Surface Transportation Project Delivery Program; TxDOT Audit Report, 72473-72480 [2015-29518]

Agencies

• Federal Highway Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 80, Number 223 (Thursday, November 19, 2015)]
[Notices]
[Pages 72473-72480]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-29518]



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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

[FHWA Docket No. FHWA-2015-0017]


Surface Transportation Project Delivery Program; TxDOT Audit 
Report

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice.

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SUMMARY: Section 1313 of the Moving Ahead for Progress in the 21st 
Century Act (MAP-21) established the permanent Surface Transportation 
Project Delivery Program that allows a State to assume FHWA's 
environmental responsibilities for review, consultation, and compliance 
for Federal highway projects. This section mandates semiannual audits 
during each of the first 2 years of State participation to ensure 
compliance by each State participating in the Program. When a State 
assumes these Federal responsibilities, the State becomes solely 
responsible and liable for carrying out the responsibilities it has 
assumed, in lieu of FHWA. This permanent program follows a pilot 
program established by Section 6005 of Safe, Accountable, Flexible, 
Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), 
where the State of California assumed FHWA's environmental 
responsibilities (from June 29, 2007). This notice presents the 
findings of the first audit report for the Texas Department of 
Transportation (TxDOT).

FOR FURTHER INFORMATION CONTACT: Dr. Owen Lindauer, Office of Project 
Development and Environmental Review, (202) 366-2655, 
owen.lindauer@dot.gov, or Mr. Jomar Maldonado, Office of the Chief 
Counsel, (202) 366-1373, jomar.maldonado@dot.gov, Federal Highway 
Administration, Department of Transportation, 1200 New Jersey Avenue 
SE., Washington, DC 20590. Office hours are from 8:00 a.m. to 4:30 
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 
specific docket page at www.regulations.gov,

Background

    Congress proposed and the President signed into law, MAP-21 Section 
1313, establishing the Surface Transportation Project Delivery Program 
that allows a State to assume FHWA's environmental responsibilities for 
review, consultation, and compliance for Federal highway projects. This 
provision has been codified at 23 U.S.C. 327. When a State assumes 
these Federal responsibilities, the State becomes solely responsible 
and liable for carrying out the responsibilities it has assumed, in 
lieu of FHWA. This permanent program follows a pilot program 
established by Section 6005 of SAFETEA-LU, where the State of 
California assumed FHWA's environmental responsibilities (from June 29, 
2007). The TxDOT published its application for assumption under the 
National Environmental Policy Act (NEPA) Assignment Program on March 
14, 2014, at Texas Register 39(11): 1992, and made it available for 
public comment for 30 days. After considering public comments, TxDOT 
submitted its application to FHWA on May 29, 2014. The application 
served as the basis for developing the Memorandum of Understanding 
(MOU) that identifies the responsibilities and obligations TxDOT would 
assume. The FHWA published a notice of the draft of the MOU in the 
Federal Register on October 10, 2014, at 79 FR 61370 with a 30-day 
comment period to solicit the views of the public and Federal agencies. 
After the close of the comment period FHWA and TxDOT considered 
comments and proceeded to execute the MOU. Since December 16, 2014, 
TxDOT has assumed FHWA's responsibilities under NEPA, and the 
responsibilities for the NEPA-related Federal environmental laws. 
Section 327(g) of Title 23, United States Code, 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 to ensure compliance by each State participating in the 
Program. The results of each audit must be presented in the form of an 
audit report and be made available for public comment. The FHWA 
published a notice in the Federal Register on August 21, 2015, to 
solicit the views of the public and Federal agencies. The FHWA received 
no comments as a result of the public notice of the draft report. This 
notice provides the final draft of the first FHWA audit report for 
TxDOT.

    Authority: Section 1313 of Pub. L. 112-141; Section 6005 of Pub. 
L. 109-59; 23 U.S.C. 327; 49 CFR 1.48.

    Issued on: November 12, 2015.
Gregory G. Nadeau,
Administrator, Federal Highway Administration.

Surface Transportation Project Delivery Program--FHWA Audit of the 
Texas Department of Transportation for the Period Between December 16, 
2014, and June 16, 2015

Executive Summary

    This is the first audit conducted by a team of Federal Highway 
Administration (FHWA) staff of the performance of the Texas Department 
of Transportation (TxDOT) regarding responsibilities and obligations it 
has been assigned under a memorandum of understanding (MOU) whose term 
began on December 16, 2014. From that date, TxDOT assumed FHWA's 
National Environmental Policy Act (NEPA) responsibilities and 
liabilities for the Federal-aid highway program funded projects in 
Texas (NEPA Assignment Program) and FHWA's environmental role is now 
limited to program oversight and review. The FHWA audit team (team) was 
formed in January 2015 and met regularly to prepare for conducting the 
audit. Prior to the on-site visit, the team performed reviews of TxDOT 
project file NEPA documentation in the Environmental Compliance 
Oversight System (ECOS, TxDOT's official project filing system), 
examined the TxDOT pre-audit information response and developed 
interview questions. The on-site portion of this audit, when all TxDOT 
and other agency interviews were performed, was conducted between April 
13 and 17, 2015.
    As part of its review responsibilities specified in 23 U.S.C. 327, 
the team planned and conducted an audit of TxDOT's responsibilities 
assumed under the MOU. The TxDOT is still in the transition of 
preparing and implementing procedures and processes required for the 
NEPA Assignment. It was evident that TxDOT has made reasonable progress 
in implementing the start-up phase of the NEPA Assignment Program and 
that overall the team found evidence that TxDOT is committed to 
establishing a successful program. This report provides the team's 
assessment of the current status of several aspects of the NEPA 
Assignment Program, including successful practices and 16 observations 
that represent opportunities for TxDOT to improve their program. The 
team identified two non-compliance observations that TxDOT will need to 
address as corrective actions in their self-assessment report.

