Surface Transportation Project Delivery Program; Alaska Department of Transportation Fourth Audit Report, 62875-62878 [2023-19703]

Agencies

• Federal Highway Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 88, Number 176 (Wednesday, September 13, 2023)]
[Notices]
[Pages 62875-62878]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-19703]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

[FHWA Docket No. FHWA-2021-0019]


Surface Transportation Project Delivery Program; Alaska 
Department of Transportation Fourth Audit Report

AGENCY: Federal Highway Administration (FHWA), U.S. Department of 
Transportation (DOT).

ACTION: Notice.

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SUMMARY: The Moving Ahead for Progress in the 21st Century Act (MAP-21) 
established the Surface Transportation Project Delivery Program that 
allows a State to assume FHWA's environmental responsibilities for 
environmental review, consultation, and compliance under the National 
Environmental Policy Act (NEPA) 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 program mandates annual audits during 
each of the first 4 years of State participation to ensure compliance 
with program requirements. This notice makes available the final fourth 
audit report for the Alaska Department of Transportation and Public 
Facilities (DOT&PF).

FOR FURTHER INFORMATION CONTACT: Mr. David T. Williams, Office of 
Project Development and Environmental Review, (202) 366-5074, 
[email protected], or Michelle Andotra, Office of the Chief 
Counsel, (404) 562-3679, [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, codified at 23 
U.S.C. 327, commonly known as the NEPA Assignment 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 liable 
for carrying out the responsibilities it has assumed, in lieu of FHWA. 
The Alaska DOT&PF published its application for NEPA assumption on May 
1, 2016; and made it available for public comment for 30 days. After 
considering public comments, DOT&PF submitted its application to FHWA 
on July 12, 2016. The application served as the basis for developing a 
memorandum of understanding (MOU) that identified the responsibilities 
and obligations that DOT&PF would assume. The FHWA published a notice 
of the draft MOU in the Federal Register on August 25, 2017, 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 DOT&PF 
considered comments and proceeded to execute the MOU. Effective 
November 13, 2017, DOT&PF assumed FHWA's responsibilities under NEPA, 
and the responsibilities for NEPA-related Federal environmental laws 
described in the MOU.
    Section 327(g) of title 23, U.S.C., requires the Secretary to 
conduct annual audits to ensure compliance with the MOU during each of 
the first 4 years of State participation and, after the fourth year, 
monitor compliance. The FHWA must make the results of each audit 
available for public comment. The FHWA published a notice in the 
Federal Register at 87 FR 66352, November 3, 2022, soliciting comments 
for 30 days pursuant to 23 U.S.C. 327(g). The FHWA received comments on 
the draft report from the American Road & Transportation Builders 
Association (ARTBA). The ARTBA's comments were supportive of the 
Surface Transportation Project Delivery Program and did not relate 
specifically to the audit. The team has considered these comments in 
finalizing the audit report. This notice makes available the final 
audit report of DOT&PF's fourth audit under the program. The final 
audit report is available for download at www.regulations.gov under 
FHWA Docket No. FHWA-2021-0019.
    Authority: Section 1313 of Public Law 112-141; section 6005 of 
Public Law 109-59; 23 U.S.C. 327; 23 CFR 773.

Shailen P. Bhatt,
Administrator, Federal Highway Administration.

Surface Transportation Project Delivery Program, FHWA's Audit of the 
Alaska Department of Transportation, April 12-16, 2021

Executive Summary

    This report summarizes the results of the Federal Highway 
Administration's (FHWA) fourth audit of the Alaska Department of 
Transportation and Public Facilities' (DOT&PF) assumption of FHWA's 
project-level National Environmental Policy Act (NEPA) responsibilities 
and obligations pursuant to a 23 U.S.C. 327 memorandum of understanding 
(MOU). The DOT&PF entered the NEPA Assignment Program after more than 8 
years of experience making FHWA NEPA Categorical Exclusion (CE) 
determinations pursuant to 23 U.S.C. 326 (beginning September 22, 
2009).
    Alaska's MOU became effective on November 13, 2017, and was amended 
on August 20, 2020. Currently, FHWA's NEPA responsibilities in Alaska 
include the oversight and auditing of the DOT&PF's execution of the 
NEPA Assignment Program and certain activities excluded from the MOU, 
such as the NEPA reviews of projects advanced by direct recipients 
other than the DOT&PF.
    The FHWA audit team began to prepare for the site visit in November 
2020. The audit team reviewed DOT&PF's NEPA project files, DOT&PF's 
response to FHWA's pre-audit information request (PAIR), and DOT&PF's 
Self-Assessment Report. On April 12-16, 2021, the audit team conducted 
a virtual site visit for the second year due to COVID-19 pandemic 
safety concerns, rather than on-site visits as had been used for the 
first two audits.

