Surface Transportation Project Delivery Pilot Program; Caltrans Audit Report, 10599-10604 [2012-3977]

Agencies

• Federal Highway Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 77, Number 35 (Wednesday, February 22, 2012)]
[Notices]
[Pages 10599-10604]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-3977]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

[FHWA Docket No. FHWA-2012-0005]


Surface Transportation Project Delivery Pilot Program; Caltrans 
Audit Report

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice; request for comment.

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SUMMARY: Section 6005 of the Safe, Accountable, Flexible, Efficient 
Transportation Equity Act: A Legacy for Users (SAFETEA-LU) established 
the Surface Transportation Project Delivery Pilot Program, codified at 
23 U.S.C. 327. To ensure compliance by each State participating in the 
Pilot Program, 23 U.S.C. 327(g) mandates semiannual audits during each 
of the first 2 years of State participation and annual audits during 
each subsequent year of State participation. This notice announces and 
solicits comments on the sixth audit report for the California 
Department of Transportation (Caltrans).

DATES: Comments must be received on or before March 23, 2012.

ADDRESSES: Mail or hand deliver comments to Docket Management Facility: 
U.S. Department of Transportation, 1200 New Jersey Avenue SE., Room 
W12-140, Washington, DC 20590. You may also submit comments 
electronically at https://www.regulations.gov, or fax comments to (202) 
493-2251.
    All comments should include the docket number that appears in the 
heading of this document. All comments received will be available for 
examination and copying at the above address from 9 a.m. to 5 p.m., 
e.t., Monday through Friday, except Federal holidays. Those desiring 
notification of receipt of comments must include a self-

[[Page 10600]]

addressed, stamped postcard or you may print the acknowledgment page 
that appears after submitting comments electronically. Anyone is able 
to search the electronic form of all comments in any one of our dockets 
by the name of the individual submitting the comment (or signing the 
comment, if submitted on behalf of an association, business, or labor 
union). You may review the DOT's complete Privacy Act Statement in the 
Federal Register published on April 11, 2000, (Volume 65, Number 70, 
Pages 19477-78) or you may visit https://DocketsInfo.dot.gov.

FOR FURTHER INFORMATION CONTACT: Ms. Ruth Rentch, Office of Project 
Development and Environmental Review, (202) 366-2034, 
Ruth.Rentch@dot.gov, or Mr. Michael Harkins, Office of the Chief 
Counsel, (202) 366-4928, Michael.Harkins@dot.gov, Federal Highway 
Administration, Department of Transportation, 1200 New Jersey Avenue 
SE., Washington, DC 20590. Office hours are from 7:45 a.m. to 4:15 
p.m., e.t., Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access

    An electronic copy of this notice may be downloaded from the Office 
of the Federal Register's home page at https://www.archives.gov and the 
Government Printing Office's Web site at https://www.gpo.gov/fdsys.

Background

    Section 6005 of SAFETEA-LU (codified at 23 U.S.C. 327) established 
a pilot program to allow up to five States to assume the Secretary of 
Transportation's responsibilities for environmental review, 
consultation, or other actions under any Federal environmental law 
pertaining to the review or approval of highway projects. In order to 
be selected for the pilot program, a State must submit an application 
to the Secretary.
    On June 29, 2007, Caltrans and FHWA entered into a Memorandum of 
Understanding (MOU) that established the assignments to and assumptions 
of responsibility to Caltrans. Under the MOU, Caltrans assumed the 
majority of the FHWA's responsibilities under the National 
Environmental Policy Act, as well as the FHWA's responsibilities under 
other Federal environmental laws for most highway projects in 
California.
    To ensure compliance by each State participating in the Pilot 
Program, 23 U.S.C. 327(g) requires the Secretary to conduct semiannual 
audits during each of the first 2 years of State participation; and 
annual audits during each subsequent year of State participation. The 
results of each audit must be presented in the form of an audit report 
and be made available for public comment. This notice announces the 
availability of the sixth audit report for Caltrans and solicits public 
comment on same.

    Authority: Section 6005 of Pub. L. 109-59; 23 U.S.C. 315 and 
327; 49 CFR 1.48.

    Issued on: February 14, 2012.
Victor M. Mendez,
Administrator.

