY 2006.
Systems and Controls
The Department recognizes that sustaining progress and momentum in the area of management control is essential to improving accountability among managers. Management control, while synonymous with internal control, assigns preventive and detective controls to integral components of an entity, providing management with reasonable assurances of achieving objectives. In FY 2005, two material weaknesses were identified in the area of management controls, which did not comply with sections 2 and 4 of the FMFIA. The Department has worked diligently to resolve these issues. One material weakness remains in FY 2006 and will continue to be addressed in during FY 2007.
The Department's Financial Process
The Department's financial processes are the foundation of its financial management and accounting operations. The effectiveness of these processes is vital to the production of timely, accurate, and reliable financial data. Each OA has worked diligently to improve upon its processes. Examples performed by FHWA are described below.
FHWA
During FY 2006, FHWA continued to work on the improvement of its financial process to support financial management and facilitate the timely preparation of accurate financial statements. FHWA was aggressive in implementing effective policies and procedures to address areas such as journal entries, suspense account balances, recognition of allocation account activity, and Intra-governmental balances. These policies and procedures were implemented after major efforts to reconcile the appropriate activity. In FY 2006, transaction codes were created for the HTF Corpus drawdown, and for Federal Land payroll, significantly reducing the number and cumulative value of journal entries. FHWA also produced and distributed to all child allocation agencies, a comprehensive parent-child allocation account manual, "Accounting Handbook for Recipient (Child) Accounts." The handbook provides an overview of trust fund accounting; how child allocation accounts operate with the parent account; guidance on policies and procedures, roles and responsibilities of the parent and child agencies; and specific accounting instructions on how to record common transactions.
FHWA applied aggressive measures to resolve outstanding suspense account transactions over 30 days old. Similar aggressive measures were taken to improve intergovernmental activity recognition
Grants Financial Management Oversight
Federal grants are awarded as a form of financial assistance from a Federal agency to a recipient to carry out a public purpose of support or stimulation authorized by a law of the United States. A grant is not used to acquire property or services for the Federal government's direct benefit. Twenty-six Federal agencies annually offer over 1,000 grant programs. OMB leads the development of government-wide policy to assure that grants are managed properly and that Federal dollars are spent in accordance with applicable laws and regulations.
FHWA
FHWA developed a new program to address the weaknesses identified in the financial management oversight. During the second half of FY 2005, FHWA management released the FIRE program. The FIRE requires each division office to perform a risk assessment, or similar prioritization process, to identify appropriate oversight activities. The initial FIRE annual review plans from Division offices were incorporated with the unit performance plan. Throughout FY 2006, FHWA has reinforced the procedures by conducting training during the CFO Web conferences. The annual review plan and submission of section 2/4 certifications for FY 2006 Division offices are complete.
In addition to addressing internal controls, FHWA assembled a team to resolve grant-related unreconciled differences between the subsidiary ledgers and the general ledger. This is an ongoing effort with an anticipated completion date in FY 2007.
The Department's Information Systems Security
The purpose of information system security is to support the goals of the Department by assuring the availability, integrity and confidentiality of information. A major part of this purpose involves investigating computing system intrusions and increasing information security awareness. Sustaining information systems security consists of analyzing financial systems used to collect, process, maintain, transmit, and report pertinent financial and accounting information. The Department recognizes that the protection of financial data is key in establishing and maintaining accurate and reliable financial management information.
FHWA
During FY 2006, FHWA continued to work on the reduction of security weaknesses and reported its progress through the quarterly Plan of Action and Milestones Departmental update process. FHWA continued to operate its vulnerability-scanning program, which requires that all remediation of vulnerabilities be complete before new servers are attached to the network. FHWA also conducted yearly security reviews on all its systems and performed yearly updates on all Security Plans, which included a review of the level of risk. FHWA assessed the sensitivity of its systems using the Standard for Security Categorization of Federal Information and Information Systems. FHWA continued its security patching efforts and performs routine patch scans to ensure that patches are applied.
FMCSA
Consistent with OST's guidance, FMCSA developed IT security plans for all of its 19 systems and completed certification and accreditation for 100 percent of its systems.
FTA
The ECHO database processor was migrated to an Oracle environment on an internet accessible platform in June 2006.
FTA completed Certification and Accreditation of both its ECHO and Delphi On-Line Transaction System mission critical systems in conjunction with the Department's IT consolidation initiative and relocation of all system applications to the new DOT building. This accomplishment ensures that FTA is in compliance with reporting to OMB under the PMA requirements.
NHTSA
NHTSA met the requirements of the Federal Information Security Management Act by accomplishing 100 percent Certification and Accreditation of its IT systems and a reduction of high-risk vulnerabilities to zero in a timely fashion. NHTSA also participated in the development of the Department's Enterprise "Target" architecture and modernization blueprint.
| Key Legislative and Administrative Requirements |
|---|
|
Legal Compliance
The DOT is required to comply with Federal management statutes passed by Congress, including regulations, various requirements and standards. Within the financial management arena, Congress has passed a number of legislative mandates intended to establish accountability and report ability within the Federal government. In the FY 2005 audit of the HTF financial statements, instances of non-compliance with legislative requirements were identified. The specific legislation is identified and the OA efforts to address the compliance issues are discussed in this section.
OMB Circular A-123, Management's Responsibility for Internal Controls
A-123 is intended to strengthen the requirements for conducting management's assessment of internal control over financial reporting. It reinforces previously released legislation with requirements that clearly provide for accountability, responsibility, and visibility.