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    The TxDOT has carried out the responsibilities it has assumed in 
keeping with the intent of the MOU and the application. The team finds 
TxDOT to be in substantial compliance with the provisions of the MOU. 
By addressing the observations in this report, TxDOT will continue to 
move the program toward success.

Background

    Congress proposed and the President signed into law, the Moving 
Ahead for Progress in the 21st Century Act Section 327, that 
established the Surface Transportation Project Delivery Program that 
allows a State to assume FHWA's environmental responsibilities for 
review, consultation, and compliance for Federal highway projects. When 
a State assumes these Federal responsibilities, the State becomes 
solely responsible and liable for carrying out the responsibilities it 
has assumed, in lieu of FHWA. This permanent program follows a pilot 
program established by Section 6005 of the Safe, Accountable, Flexible, 
Efficient Transportation Equity Act: A Legacy for Users, where the 
State of California assumed FHWA's environmental responsibilities (from 
June 29, 2007).
    The TxDOT published its application for assumption under the NEPA 
Assignment Program on March 14, 2014, and made it available for public 
comment for 30 days. After considering public comments, TxDOT submitted 
its application to FHWA on May 29, 2014. The application served as the 
basis for developing the MOU that identifies the responsibilities and 
obligations TxDOT would assume. The FHWA published a notice of the 
draft of the MOU in the Federal Register on October 10, 2014, at 79 FR 
61370, with a 30-day comment period to solicit the views of the public 
and Federal agencies. After the close of the comment period FHWA and 
TxDOT considered comments and proceeded to execute the MOU. Since 
December 16, 2014, TxDOT has assumed FHWA's responsibilities under 
NEPA, and the responsibilities for the NEPA-related Federal 
environmental laws. These are responsibilities for (among a list of 
other regulatory interactions) the Endangered Species Act, Section 7 
consultations with the U.S. Fish and Wildlife Service (USFWS) and the 
National Oceanic and Atmospheric Administration National Marine 
Fisheries Service, and Section 106 consultations regarding impacts to 
historic properties. Two Federal responsibilities were not assigned to 
TxDOT and remain with FHWA: (1) Making project-level conformity 
determinations under the Federal Clean Air Act, and (2) conducting 
government to government consultation with federally recognized Indian 
tribes.
    Under the NEPA Assignment Program, the State of Texas was assigned 
the legal responsibility for making project NEPA decisions. In enacting 
Texas Transportation Code, Sec.  201.6035, the State has waived its 
sovereign immunity under 11th Amendment of the U.S. Constitution and 
consents to Federal court jurisdiction for actions brought by its 
citizens for projects it has approved under the NEPA Assignment 
Program.
    As part of FHWA's oversight responsibility for the NEPA Assignment 
Program, FHWA is directed [in 23 U.S.C. 327(g)] to conduct semiannual 
audits during each of the first 2 years of State participation in the 
program; and audits annually for 2 subsequent years. The purpose of the 
audits is to assess a State's compliance with the provisions of the MOU 
as well as all applicable Federal laws and policies. The FHWA's review 
and oversight obligation entails the need to collect information to 
evaluate the success of the Project Delivery Program; to evaluate a 
State's progress toward achieving its performance measures as specified 
in the MOU; and to collect information for the administration of the 
NEPA Assignment Program. This report summarizes the results of the 
first audit.

Scope and Methodology

    The overall scope of this audit review is defined both in statute 
(23 U.S.C. 327) and the MOU (Part 11). An audit generally is defined as 
an official and careful examination and verification of accounts and 
records, especially of financial accounts, by an independent unbiased 
body. With regard to accounts or financial records, audits may follow a 
prescribed process or methodology and be conducted by ``auditors'' who 
have special training in those processes or methods. The FHWA considers 
this review to meet the definition of an audit because it is an 
unbiased, independent, official and careful examination and 
verification of records and information about TxDOT's assumption of 
environmental responsibilities.
    The diverse composition of the team, the process of developing the 
review report, and publishing it in the Federal Register help define 
this audit as unbiased and an official action taken by FHWA. To ensure 
a level of diversity and guard against unintended bias, the team 
consisted of NEPA subject matter experts from the FHWA Texas Division 
Office, as well as FHWA offices in Washington, DC, Atlanta, GA, 
Columbus, OH, and Baltimore, MD. All of these experts received training 
specific to evaluation of implementation of the NEPA Assignment 
Program. Aside from the NEPA experts, the team included a trainee from 
the Texas Division office and two individuals from FHWA's Program 
Management Improvement Team who provided technical assistance in 
conducting reviews. This audit team conducted a careful examination of 
highway project files and verified information on the TxDOT NEPA 
Assignment Program through inspection of other records and through 
interviews of TxDOT and other staff.
    Audits, as stated in the MOU (Parts 11.1.1 and 11.1.5), are the 
primary mechanism used by FHWA to oversee TxDOT's compliance with the 
MOU, ensure compliance with applicable Federal laws and policies, 
evaluate TxDOT's progress toward achieving the performance measures 
identified in the MOU (Part 10.2), and collect information needed for 
the Secretary's annual report to Congress. These audits also must be 
designed and conducted to evaluate TxDOT's technical competency and 
organizational capacity, adequacy of the financial resources committed 
by TxDOT to administer the responsibilities assumed, quality assurance/
quality control process, attainment of performance measures, compliance 
with the MOU requirements, and compliance with applicable laws and 
policies in administering the responsibilities assumed. The four 
performance measures identified in the MOU are (1) compliance with NEPA 
and other Federal environmental statutes and regulations, (2) quality 
control and quality assurance for NEPA decisions, (3) relationships 
with agencies and the general public, and (4) increased efficiency and 
timeliness and completion of the NEPA process.
    The scope of this audit included reviewing the processes and 
procedures used by TxDOT to reach and document project decisions. The 
intent of the review was to check that TxDOT has the proper procedures 
in place to implement the MOU responsibilities assumed, ensure that the 
staff is aware of those procedures, and that the procedures are working 
appropriately to achieve NEPA compliance. The review is not intended to 
evaluate project-specific decisions as good or bad, or to second guess 
those decisions, as these decisions are the sole responsibility of 
TxDOT.
    The team gathered information that served as the basis for this 
audit from three primary sources: (1) TxDOT's response to a pre-audit 
information

