VA Real Property: VHA Should Improve Activation Cost Estimates and Oversight

VHA operates one of the nation's largest health care systems with more than 1,200 sites across the country; however, many facilities were built decades ago and do not align with the agency's current emphasis on outpatient and specialized care. Additionally, new or expanded facilities are needed to accommodate veterans returning from recent conflicts. VHA is constructing and leasing new facilities to respond to these needs. GAO was asked to review VHA's efforts to activate new major medical facilities.

This report examines the extent to which VHA is able to compare the actual costs of activation against the estimated costs, among other objectives.

GAO analyzed VHA's documentation on estimating activation costs. GAO also interviewed officials and analyzed cost information reported by a non-generalizable selection of eight medical facilities. The facilities had more than $1 million in annual rent or $20 million in construction costs, reported finishing activation in fiscal years 2016 and 2017, and were located in various regions.

The Veterans Health Administration (VHA) under the Department of Veterans Affairs (VA) is constructing and leasing new medical facilities, such as outpatient clinics, to better serve and meet the changing needs of veterans. VHA equips and staffs these new facilities in a multi-year process called “activation.” From fiscal year 2012 through 2018, VHA channeled more than $4 billion to major medical facilities undergoing activation, which these facilities could use toward furniture, equipment, and new staffing costs, among other start-up expenses.

VHA lacks processes and clear definitions for estimating total activation costs and for comparing actual expenses against these estimates. Specifically,

VHA's current cost estimation process does not cover the full duration of activation.

Headquarters officials have never compared activation costs against estimated costs because until recently, officials said, VHA lacked the accounting mechanisms to facilitate such comparisons; however, while VHA now possesses these mechanisms, it has not documented the process for how the new information should be used.

VHA documentation does not clearly define allowable activation expenses or the appropriate spending timeframes. Local and regional officials expressed confusion over what items could be purchased with activation funds. In addition, local officials held inconsistent beliefs regarding how long expenses could qualify as activation-related.

VHA management's priorities include data-driven decision-making. Further, the Office of Management and Budget's guidance states that agencies should compare actual project costs against planned expenses so managers can determine if cost goals are being met. Without processes and clear definitions associated with measuring activation costs, VHA does not have reasonable assurance that it will be able to effectively manage the resources associated with activation.

GAO recommends that VA (1) develop and document a process for estimating total activation costs, (2) develop and document a process for comparing actual activation costs to the estimates, (3) define allowable activation expenses, and (4) clarify when facilities should cease to classify expenses as activation-related. VA agreed with GAO's recommendations.

The Veterans Heath Administration (VHA) under the Department of  Veterans Affairs (VA) operates one of the nation’s largest health-care  systems with more than 1,200 sites across the country. However, many  facilities were built decades ago and were designed for an inpatient- driven health-care system. These facilities do not align with the agency’s  current wellness approach, which emphasizes outpatient and specialized  care. Additionally, new or expanded facilities are needed to accommodate  veterans returning from countries such as Iraq and Afghanistan, who  need different types of services than veterans of earlier conflicts. VHA is  constructing and leasing new facilities to respond to these needs, and it  equips and staffs them through a multi-year process called “activation.”

Generally speaking, activation refers to the process of bringing a new  facility into full operation, such as purchasing and installing furniture and  medical equipment as well as hiring staff. From fiscal years 2012 through  2018, VHA spent more than $4 billion on activation activities at 96 new  major medical facilities.

Previously, we have found that VHA struggled with certain aspects of  activation, such as equipment purchases and cost estimation for the  overall activation process. In 2013, for example, we reported that some  medical equipment did not fit into previously constructed areas of the  medical center in Orlando, Florida, and the building needed to be altered  in order to accommodate the equipment. In addition, in 2017, we found  that VA had minimal supporting documentation for its $341 million  estimate for the cost to activate the medical center in Denver, Colorado,  and as a result we determined that the activation estimate was  unreliable.

You asked us to review VHA’s efforts to activate new medical facilities.  This report: (1) describes the tasks associated with activation, (2)  determines the extent to which VHA activated selected new medical  facilities within planned time frames, and (3) assesses the extent to which  VHA is able to compare actual activation costs against the estimated total  costs.

To describe what tasks are associated with activation, we reviewed  relevant VHA documentation, such as VA’s Activation Process Guide,  VA’s Strategic Plan for Fiscal Years 2018–2024, and VHA’s training  modules associated with activation processes. To examine specific activation efforts in greater detail, we obtained documentation and  interviewed officials from 8 of the 13 major medical facilities that reported  that they completed activation in fiscal years 2016 or 2017. We selected  one facility in each geographic region where major activations were  completed during this time period. In cases where a region contained  more than one such facility, we selected facilities that, when considered  with the other selected facilities, reflected a range of facility sizes and  total reported activation costs. For a list of the eight selected facilities and  their reported activation costs, please see appendix I. No medical centers  (i.e., inpatient hospitals) completed activation in 2016 or 2017. Therefore,  to provide context for that type of facility, we also interviewed officials  from a medical center that opened in 2016 about their activation  experiences. The information from all of these facilities is illustrative and  cannot be generalized to facilities agency-wide, but collectively, the  experiences of these facilities provide insight into the tasks associated  with activation. We also interviewed regional officials supporting the  selected sites, and VHA officials responsible for managing activation at  the national level.

To determine the extent to which VHA activated selected facilities within  planned time frames, we focused on the activation period leading up to  the provision of medical services (i.e., when each service department,  such as dentistry or physical therapy, first treated patients). For each of  the eight selected facilities, we compared the month and year when the  first patient received each service against the month and year officials at  each facility planned to start providing that service.  In making these  calculations, we used the planned dates that were in place at the time of  building acceptance (i.e., the date on which staff gained access to a  facility after construction finished). To determine planned and actual  dates, we asked officials from each of the eight facilities to complete a  form with this information and to provide supporting documentation—such  as plans, written communications, and service logs—when available. We  also interviewed officials from each of the eight selected sites to  determine reasons for any differences between the planned and actual  dates of care for any of the services. To further assess the timeliness of  activation activities, we determined the proportion of medical services at  the selected sites that were provided within 6 months of opening day, as  VA’s Activation Process Guide states that patients can generally expect  all services to be available within that time frame.