[[Page 62876]]

    The audit team appreciates DOT&PF's responsiveness to the questions 
regarding the status of general observations from the third audit. This 
report concludes with a status update for FHWA's observations from the 
third audit report.
    The audit team finds DOT&PF in substantial compliance with the 
terms of the MOU in meeting the responsibilities it has assumed. This 
report does not identify any non-compliance observations; it does 
identify four general observations and three successful practices.

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 
decisionmaking, the State becomes solely responsible and solely liable 
for carrying out these obligations in lieu of and without further NEPA-
related approval by FHWA.
    The FHWA assigned responsibility for making project NEPA approvals 
and other related environmental decisions for highway projects to 
DOT&PF. The MOU documents these responsibilities. Examples of 
responsibilities DOT&PF has assumed, in addition to NEPA, include 
Section 7 consultation under the Endangered Species Act and 
consultation under Section 106 of the National Historic Preservation 
Act.
    This is the last of the four required annual audits pursuant to 23 
U.S.C. 327(g) and Part 11 of the MOU. The FHWA uses audits as the 
primary mechanism to oversee DOT&PF's compliance with the MOU and the 
NEPA Assignment Program requirements. This includes ensuring compliance 
with applicable Federal laws and policies, evaluating DOT&PF's progress 
toward achieving the performance measures identified in Section 10.2 of 
the MOU, and collecting information needed for the U.S. Department of 
Transportation (DOT) Secretary's annual report to Congress. The FHWA 
must present its audit results in a report and make it available for 
public comment in the Federal Register.
    The audit team included NEPA subject matter experts from FHWA's 
Alaska Division Office, the Headquarters Office of Project Development 
and Environmental Review, the Resource Center, Western Legal Services 
Division, Office of Stewardship, Oversight and Management, and the DOT 
Volpe Center.

Scope and Methodology

    The audit team examined a sample of DOT&PF's NEPA project files, 
DOT&PF responses to the PAIR, and DOT&PF's Self-Assessment Report. The 
audit team also conducted interviews and reviewed DOT&PF policies, 
guidance, and manuals pertaining to NEPA responsibilities. All reviews 
focused on objectives related to the six NEPA Assignment Program 
elements contained in the MOU: Program Management, Documentation and 
Records Management, Quality Assurance/Quality Control (QA/QC), 
Training, Performance Measures, and Legal Sufficiency.
    Project File Review: To consider DOT&PF staff adherence to program 
procedures and Federal requirements, the audit team selected a sample 
of 47 individual project files for which the environmental review had 
been completed. The audit team evaluated DOT&PF's compliance with 
assumed responsibilities and adherence to their own processes and 
procedures for project-level environmental decisionmaking. The audit 
team did not evaluate DOT&PF's project-specific decisions. The sampled 
files included CEs, Environmental Assessments (EA), and environmental 
reevaluations.
    PAIR Review: The audit team reviewed DOT&PF's responses to the 
PAIR, which consisted of 28 questions about specific elements in the 
MOU that DOT&PF must implement. The audit team used these responses to 
develop specific follow-up questions for interviews with DOT&PF staff.
    DOT&PF Self-Assessment Review: The audit team reviewed DOT&PF's 
December 2020 Self-Assessment Report and used it to develop specific 
follow-up questions for interviews with DOT&PF staff. The NEPA 
Assignment Program MOU Section 8.2.5, requires the DOT&PF to conduct 
annual self-assessments of its QA/QC procedures and performance.
    Interviews: The audit team conducted interviews with 17 DOT&PF 
employees, including staff from each of DOT&PF's three regional offices 
and the Statewide Environmental Office (SEO). The audit team selected 
invited DOT&PF employees representing a diverse range of expertise, 
experience, and program responsibility to participate in interviews.
    In addition, the audit team conducted interviews of two attorneys 
with the Alaska Department of Law and interviews with individuals at 
the Bureau of Land Management (BLM), the United States Forest Service 
(USFS), and the State Historic Preservation Office (SHPO).
    Policy/Guidance/Manual Review: Throughout the document reviews and 
interviews, the audit team verified information on DOT&PF's NEPA 
Assignment Program using DOT&PF policies, guidance, manuals, and 
reports. These included the Environmental Program Manual (EPM), the 
NEPA Assignment QA/QC Plan, the NEPA Assignment Program Training Plan, 
and the NEPA Assignment Self-Assessment Report.