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request, (2) a review of a random sample of project files with approval 
dates subsequent to the execution of the MOU, and (3) interviews with 
TxDOT, the Texas Historical Commission, and the USFWS staff. The pre-
audit information request consisted of questions and requests for 
information focused on the following six topics: Program management, 
documentation and records management, quality assurance/quality 
control, legal sufficiency review, performance measurement, and 
training. The team subdivided into working groups that focused on five 
of these topics. The legal sufficiency review was limited to 
consideration of material in TxDOT's response to the pre-audit 
information request.
    The team defined the timeframe for highway project environmental 
approvals subject to this first audit to be between December 2014 and 
February 2015. This initial focus on the first 3-4 months of TxDOT's 
assumption of NEPA responsibilities was intended to: (1) Assist TxDOT 
in start-up issues in the transition period where they assumed NEPA 
responsibilities for all highway projects, (2) follow an August 2014 
Categorical Exclusion (CE) monitoring review that generated expected 
corrective actions, and (3) allow the first audit report to be 
completed 6 months after the execution of the MOU. Based on monthly 
reports from TxDOT, the universe of projects subject to review 
consisted of 357 projects approved as CE's, 9 approvals to circulate an 
Environmental Assessment (EA), 4 findings of no significant impacts 
(FONSI), 3 re-evaluations of EAs, 2 Section 4(f) decisions, and 1 
approval of a draft environmental impact statement (EIS) project. The 
team selected a random sample of 57 CE projects sufficient to provide a 
90 percent confidence interval and reviewed project files for all 19 
approvals that were other than CEs (for a total of 76 files reviewed). 
Regarding interviews, the team's focus was on leadership in TxDOT's 
Environmental Affairs Division (ENV) Headquarters in Austin. Due to 
logistical challenges, the team could only interview a sample of 
environmental and leadership staff from TxDOT Districts focusing for 
this first audit on face-to-face interviews in Austin, Waco, and San 
Antonio and conference call interviews with Corpus Christi, Laredo, and 
Fort Worth Districts. The team plans to interview staff from at least 
18 TxDOT District offices by completion of the third audit. There are a 
total of 25 TxDOT Districts and the team anticipates covering all over 
the 5-year term of this MOU.

Overall Audit Opinion

    The team recognizes that TxDOT is still in the beginning stages of 
the NEPA Assignment Program and that its programs, policies, and 
procedures are in transition. The TxDOT's efforts are appropriately 
focused on establishing and refining policies and procedures; training 
staff; assigning and clarifying changed roles and responsibilities; and 
monitoring its compliance with assumed responsibilities. The team has 
determined that TxDOT has made reasonable progress in implementing the 
start-up phase of NEPA Assignment operations and believes TxDOT is 
committed to establishing a successful program. Our analysis of project 
file documentation and interview information found two non-compliance 
observations, several other observations, and noted ample evidence of 
good practice. The TxDOT has carried out the responsibilities it has 
assumed in keeping with the intent of the MOU and the Application and 
as such the team finds TxDOT to be in substantial compliance with the 
provisions of the MOU.
    The TxDOT's staff and management expressed a desire to receive 
constructive feedback from the team. By considering and acting upon the 
observations contained in this report, TxDOT should continue to improve 
upon carrying out its assigned responsibilities and ensure the success 
of its NEPA Assignment Program.

Non-Compliance Observations

    Non-compliance observations are instances of being out of 
compliance with a Federal regulation, statute, guidance, policy, TxDOT 
procedure, or the MOU. The FHWA expects TxDOT to develop and implement 
corrective actions to address all non-compliance observations. The 
TxDOT may consider implementing any recommendations made by FHWA to 
address non-compliance and other observations. The team acknowledges 
that TxDOT has already taken corrective actions to address these 
observations. The FHWA will conduct follow up reviews of the non-
compliance observations as part of Audit #2, and if necessary, future 
audits.
    The MOU (Part 3.1.1) states ``pursuant to 23 U.S.C. 327(a)(2)(A), 
on the Effective Date, FHWA assigns, and TxDOT assumes, subject to the 
terms and conditions set forth in 23 U.S.C. 327 and this MOU, all of 
the U.S. Department of Transportation (DOT) Secretary's 
responsibilities for compliance with NEPA, 42 U.S.C. 4321 et seq. with 
respect to the highway projects specified under subpart 3.3. This 
includes statutory provisions, regulations, policies, and guidance 
related to the implementation of NEPA for Federal highway projects such 
as 23 U.S.C. 139, 40 CFR parts 1500-1508, DOT Order 5610.1C, and 23 CFR 
part 771 as applicable.''