DRAFT

Surface Transportation Project Delivery Pilot Program Federal Highway 
Administration Audit of California Department of Transportation October 
17-21, 2011

Overall Audit Opinion

    Based on the information reviewed, it is the Federal Highway 
Administration (FHWA) audit team's opinion that as of October 21, 2011, 
the California Department of Transportation (Caltrans) continued to 
make progress toward meeting all responsibilities assumed under the 
Surface Transportation Project Delivery Pilot Program (Pilot Program), 
as specified in the Memorandum of Understanding (MOU) \1\ with FHWA and 
in Caltrans' Application for Assumption (Application).
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    \1\ Caltrans MOU between FHWA and Caltrans available at: https://environment.fhwa.dot.gov/strmlng/safe_cdot_pilot.asp.
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    The FHWA commends Caltrans for its implementation of corrective 
actions in response to previous FHWA audit report findings. The FHWA 
also observed that Caltrans continued to identify and implement on a 
statewide Pilot Program basis best practices in use at individual 
Caltrans Districts (Districts).
    With the completion of FHWA's sixth audit, Caltrans has now 
operated under the Pilot Program for 4 years. In compliance with the 
time specifications for the required audits, FHWA completed four 
semiannual audits in the first 2 years of State participation and is 
now conducting the annual audit cycle, which began with the fifth audit 
in July 2010 and includes this sixth audit in October 2011. 
Collectively, FHWA audits have included on-site audits to Caltrans 
headquarters offices, 10 of the 12 Caltrans Districts, and to the 
Caltrans Regional Offices supporting the remaining two Districts. The 
audit team continues to identify significant differences across the 
Districts in terms of implementing Pilot Program policies, procedures, 
and responsibilities. Examples of such differences include: resource 
availability and allocation; methods of implementation; methods of 
process evaluation and improvement; and levels of progress in meeting 
all assumed responsibilities. It is the audit team's opinion that the 
highly decentralized nature of operations across Districts continues to 
be a major contributing factor to the variations observed in the Pilot 
Program. As a result of this organizational structure, Caltrans 
Headquarters (HQ) must provide clear, consistent, and ongoing oversight 
over Districts' implementation and operation of the Pilot Program 
responsibilities. Implementation of a robust oversight program will 
help foster the exchange of information and the sharing of best 
practices and resources between Districts and will put the entire 
organization in a better position to more fully implement all assumed 
responsibilities and meet all Pilot Program commitments.
    Due to the multiyear timeframes associated with most complex and 
controversial projects, the full lifecycle of the environmental review 
aspect of project development (proceeding from initiation of 
environmental studies and concluding with the issuance of a Record of 
Decision (ROD) or equivalent decision document) has yet to be realized 
within the Pilot Program to date. Caltrans continues to gain experience 
in understanding the resource requirements and processes necessary to 
administer its Program. It is the audit team's opinion that Caltrans 
needs to continue to refine its approaches and use of resources to meet 
all Pilot Program commitments, especially given the increasing resource 
demands associated with managing ever-more complex and controversial 
projects under the Pilot Program under recent resource constraints.

Requirement for Transition Plan

    The Safe, Accountable, Flexible, Efficient Transportation Equity 
Act: A Legacy for Users (SAFETEA-LU) Section 6005(a) established the 
Pilot Program, codified at 23 U.S.C. 327. Under the provisions of 23 
U.S.C 327(i)(1), as enacted in SAFETEA-LU, ``the program shall 
terminate on the date that is 6 years after the date of enactment of 
this section,'' which was August 10, 2011. However, section 2203(c) of 
the Surface Transportation Extension Act of 2010, Part II, Public Law 
111-322, amended 23 U.S.C 327 (i)(1) to require the Pilot Program to 
terminate seven years after the date of the enactment of SAFETEA-LU or 
August 10, 2012. The MOU between FHWA and Caltrans was amended

[[Page 10601]]

August 8, 2011, to include this new date and to update related 
provisions.

Effective Practices

    The FHWA audit team observed the following effective practices 
during the sixth audit:
    1. The creation of a statewide Community Impacts working team that 
holds monthly calls to share Community Impact Assessment (CIA) and 
Environmental Justice information. Caltrans has also developed new CIA 
guidance.
    2. Improved level of consistency in implementing processes and 
documenting information, largely due to the use of the Standard 
Environmental Reference (SER) and templates.
    3. Improved Section 4(f) de minimis letters to the officials with 
jurisdiction, with good examples from local agencies in District 4.
    4. Increased access to training, including the availability of on-
demand training, PowerPoint, Webinars and videoconferencing.
    5. Complete and well-organized project files in District 10.
    6. Assumptions and Risk statements included in early project 
development/scoping that list possible consequences, effects and costs 
of not complying with all environmental requirements and procedures.
    7. Caltrans' Standard Specifications for Construction 2010 
(recently released) requires environmental stewardship to be included 
in all construction contracts, which should aid in environmental 
mitigation implementation.
    8. The new Caltrans Standard Tracking and Exchange Vehicle for 
Environmental (STEVE) supports tracking of the environmental review 
process and sharing of project status across project teams and includes 
an internal dispute resolution process.