To assess the extent to which VHA is able to compare actual activation  costs against estimated costs, we first evaluated VHA’s process for  developing activation cost estimates. To do so, we reviewed VHA’s cost  estimation tools to determine if they covered the full activation time frame,  and assessed the process that VHA uses to develop cost estimates  against the 12 steps in the GAO Cost Estimating and Assessment  Guide. The evaluation was performed by one analyst and the  conclusions were reviewed and verified by another analyst. To determine  the extent to which VHA compares actual costs against a baseline  estimate, we reviewed cost documentation (including any estimates and  actual costs) from each of the eight selected sites. We assessed the  reliability of the cost data by comparing the data to the supporting  documentary evidence that we received from VHA; interviewing  knowledgeable VHA officials; and reviewing the data for completeness. In  addition, we researched and reviewed relevant legislation pertaining to  the amounts that were authorized for a selection of these projects. The  data were sufficiently reliable for the purposes of this report. Lastly, we  interviewed officials from the Activations Office, regional support staff,  and finance officials at the selected sites regarding cost estimates and the  extent to which actual costs are compared to those estimates.

We conducted this performance audit from September 2018 to January  2020 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.

VA’s mission is to serve America’s veterans and their families, and one of  the ways it does so is by providing veterans with medical services. To  help meet the health care needs of veterans, VHA is planning to complete  approximately 70 new major medical projects between 2020 and 2024.  Activation is one of the key steps that must occur before veterans can  access care at these facilities.

According to VA’s Activation Process Guide, activation typically involves  activities such as planning for, purchasing, and installing new furniture,  fixtures, and equipment (FF&E), ordering supplies, and hiring staff. For  new buildings, the Guide states that activation activities begin when the  building is being designed, continue through construction, and end when  the facility is fully operational.

The expenses associated with activation can reflect either one-time  purchases or ongoing expenditures. One time purchases—called non- recurring activation expenses—involve the acquisition of assets such as  furniture or equipment, or payment to a contractor for services such as  equipment installation. Ongoing expenses, or expenses incurred more  than once—called recurring activation expenses—are for staff salaries  and consumable supplies, such as gowns and gloves. After a facility  opens and begins serving patients, facilities are permitted to treat  supplies and the salaries of new staff as activation costs until the site is  serving enough patients to receive funding through one of VA’s regular  funding processes, known as the Veterans Equitable Resource Allocation  (VERA). Figure 1 provides examples of recurring and non-recurring  activation expenses.

The total cost of activation for major lease and major construction projects  can be substantial. The median activation funding that facilities reported  spending on major activations from fiscal year 2012 through 2018 was  approximately $16 million. The four newest hospitals (in Denver, Las  Vegas, Orlando, and New Orleans) spent a cumulative total of more than  $1.9 billion for activation during this time period.

The types of facilities undergoing activation can vary in size, services  provided, and overall purpose within the VHA healthcare system, as  shown in figure 2. For example, a community-based outpatient clinic  (CBOC) is typically much smaller than a medical center but can provide  primary, specialty, subspecialty, mental health, or any combination of  delivery services that can be appropriately provided in an outpatient  setting. Large medical centers can provide outpatient services as well as  a broad range of inpatient services, including emergency services,  surgery, and acute psychiatric care. Smaller facilities may refer patients to  medical centers for complex treatment.

National, regional, and local staffs play different roles in the activation  process:  National: VHA’s Activations Office—under the Office of Capital Asset  Management (OCAM)—historically provided ad-hoc support to sites  activating a major lease or construction project, such as providing on-site  training related to the activation process and facilitating input from subject  matter experts within VHA. The office also determines the base amount  of activation funding that sites receive. Officials overseeing the office  stated that its role is being reassessed and that the type of support it  provides for activations may change in light of an internal reorganization  and consideration for VA’s future growth plans.

Regional: VHA’s18 regional networks, known as Veterans Integrated  Service Networks (VISN), are responsible for the coordination and  oversight of all administrative and clinical activities at health care facilities  within their specified region. A VISN’s role in activation varies depending  on the expertise available at the facility level, but VISNs can help facilities  arrange contracts for services (like laundry or hazardous waste removal);  review a facility’s budget submissions to VHA; and facilitate discussions  with senior management or knowledge-sharing with other sites that have  recently completed activation. The VISNs are also responsible for  distributing activation funding from VHA.

Local: In addition to providing medical services, medical centers function  as administrative hubs for services in the area. As a result, the medical  center director is ultimately responsible for activating facilities within the  center’s administrative boundary. The medical centers can appoint staff to  manage the activities required for activation. These staff can include the  activations project manager, financial officers, and subject matter experts  like interior designers. As a team, the staff are responsible for developing  technical requirements, creating risk mitigation strategies, and deciding  key acquisition dates, among other tasks.

Activation Tasks Include Identifying and Fulfilling Staffing, Equipment, and Other Needs Planning and Execution of Activation Tasks Align with Building Acceptance and the First Day of Clinical Services

While VHA has not identified standard milestones for activation, based  upon our review of VHA documents and interviews with local and regional  VHA officials, we found that two events are especially relevant to the  planning and execution of activation activities: (1) building acceptance  (when VHA formally takes possession of and occupies a building) and (2)  providing medical services to the first patient. Figure 3 describes  examples of activation activities in relation to these events, although the  actual timing of tasks will vary depending on the needs of individual  facilities.

Activation Teams Begin Equipping and Staffing New Facilities Prior to Building Acceptance

Officials from selected facilities said that prior to building acceptance,  their activation activities typically focus on determining furniture and  equipment needs, placing orders, anticipating staffing needs, and hiring  new staff.

Determining furniture and equipment needs is intertwined with the  building design process, according to officials from three VHA facilities,  because the design of the physical space can dictate what equipment is  purchased. For example, a VHA official from one health-care center said  that the activations team showed the medical care providers a mock-up of  a treatment room and created cardboard models of furniture to help them  select items. The official told us that getting the medical care team’s input  early in the planning process can avoid the need to make costly changes  in order to make the physical space fit the equipment or furniture  requested by the medical care providers.

Conversely, the building may be designed to accommodate specific  equipment. For example:

Officials from one facility shared the specifications of the radiology  equipment with the team designing the building in order to leave a  proper amount of space for the equipment.