Non-Compliance Observation #1

    The first non-compliance observation, in 1 of the 76 projects 
reviewed, pertained to FHWA policy in 23 CFR 771.105(d) that (1) 
``measures necessary to mitigate adverse impacts be incorporated into 
the action,'' and (2) ``the Administration will consider, among other 
factors, the extent to which the proposed measures would assist in 
complying with a federal statute, Executive Order, or Administration 
regulation or policy.'' The team identified a project whose description 
indicated that its purpose was to mitigate impacts of a larger project 
by constructing a noise abatement barrier. Classifying this project as 
a CE [23 CFR 771.117(c)(6)], that specifies the action as a separate 
noise abatement barrier mitigation project, does not comply with FHWA 
approved TxDOT 2011 Noise Guidelines. The TxDOT must have a program for 
Type II noise abatement projects in order to allow for the construction 
of a noise abatement barrier as a separate project (23 CFR 772.5). The 
TxDOT does not currently have such a program and, therefore, could not 
approve the noise abatement barrier as a separate project. Before 
approving any NEPA decision document, TxDOT should be knowledgeable of, 
and must apply, all applicable provisions of FHWA policy and 
regulation.

Non-Compliance Observation #2

    The second non-compliance observation is a project approved by 
TxDOT staff before all environmental requirements had been satisfied. 
Before TxDOT's approval, the project required a project-level air 
quality conformity determination pursuant to 40 CFR 93.121 and be 
consistent with the State Transportation Improvement Program (STIP). 
The TxDOT staff made a conditional NEPA approval (CE determination) on 
a project that, according to records, was not correctly listed in the 
STIP. The TxDOT then reported the approval to FHWA. The FHWA's policy 
in 23 CFR 771.105 is to coordinate compliance with all environmental 
requirements as a single process under NEPA. Conditional approvals do 
not comply with the

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FHWA NEPA policy because they have the effect of allowing a project to 
move to the next step of project development without satisfying all 
environmental requirements. Also, there is no authority in the MOU for 
TxDOT to make conditional approvals. There is a specific MOU 
requirement in Part 3.3.1 for a project to be consistent with the STIP. 
The team found evidence in ECOS that this project required a project-
level air quality conformity determination. The responsibility for this 
determination was not assigned to TxDOT under the NEPA Assignment MOU, 
and FHWA subsequently made this determination. The team acknowledges 
this project was somewhat unusual as there was uncertainty at the 
Department as to whether the project was adding capacity requiring a 
Division Office conformity determination. Since that time, the Division 
Office has confirmed that such projects do add capacity and are subject 
to individual project level conformity. Where required, TxDOT must 
coordinate with the FHWA Texas Division Office staff to obtain a 
project-level air quality conformity determination before making a NEPA 
approval decision for a project.

Observations and Successful Practices

    This section summarizes the team's observations about issues or 
practices that TxDOT may want to consider as areas to improve as well 
as practices the team believes are successful that TxDOT may want to 
continue or expand in some manner. All six topic areas identified in 
FHWA's pre-audit information request are addressed here as separate 
discussions. Our report on legal sufficiency reviews is a description 
of TxDOT's current status as described in their response to the pre-
audit information request. The team will examine TxDOT's legal 
sufficiency reviews by project file inspection and through interviews 
in future audits.
    The team lists 16 observations below that we urge TxDOT to act upon 
to make improvements through one or more of the following: corrective 
action, targeted training, revising procedures, continued self-
assessment, or by some other means. The team acknowledges that by 
sharing this draft audit report with TxDOT, they have already 
implemented actions to address the observations to improve their 
program. The FHWA will consider the status of these observations as 
part of the scope of Audit #2. We will also include a summary 
discussion that describes progress since the last audit in the Audit #2 
report.

Program Management

    The team recognized four successful program management practices. 
First, it was evident through interviews that TxDOT has employed highly 
qualified staff for its program. Second, the team saw evidence of 
strong communication between TxDOT's ENV and District staff explaining 
roles and responsibilities associated with implementation of the MOU 
for NEPA Assignment. Third, based on the response to the pre-audit 
information request and from interviews, the team recognized efforts to 
create procedures, guidance, and tools to assist Districts in meeting 
requirements of the MOU. And finally, District staff understands and 
takes pride in ownership when making CE determinations. The ENV 
likewise takes pride in the responsibility for EA and EIS 
decisionmaking as well as oversight for the NEPA Assignment Program.
    The team found evidence of successful practices in information 
provided by TxDOT and through interviews. They learned of specific 
incidences where TxDOT has intentionally hired new personnel and 
reorganized existing staff to achieve a successful NEPA Assignment 
Program. The TxDOT hired a Self-Assessment Branch (SAB) manager, a 
staff development manager (training coordinator), and an additional 
attorney to assist with NEPA Assignment responsibilities. The audit 
team recognizes the TxDOT ``Core Team'' concept (which provides joint 
ENV and District peer reviews for EAs and EISs only) as a good example 
of TxDOT utilizing their existing staff to analyze NEPA documents and 
correct compliance issues before finalization. Many Districts 
appreciate the efforts of the Core Team and credit them for assuring 
their projects are compliant. The ``NEPA Chat'' is another great 
example of TxDOT's intentional effort to achieve a compliant NEPA 
Assignment Program with enhanced communication among TxDOT 
environmental staff statewide. The NEPA Chat, led by ENV, provides a 
platform for complex issues to be discussed openly, and for Districts 
to learn about statewide NEPA Assignment Program issues. To date, the 
NEPA Chat has proven to be an effective vehicle to disseminate relevant 
NEPA information quickly and selectively to the TxDOT District 
Environmental Coordinators. Lastly, based on interviews and the 
response to the pre-audit information request, almost all the ENV and 
District staff feels there is sufficient staff to deliver a successful 
NEPA Assignment program. This is further supported by ENV's willingness 
to shift responsibilities to better align with the needs of the NEPA 
Assignment program. After interviewing the various Districts, they 
indicated that ENV is available to assist the Districts when they need 
help.
    The SAB fosters regular and productive communication with District 
staff. Based on reviews of project documentation, the SAB staff 
prepares and transmits a summary of their results, both positive and 
negative, and follows up via telephone with the District Environmental 
Coordinator responsible for the project. They provided this feedback 
within 2 weeks of their review, which results in early awareness of 
issues and corrective action, where necessary; as well as positive 
feedback when the project files appear to be in order. The creation of 
the pilot ``Risk Assessment'' tool (a ``smart pdf form'') for 
environmental documents is a successful, but optional procedure. When 
used, it helps Districts understand the resources to be considered, 
what resources should receive further analysis and documents District 
decisions. Even though this tool is not currently integrated within 
ECOS, it can be uploaded when used. The TxDOT noted that it had 
recently developed a Quality Assurance/Quality Control (QA/QC) 
Procedures for Environmental Documents Handbook (March 2015), and it is 
used by the Core Team to develop EA and EIS documents. Through its 
response to pre-audit questions and through interviews with various 
staff, TxDOT has demonstrated that it has provided a good base of 
tools, guidance, and procedures to assist in meeting the terms of the 
MOU and takes pride in exercising its assumed responsibilities.
    The team considers three observations as sufficiently important to 
urge TxDOT to consider improvements or corrective actions to project 
management in their NEPA Assignment Program.