Background

    The Pilot Program allows the Secretary of Transportation 
(Secretary) to assign, and the State to assume, the Secretary's 
responsibilities under the National Environmental Policy Act (NEPA) for 
one or more highway projects. Upon assigning NEPA responsibilities, the 
Secretary may further assign to the State all or part of the 
Secretary's responsibilities for environmental review, consultation, or 
other action required under any Federal environmental law pertaining to 
the review of a specific highway project. When a State assumes the 
Secretary's responsibilities under this program, the State becomes 
solely responsible and is liable for carrying out the responsibilities 
it has assumed, in lieu of FHWA.
    To ensure compliance by each State participating in the Pilot 
Program, 23 U.S.C. 327(g) mandates that FHWA, on behalf of the 
Secretary, conduct semiannual audits during each of the first 2 years 
of State participation; and annual audits during each subsequent year 
of State participation. The focus of the FHWA audit process is four-
fold: (1) To assess a Pilot State's compliance with the required MOU 
and applicable Federal laws and policies; (2) to collect information 
needed to evaluate the success of the Pilot Program; (3) to evaluate 
Pilot State progress in meeting its performance measures; and (4) to 
collect information for use in the Secretary's annual Report to 
Congress on the administration of the Pilot Program. Additionally, 23 
U.S.C. 327(g) requires FHWA to present the results of each audit in the 
form of an audit report published in the Federal Register. This audit 
report must be made available for public comment, and FHWA must respond 
to public comments received no later than 60 days after the date on 
which the period for public comment closes.

Scope of the Audit

    This is the sixth FHWA audit of Caltrans participation in the Pilot 
Program. The on-site portion of the audit was conducted in California 
from October 17 through October 21, 2011. As required in SAFETEA-LU, 
each FHWA audit must assess compliance with the roles and 
responsibilities assumed by the Pilot State in the MOU. The audit also 
includes recommendations to assist Caltrans in successful participation 
in the Pilot Program.
    Prior to the on-site audit, FHWA completed telephone interviews 
with Federal resource agency staff at the U.S. Army Corps of Engineers, 
the U.S. Fish and Wildlife Service (FWS), the National Park Service, 
the National Oceanic and Atmospheric Administration, the Advisory 
Council on Historic Preservation, and the Environmental Protection 
Agency. The on-site audit included visits to the Caltrans Offices in 
District 2 (Redding), District 3/North Region (Marysville), District 4 
(Oakland), District 6 (Fresno), District 10 (Stockton), and 
Headquarters (Sacramento).
    This report documents findings within the scope of the audit as of 
the completion date of the on-site audit on October 21, 2011.

Audit Process and Implementation

    The intent of each FHWA audit completed under the Pilot Program is 
to ensure that the Pilot State complies with the commitments in its MOU 
with FHWA. The FHWA does not evaluate specific project-related 
decisions made by the State; these decisions are the sole 
responsibility of the Pilot State. However, the FHWA audit scope does 
include the review of the processes and procedures (including 
documentation) used by the Pilot State to reach project decisions in 
compliance with MOU Section 3.2.
    In addition, Caltrans committed in its Application (incorporated by 
reference in MOU Section 1.1.2) to implement specific processes to 
strengthen its environmental procedures in order to assume the 
responsibilities assigned by FHWA under the Pilot Program. The FHWA 
audits review how Caltrans is meeting each commitment and assess Pilot 
Program performance in the core areas specified in the Scope of the 
Audit section of this report.
    The Caltrans' Pilot Program commitments address:
     Organization and Procedures under the Pilot Program;
     Expanded Quality Control Procedures;
     Independent Environmental Decisionmaking;
     Determining the NEPA Class of Action;
     Consultation and Coordination with Resource Agencies;
     Issue Identification and Conflict Resolution Procedures;
     Recordkeeping and Retention;
     Expanded Internal Monitoring and Process Reviews;
     Performance Measures to Assess the Pilot Program;
     Training to Implement the Pilot Program;
     Legal Sufficiency Review.
    The FHWA team for the sixth audit included representatives from the 
following offices or agencies:
     FHWA Office of Project Development and Environmental 
Review;
     FHWA Office of the Chief Counsel;
     FHWA Alaska Division Office;
     FHWA Resource Center Environmental Team;
     Volpe National Transportation Systems Center;
     U.S. FWS.
    During the onsite audit, the audit team interviewed more than 60 
staff from 5 Caltrans District and HQ offices. The audit team also 
reviewed project files and records for over 55 projects managed by 
Caltrans under the Pilot Program.

