Surface Transportation Project Delivery Program; TxDOT Audit #4 Report, 15448-15453 [2018-07293]

Agencies

• Federal Highway Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 83, Number 69 (Tuesday, April 10, 2018)]
[Notices]
[Pages 15448-15453]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-07293]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

[FHWA Docket No. FHWA-2017-0038]


Surface Transportation Project Delivery Program; TxDOT Audit #4 
Report

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice.

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SUMMARY: The Surface Transportation Project Delivery Program 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. Prior to the Fixing America's Surface 
Transportation (FAST) Act of 2015, the Program required semiannual 
audits during each of the first 2 years of State participation to 
ensure compliance by each State participating in the Program. This 
notice finalizes the findings of the fourth audit report for the Texas 
Department of Transportation's (TxDOT) participation in accordance with 
these pre-FAST Act requirements.

FOR FURTHER INFORMATION CONTACT: Dr. Owen Lindauer, Office of Project 
Development and Environmental Review, (202) 366-2655, 
[email protected], or Mr. Jomar Maldonado, Office of the Chief 
Counsel, (202) 366-1373, [email protected], Federal Highway 
Administration, U.S. 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

    The Surface Transportation Project Delivery Program 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. Since December 16, 2014, 
TxDOT has assumed FHWA's responsibilities under the National 
Environmental Policy Act of 1969 and the responsibilities for reviews 
under other Federal environmental requirements under this authority.
    Prior to December 4, 2015, 23 U.S.C. 327(g) required the Secretary 
to conduct semiannual audits during each of the first 2 years of State 
participation, annual audits during years 3 and 4, and monitoring each 
subsequent year of State participation to ensure compliance by each 
State participating in the program. The results of each audit were 
required to be presented in the form of an audit report and be made 
available for public comment. On December 4, 2015, the President signed 
into law the FAST Act, Public Law 114-94, 129 Stat. 1312 (2015). 
Section 1308 of the FAST Act amended the audit provisions by limiting 
the number of audits to one audit each year during the first 4 years of 
a State's participation.
    A draft version of this report was published in the Federal 
Register on December 14, 2017, at 82 FR 59206 and was available for 
public review can comment. The FHWA received seven responses during the 
30-day public notice and comment period. None of the comments were 
substantive. The American Road and Transportation Builders Association 
voiced support of this program. The remaining six comments were 
unrelated to this report. This notice finalizes the findings of the 
fourth audit report for TxDOT participation in the Surface 
Transportation Project Delivery Program.

    Authority:  Section 1313 of Public Law 112-141; Section 6005 of 
Public Law 109-59; Public Law 114-94; 23 U.S.C. 327; 49 CFR 1.85.

    Issued on: April 3, 2018.
Brandye L. Hendrickson,
Acting Administrator, Federal Highway Administration.

Surface Transportation Project Delivery Program

FHWA Audit #4 of the Texas Department of Transportation

June 16, 2016 to August 1, 2017

Executive Summary

    This report summarizes the results of FHWA's fourth audit review 
(Audit #4) to assess the performance by the Texas Department of 
Transportation (TxDOT) regarding its assumption of responsibilities 
assigned by Federal Highway Administration (FHWA), under a 
memorandum of understanding (MOU) that took effect on December 16, 
2014. TxDOT assumed FHWA's National Environmental Policy Act (NEPA) 
responsibilities and other environmental review responsibilities 
related to Federal-aid highway projects in Texas. The status of 
FHWA's observations from the third audit review (Audit #3), 
including any TxDOT self-imposed corrective actions, is detailed at 
the end of this report. The FHWA Audit #4 team (team) appreciates 
the cooperation and professionalism of TxDOT staff in conducting 
this review.
    The team was formed in October 2016 and met regularly to prepare 
for the audit. Prior to the on-site visit, the team: (1) performed 
reviews of project files in TxDOT's Environmental Compliance 
Oversight System (ECOS), (2) examined TxDOT's responses to FHWA's 
information requests, and (3) developed interview questions. 
Interviews of TxDOT and resource agency staff occurred during the 
on-site portion of this audit, conducted on May 22-26, 2017.
    The TxDOT continues to develop, revise, and implement procedures 
and processes required to carry out the NEPA Assignment Program. 
Based on information provided by TxDOT and from interviews, TxDOT is 
committed to maintaining a successful program. This report describes 
two (2) categories of non-compliance observations and eight (8) 
observations that represent opportunities for TxDOT to improve its 
program. It also includes brief status updates of the Audit #3 
conclusions.
    The TxDOT has continued to make progress toward meeting the 
responsibilities it has assumed in accordance with the MOU. The non-
compliance observations identified in this review will require TxDOT 
to take corrective action. By taking corrective action and 
considering changes based on the observations in this report, TxDOT 
should continue to move the Surface Transportation Project Delivery 
Program (NEPA Assignment Program) forward successfully.