Observation #1

    The CE review completed in August resulted in expectations to 
implement important updates to ECOS. The team found, however, that 
TxDOT has been slow to implement updates to ECOS. These improvements 
would ensure that TxDOT's project records are complete and correct, 
utilizing the appropriate terms as cited in the MOU, law, regulation, 
or executive order. The team's ECOS related observations for 
improvement come from information provided by TxDOT and through 
interviews. Beginning with the monitoring review of CE projects 
completed in August 2014 the team identified the many accomplishments

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made by TxDOT to ensure ECOS meets the needs of users of this 
information. However, we also noted areas where necessary ECOS 
improvement had not yet happened. The team was told that due to 
outsourcing of many of TxDOT's IT services, the State was unable to 
complete improvements, due to other perceived priorities in the 
Department. The TxDOT interviewees indicated that a contract will soon 
be executed to accomplish needed changes, based on the CE monitoring 
report. Given the importance of ECOS as TxDOT's official file of record 
(for projects under implementation of the MOU) for the NEPA Assignment 
Program, and since obtaining IT contracting resources appears to be a 
challenge, the team urges TxDOT leadership to support timely and 
necessary updates to the ECOS system. The team recommends that the 
statement of work for the IT contract be sufficiently broad to 
implement all the required and necessary changes identified in both 
reviews.

Observation #2

    The team would like to draw the attention of TxDOT to issues and 
concerns arising from interaction with resource and regulatory 
agencies, especially in ways for TxDOT to address possible disputes and 
conflicts early and effectively. During interviews with both the TxDOT 
staff and resource agency staff, the team learned that there have been 
no conflicts between TxDOT and agencies. Despite no reported conflicts, 
agency staff reported issues of concern that they believed TxDOT was 
not addressing. Examples include: being kept in the loop on the 
decisions made by TxDOT, occasional quality concerns for information 
provided by TxDOT, and occasionally feeling rushed to review and 
process TxDOT projects. The team recognizes that good communication is 
a shared responsibility among the parties and suggests TxDOT consider 
ways to recognize and address disputes, issues, and concerns before 
they become conflicts.

Observation #3

    The team found indications from interviews that local public agency 
(LPA) projects do not receive the same scrutiny as TxDOT projects, 
despite TxDOT's project development and review process applying 
uniformly to all highway projects. Several District staff confirmed 
that LPA projects were reviewed no differently from TxDOT projects; 
others did not, which means TxDOT may need to consider ways to ensure 
its procedures are consistently applied, regardless of project sponsor. 
The team found the approach to developing and providing training for 
LPA sponsored projects to be a lower priority than for TxDOT projects.

Documentation and Records Management

    The team relied completely on information in ECOS, TxDOT's official 
file of record, to evaluate project documentation and records 
management. The ECOS is a tool for information recordation, management, 
and curation, as well as for disclosure within TxDOT District Offices 
and between Districts and ENV. The strength of ECOS is its potential 
for adaptability and flexibility. The challenge for TxDOT is to 
maintain and update the ECOS operating protocols (for consistency of 
use and document/data location) and to educate its users on updates in 
a timely manner.
    Based on examination of the 76 files reviewed, the team identified 
4 general observations (#4, #5, #6, and #7) about TxDOT record keeping 
and documentation that could be improved or clarified. The team used a 
documentation checklist to verify and review the files of the 76 
sampled projects.

Observation #4

    The team was unable to confirm in 11 of the projects where 
environmental commitments may have needed to be recorded in an 
Environmental Permits Issues and Commitments (EPIC) plan sheet, that 
the commitments were addressed. All environmental commitments need to 
be recorded and incorporated in the project development process so they 
are documented and or implemented when necessary. If required 
environmental commitments are not recorded in an EPIC, those 
commitments would not be implemented. The TxDOT should evaluate whether 
its procedures to ensure that environmental commitments are both 
recorded and implemented is appropriate.