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    The FHWA acknowledges that Caltrans identified specific issues 
during its sixth self-assessment performed under the Pilot Program 
(required by MOU section 8.2.6), and is working on corrective actions 
to address the identified issues. Some issues described in the Caltrans 
self-assessment may overlap with FHWA findings identified in this audit 
report.
    In accordance with MOU Section 11.4.1, FHWA provided Caltrans with 
a 30-day comment period to review this draft audit report. The FHWA 
reviewed comments received from Caltrans and revised sections of the 
draft report, where appropriate, prior to publishing it in the Federal 
Register for public comment.

Limitations of the Audit

    The conclusions presented in this report are opinions based upon 
interviews of selected persons knowledgeable about past and current 
activities related to the execution of the Pilot Program at Caltrans, 
and a review of selected documents over a limited time period. The FHWA 
audit team's ability to conduct each audit and make determinations of 
Caltrans' compliance with assumed responsibilities and commitments 
under the Pilot Program has been further limited by the following:
     Select Districts visited by the FHWA audit team. The FHWA 
audit team has not visited each District during the audit process. Each 
audit (including this audit) has consisted of visits to Districts with 
significant activity under the Pilot.
     Caltrans staff availability during audits. Some Caltrans 
staff selected to be interviewed by the audit team were out of the 
office and unavailable to participate in the onsite audit, including 
participation in scheduled interviews, despite Caltrans having been 
notified ahead of time. This limited the extent of information 
gathering.
     Limited scope of Pilot Program project development 
activity. Caltrans has not operated under the Pilot Program for a 
sufficient period of time to manage the full lifecycle of most 
Environmental Impact Statements (EIS) and other complex environmental 
documents. Therefore, FHWA is not yet able to fully determine how 
Caltrans will comply with its responsibilities assumed under the Pilot 
Program for these project situations.
     Insufficient data to determine time savings reported by 
Caltrans in the completion of environmental documents. Due to the 
relatively short period of time that the Pilot Program has been in 
place, Caltrans has not completed the environmental process for a 
sufficient number of projects of varying complexities to adequately 
support a determination on the potential time savings resulting from 
participation in the Pilot Program.
     Continued errors in the quarterly reports. As has been the 
case in every audit, the quarterly reports prepared by Caltrans listing 
environmental approvals and decisions made under the Pilot Program 
continue to contain omissions and errors. It is difficult for FHWA to 
exercise full oversight on Pilot Program projects without a complete 
accounting of all NEPA documents produced under the Pilot.

Status of Findings Since the Last Audit (July 2010)

    As part of the sixth audit, FHWA evaluated the corrective actions 
implemented by Caltrans in response to the ``Deficient'' and ``Needs 
Improvement'' findings in the fifth FHWA audit report.

Deficient Audit Finding Status

    1. Quarterly Reports--The quarterly reports Caltrans provided to 
FHWA under MOU Section 8.2.7 continued to include inaccuracies related 
to environmental document approvals and decisions made under the Pilot 
Program. The audit team acknowledges that Caltrans has recently 
implemented the STEVE environmental database system on a statewide 
basis to assist in the development of a comprehensive database of 
environmental projects and milestones.
    2. Section 4(f) Documentation--As noted in the past two audits, 
inconsistencies in Section 4(f) compliance and documentation have been 
observed by the audit team. The FHWA acknowledges that Caltrans 
continues to provide Section 4(f) training and assistance to the 
Districts to improve the understanding of the Section 4(f) statute and 
regulations. However, training implementation is inconsistent with 
staff implementing Section 4(f) across Districts.
    3. Quality Assurance/Quality Control (QA/QC) Certification 
Process--Project file reviews completed during the sixth audit 
continued to identify incorrect and incomplete QC certification forms. 
Caltrans continues to address inadequacies in this process through 
staff-specific training when inconsistencies are identified, most 
notably during the self-assessment process.