Overall Audit Opinion

    This report identifies four observations and three successful 
practices. The audit team finds DOT&PF is substantially in compliance 
with the provisions of the MOU, has carried out the environmental 
responsibilities it assumed through the NEPA Assignment Program, and 
has taken steps to address observations identified in the third audit.

Non-Compliance Observations

    The audit team made no non-compliance observations in the fourth 
audit.

Observations and Successful Practices

    This section summarizes the audit team's observations of DOT&PF's 
NEPA Assignment Program implementation and DOT&P''s successful 
practices. ``Observations'' are items the audit team would like to draw 
DOT&PF's attention to, which may benefit from revisions to improve 
processes, procedures, or outcomes, if such steps have not already been 
taken. ``Successful practices'' are those that FHWA would like to 
commend DOT&PF on developing. These may include ideas or concepts that 
DOT&PF has planned, but not yet implemented. Successful practices and 
observations are described under the six MOU topic areas: Program 
Management, Documentation and Records Management, QA/QC, Training, 
Performance Measures, and Legal Sufficiency.
    This audit report provides an opportunity for DOT&PF to take 
further actions to improve their program. The FHWA will consider the 
status of areas identified for potential improvement in this audit's 
observations as part of the scope of future monitoring events. DOT&PF 
will continue to be able to describe program improvements in their 
annual Self-Assessment reports.

Program Management

    Program Management includes the overall administration of the NEPA

[[Page 62877]]

Assignment Program. The audit team noted the following successful 
practices and observations related to Program Management.

Successful Practice #1: Business Program Management (BPM) System

    Interviewees overwhelmingly responded positively to questions 
regarding the development and implementation of the BPM system. They 
acknowledged the efforts by the developers and SEO to include the 
following: virtual training sessions and demonstrations, creation of a 
user's manual, PowerPoint handouts, and beta testing with Regional 
Environmental Managers (REMs) to work through ``bugs'' in the system.

Observation #1: Permitting Dashboard Reporting Procedures

    Section 5.1.1 of the MOU subjects DOT&PF to the same procedural 
requirements and substantive requirements that apply to the DOT 
Secretary including, but not limited to Federal statutes or FHWA 
policy. Per 23 U.S.C. 139 and the Memorandum from Deputy Assistant 
Secretary for Transportation Policy, Federal Permitting Dashboard 
Reporting Standard, December 28, 2018, EA and Environmental Impact 
Statement (EIS) project information is required to be entered in the 
Federal Infrastructure Permitting Dashboard (Dashboard). The Dashboard 
Reporting Standards require EIS's and EA's permitting timetables to be 
entered in the dashboard: (1) within 90 days after the issuance of a 
Notice of Intent for an EIS, or (2) the class of action determination 
for an EA initiated after June 2016. Based on interviews, only one 
project has been entered into the Dashboard, which FHWA verified. Based 
on DOT&PF records, three projects should have been entered into the 
Dashboard. The FHWA understands that DOT&PF does not have written 
procedures regarding how to carry out these responsibilities. Written 
procedures would provide opportunities for consistent, timely, and 
compliant reporting of the projects required to be in the Dashboard.

Documentation and Records Management

    Documentation and Records Management includes maintaining project 
files and other recordkeeping (whether hardcopy or electronic) 
pertaining to the DOT&PF's discharge of the responsibilities it has 
assumed under the 23 U.S.C. 327 Program. From November 1, 2019, through 
October 31, 2020, DOT&PF made 228 project decisions. Through employing 
both random and judgmental sampling procedures, the audit team 
identified 47 project decisions to review.

Successful Practice #2: Tracking

    Interviews with Section 106 Professionally Qualified Individuals 
(PQI) revealed the use of an Excel database in at least one DOT&PF 
region to track and manage Section 106 information for projects. 
Tracking information on consultation letters, determinations of 
eligibility, effect findings, SHPO concurrence, etc. allows the PQI to 
stay on top of required tasks and ensure work is completed. Once 
Section 106 consultation is completed, the PQI enters this data into 
the SEO Access database tracking system that is used for the Section 
106 Programmatic Agreement monitoring and annual reporting.