Background

    The NEPA Assignment Program allows a State to assume FHWA's 
environmental responsibilities for review, consultation, and 
compliance for highway projects. This program is codified at 23 
U.S.C. 327. When a State assumes these Federal responsibilities for 
NEPA project decision-making, the State

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becomes solely responsible and liable for carrying out these 
obligations in lieu of, and without further NEPA related approval 
by, FHWA.
    The State of Texas was assigned the responsibility for making 
project NEPA approvals and the responsibility for making other 
related environmental decisions for highway projects on December 16, 
2014. In enacting Texas Transportation Code, Sec.  201.6035, the 
State has waived its sovereign immunity under the 11th Amendment of 
the U.S. Constitution and consents to defend against any actions 
brought by its citizens for NEPA decisions it has made in Federal 
court.
    The FHWA project-specific environmental review responsibilities 
assigned to TxDOT are specified in the MOU. These responsibilities 
include: compliance with the Endangered Species Act (ESA), Section 7 
consultations with the U.S. Fish and Wildlife Service (USFWS) and 
the National Oceanic and Atmospheric Administration's National 
Marine Fisheries Service, and Section 106 consultations with the 
Texas Historical Commission (THC) regarding impacts to historic 
properties. Other responsibilities may not be assigned and remain 
with FHWA. They include: (1) responsibility for project-level 
conformity determinations under the Clean Air Act, and (2) the 
responsibility for government-to-government consultation with 
federally-recognized Indian Tribes. Based on 23 U.S.C. 327(a)(2)(D), 
any responsibility not explicitly assigned in the MOU is retained by 
FHWA.
    The MOU specifies that FHWA is required to conduct six audit 
reviews. These audits are part of FHWA's oversight responsibility 
for the NEPA Assignment Program. The reviews are to assess a State's 
compliance with the provisions of the MOU. They also are used to 
evaluate a State's progress toward achieving its performance 
measures as specified in the MOU; to evaluate the success of the 
NEPA Assignment Program; and to inform the administration of the 
findings regarding the NEPA Assignment Program. In December 2015, 
statutory changes in Section 1308 of the Fixing America's Surface 
Transportation Act (FAST Act) reduced the frequency of these audit 
reviews to one audit per year during the first 4 years of State 
participation in the program. This audit is the fourth completed in 
Texas. The fifth and final audit is planned for 2018.

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. Regarding 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. Principal members of the team that conducted this 
audit have completed special training in audit processes and 
methods.
    The diverse composition of the team and the process of 
developing the review report and publishing it in the Federal 
Register help to maintain an unbiased review and establish the audit 
as an official action taken by FHWA. The team for Audit #4 included 
NEPA subject-matter experts from the FHWA Texas Division Office, as 
well as FHWA offices in Washington, DC, Atlanta, GA, Charleston, SC, 
and Salt Lake City, UT. In addition to the NEPA experts, the team 
included FHWA planners, engineers, and air quality specialists from 
the Texas Division Office.
    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, 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 consider TxDOT's technical competency and organizational 
capacity, adequacy of the financial resources committed by TxDOT to 
administer the responsibilities assumed, quality assurance/quality 
control (QA/QC) process, attainment of performance measures, 
compliance with the MOU requirements, and compliance with applicable 
laws and policies in administering the responsibilities assumed.
    This audit reviewed processes and procedures (i.e., toolkits and 
handbooks) TxDOT staff use to process and make NEPA approvals. The 
information the team gathered that served as the basis for this 
audit came from three primary sources: (1) TxDOT's response to a 
pre-audit #4 information request (PAIR #4), (2) a review of both a 
judgmental and random sample of project files in ECOS with approval 
dates after February 1, 2016, and (3) interviews with TxDOT and the 
USFWS staff. The TxDOT provided information in response to FHWA pre-
audit questions and requests for documents and provided a written 
clarification to FHWA thereafter. That material covered the 
following six topics: program management, documentation and records 
management, quality assurance/quality control, legal sufficiency 
review, performance measurement, and training. In addition to 
considering these six topics, the team also considered the following 
topics: Endangered Species Act (ESA) compliance, consideration of 
noise impacts and noise mitigation (Noise), and adherence to the 
TxDOT Public Involvement plan.
    The intent of the review was to check that TxDOT has the proper 
procedures in place to implement the responsibilities assumed 
through the MOU, ensure that the staff is aware of those procedures, 
and make certain the staff implements the procedures appropriately 
to achieve compliance with NEPA and other assigned responsibilities. 
The review did not second guess project-specific decisions, as such 
decisions are the sole responsibility of TxDOT. The team focused on 
whether the procedures TxDOT followed complied with all Federal 
statutes, regulation, policy, procedure, process, guidance, and 
guidelines.
    The team defined the timeframe for highway project environmental 
approvals subject to this fourth audit to be between February 1, 
2016, and January 31, 2017. The project file review effort occurred 
in two phases: approvals made during Round 1 (Feb 1, 2016-July 31, 
2016) and Round 2 (Aug 1, 2016-Jan 31, 2017). One important note is 
that this audit project file review time frame spans a full 12 
months, where previous audits reviewed project approvals that 
spanned 6 months. The population of environmental approvals included 
224 projects based on 12 certified lists of NEPA approvals reported 
monthly by TxDOT. The NEPA project file approvals reviewed included: 
(1) categorical exclusion (CE) determinations, (2) approvals to 
circulate draft Environmental Assessments (EA), (3) findings of no 
significant impacts (FONSI), (4) re-evaluations of EAs, Section 4(f) 
decisions, (5) approvals of a draft environmental impact statement, 
and (6) re-evaluations of EISs and records of decision (ROD). 
Project files reviewed constitute a sample of randomly selected c-
listed CEs, and 100 percent of the following file approvals: 4(f) 
approvals; CE determinations for actions not listed in the ``c'' or 
``d'' lists; the FONSI and its EA; the ROD and its EIS; and re-
evaluations of these documents and approvals.
    The interviews conducted by the team focused on TxDOT's 
leadership and staff at the Environmental Affairs Division (ENV) 
Headquarters in Austin and staff in four of TxDOT's Districts. The 
team interviewed the Austin District and then divided into two 
groups (the next day) to complete the face-to-face interviews of 
district staff in Waco and San Antonio. Members of the team 
interviewed staff from the Ft. Worth District via teleconference. 
The team used the same ECOS project document review form but updated 
interview questions for districts and ENV staff with new focus areas 
to gather data.