Needs Improvement Audit Findings Status

    1. Maintenance of Project and General Administrative Files--
Caltrans has instituted specific procedures for maintaining project 
files in accordance with the Uniform Filing System and has provided 
training on these procedures. Inconsistencies in the application of 
these procedures, reported in previous audit findings, were also 
identified in this audit.
    2. Performance Measure--FHWA recommended that Caltrans share with 
FHWA the specific agencies' rating information so that specific issues 
could be identified. Caltrans has provided this information to FHWA.
    3. Coordination with Resource Agencies--Conversations with Federal 
resource agencies prior to the onsite audit indicated that 
relationships between the agencies and Caltrans are generally 
considered to be effective; however, the audit team noted an issue 
regarding insufficient information being initially submitted to the 
resource agencies.
    4. Procedural and Substantive Requirements--There were identified 
instances of incomplete documentation regarding the Endangered Species 
Act Section 7 process. This was also an area of irregularities 
identified in the Caltrans Self Assessment. Section 7 compliance 
continues to be a topic addressed by the Biological Consultancy group 
and, included as part of the STEVE, there is an elevation process for 
Section 7 conflicts.
    5. Re-evaluation Process--Project file reviews and staff interviews 
continue to indicate varying degrees of compliance with the re-
evaluation process and procedures.
    6. Section 4(f) Consistency Issue--Project file reviews and 
interviews with Caltrans staff confirmed continuing inconsistencies in 
the implementation of the Section 4(f) process as well as with a 
general understanding required in carrying out Section 4(f) provisions. 
The audit team does acknowledge that a Section 4(f) evaluation training 
on demand module was recently posted for use by Caltrans staff.
    7. Training--As in past audits, the audit team observed 
inconsistencies in the use of tools to identify training needs, ensure 
training is received, and to track employees' training histories. The 
audit team also determined there was no method for employees to track 
completion of any online training available on the Caltrans Web site.

Findings Definitions

    The FHWA audit team carefully examined Pilot Program areas to 
assess

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compliance in accordance with established criteria in the MOU and 
Application. The time period covered by this audit report is from the 
start of the Caltrans Pilot Program (July 1, 2007) through completion 
of the sixth onsite audit (October 21, 2011) with the focus of the 
audit on the most recent 15 month period. This report presents audit 
findings in three areas:
     Compliant--Audit verified that a process, procedure or 
other component of the Pilot Program meets a stated commitment in the 
Application and/or MOU.
     Needs Improvement--Audit determined that a process, 
procedure or other component of the Pilot Program as specified in the 
Application and/or MOU is not fully implemented to achieve the stated 
commitment or the process or procedure implemented is not functioning 
at a level necessary to ensure the stated commitment is satisfied. 
Action is recommended to ensure success.
     Deficient--Audit was unable to verify if a process, 
procedure or other component of the Pilot Program met the stated 
commitment in the Application and/or MOU. Action is required to improve 
the process, procedure or other component prior to the next audit;
 or
    Audit determined that a process, procedure or other component of 
the Pilot Program did not meet the stated commitment in the Application 
and/or MOU. Corrective action is required prior to the next audit;
 or
    Audit determined that for a past Needs Improvement finding, the 
rate of corrective action has not proceeded in a timely manner; is not 
on the path to timely resolution of the finding.

Summary of Findings--October 2011

Compliant

    Caltrans was found to be compliant in meeting the requirements of 
the MOU for the key Pilot Program areas within the scope and the 
limitations of the audit, with the exceptions noted in the Deficient 
and Needs Improvement findings in this audit report set forth below.