Observation #2: Documentation of Public and Agency Comments in CE

    In 6 of 21 (28 percent) CE project files reviewed, there was 
inadequate documentation of public and/or agency comments and 
resolution of the comments. This is not in accordance with Chapter 4 of 
the DOT&PF Highway Preconstruction Manual, which requires that CE Forms 
``list the issues raised by the public and agencies and the manner in 
which they were resolved.'' In addition, this observation appears to be 
inconsistent with data reported in Section 9.2.2. (Maintain 
completeness and adequacy of documentation of SEO records for projects 
done under the program) of DOT&PF's 2020-2021 Self-Assessment Report.
    Interview responses to questions about public involvement 
requirements for CEs varied. Some interviewees responded that they 
follow the guidance in the Environmental Procedures Manual. Several 
interviewees spoke to responding directly to commenters via emails or 
letters and the potential for controversy to affect the class of action 
decision. However, none specifically mentioned the need to document 
comments and/or controversy and DOT&PF's responses to them on the CE 
forms. The FHWA recommends that DOT&PF incorporate procedures for 
documenting public involvement for CEs when appropriate into the EPM.

Quality Assurance/Quality Control

    Under Section 8.2.4 of the MOU, DOT&PF agreed to carry out regular 
QA/QC activities in accordance with the MOU and DOT&PF procedures 
established to implement the NEPA Assignment Program. Based on the 
information evaluated by the audit team, DOT&PF continues to carry out 
regular QA/QC activities in accordance with the MOU. The FHWA believes 
the BPM system provides more opportunity to augment data collection and 
reporting for continued program improvement.

Observation #3: The State's Commitment of Adequate Resources and QA/QC 
Performance

    Sections 4.2.1 and 4.2.2 of the MOU outline the requirements for 
the State's commitment of adequate resources to carry out NEPA 
Assignment successfully. Moderate to high staff turnover has been a 
recurring issue. This has been documented in Audit #1 report 
Observation #3 and Audit #2 report Observation #3. In the January 2020 
Self-Assessment Report, DOT&PF acknowledged the issue and indicated 
that they will continue to track staffing impacts on the program 
through the QA/QC process. During Audit #4, FHWA documented comments 
from multiple DOT&PF staff in some of the regions concerning workload, 
staffing, and turnover issues affecting QA/QC processes and observed a 
downward trend in QA/QC performance (i.e., more errors and omissions in 
NEPA approvals relative to the previous audit performance period). In 
addition, interviews with the SHPO suggested some of the Section 106 
challenges, such as incomplete applications during Section 106 
consultations, may be due to workload issues at DOT&PF. Despite these 
observations, FHWA found that DOT&PF's implementation of the 327 
Program was in substantial compliance with the MOU. The FHWA encourages 
DOT&PF to continue to assess how workload, staffing, and turnover 
issues might affect the level of compliance with the 327 MOU, 
organizational performance for carrying out NEPA Assignment and overall 
program delivery, and consider using tools like the BPM system, 
resource sharing, increased use of consultants, and other approaches to 
help address workload and staffing issues raised by some regions as 
well as the QA/QC performance issues indicated in the most recent self-
assessment and observed by the audit team.

Training

    Under Sections 12.1 and 12.2 of the MOU, the DOT&PF committed to 
implementing training necessary to carry out the environmental 
responsibilities assumed under the NEPA Assignment Program. The DOT&PF 
also committed to assessing its need for training, developing a 
training plan, and updating the training plan on an annual basis.

[[Page 62878]]

Observation #4: Training Needs Assessment

    Considering ongoing staff turnover, as discussed in Observation #3, 
FHWA encourages DOT&PF to conduct a detailed statewide training needs 
assessment of new environmental staff. This will help DOT&PF allocate 
resources more efficiently to identify skill and knowledge gaps. The 
FHWA also encourages DOT&PF to explore cross training opportunities 
with other agencies (e.g.: SHPO, BLM, USFS) and engage them in 
development of their annual training plan.