Overall Audit Opinion

    The TxDOT continues to make progress in the implementation of 
its program that assumes FHWA's NEPA project-level decision 
responsibility and other environmental responsibilities. The team 
acknowledges TxDOT's effort to refine and, when necessary, establish 
additional written internal policies and procedures. The team found 
evidence of TxDOT's continuing efforts to train staff in clarifying 
the roles and responsibilities of TxDOT staff, and in educating 
staff in an effort to assure compliance with all of the assigned 
responsibilities.
    The team identified two non-compliant observations in this audit 
that TxDOT will need to address through corrective actions. These 
non-compliance observations come from a review of TxDOT procedures, 
project file documentation, and interview information. This report 
also identifies several notable observations and successful 
practices that we recommend be expanded.

Non-Compliance Observations

    Non-compliance observations are instances where the team found 
the TxDOT was out of

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compliance or deficient in proper implementation of a Federal 
regulation, statute, guidance, policy, the terms of the MOU, or 
TxDOT's own procedures for compliance with the NEPA process. Such 
observations may also include instances where TxDOT has failed to 
maintain technical competency, adequate personnel, and/or financial 
resources to carry out the assumed responsibilities. Other non-
compliance observations could suggest a persistent failure to 
adequately consult, coordinate, or consider the concerns of other 
Federal, State, Tribal, or local agencies with oversight, 
consultation, or coordination responsibilities. The FHWA expects 
TxDOT to develop and implement corrective actions to address all 
non-compliance observations. As part of information gathered for 
this audit, TxDOT informed the team they are still implementing some 
recommendations made by FHWA on Audit #3 to address non-compliance. 
The FHWA will conduct follow-up reviews of non-compliance 
observations in Audit #5 from this review.
    The MOU (Part 3.1.1) states that ``[p]ursuant 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 USDOT Secretary's responsibilities for 
compliance with the National Environmental Policy Act of 1969 
(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 
1500-1508, DOT Order 5610.1C, and 23 CFR 771 as applicable.'' Also, 
the performance measure in MOU Part 10.2.1(A) for compliance with 
NEPA and other Federal environmental statutes and regulations 
commits TxDOT to maintaining documented compliance with requirements 
of all applicable statutes and regulations, as well as provisions in 
the MOU. The following non-compliance observations are presented as 
two categories of non-compliance observations: (1) with procedures 
specified in Federal laws, regulations, policy, or guidance, or (2) 
with the State's environmental review procedures.
    Audit #4 Non-Compliance Observation #1: Section 5.1.1 of the MOU 
requires the State to follow Federal laws, regulations, policy, and 
procedures to implement the responsibilities assumed. This review 
identified several examples of deficient adherence to these Federal 
procedures.
    a) Project scope analyzed for impacts differed from the scope 
approved
    Making an approval that includes actions not considered as part 
of environmental review is deficient according to the FHWA Technical 
Advisory 6640.8A. The scope of the FONSI cannot include actions not 
considered in the EA. This recurring deficiency was also identified 
for a project file in Audit #3.
    b) Plan consistency prior to NEPA approval
    Section 3.3.1 of the MOU requires that prior to approving any CE 
determination, FONSI, final EIS, or final EIS/ROD, TxDOT will ensure 
and document that the project is consistent with the current 
Transportation Improvement Plan, Regional Transportation Plan, or 
Metropolitan Transportation Plan. The team identified two projects 
where TxDOT made NEPA approval without meeting the MOU consistency 
requirement.
    c) Public Involvement
    The FHWA's regulation at 23 CFR 771.119(h) requires a second 
public notification to occur 30 days prior to issuing a FONSI. The 
team reviewed a project file where TxDOT approved a FONSI for an 
action described in 23 CFR 771.115(a) without evidence of a required 
additional public notification. TxDOT acknowledges this requirement 
in their updated public involvement handbook.
    d) Timing of NEPA approval
    One project file lacked documentation for Section 106 compliance 
prior to TxDOT making a NEPA approval. The FHWA regulation at 23 CFR 
771.133 expects compliance with all applicable laws or reasonable 
assurance all requirements will be met at the time of an approval.
    Audit #4 Non-Compliance Observation #2: Section 7.2.1 of the MOU 
requires the State to develop State procedures to implement the 