In FY 2006 the Department implemented an improved Internal Control Program, which includes the requirements OMB Circular A-123 (Appendix A). The plan reflects the required changes in internal controls for financial reporting. The A-123 Implementation Plan identified twelve key business processes. The HTF funds documented and tested six during FY 2006. The remaining six will be tested in FY2007.
Federal Financial Management Improvement Act (FFMIA)
The FFMIA establishes guidance for uniform accounting standards throughout the Federal government. It mandates that financial systems comply with Federal financial management requirements, Federal accounting standards, and the USSGL at the transaction level.
The Department's Consolidated Financial Statements for the previous 5 years (FY 2001-FY 2005) have received unqualified audit opinions from the Department's Office of the Inspector General (OIG). The OIG has further concluded that the Department was not in full compliance with the FFMIA because material weaknesses existed for the Department's financial, accounting, and information security programs. FFMIA builds on the foundation laid by the Chief Financial Officers (CFO) Act of 1990 by emphasizing the need for agencies to have financial management systems that can generate timely, accurate, and useful information with which to make informed decisions and to ensure accountability on an ongoing basis. Full compliance with FFMIA is contingent on the success of implementing Delphi and resolving outstanding implementation issues throughout the Department. Identified below are the actions each OA has taken to correct the material weaknesses:
FHWA
FHWA continues to refine and develop accounting policies and procedures on recording and reconciliation of financial transactions. FHWA also established reconciliation processes to ensure data in the grant system, agrees with data in the financial management system. FHWA began work to develop procedures to identify and reconcile all intra- and interagency transactions to include specific coding to identify these transactions in the accounting system.
NHTSA
NHTSA has standardized and implemented new accounting policies and procedures for recording financial transactions. These policies include regularly scheduled reconciliation meetings of significant accounts including the Grants Tracking System. NHTSA has participated in DOT intra-OA, reimbursable agreement reconciliation meetings and successfully completed a reconciliation of these agreements. NHTSA has standardized reimbursable agreement policies and procedures, including regular reconciliations.
Anti-Deficiency Act
The Anti-Deficiency Act prohibits the obligation or expenditure of Federal funds in excess of the amounts appropriated by Congress or in excess of amounts permitted by regulations. It also forbids the obligation of any funds in advance of the official appropriation of funds and requires the head of each government agency to establish an administrative control system to ensure agency compliance. DOT understands the importance of the Anti-Deficiency Act and has taken the actions outlined below to establish a control system and help ensure compliance across the department.
FHWA
In the previous year audit reports an anti-deficiency matter was identified whereby DOT improperly expended Treasury miscellaneous receipts in the amount of $49 million. DOT reported this violation to OMB and Congress in FY 2003. By the end of FY 2003, DOT had returned approximately $44 million to the Treasury. The remaining $5 million is largely attributed to FHWA's Federal-Aid Highway activities. FHWA returned the $5 million to the Treasury as of September 30, 2006.
Government Performance and Results Act (GPRA)
GPRA provides guidance for improving operations, programs, and management. It requires the submission of a strategic plan for programs and activities, including performance goals and objectives to OMB. The FY 2005 audit revealed inadequate controls to ensure the proper use of HTF funds after distribution to grantees. During FY 2006 the Department implemented the following actions to address this weakness and improve polices and procedures in this area.
FHWA
FHWA played a major role in the development of the DOT FY 2006-2011 Strategic Plan, which is required by OMB Circular A-11. The Strategic Plan provides a framework of strategic goals and outcomes that each OA adopts in developing an annual performance budget and implementation plan that includes key performance objectives, measures, and targets. FHWA is responsible for annual performance-based planning since FY 1999 and submitted its first performance budget in FY 2004. FHWA's annual performance objectives are incorporated into the Administrator's annual Accountability Contract with the Secretary of Transportation.
FHWA is currently producing cost by Strategic Goal data from the Managerial Cost Accounting (MCA) System. FHWA will begin to produce reports in the first quarter 2007 indicating usage and efficiency. This will show the link between the costs of business operations to overall strategic outcomes. In addition, FHWA will meet its performance objectives by:
- Providing the ability to use cost information in planning and budgeting
- Developing the ability to understand and manage costs
- Improving business process performance and the ability to manage strategic cost
The MCA system tools provided will help meet Congressional and OMB requirements (Standard of Federal Financial Accounting Standard (SFFAS) No. 4 and 30, OMB Circulars A-11, A-122 or A-110, Presidents Management Agenda (PMA)) for budget and performance integration, and impact management decision-making.
FTA
In response to the PMA initiative for budget and performance integration and other Federal financial requirements, FTA began implementing MCA. FTA implemented a key component of its MCA effort on February 6, 2006, with agency-wide Labor Distribution Reporting (LDR). FTA undertook an extensive four-week training approach providing multiple training venues to ensure that each of the approximately 320 headquarters and 180 Regional employees had the opportunity to participate via hands-on, teleconference training and/or self-paced training—downloaded to their desktops or over the Web with EyeCron. Within the first two weeks, over 350 employees (or 70%) had been trained in Labor Distribution Reporting within CASTLE. Up to 98% of FTA employees are reporting LDR every pay period. Obtaining labor-hours by project tasks will enable FTA management to quantify the amount of resources committed to projects and programs and determine the relative utilization to help assign workload, make staffing decisions and shift program responsibilities. Modules were completed to align the labor collection with the program funds and performance goals to achieve full implementation of MCA.