Needs Improvement

    (N1) Training--Inconsistent Level of Training for Staff--MOU 
Section 12.1.1 requires Caltrans to ensure that its staff is properly 
trained and that training will be provided ``in all appropriate areas 
with respect to the environmental responsibilities Caltrans has 
assumed.'' Section 4.2.2 of the MOU also requires that Caltrans 
maintain adequate staff capability to effectively carry out the 
responsibilities it has assumed.
    The audit team found the following inconsistencies across the 
Districts regarding the level of needed trainings received by Caltrans 
staff:
    (a) Several of the Section 4(f) District Points of Contact (POC) 
have very little, if any experience with writing or reviewing a Section 
4(f) document and have had little training in Section 4(f). The audit 
team learned that the specific roles and responsibilities for the POCs 
had not yet been determined. Also, it has not been decided if there 
will be the formation of a working/peer group of these POCs or how they 
should proceed in becoming ``expert'' in this area;
    (b) The audit team learned through interviews that the number and 
variety of available online on-demand trainings have increased. 
However, the lack of a system to track those taking these trainings 
creates difficulties in identifying staff training needs;
    (c) Interviews with staff reflected instances where staff had to 
cancel their attendance at trainings due to resource limitations, or 
schedule demands; and
    (d) Interviews with staff indicated a large staff turnover in 
certain Districts. The loss of experienced staff increases the 
importance of the training needed for new employees, which is uncertain 
due to resource restrictions in these same Districts.
    (N2) Training--Inconsistent Understanding of Required Processes--
MOU Section 4.2.2 requires Caltrans to maintain adequate organizational 
and staff capacity to effectively carry out the responsibilities it has 
assumed under MOU Section 3. Good communication among all staff levels 
is essential for this to be accomplished. The following inconsistencies 
in lack of knowledge and inconsistent understanding were noted during 
interviews with Caltrans staff:
    (a) Interviews with Caltrans staff in varying positions in three 
Districts revealed a lack of understanding of the FHWA fiscal 
constraint requirements and its relationship to NEPA documents;
    (b) A majority of Caltrans staff members interviewed indicated that 
there is a lack of understanding of the definitions for the following 
Section 4(f) terms: Section 4(f) use; temporary occupancy; avoidance 
alternatives; least overall harm analysis; and constructive use of a 
Section 4(f) resource.
    (c) Interviews with Caltrans staff reflected that there was a lack 
of understanding for determining a de minimis impact on a Section 4(f) 
resource;
    (d) Several Caltrans staff members interviewed indicated a lack of 
knowledge regarding the identification of officials with jurisdiction 
over Section 4(f) resources; and
    (e) Interviews with Caltrans District 4 staff reflected that there 
was a lack of communication among all staff concerning the District's 
new requirement to hold public hearings for all EAs.
    (N3) Air Quality Conformity Determinations--Section 8.5.1 of the 
MOU and SER Chapter 38 require Caltrans staff to document the air 
quality conformity analysis for each project by submitting a request to 
FHWA for a formal conformity determination, as required by 23 U.S.C. 
327(a)(2)(B)(ii)(I). The request for the conformity determination 
should be submitted to FHWA as soon as possible after the preferred 
alternative is identified. The FHWA conformity determination must be 
received before the final NEPA action is completed.
    Through interviews and project file reviews, the audit team 
identified an environmental assessment (EA) that was approved without a 
project-level conformity determination letter from FHWA. This 
determination letter was later obtained from FHWA and a re-evaluation 
was performed by Caltrans and included in the project file.

Deficient

    (D1) Reports Listing Approvals and Decisions (i.e., Quarterly 
Reports)--MOU Section 8.2.7 requires Caltrans to submit a report 
listing all Pilot Program approvals and decisions made with respect to 
responsibilities assumed under the MOU with FHWA (each quarter for the 
first 2 years and no less than every 6 months after the first 2 years). 
Caltrans has chosen to continue to provide quarterly reports to FHWA 
after the first 2 years. As was identified in every previous FHWA audit 
report, inaccurate project reporting was identified in this audit and 
it continues to be an ongoing issue affecting the quarterly report 
process.
    Among the reporting errors identified in this audit were the 
omission of two completed decisions--one ROD and one Finding of No 
Significant Impact (FONSI).
    The FHWA acknowledges that a new statewide database (STEVE) has 
recently been implemented throughout the Districts, and Caltrans 
anticipates that this new system will improve the accuracy of 
information provided in the quarterly reports provided to FHWA.
    (D2) QA/QC Certification Process--MOU Section 8.2.5 and SER Chapter 
38 require Caltrans staff to review each