responsibilities assumed. This review identified several examples of 
deficient adherence to these state procedures.
    a) Reporting of approvals made by TxDOT
    MOU section 8.7.1 requires the State to certify on a list the 
approvals it makes pursuant to the terms of the MOU and Federal 
review requirements so FHWA knows which projects completed NEPA and 
are eligible for Federal-aid funding. The FHWA identified a project 
whose approval was made pursuant to State law and therefore should 
not have been on the certified list of projects eligible for 
Federal-aid funding. This is a recurrence from Audit #3.
    b) Noise workshop timing
    One project did not follow the TxDOT Noise guidelines for the 
timing of a required noise workshop. TxDOT improperly held a noise 
workshop months before the public hearing opportunity. The TxDOT 
noise guidelines (Guidelines for Analysis and Abatement of Roadway 
Traffic Noise, 2011) identifies procedures for compliance with 23 
CFR 772. This is a recurrence of the same non-compliance observation 
in Audit #3.
    c) Endangered Species Act Section 7
    The TxDOT provided training to staff and updated its Section 7 
compliance procedures, as part of a partnering effort after Audit #3 
between FHWA, TxDOT, and USFWS. However, one project was still not 
in compliance with the updated procedures.
    d) Indirect & Cumulative Impacts
    One project file reviewed by the team lacked the indirect and 
cumulative impact analysis that is expected according to TxDOTs 
indirect and cumulative impact evaluation procedures.
    e) Federal approval request for a State-funded project
    The review team reviewed a project file where TxDOT followed 
State environmental laws and then requested Federal-aid to purchase 
right-of-way. TxDOT informed the team that they are removing Federal 
funds from the ROW portion of this project as corrective action. 
This is a recurrence from Audit #3.

Successful Practices and Other Observations

    This section summarizes the team's observations about issues or 
practices that TxDOT may consider as areas to improve. It also 
summarizes practices that the team believes are successful, so that 
TxDOT can consider continuing or expanding those programs in the 
future. Further information on these successful practices and 
observations is contained in the following subsections that address 
these six topic areas: program management; documentation and records 
management; quality assurance/quality control; legal sufficiency; 
performance management; and training.
    Throughout the following subsections, the team lists eight 
observations for TxDOT to consider in order to make improvements. 
The FHWA's suggested implementation methods of action include: 
corrective action, targeted training, revising procedures, continued 
self-assessment, improved QA/QC, or some other means. The team 
acknowledges that, by sharing the preliminary draft audit report 
with TxDOT, TxDOT has begun the process of implementing actions to 
address these observations and improve its program prior to the 
publication of this report.

1. Program Management

Successful Practices and Observations

    The team appreciates TxDOT ENV willingness to partner with FHWA 
before, during, and after audit reviews. This has resulted in 
improved communication and assisted the team in verifying many of 
the conclusions in this report. The quarterly partnering sessions, 
started in 2016, will be an ongoing effort. These exchanges of 
information between FHWA and TxDOT have clarified and refined FHWA's 
reviews and assisted TxDOT's efforts to make improvements to their 
environmental review processes and procedures.
    The team noted in district and ENV staff interviews that they 
welcomed the opportunity to be responsible and accountable for NEPA 
decisions. In addition, TxDOT District staff members and management 
have said in interviews that they are more diligent with their 
documentation because they know that these approvals will be 
internally assessed and the district held accountable by the TxDOT 
ENV Program Review Team (formerly TxDOT's Self-Assessment Branch, 
[SAB]). District staff indicated in interviews that the former SAB 
detailed reviews were highly valued because they learned from their 
mistakes and make improvements. Accountability, in part, is driving 
an enhanced desire for TxDOT staff to consistently and carefully 
complete environmental reviews.
    The team recognizes enhanced communication among individuals in 
the project development process through the Core Team (a partnership 
of district and ENV environmental staff assigned to an individual 
EIS project) as a valuable concept. Information gained from 
interviews and materials provided by TxDOT in most cases demonstrate 
improved communication amongst districts and between districts and 
ENV. The team noted that ``NEPA Chats'' (regular conference calls 
led by ENV,