Similarly, an annex’s activation staff worked with the resident engineer  to design an enclosed area separate from their main building for a  mobile MRI machine. This design ensured a new MRI machine could  be swapped out in the event of a breakdown without causing a  disruption to the facility’s operations.

Officials said that they also begin the purchasing process for equipment  and furniture prior to building acceptance. VHA officials stated they work  backwards from the construction endpoint to determine when to order  items. VHA officials told us they need to place orders for certain items— such as high-tech equipment or made-to-order furniture—well in advance  of the facility’s opening because the items are known to have long  delivery times. For example:

Officials from one clinic reported they ordered their facility’s imaging  equipment 22 months before they needed it.

Similarly, an official from a different clinic said that furniture is often  not manufactured until it is ordered, so it can take several months to  arrive. In contrast, the official said items like a staff refrigerator could  be picked up at a local store within days and do not require  substantial advance planning.

Facilities also begin planning for their workforce needs prior to building  acceptance. For example:

An official from one clinic stated that facilities typically identify their  staffing needs during this time period by position, title, and pay.

Officials from an annex said that before their facility’s construction  groundbreaking, they discussed how many staff would move from the  old facility to the new facility, and how many new staff they expected  to hire.

After activation teams determine their staffing needs, facilities hire and  begin training new staff. For example:

An official from one clinic said that new staff needed to be trained  prior to opening day, so it is not uncommon for staff to be hired and  brought on-board before the facility begins providing clinical services.

In the case of a very large facility, such as a medical center, hiring the  required staff can require an extensive search that must commence  before the building is finished. An official from a medical center said  that a shortage of skilled medical workers required a nationwide  search for suitable candidates.

New Facilities Prepare for Patient Care after Building Acceptance

Officials said that after a building is accepted as complete, activation  typically focuses on tasks associated with moving into the space, such as  equipment installation and training staff. For example:

One clinic’s project calendar showed in the weeks leading up to  opening day that the activations staff planned to install office furniture  such as desks and filing cabinets, as well as to perform checks on  biomedical equipment to ensure proper functioning.

Officials from another clinic coordinated equipment and furniture  deliveries between the warehouse (where items were being stored)  and the new facility.

The extent of staff training after building acceptance depends on the need  to familiarize staff with the new facility, and the complexity of services  offered. Activation staff might choose to have medical staff become  familiar with the new facility by working at the facility prior to new  operations. For example:

One clinic’s staff started working in the building before their first  patient was seen in order to become familiar with the new space.

An official from a medical center said that facility staff adjusted to  operating newer infrastructure, such as learning to operate a modern  computerized boiler system. That official also stated that the medical  center might need to conduct extensive training exercises to simulate  24/7 inpatient care. In contrast, outpatient facilities that do not operate  around the clock may not have these same training needs.

Activation Continues after Facilities Begin Providing Clinical Services

Once a facility begins providing medical care, officials said that activation  tasks are typically related to facility operations. These tasks can include  on-the-job training in the new space and making necessary adjustments  to the facility to ensure it runs properly while concurrently serving new  patients. For example:

An official at one clinic said that beginning patient care with a  decreased workload, known as a “soft opening,” can help facilitate on- the-job training. The same official explained that this approach allows  staff to become accustomed to their new facility’s operations and  address any issues that may emerge without the demands of  operating at full capacity.

VHA officials from a health care center said that space adjustments  included repositioning exam beds and ordering ergonomic chairs.

Officials at several sites stated that they used SharePoint, an internal  communication tool, to keep track of needed adjustments. This  approach enables staff to monitor ongoing issues during the  beginning of new operations, resolve unexpected problems, and track  issues as they occur.

Several VHA officials also said that some activation tasks —such as  hiring staff—may occur after a facility begins serving patients. If a facility  plans on a phased opening, in which some services will not be available  on the first day, processes that would typically be completed earlier may  take place during this time frame instead. For example, a medical center  in our review utilized a phased-opening approach, as it expanded its  capabilities with new medical services after opening.

Selected Facilities Provided Most Clinical Services within Expected Time Frames, but Delays Occurred for a Variety of Reasons

The facilities included in our review provided most medical services within  planned time frames; however, nearly one-third of services were  delayed for various reasons. Overall, 59 of the 87 services were offered  within planned time frames (69 percent). Of the 28 services that were not  provided on time, staffing, equipment size, “commissioning”, and  procurement issues contributed to the delays, according to officials.

Staffing issues delayed a total of 14 services in two of the seven  facilities reviewed. One facility had 13 services with delays that  ranged from 4 to 6.5 months. Officials said the delays were due to  difficulties recruiting the staff necessary for those services, which  included various types of surgery, radiology, and mental health,  among others. Similarly, difficulties recruiting a dentist at a second  facility delayed dental service 4 months beyond the expected delivery  time frame.

Equipment at one facility did not fit into some of the rooms and the  space needed to be altered in order to accommodate it. Officials  said that all 12 services were delayed by approximately 1 month so  that the facility could open with all services available, though officials  noted that the full extent to which the equipment issues contributed to  these delays was unknown (i.e., there could have been other causes  that they could not recall.)

Commissioning issues delayed women’s healthcare services at one  annex by approximately 1 month. Officials said that the air circulation  rate—which needed to be higher in rooms where certain procedures  are performed—was inadequate. As a result, the air exchange had to  be improved before the facility could begin performing the planned  clinical procedures.

Procurement issues led to delays in providing radiology services at  one facility. Officials told us that x-ray services were delayed by 3  months because the equipment was ordered through the centralized  purchasing process, which took longer than local officials had  anticipated.

These delays primarily affected services that were originally planned to  be offered within 2 months of building acceptance. While selected  facilities planned to offer approximately 92 percent of services within 2  months of building acceptance, as shown in figure 4, 61 percent were  actually offered within that time frame.

VHA does not provide a guideline for how much time facilities should  need after building acceptance to provide clinical services. Officials  explained that the appropriate amount of time will vary based upon the  scope of the project, including factors such as the number and kinds of  services offered and the level of effort associated with installing the  equipment (e.g., a replacement hospital will require more effort than a  small outpatient clinic). Thus, we did not determine if facilities were  allotting appropriate amounts of time to complete activation activities and  serve patients. However, VA’s Activation Process Guide provides some  information regarding when full services should be available. The Guide  states that clinical services can be added for up to 6 months after opening  day (i.e., the first day that patients receive any services at the facility).  The Guide further states that facilities may expect to offer services  gradually—versus all on opening day—when services are new to an area.