FTA also completed an assessment of its Formula Grant program using the OMB PART. FTA received a PART score of 92 (out of 100), completed as part of the FY 2006 Budget. The results of the PART demonstrate that the Formula Grant program is effective in increasing ridership and improving the condition of transit assets and accessibility to public transportation for physically challenged individuals.
FMCSA
FMCSA enhanced its MCA plan, which was developed the previous year for Agency-wide implementation. The plan is linked to the performance-based budget and includes a method to measure cost by performance, measurable milestones, and firm target dates. FMCSA established a framework by which costs could be collected at a detailed level within agency strategic and performance goals. FMCSA is now in the requirements analysis phase with a goal to begin implementation during FY 2007.
NHTSA
NHTSA is in the requirements analysis phase of costing information need, developing an implementation strategy and identifying the necessary tools to implement a system in FY 2007.
Performance Goals, Objectives, and Results
The Department prepares a strategic five-year plan and an annual performance budget where it establishes its strategic objectives, outcomes, and goals. Within the HTF, the performance budget of each OA supports the Department's performance measures. Each fiscal year, the OAs establish individual performance goals and objectives, annual measures and targets, and resources required to accomplish the goals. During the year, the OAs gauge their progress toward achieving the Department's goals and report on performance in the Department's Performance and Accountability Report (PAR).
The Department had six strategic goals in FY 2006 to provide direction to each of its OAs:
- Safety - Enhance the public health and safety by working toward the elimination of transportation-related deaths and injuries.
- Mobility - Advance accessible, efficient inter-OA transportation for the movement of people and goods.
- Global Connectivity - Facilitate a more efficient domestic and global transportation system that enables economic growth and development.
- Environmental Stewardship - Promote transportation solutions that enhance communities and protect the natural and built environment
- Security - Balance homeland and national security transportation requirements with the mobility needs of the Nation for personal travel and commerce.
- Organizational Excellence - Advance the Department's ability to manage for results and achieve the goals of the PMA.
This section documents the performance highlights of strides made by the Operating Administrations funded through the HTF towards attaining its goals. They are addressed under the FY 2006 strategic goals. Only FY 2006 data is discussed for FTA's[2] performance. A full assessment of the completeness and reliability of HTF performance data and the detailed information on the source, scope, and limitations for the performance data in this report is provided at http://www.dot.gov/perfacc2006/perfmeascr.htm.
FY 2006 results are estimated or projected, as the FY 2006 data is not available to date. The results were derived using FY 2005 data. Depending on the measure, the actual data will be available in twelve to eighteen months.
SAFETY
Enhance the public health and safety by working toward the elimination of transportation-related deaths and injuries.
Strategic Outcomes
- Reduce transportation-related deaths.
- Reduce transportation-related injuries.
Departmental Performance Goals
- Reduce highway fatalities per 100 million miles traveled to no more than 1.0 in 2008, from 1.69 in 1996.
- Reduce large truck-related fatalities per 100 million truck vehicle miles traveled (VMT) to no more than 1.65 in 2008, from 2.81 in 1996.
The Department's Safety Strategic Outcomes were divided into two major groups, Surface Transportation Safety and Aviation Safety. There are six strategies within the surface transportation safety group. The strategies applicable to the HTF are Improve Motor Vehicle and Driver Safety, Safer and Smarter Highway Infrastructure, Improve Transit Safety, and Improve Motor Carrier Safety.
FHWA
Highway Safety: Highway crashes account for 95 percent of all transportation-related fatalities and 99 percent of transportation injuries, and is the leading cause of death for Americans age 4 through 34. The large number of crashes has placed a considerable burden on the nation's health care system and has had significant economic effects. The cost to the economy of all motor vehicle crashes is approximately $230.6 billion, or 2.3 percent of the U.S. gross domestic product. Highway fatalities results are reflected in the chart below.
2006 Results: In 2005, there was a slight rise to 43,433 traffic deaths and the fatality rate was 1.47. Early projections for 2006 are for another increase to 43,661 fatalities, but with a projected rate of 1.46 per hundred million VMT. Based on the projection, the target is not expected to be met. The Fatality Analysis Reporting System (FARS) was used to obtain this data.
The FHWA continued to concentrate efforts on reducing the number of fatalities in three types of crashes: roadway departures, crashes at or near intersections, and collisions involving pedestrians. In addition, the FHWA and its partners promoted a comprehensive approach to highway safety planning. The approach helps States improve utilization of limited resources to improve roadway safety. Twenty states have developed Strategic Highway Safety Plans (SHSP) and an additional 11 states are actively developing plans. Virtually all states are in the process of developing a SHSP in order to have an approved plan by October 1, 2007.
2007 Performance Forecast: It is unlikely that the target will be met. FHWA is reviewing trends and identifying the program factors that contribute to reductions in the average fatality rate, as well as reviewing highway safety practices observed in other countries to identify states that appear to be on track to achieve substantial reduction in fatalities over the next few years.
NHTSA
Safety Belt Use:Safety belt use in the United States reached a historic high of 82 percent in 2005 (latest data available). The Secretary and Administrator launched the annual Click It or Ticket (CIOT) campaign in May 2006. The campaign coincided with the Memorial Day weekend, one of the most heavily traveled holiday weekends. This year's CIOT Campaign was accompanied in 18 states by an additional campaign, Buckle up in Your Truck, to encourage improved safety belt usage in pickups.