Observation #5

    The team found 7 of the 57 CE projects reviewed to lack sufficient 
project description detail to demonstrate that the category of CE 
action and any related conditions or constraints were met, in order to 
make a CE approval. The team performing the CE monitoring review 
completed in August 2014 made a similar observation where TxDOT 
indicated it would take corrective action. The particular project files 
included actions that could not be determined to be limited to the 
existing operational right-of-way (CE c22), or an action that utilizes 
less than $5 million of Federal funds (CE c23) or an action that met 
six environmental impact constraints before it could be applied (CEs 
c26, c27, c28). The documented compliance with environmental 
requirements prepared by TxDOT needs to support the CE action proposed 
and that any conditions or constraints have been met. The TxDOT should 
evaluate whether changes in ECOS and/or their procedures are necessary 
to ensure that project descriptions are recorded in sufficient detail 
to verify the appropriate CE action was approved.

Observation #6

    The team at times encountered difficulty finding information and 
found outdated terms in project files. Several project files included 
CE labels that are no longer valid (blanket categorical exclusion, 
BCE), but approvals for those project identified the appropriate CE 
action. Other files indicated that certain coordination had been 
completed, but the details of the letters or approvals themselves could 
not be located. In reviewing project records, the team occasionally 
encountered difficulty finding uploaded files because information 
occurred in different tabs within ECOS. Another source of confusion for 
the team was inconsistency in file naming (or an absence of a file 
naming convention) for uploaded files. Because of these difficulties 
the team could not determine whether a project file was incomplete or 
not. The audit team urges TxDOT to seek ways to establish procedures 
and organize ECOS to promote project records where information may be 
identified and assessed more easily.

Observation #7

    The team notes that most ECOS project records are for CEs, which 
may be difficult to disclose to the public. Based on interviews with 
TxDOT staff the team wondered how TxDOT would disseminate information, 
such as technical reports, from ECOS as part of Public Involvement 
procedures. The ENV management has since explained that information 
will be provided upon request or at public meetings/hearings for a 
project.

Quality Assurance/Quality Control

    The team considers the QA/QC program to be generally in compliance 
with the provisions of TxDOT's QA/QC Plan. However, TxDOT has yet to 
apply the SAB program-level review for EA and EIS projects and the lack 
of data from these types of projects means the

[[Page 72478]]

team at this time cannot fully evaluate the effectiveness of the 
program for these types of projects. The team learned that TxDOT's SAB 
is still developing standards and training for implementation.
    The team recognized four areas of successful practices in TxDOT's 
approach to QA/QC. First, TxDOT's use of a Core Team and its 
development and usage of QA/QC checklists and toolkits are effective 
and appear to result in a more standardized internal review process. 
The TxDOT QA/QC Plan states that a Core Team, composed of a District 
Environmental Coordinator and one individual from ENV, will be formed 
for every EA and EIS project. The QA/QC Plan states that Toolkits, 
Administrative Completeness Reviews and Determinations, Review for 
Readiness, and Certification forms will be utilized to ensure quality 
documents and compliance with NEPA laws and regulations.
    Second, the team learned through interviews that TxDOT's SAB review 
process has resulted in very timely and helpful feedback to District 
staff. The team was told that feedback from SAB team reviews is 
generally communicated within 2 weeks of the NEPA documentation 
completion date. District staff said that they appreciate the feedback 
that helps to ensure they are following procedures and guidelines. The 
TxDOT also established a ``Corrective Action Team'' (CAT) that aids in 
the SAB team's effectiveness. The CAT is responsible for determining if 
findings from SAB reviews are systematic or confined to a certain area 
or individual. The CAT is in place to ensure issues found by SAB review 
are resolved.
    Third, the team was told that some District staff developed their 
own QA/QC tools and processes for CE projects (i.e. smart PDF forms, 
peer reviews, and a two signature approval process) that have led to 
fewer errors.
    Fourth, TxDOT's SAB and CAT recently implemented peer reviews for 
forms, guidance, and handbooks that should lead to the reduction of 
improper documentation and need for revisions. The SAB and CAT team 
work together with ENV subject matter experts to update forms, 
guidance, and handbooks in three locations (ENV internal server, 
internal ENV Web page, and external TxDOT Web site). The ENV has 
strongly encouraged the Districts to go to the appropriate location 
before starting a new document to ensure they are using the most up to 
date version of all forms. The end result of the form peer review 
process should result in fewer errors and more consistency in NEPA 
documentation.
    The team considers three observations as sufficiently important to 
urge TxDOT to consider improvements or corrective actions to their 
approach to QA/QC.

Observation #8

    The team learned through interviews that no EA or EIS projects had 
been reviewed by the SAB and there was no agreed upon timeline for the 
completion of SAB guidelines or standards. This is due to the standards 
for SAB reviews of EA and EIS documents not yet being established, and 
to the fact only four FONSIs were made on EAs at the time of the team's 
ECOS project file review. The team acknowledges that TxDOT conducts QA/
QC for EA and EIS projects and urges TxDOT to complete and apply their 
SAB approach in a timely manner.

Observation #9

    The team learned through interviews that there is no established 
project sampling methodology for self-assessing TxDOT's effectiveness 
of their standards and guidance. While TxDOT employs sampling, the team 
could not find information that described how TxDOT assessed that they 
evaluated a sufficient number of projects. Through our interviews with 
SAB staff the team learned that there have been several approaches to 
conducting reviews of the CEs completed since the NEPA Assignment 
Program. Before the NEPA Assignment Program began, the SAB team 
reviewed 100 percent of CE files. Then between December 2014, and 
February 2015, SAB reviews were a grab sample of 11 files each week. 
Eight were partial project reviews that focused on certain project 
types. The remaining three reviews were of complete project files for 
new CE categories (c22 and c23's). Since February 2015, the SAB team 
has reviewed only the CE Documentation Form in project files. The team 
was unable to determine whether TxDOT staff had a basis to assert that 
its process was working as intended and that they could adequately 
identify areas needing improvement. The TxDOT needs to better assess 
the effectiveness of its QA/QC approach (a performance measure that it 
must report on) by clarifying its review approach, recording 
justifications for decisions TxDOT makes on how often project records 
are evaluated, and what specifically is reviewed.