[[Page 15451]]

providing a platform for districts to discuss complex NEPA 
implementation issues) are still, for the most part, well received. 
Districts also provide internal self-initiated training across 
disciplines so everyone in the district office is aware of TxDOT 
procedures to try to ensure that staff follows NEPA-related, 
discipline specific processes. This keeps projects on-schedule or 
ensures that there are no surprises if projected schedules slip.
    Audit #4 Observation #1: Noise procedure clarification.
    TxDOT ENV is currently in the process of proposing an update to 
their Noise Guidelines. The team reviewed a project file where the 
decisions based on an original Noise Study were re-examined to reach 
a different conclusion. The current TxDOT Noise Guidelines do not 
address how, or under what conditions a re-examination of an 
original Noise Study report that reaches different conclusions could 
occur. The team urges TxDOT to clarify their Noise Guidelines to 
ensure consistent and fair and equitable treatment of stakeholders 
affected by highway noise impacts.
    Audit #4 Observation #2: Section 7 of the Endangered Species Act
    During the interviews, the review team learned that there is a 
disincentive for ``may affect'' determinations because TxDOT cannot 
predict the amount of time required to complete informal 
consultation. If a particular project's schedule could accommodate 
the time required for informal consultation, a ``may affect'' 
determination might be made to minimize a risk of a legal challenge.
    The review team would like to draw TxDOT's attention to the 
possibility that risk management decisionmaking can introduce a bias 
or ``disincentive'' to coordinate with USFWS when it is expected 
according to Federal policy and guidance. In fulfilling ESA Section 
7(a)(2) responsibilities, Congress intended the ``benefit of the 
doubt'' to be given to the species (H.R. Conf. Rep. 96-697, 96 
Cong., 1st sess. 1979).
    The team acknowledges that TxDOT plans to train staff on its 
revised ESA handbook and standard operating procedures (SOP), and 
this may inform staff of this bias. Through interviews, the team 
learned that in certain districts with sensitive habitats (i.e., 
karst) or the possibility of a species present (i.e., a salamander), 
ENV managers would review a project's information in addition to the 
district's and/or ENV biologists. This enhanced review process is 
currently limited only to two districts and could be expanded to 
include instances where such bias may occur.
    Audit #4 Observation #3: Project description and logical termini
    The team reviewed one project where the scope described in the 
NEPA document differed from what was proposed to be implemented. A 
proposed added capacity project's description indicated a longer 
terminus compared to a schematic. The team could not determine 
whether the description or the schematic accurately reflected the 
project proposal.
    A second reviewed project contained a description of the 
proposed project as the project's purpose instead of identifying a 
purpose that would accommodate more than one reasonable alternative. 
The team urges TxDOT to make reviewers aware of these challenges.

2. Documentation and Records Management

    The team relied on information in ECOS, TxDOT's official file of 
record, to evaluate project documentation and records management 
practices. Many TxDOT toolkit and handbook procedures mention the 
requirement to store official documentation in ECOS. The ECOS is 
also a tool for storage and management of information records, as 
well as for disclosure within TxDOT District Offices. ECOS is how 
TxDOT identifies and procures information required to be disclosed 
to, and requested by, the public. ECOS is being upgraded, and there 
are four more phased upgrades planned over time. The most recent 
work includes incorporation of a revised scope development tool, 
Biological Evaluation form, and new way to electronically approve a 
CE determination form in lieu of paper. The TxDOT staff noted that 
ECOS is both adaptable and flexible.

Successful Practices and Observations

    A number of successful practices demonstrated by TxDOT were 
evident as a result of the documentation and records management 
review. The team learned that ECOS continues to improve in download 
speed and compatibility. The team learned through interviews with 
TxDOT staff members that ENV is changing the scope development tool 
within ECOS and that functionality will improve. Some staff 
indicated that they also utilized the scope development tool to 
develop their own checklists to ensure that all environmental 
requirements have been met prior to making a NEPA approval.
    Audit #4 Observation #4: Record keeping integrity
    The team's review included project files that were incomplete 
because of missing or incorrect references that would link the files 
to environmental review documentation. TxDOT has indicated that they 
are working to address this problem. In addition to the issue of 
database links, the team identified a project file that lacked a 
record of required public involvement required per TxDOT procedures. 
The team learned from interviews that ENV and district staff do not 
consistently include such documentation in ECOS. Also, one reviewed 
project file had outdated data for threatened and endangered 
species. The team urges TxDOT staff to rely upon up to date and 
complete data in making project decisions.
    The team identified one project file where total project costs 
were not presented in the project documentation and EA documents 
were added after the FONSI was signed. The added EA documentation 
was editorial in nature. The team urges TxDOT to ensure the project 
file contains supportive documentation. Material that was not 
considered as part of the NEPA decision, and that was dated after 
the NEPA approval should not be included in a project's file.
    The team found a project file that had conflicting information 
about a detour. The review form indicated that no detour was 
proposed, but letters to a county agency said that a road would be 
closed, which would require addressing the need for a detour. Our 
review was unable to confirm the detour or whether the impact road 
closure was considered.