<FY 2006 Results: NHTSA met the goal for use of safety belts in FY 2005 (most recent data available). In the past five years, safety belt use has increased steadily from 71 percent in 2000 to 82 percent in 2005 (latest data available). In 2005, 55 percent of those killed in passenger-vehicles were not wearing safety belts. The alcohol measure for FY 2006 was revised to reflect that 85 percent of the alcohol-related fatalities involved drivers with a blood alcohol content above .08. FARS was used to obtain this data.Although data is not yet available for child restraint use, the number of children, youth and young driver fatalities decreased in 2005. The number of fatalities declined for children of all ages, but particularly for youths aged 8 to 15. The number of crashes involving young drivers (age 16 to 20) decreased by 6.3% and the number of young drivers killed also decreased by 4.6%.
FTA
Transit Safety: Public transit provides a flexible alternative to automobile and highway travel, while offering a higher degree of safety. Currently, transit is one of the safest OAs of travel per passenger miles traveled. According to the National Safety Council, passengers on the nation's bus, rail, or commuter rail systems are 40 times less likely to be involved in a fatal accident, and 10 times less likely to be involved in an accident resulting in injury. The challenge is to further reduce the rate of fatalities and injuries even as the total number of people using transit increases. Transit fatalities results are found in the chart below.
FY 2006 Results: FTA met the target for transit safety in FY 2006. This result is based on six months of data from the National Transit Database and four months of Commuter Rail data from the Federal Rail Administration Rail Accident Incident Reporting System (RAIRS). Strong growth in transit ridership and the continued expansion of transit service significantly increased the number of passenger miles in 2006 over 2005. The challenge is to continue the decrease in fatalities, even as passenger miles traveled increases. Final performance data will be available in March 2007 when 12 months of data will be available.
MOBILITY
Advance accessible, efficient, inter-OA transportation for the movement of people and goods.
Mobility, as much as any other factor, defines the United States as a Nation and is intertwined with the Nation's economic growth. It connects people with work, school, community services, markets, and other people. The U.S. transportation system carries over 4.6 trillion passenger-miles of travel and 3.9 trillion ton-miles of freight every year, generated by more than 276 million people and 6 million businesses.
Strategic Outcomes
- Improved infrastructure in all OAs
- Reduced congestion in all OAs
- Increased reliability throughout the system
- Increased access for all Americans
Departmental Performance Goals
- Improve and expand the NHS to increase system efficiency and improve safety.
- Limit annual growth of urban area travel time under congested conditions to 0.2 percent below the projected increases in congestion.
- Increase transit ridership to improve urban and rural mobility, and reduce traffic congestion by increasing the average number of transit boardings per transit market (top 150 transit agencies) by one percent.
- Increase public transit systems' accessibility to those with disabilities.
- Increase the number of employment sites made accessible by public transportation services.
The Department's Mobility and Economic Growth strategic outcomes are divided into seven strategies. The strategies applicable to the HTF are the Highway Infrastructure, Highway Congestion, Transit Ridership, and Transportation Accessibility strategies. Under each strategy is the administration responsible for achieving the Departmental performance goals. Mobility Performance Measures from FY 2004 through FY 2006 are provided in the chart below.
Mobility Performance Measures |
|||||
FY 2004 |
FY 2005 |
FY 2006 Target |
FY 2006 Preliminary |
FY 2006 Goal |
|
Percentage of travel on the NHS meeting pavement performance standards for "good" rated ride |
52.0 (r) |
51.8 (r) |
55..5 |
54.2* |
Not Met |
Percent of total annual urban-area travel occurring in congested conditions |
31.6 (r) |
31.8 |
33.7 |
32.1# |
Met |
(r) Revised; * Preliminary Estimate; # Projection by Bureau of Transportation Statistics (BTS)
Benchmark changed in for FY06
FHWA
Highway Congestion: Traffic congestion on our nation's highways now affects more trips, more hours of the day, and more of the transportation system than ever before. Congestion varies significantly day to day because demand and capacity are constantly changing at any given location. Travelers in 85 urban areas spent 3.76 billion hours stuck in traffic in 2002, an increase from 0.72 billion in 1982. Reducing congestion and delay will improve urban travelers' mobility and productivity and curb economic inefficiencies induced by congestion.
2006 Results: The estimated percentage of congested travel was 32.1 percent in FY 2006, a figure above the projected level of 33.5 percent and the target of 33.7 percent. The goal is met. The rate of growth in traffic congestion nationwide appears to be slowing based on the analyses of real-time traffic data that the FHWA has collected during 2004-2006 from travel information websites and transportation management centers in selected cities.
To ensure that Intelligent Transportation Systems (ITS) technologies work together smoothly and effectively, FHWA continued to develop the technical and institutional framework needed for deployment of the nation's ITS infrastructure. FHWA supported the completion of 270 Regional ITS Architectures. FHWA continued to support the deployment of 511, a national travel information telephone service that provides drivers with easier access to local travel conditions information. Through the American Association of State Highway and Transportation Officials (AASHTO)-led 511 coalitions, FHWA developed guidelines and provided technical assistance and information through various means including Web meetings and a National Conference. The 511-telephone service is now accessible to about 38 percent of the Nation's population.
Encouraging public and private partnerships is a key strategy in the Transportation Secretary's National Strategy to Reduce Congestion. The FHWA compiled a manual of innovative ways to use public-private partnerships on highway projects under current law, including SAFETEA-LU, in order to facilitate private industry entering into partnerships with public agencies to build roads. FHWA intensified its efforts to manage facility capacity through the implementation of pricing strategies. In response to new options provided in SAFETEA-LU, a Federal Register notice was issued to assist public authorities in identifying the most appropriate program to meet their requirements. A Tolling and Pricing Primer that provides a comprehensive perspective of the Agency's tolling and pricing initiatives, including Public-Private Partnerships and Innovative Financing programs, was developed for states and other public entities.