Of the 87 services offered by the facilities in our review, 86 were offered  within 6 months of opening day. The remaining service—a clinic that  provides colonoscopy and other related procedures at one facility— opened on schedule approximately 11 months after opening day. This  facility was replacing another facility that had not previously offered this  service. Officials explained that because the service was new, they  needed more time to develop and equip the space as well as hire staff, so  they planned on offering this service later than services that were being  transferred from the previous facility.

VHA Lacks Processes and Clear Definitions to Estimate and Oversee Total Activation Costs

VHA lacks processes to develop total cost estimates for major activations.  Without total cost estimates, VHA is unable to determine whether actual  activation expenses are higher or lower than planned. Furthermore, VHA  does not have documentation that defines allowable activation costs,  including what facilities can purchase with activation funding and when  facilities should cease spending activation funds. As a result, VHA  officials lack critical information to support decision-making about  resource allocation, and are not well positioned to effectively identify and  investigate deviations from planned spending.

VHA Lacks Processes to Develop Total Activation Cost Estimates and Compare Them against Actual Costs

VHA lacks processes to develop reliable total activation cost estimates for  major activation projects and to compare actual costs against these  estimates. According to our assessment of information from VHA, the  current cost estimation process does not cover the full duration of  activation and does not reflect best practices for developing reliable cost  estimates. In addition, VHA officials said that until recently, the agency  lacked the accounting mechanisms necessary to facilitate comparisons of  a project’s total activation costs against estimated costs; however, while  VHA now possesses these mechanisms, it has not documented the  process for how the new information should be used.

The Activations Office and facility activation staff annually develop cost  estimates for the upcoming 3 fiscal years using (1) an activation cost  model (the model) and (2) a cost template (the template). According to  Activations Office officials, the model is managed by the Activations  Office and uses inputs such as a facility’s square footage and project  schedule. Activations Office officials also said that the template is typically  completed by facility activation staff and includes inputs such as planned  clinical services as well as estimated staffing, equipment, and supply  costs. While the cost estimate is driven primarily by the model,  information in the template is also considered before annual activation  funds are distributed, according to Activations Office officials. Figure 5  shows the steps for determining and distributing annual activation funds.

We determined that the model and template do not estimate costs for the  entire duration of a facility’s activation. According to our review of  facilities’ spending data, activation spending for a given facility can occur  over more than 3 fiscal years. All eight of the facilities in our review, for  example, spent activation funds over 4 or 5 fiscal years. Thus, the  estimate the Activations Office would have developed at the beginning of  these projects would not have reflected total activation costs. Moreover,  we did not see evidence that VHA medical facilities independently  develop total activation cost estimates that are appropriate to compare  against total actual costs. None of the eight selected facilities we  reviewed could provide total activation cost estimates appropriate for this  use, according to officials at each facility. Officials from five facilities  stated that they had not developed such estimates, an official from one  facility said that an estimate could not be located and probably had never  been done, and officials from two facilities said that such documentation  could not be located.

VHA officials said that the existing cost estimation tools reflected the  budgeting process (i.e., the current fiscal year and two future years) and  that they had not previously been required to develop a cost estimate for  the entirety of activation. Officials noted that as the Activations Office’s  role shifts to include more oversight, it will be important for the Office to  have total cost estimates for activation; however, as of September 2019,  VHA did not have any specific plans for how to collect estimates for a  project’s entire activation cost.

We also found that VHA’s current process for developing activation cost  estimates does not fully align with best practices for developing cost  estimates as established in the GAO Cost Guide (see table 1 below).  VHA’s process minimally met 10 and did not meet 2 of the steps—each of  which reflects multiple best practices—required to develop reliable cost  estimates. A reliable cost estimate is critical to the success of any  program, providing the basis for informed decision-making, realistic  budget formulation and program resourcing, and accountability for results.  VHA officials acknowledged that following these practices would be  valuable for the activations process, and explained that the agency did  not previously incorporate these practices because they had not  assessed the strength of their activation cost estimation process in this  manner.

Lastly, the Activations Office does not compare existing estimates and  actual activation costs. While the Activations Office develops activation  cost estimates for the upcoming 3 fiscal years and has some capabilities  to track activation costs, to date it has not compared the planned costs to  actual expenses. According to Activations Office officials, they have  historically been unable to track how activation funding was spent at the  facility level, which impeded such comparisons. Starting in fiscal year  2020, officials from the Activations Office plan to use accounting codes  associated with each activation project, which will allow them to track  expenses at the facility level. An internal review conducted in mid-2019 by  the department overseeing the Activations Office concluded that the  agency needed to regularly assess the extent to which activations spent  funds as planned. As of October 2019, however, officials said the office  has not documented the process for how they will deploy their new  accounting oversight capabilities, including which personnel would be  responsible for conducting such comparisons, the frequency of  comparisons, and any follow-up steps that would be considered in the  event of significant differences.

Without processes for estimating total costs and comparing them against  actual expenses, the Activations Office is limited in its ability to improve  resource planning, budgeting, and allocation—critical elements that  support VA’s stated management priority to enhance data-driven  decision-making. Further, guidance from the Office of Management and  Budget states that agencies should obtain information on actual project  costs and compare them against planned expenses so managers can  have a clear understanding of how resources are being used and whether  cost goals are being met. Documented processes for cost estimation  and comparison would be particularly important in the case of large  medical centers, whose activation costs are in the hundreds of millions of  dollars.

VHA’s Activations Office Has Not Clearly Defined Allowable Activation Costs or Spending Time Frames

The Activations Office has not clearly defined what officials at local  facilities can purchase with activation funding and how long activation  funding should continue after opening day. Activations Office officials said  that there is a general understanding that some expenses, such as  medical equipment for new facilities or services, are activation expenses,  and that the Activations Office intends to provide activation funding until  the facility begins to receive VERA funding to cover operational  expenses. However, there is no policy to inform facility activation staff of  what they can purchase with activation funding and when funding will  cease. In mid-2019, an internal review conducted by the department  overseeing the Activations Office found that the lack of clarity regarding  what could or could not be purchased should be remedied; however, as  of September 2019, no specific plans have been established to define  appropriate purchases.