3. Quality Assurance/Quality Control (QA/QC)

Successful Practices and Observations

    The team observed some continued successful practices from 
previous audits in QA/QC. These successful practices include the use 
of established checklists, certifications, NEPA Chats, and the CORE 
Team concept (items described in previous audit reports). The TxDOT 
District Office environmental staff continue to do peer reviews of 
environmental decisions to double check the quality and accuracy of 
documentation. The Environmental Affairs Division has established a 
post-NEPA review team (performance review team) that was briefly 
mentioned in the Self-Assessment report to FHWA. Through our 
interviews, we learned that the team reaches out to ENVs own Section 
Directors and subject matter experts, in addition to District 
environmental staff, regarding their observations to improve the 
quality of documentation in future NEPA decisions. The FHWA team 
observed increased evidence in ECOS of documentation of 
collaboration illustrating the efforts to improve document quality 
and accuracy.
    Audit #4 Observation #5: Effectiveness and change in QA/QC
    Based on project file reviews, the team found errors and 
omissions that should have been identified and addressed through 
TxDOT quality control. Also, TxDOT's certified monthly list of 
project decisions contained errors, some of which were recurring.
    During this review period, the team was informed that TxDOT's 
approach to QA/QC had changed since the previous audit review. In 
audit #3, the team identified the Self-Assessment Branch (SAB) as a 
successful practice. TxDOT's response in the PAIR #4 indicated SAB 
was disbanded and ENV did not explain how its function would be 
replaced. Through interviews, the team learned that TxDOT had 
reorganized its SAB staff and modified its approach to QA/QC. This 
report identifies a higher number of observations that were either 
non-compliant or the result of missing or erroneous information 
compared to previous audits. The team could not assess the validity 
and relevance of TxDOT's self-assessment of QA/QC because TxDOT's 
methodology (sampling and timeframe) was not explained. Lastly, 
through interviews with district environmental staff, the team 
learned that they are unclear on how errors and omissions now 
identified by the new ``performance review team'' and ENV subject 
matter experts (SMEs) are to be resolved. The team urges TxDOT to 
evaluate its new approach to QA/QC with relevant and valid 
performance measures and to explain its approach to QA/QC to its 
staff.

[[Page 15452]]

4. Legal Sufficiency Review

    Based on the interviews with two of the General Counsel Division 
(GCD) staff and documentation review, the requirements for legal 
sufficiency under the MOU continue to be adequately fulfilled.
    There are five attorneys in TxDOT's GCD, with one serving as 
lead attorney. Additional assistance is provided by a consultant 
attorney who has delivered environmental legal assistance to ENV for 
several years and by an outside law firm. The contract for the 
outside law firm is currently going through a scheduled re-
procurement. The GCD assistance continues to be guided by ENVs 
Project Delivery Manual Sections 303.080 through 303.086. These 
sections provide guidance on conducting legal sufficiency review of 
FHWA-funded projects and those documents that are to be published in 
the Federal Register, such as the Notice of Intent (NOI) to prepare 
an EIS, Statute of Limitation (139(l)), and Notice of Availability 
of EIS.
    GCD continues to serve as a resource to ENV and the districts 
and is involved early in the development of large and complex 
projects. One example is the very large Houston District IH 45 
project around downtown Houston with an estimated cost of $4.5 
billion. The GCD lead attorney has been involved in the project and 
participated in the project's public hearing. GCD participates in 
the monthly NEPA chats and recently provided informal training 
during the chat on project scoping, logical termini, and independent 
utility.
    According to TxDOT's response to FHWA's PAIR #4, GCD staff has 
reviewed or been involved in legal review for eight projects. The 
ENV project delivery managers make requests for review of a document 
or assistance to the lead attorney, who then assigns that project to 
an attorney for legal review. Attorney comments are provided in the 
standard comment response matrix back to ENV and are reviewed by the 
lead attorney. All comments must be satisfactorily addressed for GCD 
to complete its legal sufficiency determination. The GCD does not 
issue conditional legal sufficiency determinations. Legal 
sufficiency is documented by email to ENV.
    A notable effort by GCD, in the last year, were the two lawsuits 
on TxDOT issued Federal environmental FONSI decision on the MOPAC 
intersections, the ongoing environmental process on the widening of 
south MOPAC, and State environmental decision on SH 45 SW. The 
lawsuit advanced only the Federal environmental decision on the 
MOPAC intersections. GCD worked first to develop the administrative 
record, having the numerous consultant and TxDOT staff provide 
documentation of their involvement on the MOPAC intersections 
project. Staff from GCD, Attorney General, and outside counsel then 
developed the voluminous record, which is their first since assuming 
NEPA responsibilities. The initial request by the plaintiffs for a 
preliminary injunction on the project was denied in Federal court, 
and, since a hearing on the merits was held later, they are awaiting 
the judge's decision. The FHWA and DOJ were notified, as 
appropriate, of the notices of pleadings through the court's PACE 
database.