Emergency Relief Program: Authorized by Congress, the Emergency Relief Program repairs or reconstructs Federal-aid highways and roads damage results from natural disasters (such as floods, hurricanes, earthquakes etc.) or catastrophic failure from external causes. In addition to the $100 million permanent authorization for the Emergency Relief program, there were two FY 2006 supplemental General Fund appropriations totaling $3.5 billion ($2.75 billion for hurricane relief in P.L. 109-148 and $702 million to address the backlog of eligible ER projects in P.L. 109-234).
FY 2007 Performance Forecast: FHWA continued efforts to improve the pavement condition on the Nation's highways. The goal is to reach a target of 55.5 percent of vehicle miles traveled on NHS pavements with good ride quality (International Roughness Index (IRI) of 95 inches/mile or less) by 2008. In 2006, 54.2 percent of travel on the NHS occurred on facilities with a reported IRI of 95 inches per mile or less. Congestion levels nationwide should remain below the target of 32.5 percent in 2007 and targets are attainable. The results for the period between FY 2002 and 2005 indicate that the overall rate of growth in traffic congestion nationwide is slowing, and is less than projected increases of 0.7 percent annually.
Based on recent trends, it is unlikely that the pavement condition target will be met in FY 2007. The criteria for the pavement condition measure were revised in 2005 to encourage states to focus on increasing the good quality pavements, rather than simply minimizing the poor pavements. However, needed improvements in key states have the most influence on the nationwide results.
GLOBAL CONNECTIVITY
Facilitate a more efficient domestic and global transportation system that enables economic growth and development.
Strategic Outcomes
- Reduced barriers to trade in transportation goods and services
- More efficient movement of cargo throughout the supply chain
- Enhanced international competitiveness of the U.S. transport providers and manufacturers
- Harmonized and standardized regulatory and facilitation requirements
- More competitive, cost effective and efficient environment for passenger travel
- Expanded opportunities for all businesses, especially small, women-owned and disadvantaged businesses
Departmental Performance Goals
- Increase freight travel efficiency.
- Increase the Standardization and Harmonization of Transportation Standards and Practices.
- Improve the efficiency and cost-effectiveness of passenger travel.
- Increase opportunities for small-disadvantaged and women-owned businesses.
FHWA
2006 Results: The DOT and FHWA adopted the number of freight corridors with an annual decrease in their annual average buffer index rating as a measure of improvement in freight travel in significant corridors. As travel speeds become more consistent and reliable in the significant corridors, the number of corridors with declining annual buffer index ratings should increase.
The FHWA began measuring travel speeds along significant freight corridors in 2005. As illustrated below, travel speed measurements were used to calculate the average travel speed and average buffer index for five interstate corridors in which data were collected. The data collection was expanded to 25 freight corridors in 2006. The buffer index represents the extra time freight carriers should add to their average travel time in order to ensure on-time arrival, at least 95 percent of the time, for an end-to-end trip along the corridor. The extra time added accounts for any unexpected delay. The buffer index, expressed as a percentage, decreases as trip reliability improves.
Average Travel Speed & Buffer Index on Freight Significant Corridors FY 2006 |
|||
Corridor Name |
Description (Start and End Locations) |
Average Travel Speed (miles per hour) |
Average Buffer Index (%) |
I-5 |
San Diego, CA (Mexican Border) to Blaine, WA (Canadian Border) |
49.7 mph |
18.9% |
I-10 |
Santa Monica, CA to Jacksonville, FL |
55.9 mph |
20.8% |
I-45 |
Galveston, TX to Dallas , TX |
54.1 mph |
30.8% |
I-65 |
Mobile, AL to Gary, IN |
57.7 mph |
6.8% |
I-70 |
Cove Fort, UT to Baltimore, MD |
54.3 mph |
11.1% |
FY 2007 Performance Forecast: It is unlikely that the 2007 target, which is based on reducing the buffer index in 100 percent of the corridors monitored in 2005, will be met. However, FHWA expects to see improvement in a majority of the corridors under study.
Motor Fuel Tax Evasion: Motor fuel tax evasion has become a significant concern. The HTF experiences an estimated loss of $1 billion per year due to under-reporting or non-reporting of motor vehicle taxes. In accordance with the SAFETEA-LU and American Jobs Creation Act of 2004 legislation, FHWA is working with the Internal Revenue Service (IRS) to evaluate the effectiveness of IRS' motor fuel tax evasion (MFTE) enforcement efforts. Results of a Treasury Inspector General for Tax Administration audit and FHWA development of an oversight plan will provide methods to determine the effectiveness of IRS's MFTE enforcement efforts prior to providing additional funds from the HTF. Continued use of HTF funds for MFTE enforcement by IRS is contingent on the effectiveness of IRS collecting the estimated $1 billion lost due to MFTE annually.
FMCSA
In 2005, FMCSA participated in testing of the Automated Commercial Environment/ International Trade Data Systems (ACE/ITDS). Through this system an Automated Truck Manifest feature will be implemented to further improve the efficiency of inspections at the Canadian and Mexican borders. Through implementing this system, FMCSA will be the first DOT agency to collaborate with the U.S. Customs and Border Protection on this Administration's Second Term and Secretarial initiative.