Officials we spoke with—both at the selected medical facilities and  VISNs—expressed uncertainty about what expenses they could pay for  using activation funding.

Officials from two of eight facilities told us that there were times when  they did not know if they should charge an expense to activation or  another funding source, such as construction accounts. For  example, officials at one facility told us that they were unsure whether  construction or activation funds would pay for the special window  blinds needed for the intensive care units.

Officials at four of the VISNs also said that when contacted by medical  facility officials for guidance on allowable expenses, there were times  when they did not know if facilities should charge an expense to  activation or another funding code.

In addition, officials from the selected sites held differing views on how  long they were eligible to receive activation funding from the Activations  Office. Finance officials for one of the selected facilities said that  activation funding is provided for up to 5 years, while officials from several  other facilities said that activation funding is available until operational  expenses are covered by VERA. Activations Office officials said that the  latter interpretation is accurate and that this transition to ongoing VERA  support should take place within approximately 2 years after opening  day. However, an official from the Activations Office said that a few  facilities have received funding from the Activations Office for more than 2  years after opening because there was no clear definition for when  activation funding should cease.

The lack of clear definitions regarding what constitutes allowable  activation expenses and when activation funding should end limits VHA’s  ability to consistently and accurately estimate and track activation costs.  For example, similar facilities could develop varying total cost estimates  due to different understandings of what expenses are allowable. VA  management priorities include making data-driven decisions to improve  resource planning, budgeting, and allocation. In addition, Standards for  Internal Control in the Federal Government states that management  should use quality information to achieve the entity’s objectives. Clear  definitions on what expenses facilities should charge to activation  accounts, and for how long, would improve the Activations Office’s ability  to monitor activation costs and improve resource stewardship.

As VHA undertakes the process of replacing facilities to better reflect its  focus on outpatient and specialized care, it is poised to spend hundreds  of millions of dollars per year to equip and staff these new sites. However,  VHA does not have a clear understanding of total costs and whether  individual activation projects are spending funds effectively. Because  VHA does not have a process for developing an estimate for the entire  activation cost of a project, the agency lacks a critical baseline that can  inform future spending decisions. In addition, because VHA lacks a  process that describes how officials should compare actual expenses to  that estimate, the agency has no mechanism to regularly identify and  respond to unplanned differences in activation costs. Furthermore,  defining allowable activation expenses would better position VHA to  ensure total cost estimates are consistent from facility to facility. Lastly,  additional clarification on how to estimate activation costs and compare  them against actual expenses would help VHA to more effectively  manage the activations process. Without processes and clear definitions  associated with activation cost measurement, VHA does not have  reasonable assurance that it will be able to effectively manage the  resources associated with activation.

We are making the following four recommendations to VA:

The Assistant Deputy Under Secretary for Health for Administrative  Operations should develop and document a process for estimating  total activation costs for major medical facility projects. This process  should reflect the 12 steps for developing a reliable cost estimate  outlined in the GAO Cost Guide. (Recommendation 1)

The Assistant Deputy Under Secretary for Health for Administrative  Operations should develop and document a process for comparing  actual activation costs for major medical facility projects to estimates.  This process should identify the personnel responsible for comparing  the estimated costs to the actual expenses and document their  responsibilities. (Recommendation 2)

The Assistant Deputy Under Secretary for Health for Administrative  Operations should define and document what items and services  officials can purchase with activation funds. (Recommendation 3)

The Assistant Deputy Under Secretary for Health for Administrative  Operations should define and document when facilities should cease  to spend activation funds. (Recommendation 4)

We provided a draft of our report to VA for review and comment. VA  provided written comments, which are reprinted in appendix II. VA  concurred with all of our recommendations. VA further provided  information on how it intends to address our recommendations, with  target dates for completion in December 2020.

We are sending this report to the appropriate congressional committees  and to the Secretary of the Department of Veterans Affairs. In addition,  this report is available at no charge on the GAO website at http://gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-2834 or vonaha@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. Other key contributors to this report are listed in  appendix III.

Appendix I: Reported Activation Costs at Selected VHA Medical Facilities

To understand the costs of the activations of the eight selected facilities,  we asked activation officials at each facility to provide a breakdown of the  activation costs by the following categories: (1) Furniture, Fixtures, and  Equipment; (2) Staffing; (3) Supplies; (4) Other; and (5) Total Cost. We  used these cost categories because these are the categories in the  template that facilities complete to estimate activation costs.

Appendix II: Comments from the Department of Veterans Affairs

Appendix III: GAO Contact and Staff Acknowledgments

In addition to the contact above, Heather Halliwell (Assistant Director);  Alison Snyder (Analyst-in-Charge); Rose Almoguera; Brian Bothwell;  Geoffrey Hamilton; Jason Lee; Terence Lam; Ethan Levy; Josh Ormond;  Daniel Setlow; Laurel Voloder; Mary Weiland; and Elizabeth Wood made  key contributions to this report.

How much does it cost to get a new medical facility for veterans up and running? The Veterans Health Administration (VHA) spent more than $4 billion staffing and equipping (“activating”) such facilities from fiscal year 2012 through 2018.

But VHA doesn’t have a clear definition of allowable activation expenses or a process to estimate total activation costs.

Our recommendations address these issues to improve VHA’s oversight of activation costs.


Transit Workforce Development: Improved Strategic Planning Practices Could Enhance FTA Efforts

FTA provides more than $12 billion annually to support and expand transit services. The operation of transit systems depends on a skilled, qualified workforce, but impending transit worker retirements and advances in transit technology may create challenges for the transit workforce such as finding eligible applicants for transit jobs and obtaining the technology expertise needed.

GAO was asked to review various issues related to the sufficiency of the transit workforce. This report discusses the extent to which: (1) information exists about future transit workforce needs and (2) FTA assists with addressing current and future transit workforce needs, among other things. GAO reviewed DOT and FTA documents, including strategic and performance plans, and interviewed DOT and FTA officials and other transit stakeholders, including representatives of transit agencies, research organizations, and unions. Stakeholders were selected based on recommendations from other transit stakeholders and for geographic diversity, among other factors.

The nation's transit infrastructure requires a trained workforce, consisting of a variety of occupations (see figure), to operate, maintain, and oversee it.