[[Page 10604]]

environmental document in accordance with the policy memorandum titled, 
``Environmental Document Quality Control Program under the NEPA Pilot 
Program'' (July 2, 2007). As was identified in past audits, incomplete 
and incorrectly completed QC certification forms continued to be 
identified in this audit. During project file reviews by the audit 
team, the following instances of incomplete or incorrect QC 
certification forms were observed:
    (a) Four Internal QC certification forms (for three projects) were 
completed and signed and dated by reviewers after the approval date of 
the document;
    (b) One class of action determination form was signed on the same 
date that the document was approved;
    (c) Five QC certification forms contained undated review signatures 
or the signatures were not obtained in the proper sequence in 
accordance with the Caltrans established QA/QC processes. This included 
four projects where external QC certification forms contained 
signatures that were obtained after the internal QC certification form 
signatures; and
    (d) Five QC certification forms were missing the signatures of 
required reviewers.
    (D3) QA/QC Certification Process--MOU Section 8.2.5 and SER Chapter 
38 require Caltrans staff to review each environmental document in 
accordance with the policy memorandum titled, ``Environmental Document 
Quality Control Program under the NEPA Pilot Program'' (July 2, 2007). 
The policy memorandum included the revision to the quality control 
program that includes the addition of a NEPA QC Review. The purpose of 
this review component is to ensure that the environmental document 
complies with the FHWA policies and guidance and the requirements of 
all applicable Federal laws, executive orders, and regulations.
    Interviews with Caltrans staff and project file reviews in one 
District indicated that a NEPA QC reviewer was directed by the Office 
Chief of Environmental Affairs and the District Director to sign the 
internal certification form without having reviewed the final version 
of the environmental document in order to meet the project schedule. 
The NEPA QC reviewer had noted in the project file that there were two 
items, previously identified to be addressed, that had not yet been 
addressed in the document that was signed.
    (D4) Re-evaluation Process--MOU Section 5.1 requires Caltrans to be 
subject to the same procedural and substantive requirements that apply 
to DOT in carrying out the responsibilities assumed under the Pilot 
Program. This includes the process and documentation for conducting 
NEPA re-evaluations to comply with 23 CFR 771.129. Additionally, SER 
Chapter 33 discusses revalidations and re-evaluations. As in past 
audits, project file reviews and staff interviews identified varying 
degrees of understanding of, and compliance with, these procedures and 
the improper use of re-evaluation documentation to serve another 
project development purpose. Project file reviews identified the 
following inconsistencies with regards to re-evaluations:
    (a) A re-evaluation is done to determine if the approved 
environmental document or the Categorical Exclusion (CE) designation 
remains valid. In the re-evaluation process, the original decision and 
analysis needs to be reviewed for its validity. A re-evaluation was 
used to increase the scope of the original EA/FONSI. The FHWA re-
evaluation process does not accommodate such an approach. The 
supporting documentation and project files for this project were not 
available for review; and
    (b) In a second project, the NEPA document was identified in the 
Quarterly Report as a re-evaluation. This project was identified as an 
intersection improvement that was to be added to a larger project, 
already under construction. The project file contained both re-
evaluation forms and CE checklist forms. Under NEPA, the project should 
have been a stand-alone CE, as it was not a part of the original 
project.
    (D5) Section 4(f) Documentation--MOU Section 5.1.1 affirms that 
Caltrans is subject to the same procedural and substantive requirements 
that apply to DOT in carrying out the responsibilities assumed under 
the Pilot Program. The SER Chapter 20, Section 4(f) and Related 
Requirements, sets forth procedures for documenting impacts to Section 
4(f) properties in Caltrans-assigned environmental documents. As was 
also noted in the fourth and fifth FHWA audits of the Pilot Program, 
project file reviews and interviews with staff conducted during this 
audit identified inconsistencies with the implementation and 
documentation requirements for carrying out the Section 4(f) 
provisions.
    In the case of Section 4(f) evaluations, the audit team found the 
following:
    (a) Two of the three evaluations did not contain a required Section 
4(f) avoidance alternative analysis.
    (b) Two of the three evaluations did not provide a required Least 
Overall Harm Analysis.
    (D6) Statement Regarding Assumption of Responsibility--MOU section 
3.2.5 requires language regarding Caltrans' assumption of 
responsibility under 23 U.S.C. 327 be included on the cover page of 
each environmental document for all assumed Pilot Program projects. The 
audit teams' project file reviews found the following inconsistencies 
with this requirement:
    (a) The cover page for one EA reviewed during the audit did not 
include this required statement;
    (b) The cover page for one Final EIS had been modified from the 
language agreed to in the MOU; and
    (c) The cover page for three California Environmental Quality Act 
only document contained the FHWA assumption statement, even though 
there was no FHWA involvement in this document.
[FR Doc. 2012-3977 Filed 2-21-12; 8:45 am]
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