North American Free Trade Agreement (NAFTA) Implementation: FMCSA efforts continued to implement the President's order to open the southern border to expanded CMV operations under NAFTA. In a unanimous decision, the U.S. Supreme Court helped to clear the way for implementation of three rules governing the operation of Mexico-domiciled CMVs beyond the border commercial zones. This was due to the reversal of a January 2003 decision of the U.S. Court of Appeals for the Ninth Circuit, which held that FMCSA was not required to prepare an Environmental Impact Statement (EIS) and Clean Air Act Conformity Analysis before promulgating the rules.
Consumer Information on Interstate Movers: There are approximately 1.5 million shipments of household goods in the United States each year, roughly 600,000 of which are interstate moves. In response to increased consumer complaints, FMCSA significantly expanded and enhanced its web-based database that informs consumers of their rights and responsibilities and serves as a guide in the selection of a reputable carrier.
FTA
New Starts Program: Cost containment of major capital projects is one of FTA's four core accountabilities used to evaluate senior executives. Some of the variables that can lead to or help avoid cost overruns of these large projects include:
- Current economic bidding climate and financing terms
- High risk factors, such as environmental mitigation
- Quality of planning, project scope, and local decision-making<
- Quality of project design and procurement process
- Reputation/expertise of the transit agency
As of September 2006, 95 percent of all Full Funding Grant Agreements (FFGAs) are within five percent of their baseline cost.
Grant Processing: FTA improved program delivery to its customers by making dramatic improvements in the timeliness of grant processing, which allowed them to meet its FY 2006 target. As of September 30, 2006, 94 percent of the 2,192 grants processed were obligated in 60 days or less. The time used to process grants decreased to 29 days in 2006.
ENVIRONMENTAL STEWARDSHIP
Promote transportation solutions that enhance communities and protect the natural and built environment.
Strategic Outcomes
- Reduce pollution and other adverse environmental effects of transportation and transportation facilities
- Streamlined environmental review of transportation infrastructure projects
Departmental Performance Goals
- Reduce adverse effects on ecosystems and improve ecosystem viability.
- Reduce transportation pollution.
Environmental Stewardship Performance Measures |
|||||
|---|---|---|---|---|---|
Performance Measure |
FY 2004 |
FY 2005 |
FY 2006 Target |
FY 2006 preliminary |
FY 2006 Goal Met? |
Ratio of wetlands replaced for every acre affected by Federal-aid highway projects |
2.1 |
3.3 (r) |
1.5 |
2.6# |
Met |
Number of exemplary ecosystem initiatives |
15 |
23 |
24 |
43 |
Met |
12-month moving average number of areas in a conformity lapse |
6.3 (r) |
5.8 (r) |
6.0 |
1.3* |
Met |
Median time in months for all Federal-aid Highway projects to have a completed Environmental Impact Statement (EIS) |
54 |
56 |
40 |
57 |
Not Met |
(r) Revised; * Preliminary Estimate; # Projection by BTS
The Department's objective is to advance the benefits of transportation while minimizing its negative environmental impacts. In 2006, the Department's environmental programs prevented as much harm as possible from being done to the environment by transportation projects and operations.
FHWA
Wetland Protection and Recovery: Wetlands are important natural ecosystems that filter pollutants and minimize potential floodwater damage. In 1996, FHWA established a national policy on wetland protection that called for a net gain of wetlands in federally assisted projects. Over the past 10 years, considerable progress has been made throughout the country. An Exemplary Ecosystem Initiative (EEI) is an action or measure that will help sustain or restore natural systems and their functions and values, using an ecosystem or landscape context. Examples include mitigation projects that support wildlife movement and habitat connectivity, the development of watershed-based environmental assessment and mitigation approaches, the use of wetland banking, and the use of special measures to prevent invasive species along highway rights-of-way.
2006 Results: Federal-aid projects nationwide replaced wetlands at a ratio of 2.6 acres of compensatory wetland mitigation for every acre impacted. FHWA coordinated wetlands programs and research initiatives with other Federal agencies including the U.S. Environmental Protection Agency (EPA) and the U.S. Department of the Interior.
The FHWA met the FY 2006 goal for the number of Ecosystem Initiatives. It recognized 20 new EEI in 2006, exceeding by 13 the target of designating seven additional initiatives and bringing the total number that FHWA has designated thus far to 43. FHWA partnered with other Federal agencies and several states in developing Ecological and Ecosystem Approach to Developing Infrastructure Projects. This publication supports planning and mitigation of projects in a manner that protects the most critical resources in an ecosystem. These efforts enhance our ability to streamline environmental review processes and meet new needs and demands for mitigation of impacts to wetlands and other significant natural habitats, including species listed under the Endangered Species Act, as well as other wildlife species of special concern.
FY 2007 Performance Forecast: FHWA expects to exceed a revised performance target in FY 2007 for Exemplary Ecosystem Initiatives.
Mobile Source Emission: The National Ambient Air Quality Standards (NAAQS) target six major pollutants as among the most serious airborne threats to human health. Areas exceeding certain NAAQS, known as air-quality non-attainment areas, are required to meet transportation conformity requirements in the Clean Air Act. Failure to meet the requirements will put an area in a conformity lapse, during which only limited types of projects can proceed. The EPA has recently proposed new and revised NAAQS, which may subject more new non-attainment areas to conformity requirements.
On average, approximately six non-attainment and maintenance areas are in air-quality transportation conformity lapse in any given month. In FY 2006, the 12-month moving average number of areas in a conformity lapse was 1.3.