Information on future transit workforce needs is limited in part by the absence of transit-specific workforce projections. According to Federal Transit Administration (FTA) officials, the best information available is an August 2015 report developed by the Department of Transportation (DOT) and other federal stakeholders to produce transportation job projections. However, the report's transit data are combined with ground passenger transportation data (e.g., school buses, taxis), and many of these services are specifically excluded from the statutory definition of transit. Transit-specific data were not available and would be costly to obtain, according to the researchers who wrote the report. Thus, the report does not exclusively reflect the transit workforce. The views of stakeholders GAO interviewed varied regarding whether additional workforce data were needed. Working with stakeholders to understand what, if any, additional information is needed could enable FTA to weigh the complete costs and benefits of developing future transit workforce data. This approach could also enable FTA to make informed decisions on allocating the appropriate resources toward transit workforce efforts.

While FTA assists transit stakeholders with addressing workforce needs—for example, providing about $29 million in workforce development assistance in fiscal year 2017—it lacks key strategic planning practices that could ensure its efforts are effective. FTA first reported to Congress in 2016 that it planned to develop a transit workforce strategic plan; however, no clear action has been taken to develop one so far. Further, FTA does not have clearly defined performance goals and measures—as outlined in the Government Performance and Results Act of 1993 (GPRA) and the GPRA Modernization Act of 2010—for FTA's transit workforce development efforts. Without these key strategic planning practices, FTA is limited in its ability to make informed decisions about effectively leveraging its resources to address future transit workforce needs and in measuring the effectiveness of its efforts.

GAO is making three recommendations to FTA: (1) in collaboration with stakeholders, determine whether additional transit workforce data are needed; (2) develop a comprehensive transit workforce strategy; and (3) develop performance goals and measures for FTA's transit workforce development efforts. DOT concurred with our recommendations.

Since 1964, the Department of Transportation’s (DOT) Federal Transit  Administration (FTA) has partnered with state and local governments to  create and enhance transit systems, providing more than $12 billion  annually to support and expand rail, bus, trolley, ferry, and other public  transit services. The operation of the nation’s transit systems—now and in  the future—depends on a skilled and qualified workforce. According to  DOT, transportation organizations face increasing difficulty in finding  qualified workers and managers to fill priority occupations. Changes in the  transportation industry, evolving technology, and upcoming retirements in  the U.S. workforce create workforce development challenges for  transportation organizations, training providers, academic institutions, and  other transit stakeholders. In DOT’s current strategic plan, DOT states  that it will develop and implement strategies that will foster the training  and development of the transportation workforce to acquire the needed  skills and capabilities to meet the current and future needs of the  industry.

You asked us to review the sufficiency of the transit workforce. This report  discusses:  the extent to which information exists about future transit workforce  needs,  the actions selected transit stakeholders are taking to address current  and future transit workforce needs, and  the extent to which FTA assists with addressing current and future  transit workforce needs.

To address these objectives, we reviewed key DOT and FTA documents  including strategic plans, reports to Congress, and reports on transit  workforce grants. We conducted interviews with a selection of transit  agencies and stakeholders. We selected a non-generalizable sample of  eight stakeholders, which included two research organizations, two  unions, two trade groups, one membership association of workforce  boards, and one transportation-consulting firm. In addition, we  interviewed officials from six transit agencies we selected for size and  geographic diversity (western, central, and eastern U.S.), among other  factors. Although the views of these officials and stakeholders are not  generalizable to those of all transit agencies and stakeholders, they  represent a range of perspectives and expertise regarding the transit  workforce’s efforts to address needs.

To determine the extent to which information exists about the future  transit workforce needs, we analyzed a report, developed by DOT and the  Departments of Labor (DOL) and Education, on the current and future  transportation workforce, and we interviewed officials from those  agencies. We also reviewed the Standards for Internal Control in the  Federal Government (Federal Internal Control Standards) for criteria on  quality information and compared FTA actions to this information. To  identify the actions that selected transit stakeholders are taking to  address current and future transit workforce needs, we included  examples of actions that stakeholders generally discussed with us,  among other things. To determine the extent to which FTA is assisting  transit agencies with identifying and addressing current and future  workforce needs, we compared FTA’s actions to Federal Internal Control  Standards, the Government Performance and Results Act of 1993  (GPRA), and the GPRA Modernization Act of 2010.

We conducted this review from January 2018 to March 2019 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

In 2017, transit agencies provided over 10 billion rides to people traveling  to and from businesses, homes, and other locations throughout the  United States, according to FTA. Transit infrastructure for those rides  includes railways, roads, bridges, tunnels, and stations. According to the  2017 American Public Transportation Association’s (APTA) Fact Book,  more than 6,700 organizations provided public transportation in a variety  of modes in 2015. Transit modes include:  fixed-route bus services—the most prevalent transit mode in the  country—vehicles operate according to regular schedules along  prescribed routes with designated stops;  rail services—vehicles operating along railways;  ferryboat services—vessels carrying passengers and/or vehicles over  a body of water; paratransit services—generally, accessible, origin-to-destination  transportation services that operate in response to calls or requests  from riders; and other demand-response services—sometimes called “dial-a-ride.”

Public transportation, or transit, is statutorily defined as regular,  continuing shared-ride surface transportation services that are open to  the general public or open to a segment of the general public defined by  age, disability, or low income. This definition has multiple statutory  exclusions including intercity bus service, school bus service, and charter  bus service.

The transit infrastructure requires appropriately trained personnel to  operate, maintain, and oversee services and assets (e.g., vehicles).  APTA estimated that, in 2015, U.S. public transit agencies employed  more than 430,000 fulltime and part-time personnel, including contractors.  The transit workforce consists of a variety of occupations, such as bus  operators, train conductors, dispatchers, mechanics, supervisors, and  other occupations (see fig. 1 for examples.)

FTA supports transit agencies’ workforce development by providing  financial and technical assistance, among other things. FTA’s financial  assistance efforts include implementing the Innovative Public  Transportation Frontline Workforce Development Program, which  provides competitive grants to transit agencies (transit workforce grants)  to assist with the development of innovative human resources activities.  FTA awarded transit workforce grants in fiscal years 2011, 2012, and  2015. Grant-eligible projects included employment training, outreach to  increase minority and female employment in transit, research on transit  personnel and training needs, and training and assistance for minority  business opportunities. Grant recipients included transit agencies, non- profit community groups, schools, and others. Additionally, recipients can  use up to one-half of one percent of certain grant funds, such as  Urbanized Area Formula Grants, for eligible human resources and  training activities with the approval of DOT.