Performance Measures

    The FHWA and DOT&PF mutually established a set of performance 
measures to evaluate DOT&PF's performance in assuming NEPA Assignment 
Program responsibilities. The DOT&PF continues to collect, maintain, 
and develop data towards monitoring its performance as required by 
Section 10.1.3 of the MOU. The audit team noted the following 
successful practice related to Performance Measures.

Successful Practice #3: Relationships With Agencies

    The audit team found that DOT&PF has very good and positive 
relationships with BLM, USFS, and SHPO. The FHWA has interviewed 
resource agencies in previous audits and found that overall, they had 
good working relationships with DOT&PF. The audit team decided to 
interview staff from BLM and the USFS during Audit #4 since Federal 
Land Management Agencies had not been interviewed in past audits and 
they were included in DOT&PF's May 2020 agency poll. The audit team 
also chose to interview the SHPO since they had not been interviewed 
since Audit #1. The individuals interviewed from these three agencies 
indicated that overall, their working relationships with DOT&PF were 
very good and positive. This information correlates well with the 
overwhelmingly positive responses DOT&PF received to their agency poll.

Legal Sufficiency

    Since 2017, the same attorney from the Alaska Attorney General's 
Office, Transportation Section, has been assigned to the NEPA 
Assignment Program. The assigned attorney has significant experience 
with Federal-aid highway projects and the Federal environmental 
process. The attorney works directly with DOT&PF staff on project 
environmental documents. Based on the interviews, the attorney becomes 
involved early in project development, normally reviewing a NEPA 
document before receiving a formal request for a legal sufficiency 
review. During the audit period, the attorney did not review an EIS or 
a Section 4(f) evaluation requiring a legal sufficiency review. 
Although a legal sufficiency review is not required for EAs, the 
attorney reviewed two EAs during the audit period. The attorney 
reported that the review process for an EA is like the review process 
for an EIS.
    Department of Law Management stated during the interviews that 
while one attorney is currently assigned to the program, should 
workload increase significantly another attorney could be assigned to 
NEPA work or litigation, likely through the utilization of outside 
counsel per 23 U.S.C. 327(a)(2)(G).
    The audit team finds that DOT&PF meets the legal sufficiency 
determination and staffing requirements set forth in the DOT&PF 
Environmental Procedures Manual.

Status of Observations From Audit #3 Report (April 2020)

    This section describes the actions DOT&PF has taken in response to 
observations made during the third audit.

Observation #1: Self-Assessment Procedures

    The DOT&PF's 2018 NEPA Assignment Program Self-Assessment 
Procedures require that SEO develop the preliminary and final Self-
Assessment Report through coordination with, and input from, the REMs. 
During Audit #3 interviews, the audit team found that DOT&PF did not 
develop the January 2020 Self-Assessment Report in accordance with 
their procedures, nor distribute the final report to the regions. For 
Audit #4, DOT&PF indicated in their responses to the PAIR that the 
draft December 2020 Self-assessment was sent to the REMs for review and 
comment according to their procedures. Comments were received and 
addressed in the final Self-Assessment Report, which was then shared 
with the regions.

Observation #2: Assessing Resource Agency Communication

    Section 10.2.1 C. of the MOU requires DOT&PF to ``Assess change in 
communication among DOT&PF, Federal and State agencies, and the public 
resulting from assumption of responsibilities under this MOU''. The MOU 
allows DOT&PF to determine the method it will use to assess this 
change. The DOT&PF selected to use an annual resource agency poll. The 
DOT&PF identified this measure in its DOT&PF NEPA Assignment Program 
Performance Measures document located on its website. At the time of 
Audit #3, DOT&PF had not yet used a resource agency poll, and FHWA 
recommended that DOT&PF consider changing the method for reporting this 
measure.
    In May 2020 (prior to Audit #4), DOT&PF conducted an agency survey 
to assess changes in communication among DOT&PF, State, and Federal 
resource agencies. As described in DOT&PF's Self-Assessment Report, the 
survey consisted of six questions distributed via an online platform to 
a representative cross section of State and Federal resource Agency 
staff. Twenty-four responses were received from 11 different resource 
agencies. The DOT&PF asked the question: ``Has the level of 
communication improved, declined, or remained the same since the MOU 
became effective?'' Eleven of the responses indicated that there had 
been an improvement in communication and the remaining responses 
indicated there had been no change.

[FR Doc. 2023-19703 Filed 9-12-23; 8:45 am]
BILLING CODE 4910-22-P