FY 2007 Performance Forecast: HTF OAs expect to meet or exceed the performance targets in FY 2007 for areas in a conformity lapse. While there are multiple causes for a transportation conformity lapse, including new conformity requirements for the new fine particulate matter air-quality standard, the FHWA should be able to provide adequate guidance and assistance to these areas to address these causes and meet the more stringent targets in most instances.
Environmental Streamlining: Project delays impede needed transportation system improvements and increase costs. Streamlining of environmental reviews and documentation is essential to mitigating time delays and implementing highway projects on a more timely and cost effective basis. The FHWA encourages states and resource agencies to establish and meet timelines for all projects with an EIS or Environmental Assessment (EA). The table below provides data related to the EIS completion.
Median time in months required for all Federal-aid Highway projects to have a completed Environmental Impact Statement (EIS) |
|||
|---|---|---|---|
FY 2004 |
FY 2005 |
FY 2006 |
|
Target |
48 |
45 |
40 |
Actual |
54 |
56 |
57 |
FY 2006 Results: The median time to complete an EIS for projects funded by the FHWA increased slightly from 56 months in FY 2005 to 57 months in FY 2006. The target for 2006 was not met.
FY 2007 Performance Forecast: Given recent trends and underlying causes of delays including a lack of funding and priority for projects, local controversy, and a combination of Federal and state environmental review delays, it is unlikely that FHWA will meet the target for median completion time for an EIS.
SECURITY
Ensure the security of the transportation system for the movement of people and goods, and support the National Security Strategy.
Transportation security is equal in importance to transportation safety. The Department's objective is to contribute to homeland and national security by providing strategic mobility, and by working in tandem with the Department of Homeland Security to minimize the vulnerability of the U.S. transportation system to disruption, damage, or exploitation through crime or terrorism.
Strategic Outcomes
- All OAs have implemented steps that would prepare them for a rapid recovery of transportation from international harm and natural disasters
- The U.S. transportation system meets National security requirements
Departmental Performance Goals
- Increase national defense capability.
Ensure sufficient contingency sealift and commercial outload ports are available to support Department of Defense mobilization requirements.
Although there were no specific performance measures assigned to the HTF OAs in support of this Strategic Objective, the following are actions the OAs took to improve the nation's transportation system security.
FHWA
Transportation Security: FHWA worked closely with the Transportation Security Administration (TSA) in the development of the Transportation Sector Security Plan to ensure that highway-related security plans and standards reflect highway industry institutional knowledge and have industry support.
FMCSA
FMCSA continues its activities to heighten the awareness and sensitivity of motor carriers transporting Hazardous Material (HAZMAT) to security threats, and to strengthen and support programs that ensure the safe and secure transport of HAZMAT. These activities include:
- Continuing to work with its state and Federal partners to expand and refine its network of contacts to communicate alerts to truck inspectors and the trucking industry.
- Training law enforcement and carriers in security awareness through its Trucks and Terrorism seminars
- Continuing to coordinate its HAZMAT permitting regulations with TSA
- Leading strike force activities in conjunction with: the U.S. Coast Guard; FRA; the U.S. Customs and Border Protection Agency; the Federal Aviation Administration; and state agencies in Chicago, IL; Wilmington, NC; Jacksonville, FL; Savannah, GA; Charleston, SC; and at Dulles Airport, VA, aimed at improving safety, security, and identifying undeclared shipments of HAZMAT.
- Enhancing data collection through extensive involvement in inter-OA efforts to create a unified HAZMAT inspection and enforcement database<
- Leading a cross OA HAZMAT working group to determine the Department's HAZMAT training requirements.
- Continuing to provide training and educational material to state agencies and industry on developing security plans
ORGANIZATIONAL EXCELLENCE
Advance the Department's ability to manage for results and achieve the goals of the PMA.
The Department continues improve the design of our organization to better achieve our strategic goals. Through strategic planning, customer focus, and the analysis of information, we create our objectives, measures, and plans. We manage our processes and human resources to implement the plans, and we measure results to gauge our progress annually.
Strategic Outcomes
- Strategic management of human capital
- Improved financial management
Departmental Performance Goals
- Achieve strategic management of human capital
- Achieve Financial Performance Goals
Samples of some OA accomplishments in the area of organizational excellence are described below.
FHWA
The Department implemented programs to increase hiring in mission-critical occupations. Recruiters were able to target diverse candidates with valuable competencies. OA hiring from the pool of candidates were satisfied with the additions the workforce. The program's success doubled in FY 2006.
Workforce planning was also an important initiative during FY 2006. The department recognized and closed or narrowed competency gaps fields such as IT and succession plans were mapped out for several disciplines.
The target for closing critical competency gaps in financial management through targeted hiring was met.
FTA
People with disabilities were placed in internships, many of whom where subsequently appointed to permanent full-time or long-term positions. FTA earned recognition from the Northern Virginia Department of Rehabilitative Services and "Employer of the Year".
FTA also completed the majority of its cost accounting implementation using a commercial-off the-shelf software package. They have provided the Executive Management Team with preliminary reports from the new system and plan to finalize the reports in November 2006.