Observation #10

    The team learned that TxDOT District staff does not have a clear 
and consistent understanding of what distinguishes ``quality 
assurance'' and ``quality control'' and ``self-assessment'' with 
regards to expectations for reviews necessary to reach a NEPA decision 
versus feedback once a decision was made. From interviews with District 
and ENV staff, the team found staff was unclear about the role and 
responsibility of the SAB and the CAT. Several District managers said 
that they had not seen the QA/QC feedback on projects in their District 
and were not sure if their staff had received comments from the SAB or 
the CAT. The TxDOT should evaluate whether they need to clarify 
expectations for receiving review comments before and after NEPA 
decisionmaking to District staff.

Legal Sufficiency Review

    During this audit period FHWA attorneys delivered a legal 
sufficiency training for the benefit of the TxDOT attorneys. The team 
did not perform analyses of this topic area during this audit. However, 
the team noted that TxDOT developed a set of Standard Operating 
Procedures for Legal Sufficiency Review. The process is also described 
in ENV's Project Delivery Manual, an internal document of processes and 
procedures used by project delivery staff. The TxDOT's Office of 
General Counsel tracks legal review requests and their status by 
keeping a log.
    According to TxDOT's project delivery manual, four attorneys are 
available for legal reviews. Additional legal assistance may be 
requested by TxDOT to the Transportation Division of the Office of the 
Texas Attorney General. These attorneys would, as part of their review 
responsibilities, provide written comments and suggestions (when 
necessary) to TxDOT ENV to help ensure a document's legal sufficiency. 
They would also be available to discuss questions or issues. Once the 
reviewing attorney is satisfied that staff has addressed his or her 
comments/suggestions to the maximum extent reasonably practicable, the 
reviewing attorney will provide TxDOT ENV with written documentation 
that the legal sufficiency review is complete.
    The TxDOT ENV has indicated it will not finalize a Final EIS, 
individual Section 4(f) evaluation, Notice of Intent, or 139(l) Notice 
before receiving written documentation that the legal sufficiency 
review is complete. The team was informed that, at the discretion of 
TxDOT ENV, EAs may be reviewed for legal sufficiency. If additional 
reviews are needed, the type and scope of an additional review would be 
determined by TxDOT ENV on a case-by-case basis.

[[Page 72479]]

Performance Measurement

    The purpose of performance measures is explained in the MOU (Part 
10). Four performance measures were mutually agreed upon by FHWA and 
TxDOT so that FHWA can take them into account in its evaluation of 
TxDOT's administration of the responsibilities it has assumed under the 
MOU. These measures provide an overall indication of TxDOT's discharge 
of its MOU responsibilities. In collecting data related to the 
reporting on the performance measures, TxDOT monitors its overall 
progress in meeting the targets of those measures and includes this 
data in self-assessments provided under the MOU (Part 8.2.5). The four 
performance measures are: (1) Compliance with NEPA and other Federal 
environmental statutes and regulations, (2) quality control and 
assurance for NEPA decisions, (3) relationships with agencies and the 
general public, and (4) increased efficiency and timeliness in 
completion of the NEPA process.
    The TxDOT is gathering performance baseline data and testing data 
collection techniques designed to inform the performance measure 
metrics that will be reported. The TxDOT intends, according to 
information provided in their response to pre-audit information 
questions, to begin reporting on performance measures with the 
submittal of the next self-assessment summary report. This report is 
expected in September 2015.
    Developing baseline measures is an important part of establishing a 
performance measure program. The team learned in interviews that 
TxDOT's QA/QC process includes procedures to ensure that each 
performance measure has begun with the careful vetting (by following up 
with individuals in Districts) of data used to develop the baseline 
measures for performance timeliness. This process should contribute to 
the validity of the measures. The TxDOT staff explained in interviews 
that the primary sources of information for overall performance measure 
baselines are District records and ECOS records.
    The TxDOT staff stated that they are considering a variety of 
performance measurements in addition to measures identified in their 
response to the pre-audit information request. The audit team 
recognizes that developing meaningful measures for this program is 
difficult. However, the audit team encourages TxDOT staff to continue 
to explore innovative ways to measure performance. (For example, one 
interviewee described statistical and visual methods to report the 
performance measure of timeliness this way: ``We will calculate all the 
statistical numbers. We will look at median and look at cluster around 
the median. It will likely result in a visual analysis of the data (box 
plot with outliers, measures of central tendency).'')

Observation #11

    The TxDOT reports in their response to the pre-audit information 
request that the QA/QC measure for NEPA decisions focuses only on EA 
and EIS projects, but not decisions related to CEs and other specific 
NEPA-related issues. Many decisions are tied to NEPA including 
important ones such as decisions on Section 4f (identification of 
properties, consideration of use, consideration of prudent and feasible 
avoidance alternatives) and re-evaluations (whether the outcome was 
adequately supported and is still valid). In applying this performance 
measure, the team urges TxDOT consider evaluating a broader range of 
decisions.