FTA also administers the National Transit Database (NTD), which is  intended to provide information to assist in transit planning efforts. All  recipients and direct beneficiaries of grants from the Urbanized Area  Formula Program and Rural Area Formula Program, such as local  transit agencies, are required to report certain data to the NTD. FTA  also encourages agencies not receiving grants from these programs to  report voluntarily so the NTD can be more complete. In 2016, over 2000  transit agencies submitted full or partial reports to the NTD. The NTD  stores information from local transit agencies, such as financial and  operating data, to inform transit service planning for government agencies  and other organizations. Some workforce data, such as the number of  full-time and part-time transit agency employees, is reported to the NTD.  NTD data provide information on the transit workforce at the time the data  are reported, but are not used to project future transit workforce needs.

FTA partners with the National Transit Institute (NTI), hosted and staffed  by Rutgers University, to provide workforce development educational  resources and training. NTI delivers over 300 courses per year  nationwide to public transit employees and government transportation  agency employees at all levels. These courses focus on compliance with  federal regulations and developing skills to operate a transit agency.

At the department level, in August 2015, DOT, DOL, and the Department  of Education worked with industry stakeholders to project the employment  and skill needs of the transportation industry from 2012 to 2022. Primary  sources for the report included the DOL’s Bureau of Labor Statistics  (BLS) employment projections, current population survey (demographics),  and analysis from Economic Modeling Specialists International. The effort  developed a variety of transportation workforce statistics and resulted in  the Strengthening Skills Training and Career Pathways Across the  Transportation Industry: Data Report on Future Transportation Workforce  Needs (Transportation Industry Report). Among other things, the report: projected that an additional 4.6 million transportation workers will  need to be hired to fill vacancies created by separations (occupational  transfers, retirement, and other exits from the workplace), and net job  growth from 2012 to 2022; provided data on current worker distribution (at that time) by age and  sex for six transportation sectors and by race and ethnicity for  selected transportation occupations; and  included top job occupations by sector and projected industry and  occupational job openings based on separations and job growth.

Limited Information Exists on Future Transit Workforce Needs

The extent of future transit workforce needs is unclear due to the absence  of transit-specific workforce projections, unclear communication on the  data that are available, and because the data that are available do not  extend past 2022. The best information available on future transportation  workforce needs, according to FTA officials is the August 2015  Transportation Industry Report. The Transportation Industry Report  does have projections on transportation workforce needs, but the transit  industry data are combined with other ground passenger transportation  industries such as intercity buses, charter buses, taxis, school buses, and  limousines. Thus, the report does not exclusively reflect the transit  workforce.

According to researchers who wrote the report, the transit and ground  passenger transportation data were reported as one industrial sector  because it would be a significant undertaking to focus solely on transit  workforce data without funding a study for this specific area. The  Transportation Industry Report was developed with data, in part, from  BLS, which does not exclusively report on occupational projections for  public transportation. BLS develops workforce projections of the U.S.  labor market by industry, subsector, and occupational codes, including  the number of employees and types of employers. BLS officials we  interviewed said that industry and occupational data sets do not allow the  level of specificity that would be needed to identify only transit agencies.

The Transportation Industry Report predicted 1 million job openings in the  transit and ground passenger transportation sector from 2012 to 2022  and listed the top 10 projected job openings. However, these projected  job openings include a number of occupations within services that are  statutorily excluded from the definition of transit. For example, the three  largest categories of job openings—comprising about 72 percent of the  projected openings—have the following key transit exclusions:

School bus and special client bus drivers made up approximately  33 percent of the projected openings (330,699 job openings).  However, school bus services are specifically excluded from the  statutory definition of transit, as are sightseeing services, charter bus  services, courtesy shuttle services for patrons of one or more specific  establishments, and intra-terminal or intra-facility shuttle services.

Transit and intercity bus drivers made up almost 20 percent of the  projected openings (199,727 job openings). However, intercity bus  service (for example, Greyhound bus service) is specifically excluded  from the statutory definition of transit.

Taxi drivers and chauffeurs made up almost 19 percent of the  projected openings (188,895 job openings). However, these services  may not meet the statutory definition of transit.

However, when communicating about the report, FTA has not always  made clear that the data in the Transportation Industry Report combine  both transit and ground passenger transportation workforce projections,  though this was not intentional, according to FTA officials. FTA has  presented the combined data as representing the “transit” or “public  transit” workforce in recent annual reports to Congress and a few public  presentations. For example, one of the findings in the Transportation  Industry Report is that the combined sector of transit and ground  passenger transportation has the highest percentage of older workers  who are at or nearing retirement age. However, in recent reports to  Congress, FTA states that, public transit has the highest percentage of  older workers at or nearing retirement age. However, this statement did  not reflect that the percentages included transit and ground passenger  transportation data. We also found similar information involving retirement  percentages and job openings in a number of FTA presentations that are  available to the public online. In addition, we found two examples of  incorrect numbers in recent reports to Congress that FTA officials said  were “typos” that have now been corrected in the most recent fiscal year  2017 report.

FTA’s characterization of this data could confuse transit stakeholders,  including Congress, on needs, retirements, and growth in the transit  industry. When FTA identifies combined information as “transit”  projections, the audience may not understand the extent to which the  data reflect services that do not meet the statutory definition of transit. We  found evidence that this may have already occurred to some extent.  During our review, we found examples of stakeholders in the industry  repeating the same statistics that FTA has presented as “transit” in  publications and in our interviews with them, raising questions about  whether the industry may have misconceptions about the future transit  workforce. FTA officials told us that the combination of transit and ground passenger transportation is appropriate because of similarities in the  industries and the common practice of transit agencies hiring contractors  from ground passenger transportation to supplement workforce  personnel. However, the context of this information has not always been  clear in reports to external parties.