Successful Practice

    ENV involves GCD early on projects and issues in need of their 
attention and expertise. Based on our discussions, GCD continues to 
be involved with the districts and ENV throughout the NEPA project 
development process, when needed, and addresses legal issues, as 
appropriate. Based on interview responses, observation, and the 
comments above, TxDOT's approach to legal sufficiency is adequate.

5. Performance Measurement

    TxDOT states in their self-assessment summary report that they 
achieved acceptable performance goals for all five performance-based 
performance metrics with the remaining seven performance goals 
remaining, consistent with the March 2016 self-assessment. The TxDOT 
continues to devote a high level of effort to develop the metrics to 
measure performance. During this audit, the team learned through 
interviews that the methodology employed to assess QA/QC performance 
had been revamped to the point that the results do not appear to be 
comparable with measures from previous years.

Successful Practices and Observations

    As part of TxDOT's response to the PAIR #4, TxDOT provided an 
alternate performance metric for EA timeframes that analyzed the 
distribution of EA durations for projects initiated and completed 
prior to assignment, initiated prior to assignment but completed 
after assignment, and ones initiated and completed after assignment. 
This creative approach identified both improved and diminished 
performance in EA timeframes for projects initiated before 
assignment but completed after assignment. TxDOT reports in their 
response to the PAIR #4 that, at a 95 percent confidence interval, 
comparing completion times for EA projects before and after 
assignment, the post-assignment median timeframe for completion is 
faster after assignment.
    Audit #4 Observation #6: Performance measure awareness and 
effectiveness
    The team noted through interviews of TxDOT District Office staff 
that many were unaware of TxDOT performance measures and their 
results. We encourage TxDOT environmental leadership to make these 
results available to their staff, if only as a means of feedback on 
performance. Overall, these measures are a positive reflection of 
actions taken by TxDOT staff, and sharing changes in performance 
measures may lead to improved performance.
    As mentioned above, the team learned that TxDOT's QA/QC 
methodology changed from that utilized since the previous audit. 
Previously, the measure reported the percent of project files 
determined to be complete and accurate, but included information on 
substantive errors made across different documents. Now the measure 
is limited only to the percent of project files determined to be 
complete that relies upon new yes/no/NA response questions whose 
result lacks an evaluation of the substantial-ness of errors of 
accuracy or completion. The team urges TxDOT to continue to analyze 
the information they are already collecting on the completeness and 
accuracy of project files as means of implementing information that 
usually leads to continuous improvement.

6. Training Program

    Since the period of the previous audit, TxDOT has revamped its 
on-line training program, as training courses content were out of 
date. Training continues to be offered to TxDOT staff informally 
through NEPA chats as well as through in-person instructor training. 
All of the training information for any individual TxDOT District 
staff environmental professional can be found on a TxDOT SharePoint 
site and is monitored by the training coordinator (especially the 
qualifications in the Texas Administrative Code). This makes it much 
more straightforward for third parties (including FHWA) to assess 
the district staff competency and exposure to training. Since Audit 
#3 TxDOT has increased the number of hours of training that staff 
are required to have to maintain environmental certification from 16 
to 32 hours. Based on interviews, we learned that some individuals 
had far exceeded the minimal number of training hours required. We 
learned that training hours could be earned by participating in the 
environmental conference, but with a stipulation that other sources 
of training would be required.

Successful Practices and Observations

    The team recognizes the following successful training practices. 
We learned from interviews that two TxDOT District Offices conduct 
annual training events for staff of local governments as a means to 
help them develop their own projects. This training identifies the 
TxDOT expectations for successful project development, including 
environmental review.
    Another successful practice we learned from interviews, and 
reported by TxDOT in the list of training scheduled, is that public 
involvement training has been revised to emphasize additional 
outreach that goes beyond the minimum requirements. The emphasis 
appears to be on achieving meaningful public engagement rather than 
simple public disclosure.
    Finally, the team would like to acknowledge that TxDOT has 
recognized and taken advantage of cross training that is a 
successful practice. The TxDOT ENV strategic planning coordinator 
informed us in an interview that he co-taught a class on planning 
consistency by adding an environmental component. The team taught 
how the planning issues relate to environmental review and 
compliance five or six times throughout the State. The ENV strategic 
planning coordinator is now working with the local government 
division to add an environment module to the Local Project 
Assistance class with specific discussion of environmental reviews 
(adding information on how to work with ENV at TxDOT, or how to find 
consultants who are approved to do work for TxDOT).
    Audit #4 Observation #7: Additional outreach on improvements.
    The team learned through interviews the value and importance of 
NEPA chats for informing ENV staff when there are changes