Observation #12

    The team recognizes that TxDOT is still in the very early stages of 
applying its performance measures. Based on information gained in the 
pre-audit request and through interviews, more information on 
performance measures and their verification may need to be presented 
before the utility of such measures can be evaluated for audit 
purposes. The performance measure for compliance with NEPA and other 
Federal requirements for EA and EIS projects have yet to be fully 
defined. The performance measurement plan indicated that TxDOT would 
conduct agency polls to determine the measure for relationships with 
agencies and the general public, but little detail was provided as to 
what polls would be conducted and verified. The team also was concerned 
that the measure for the TxDOT relationship with the public may be too 
limited by focusing on the number of complaints. Such ``negative 
confirmation'' monitoring tends to be used when the underlying system 
or process under evaluation is known to have low levels of errors or 
problems. Given that NEPA assumption is new to TxDOT, such practice 
does not appear to be appropriate for gauging effectiveness at this 
time.

Training Program

    The team reviewed TxDOT's initial training plan provided in the 
response to the pre-audit information request and evaluated its 
contents and adequacy through interviews of ENV and District staff. 
Based on information gained, TxDOT staff should consider the following 
issues and questions in preparing the annual update of their training 
plan, as required in the MOU. The team found the training plan 
compliant.
    The team recognizes two successful practices. First, FHWA 
recognizes that TxDOT's largest venue for training is its annual 
environmental conference. This annual gathering of Federal, State, and 
local agency employees as well as consultants, in a context of 
fellowship (400+ attendees), addresses a wide array of environmental 
topics that reinforce existing and new environmental policies and 
procedures. The presentations at the conference are usually no longer 
than 1 hour per topic, but on some occasions does provide more in depth 
training. The team encourages the continuation of the conference.
    Second, the ``NEPA Chat'' is a monthly ENV-led web-based learning/
exchange opportunity for TxDOT environmental employees statewide. It is 
a venue for them to receive updated news and announcements, exchange 
ideas and is a forum for routine communication among Districts and ENV. 
This informal training venue is versatile, flexible, and responsive to 
the need to communicate information that should improve the consistency 
of statewide NEPA Assignment practices.
    The team considers four observations as sufficiently important to 
urge TxDOT to consider improvements or corrective actions to their 
approach to the training program. The FHWA recognizes that TxDOT's 
assumption of Federal environmental responsibilities and liabilities is 
new and involves tasks not previously performed or familiar to its 
staff. This is the reason why training is a component of a State's 
qualifications and readiness to assume FHWA's responsibilities and is 
addressed in a separate section in the MOU (Part 12).

Observation #13

    The team identified a concern about TxDOT's approach to training 
and its training plan. Information gained in interviews indicated that 
the initial TxDOT training plan relied heavily on a training model 
employed by the California Department of Transportation (Caltrans), 
because Caltrans is the only State that has assumed NEPA 
responsibilities for the entire highway program. The FHWA does not 
believe the Caltrans training model can replicate its current form to 
meet the needs of TxDOT, because TxDOT has fewer NEPA staff, State 
environmental laws that differ in scope, and a different

[[Page 72480]]

business ``culture.'' There are other States (Idaho, Michigan, North 
Dakota, Ohio, and Wyoming) that have established training plans that 
TxDOT could draw upon as examples. These examples may benefit TxDOT and 
TxDOT should consider evaluating components of these State's training 
plans in their future annual updates of their own training plan.

Observation #14

    The team found evidence that some aspects of training tasks were 
either unattended and/or appear to have been forgotten based on the 
training plan information provided to the team. The TxDOT has a section 
of their Web site devoted to training, that the team learned from 
interviews, is out of date. Some courses are no longer taught and 
several classes are in need of updating, all of which provided for 
training of non-TxDOT staff (i.e. local governments and consultants). 
The team urges TxDOT to assess whether the proposed training approach 
for non-TxDOT staff (relying heavily upon the annual environmental 
conference) is adequate and responsive enough to address a need to 
quickly disseminate newly developed procedures and policy.

Observation #15

    The TxDOT training plan is currently silent on whether certain 
subjects and topics are mandatory or required for certain job 
responsibilities. The TxDOT staff told the team they would be 
developing a ``progressive training plan'' that will identify the range 
of training necessary for each job classification. District 
Environmental Coordinators, and particularly District managers who 
allocated training resources, indicated in interviews that they needed 
to know which training was required for various TxDOT job categories, 
to set budgeting priorities. The team recognized the important 
connection between getting District staff trained and a clear statement 
whether training was required for a certain job. Due to the connection 
potentially being tenuous, this may explain the inconsistency the team 
heard in interview responses to questions on training commitments from 
District managers. The team suggests that the progressive training plan 
clearly identify training required for each job classification.

Observation #16

    From the perspective of the MOU, training planning and 
implementation is a partnership effort amongst TxDOT, FHWA, and other 
agencies. Training should be an ongoing task that follows an up-to-date 
and mid-to-long range training plan. The current training plan includes 
mostly TxDOT self-identified training needs and addresses those needs. 
The MOU (Part 12.2) allows for 3 months after the MOU is executed, to 
develop a training plan in consultation with FHWA and other agencies. 
The TxDOT has committed in the MOU to consider the recommendations of 
agencies in determining training needs, and to determine with FHWA, the 
required training in the training plan MOU (Part 12.2). The TxDOT 
considered and will address the specific comments from the U.S. Army 
Corps of Engineers in the current training plan. However, the team 
learned through interviews that individuals responsible for training 
planning were unaware of the coordination between TxDOT subject matter 
experts and other agencies related to training. It may be useful for 
the TxDOT training coordinator to be fully involved and aware of the 
range of coordination other TxDOT staff performs so that the training 
plan benefits from this coordination.

Finalization of Report

    The FHWA received no comments during the 30-day comment period for 
the draft audit report. The FHWA has finalized the draft Audit #1 
report previously published in the Federal Register without substantive 
changes.

[FR Doc. 2015-29518 Filed 11-18-15; 8:45 am]
BILLING CODE 4910-22-P