Analysis of Financial Statements
The table below provides the significant financial highlights of FY 2006 for the HTF (in thousands):
End of Year HTF Financial Data |
FY 2006 (Earmarked Funds) |
|---|---|
Fund Balance With Treasury |
$4,431,555 |
Investments |
10,997,655 |
Accounts Receivable, Net |
38,564 |
Plant, Property and Equipment, Net |
101,070 |
Advances and Prepayments |
191,346 |
Total Assets |
$15,760,190 |
Accounts Payable |
$112,383 |
Federal Employee Benefits |
11,974 |
Grant Accrual |
3,556,098 |
Other Liabilities |
208,145 |
Total Liabilities |
$3,888,600 |
Net Position |
$11,871,590 |
Total Budgetary Resources for the Year |
$78,033,599 |
Non-Exchange Revenues |
$38,780,358 |
Gross Costs |
$37,203,191 |
Exchange Revenues |
61,846 |
Total Net Costs |
$37,141,345 |
FY 2006 Continuing Resolutions
The Transportation Appropriations bill was passed by Congress on November 18th and signed by the President on November 30th. FHWA was under the first two continuing resolutions:
H.J. Res. 68: CR through November 18, 2005
H.J. Res. 72: CR through December 17, 2005
The HTF financial statements, which appear in the Financial Section of this Report, received an unqualified opinion issued by the independent public accounting firm of KPMG LLP. Preparing these statements is part of the HTF's goal to improve financial management and to provide accurate and reliable information that is useful for assessing performance and allocating resources. Management of each OA is responsible for the integrity and objectivity of the financial information presented in the financial statements.
The financial statements and financial data presented in this report have been prepared from the accounting records of the HTF in conformity with accounting principles generally accepted in the United States of America (GAAP). The Federal Accounting Standards Advisory Board (FASAB) prescribes GAAP for Federal entities.
Overview of Financial Position
The following chart depicts the percentage of dollars distributed from HTF Corpus to the Operating Agency's for FY 2006 (in millions):
Assets: The Consolidated Balance Sheet shows the HTF had total assets of $15.8 billion at the end of FY 2006. This is an increase of $3 billion (23.4 percent) from the previous year's total assets of $12.8 billion. This increase is primarily due to the result of the increase in investments ($2.7 billion). Increases in investments are generally due to continued economic growth. Growth in highway travel and increased fuel consumption is closely aligned with growth in the gross domestic product.
The HTF's assets reflected in the Consolidated Balance Sheet are summarized in the following chart (dollars in millions):
Investments and Fund Balance with Treasury comprise over 97% of total assets for FY's 2006. Investments consist entirely of U.S. Government non-interest bearing securities held in the HTF Corpus.
Liabilities: The HTF had liabilities of $3.9 billion at the end of FY 2006, which is reported in the Consolidated Balance Sheet and summarized in the following chart (dollars in millions):
Liabilities increased by $1.3 billion (50 percent) from the previous year's total liabilities of $2.6 billion. This increase is primarily due to the result of the increase in grant liabilities ($1.2 billion). Grant liabilities represent an accrual for costs incurred by grantees that have not been reimbursed by the operating administrations.
Ending Net Position: The HTF's Net Position at the end of FY 2006 was $11.9 billion. This was an insignificant increase from the prior year's total of $10.2 billion. This amount is reflected on the Consolidated Balance Sheet and Statement of Changes in Net Position.
Non-Exchange Revenues: The HTF's non-exchange revenues at the end of FY 2006 were $38.8 billion. This was an insignificant increase from the prior year's total of $37.9 billion. This amount is reflected on the Consolidated Statement of Changes in Net Position.
Net Costs: The HTF's Net Costs at the end of FY 2006 was $37.1 billion, which was an increase of $4.9 billion (15.2 percent) from the previous year's total of $32.2 billion. Due to the continuing resolutions and a delay in the reauthorization of SAFETEA-LU, the majority of the Federal-aid programs were not able to allocate a significant portion of FY 2005 funding until FY 2006. The effect of these events resulted in increased in expenditures for FY 2006.
Limitation of Financial Statements
Management prepares the accompanying financial statements to report the financial position and results of operations for the Highway Trust Fund pursuant to the requirements of United States Code Title 31, section 3515(b).
The HTF has adopted provisions of the Federal Accounting Standards Advisory Board's Statement of Federal Financial Accounting Standards (SFFAS) No. 27, Identifying and Reporting Earmarked Funds, which became effective October 1, 2005. This new standard amended SFFAS No. 7, Revenue and Other Financing Sources, by: elaborating the special accountability needs associated with dedicated collections; separating dedicated collections into two categories --- earmarked funds and fiduciary activity; and defining and providing accounting and reporting guidance for earmarked funds. In adopting the new standard, the HTF considers all of its activities related to earmarked funds.
While these statements have been prepared from the books and records of the HTF in accordance with the formats prescribed in OMB Circular A-136, Financial Reporting Requirements, these statements are in addition to the financial reports used to monitor and control the budgetary resources that are prepared from the same books and records.
These statements should be read with the understanding that they are for a component of the U.S. Government, a sovereign entity. One implication of this is that unfunded liabilities reported in the statements cannot be liquidated without the enactment of an appropriation and ongoing operations are subject to the enactment of appropriations
Summary
This overview of the HTF is designed to inform all stakeholders of the significant efforts underway to demonstrate sound fiscal and management practices to exercise good stewardship of the taxpayer dollars entrusted to DOT. While this document focuses on overall management efforts, challenges and accomplishments, additional information can be found in the DOT Performance and Accountability Report.
[1] Due to inactivity and immateriality to HTF funds, Federal Railroad Administration is now included in Other-HTF fund activities.
[2] FTA was funded through the HTF Corpus and direct appropriation from Treasury prior to FY 2006. As a result of SAFETEA-LU, FTA's funding structure has changed and a trust fund account exists to solely fund formula programs and bus and bus-related grants.