[[Page 15453]]

in procedures, guidance, or policy. For example, when the handbook 
for compliance with ESA was first completed, it was the subject of a 
NEPA chat. The team is aware of recent changes TxDOT made to the 
handbook related to a non-compliance related to ESA compliance. 
Based on information gained from interviews, the team learned that 
the changes to the ESA SOP/handbook were not followed by a NEPA 
chat. As a result, we confirmed that most of the TxDOT Biology SMEs 
were unaware of the handbook changes. The team appreciates that 
TxDOT has revised its ESA handbook and urges staff to implement 
training or other outreach to inform TxDOT staff of these revisions.
    Audit #4 Observation #8: FAST Act training.
    The Fixing America's Transportation (FAST) Act included several 
new statutory requirements for the environmental review process, as 
well as other changes that change NEPA procedures and requirements. 
The FHWA's Office of Project Development and Environmental Review 
has released some guidance on how to implement these requirements 
and anticipates releasing additional information. Even though 
additional information on these changes is forthcoming, States under 
NEPA assignment are required to implement these changes. The team 
learned through TxDOT's PAIR #4, and through interviews, that TxDOT 
has neither developed nor delivered training to its staff concerning 
new requirements for the FAST Act for environmental review. In 
response to this observation, TxDOT is currently collaborating with 
FHWA to develop a presentation on this topic for its annual 
environmental conference.

Status of Non-Compliance Observations and Other Observations from Audit 
#3 (April 2017)

Audit #3 Non-Compliance Observations

    1. Section 7 Consultation--TxDOT ENV made revisions to their ESA 
procedures that they have shared with FHWA and USFWS via partnering 
sessions. TxDOT implementation and training efforts are still 
pending by ENV management on the revised procedures to ENV and 
district staff.
    2. Noise Policy--TxDOT has informed the team that TxDOT is in 
the process of updating the 2011 Noise Guidelines. TxDOT will submit 
those guidelines to FHWA for review and approval once they are 
updated. TxDOT has not indicated whether they intend to provide 
training on these guidelines for TxDOT District Office and 
consultant staff.
    3. Public Involvement--TxDOT updated their FHWA approved 
Handbook in November 2016. There was one recurrence of a non-
compliant action that was reported in Audit #3 during Audit #4. 
TxDOT informed FHWA that ENV will request that FHWA review their 
Texas Administrative Code in lieu of their previous request that 
FHWA review only their Public Involvement Handbook.
    4. Section 4(f)--FHWA did not have any non-compliance 
observations in regards to TxDOT carrying out their assigned Section 
4(f) responsibilities during Audit #4.

Audit #3 Observations

    1. A certified project had an incomplete review--TxDOT continues 
to certify NEPA approvals for projects on a list provided to FHWA. 
This audit review identified an error of the inclusion of a project 
on a certified list.
    2. Inconsistent and contradictory information in some project 
files--TxDOT has made ECOS software upgrades recently that address 
this problem. This audit review continued to identify project file 
errors in the consistency of information.
    3. TxDOT's QA/QC performance measure could demonstrate 
continuous improvement--Since Audit #3, TxDOT has developed a new 
approach to the QA/QC performance measure. For CE reviews, the 
methodology is based on ``yes/no/NA'' answers to 50 questions (for 
EA projects there are 100 questions) based on requirements in the 
TxDOT handbooks. The measures are an average of the individual 
projects reviewed. TxDOT has not addressed how this new measure may 
demonstrate continuous improvement.
    4. Consider implementing more meaningful timeliness measures--
TxDOT's response to the pre-audit information request as well as in 
their self-assessment summary included detailed discussions of the 
timeliness measures for CEs as well as for EA projects that are 
meaningful.
    5. TxDOT's ability to monitor the certification and competency 
status of their qualified staff--TxDOT has included on its training 
SharePoint site a database that identifies each environmental staff 
member, a complete list of training they have completed, and when 
that training occurred. TxDOT's training coordinator is responsible 
for monitoring this database to ensure all staff maintain their 
competency and qualification status per State law as well as the 
ongoing training requirement specified by the ENV director.

Finalization of Report

    The FHWA received seven responses to the Federal Register Notice 
during the public comment period for this draft report. None of 
comments were substantive; one from the American Road and 
Transportation Builders Association voiced support of this program. 
Six comments were unrelated to this report. This report is a 
finalized draft version of this report without substantive changes.

[FR Doc. 2018-07293 Filed 4-9-18; 8:45 am]
 BILLING CODE 4910-22-P