Further, the Transportation Industry Report’s projections on the future  transportation workforce are only estimated through 2022. DOT officials  said that they do not have plans to update the report beyond 2022 or to  develop a report that focuses solely on transit workforce projections. FTA  officials told us that they plan to hire a data scientist to assist them with  transit workforce issues. FTA officials also told us in November 2018, that  the report was intended to provide trend information and that they do not  plan to use the transit numbers from the Transportation Industry Report in  future reports and presentations, and considering that the report will soon  reach the end of its projections in 2022, we are not making a  recommendation about how to communicate the context of the  information in the Transportation Industry Report.

Opinions on the need for additional transit workforce data and projections  varied among transit stakeholders we interviewed. Several stakeholders  cited the difficulties of collecting transit-specific projections or other types  of data, while others pointed to the need for more data such as data  identifying shortages in specific occupations and retirement age of transit  employees. However, officials from the Community Transportation  Association of America, which represents small and rural transit agencies,  said that requiring additional data from transit agencies could be a time- consuming burden for local transit officials. The association officials  suggested that transit stakeholders should work together to use existing  workforce data from FTA or BLS to develop workforce projection data.  Transportation Research Board officials also said that additional transit  workforce data would be costly and difficult for transit agencies to provide.  However, the Director of Eno’s Center for Transportation Leadership, a  research organization, stated that it is extremely difficult to develop  national policies, programs, and grants to address systemic workforce  problems because of the gaps in transit workforce data.

Federal Internal Control Standards highlight the importance of using  quality information to make informed decisions and identifying the  information requirements needed to do so while considering the  expectations of internal and external users. While the views of  stakeholders we interviewed varied on the extent to which additional  transit workforce data and projections are needed, new transit workforce  projections could inform decision-making on transit workforce planning to  address potential future shortages or other needs. We have previously  reported that agencies should weigh data collection decisions carefully,  noting that there is a cost to data collection, and that only needed data  should be collected. Working with stakeholders to understand what, if  any, additional transit-specific workforce data transit stakeholders need  and the related collection costs could enable FTA to weigh the complete  costs and benefits of developing future data for the transit industry and to  make informed decisions on allocating the appropriate resources toward  those efforts.

Selected Transit Stakeholders Are Taking Steps to Address Transit Workforce Needs and Cited Ongoing Recruiting and Retention Challenges

Transit stakeholders we interviewed highlighted actions they are taking to  address transit workforce needs but also noted continuing difficulties with  recruiting and retaining staff. Examples of actions they have taken to  address workforce needs, either with a transit workforce grant or with  other funding include:

Career enhancement: Los Angeles County Metropolitan  Transportation Authority officials told us that they have developed a  program that offers growth opportunities by providing “upskilling”  resources at all levels of the agency including employee development,  management/leadership, and transportation senior leadership, among  other things.

Courseware development: The Transportation Learning Center  organized three industry consortiums to develop national standards- based courseware—Rail Car, Signals, and Elevator/Escalator  Technicians, according to the Transportation Learning Center. For  example, under the Signals Training Consortium, 25 new courses  have been developed covering the inspection, maintenance, and  troubleshooting of transit and commuter rail signaling equipment. The  curriculum is planned to include both classroom and on-the-job  training.

Internships: The Conference of Minority Transportation Officials  developed a program to prepare college, university, and vocational  school students to enter transit and transportation-related fields,  according to conference officials. In 2018, this program placed 29  interns nationwide in architectural and engineering firms as well as  state and local government agencies.

Managerial training: The Eno Center for Transportation provided  classes for mid- and senior-level transit executives and has started  one for first-line supervisors, according to an Eno official. This training  includes lectures, classes, job shadowing, informal mentoring, field  trips, and meetings with counterparts.

Research: The Community Transportation Association of America  reported on a survey it conducted of its members in June 2018 on the  salary and benefits for professional transit positions in the industry.  The survey’s 236 respondents provided information on hourly and/or  salary information, operating budget, available benefits, services  provided, and number of employees, among other things. According  to the Association, the members asked for this survey because it  helps them make staffing and employment decisions within their  agencies.

Technology education: Jacksonville Transportation Authority officials  told us that they have established a “Workforce of the Future” working  group whose charge is to prepare the workforce to incorporate  emerging technologies as it transitions its aged elevated, automated  people-mover system—the “Skyway”—to autonomous vehicle  technology. The working group supports a public automated-vehicle  test track as well as employee town halls to develop the tools to  discuss these issues in their communities.

Other Transit Workforce Grant-Supported Actions

FTA’s transit workforce grants also supported stakeholder actions to  address transit workforce issues including:  In fiscal year 2011, FTA awarded 12 workforce grants totaling $3  million. For example, the Chicago Transit Authority received a grant to  develop and validate a transit-manager competency model to help  supervisors recognize and support skills and leadership potential in  their staff. In addition, the Florida Department of Transportation  received a grant for its Certified Transit Technician Program, which  resulted in 13 hires, each receiving the opportunity for additional  certification and a college degree.

In fiscal year 2012, FTA awarded 17 grants totaling $7.05 million.  For example, the Southwest Ohio Regional Transit Authority  (Cincinnati) received a grant to develop a program that provided  technical training in hybrid engine technology to improve its  maintenance program and hybrid bus fleet. The Corporation to  Develop Communities of Tampa, Inc. received a grant to recruit, train,  and employ up to 30 people in the transit industry, including transit  operations and maintenance workers.

In fiscal year 2015, FTA awarded 16 grants for $8.1 million. For  example, the Bay Area Rapid Transit District was awarded a grant to  create a pathway to employment in the transit industry for traditionally  under-represented individuals. The Workforce Development Council  of Snohomish County, Washington, received a grant to bring together  local partners to create a pipeline of skilled workers ready to enter the  transit and construction industries. The partners have targeted  women, minorities, and native tribes to access apprenticeships, social  services, and job placement programs.

Notwithstanding these efforts, the transit stakeholders we spoke with  identified ongoing recruiting and retention challenges as shown in table  1.

FTA Helps Address Transit Workforce Needs, but Improved Strategic Planning Could Better Focus Assistance

FTA Provides Transit Workforce Assistance

FTA has taken a number of actions to assist transit agencies with future  workforce needs including:

FTA provides technical assistance, standards development, training,  and workforce development projects for the transit workforce. In  fiscal year 2017, the active projects totaled over $29 million.

Almost 13.3 million (approximately 46 percent) of this funding  went to technical assistance projects. For example, FTA spent  almost $4 million to assist the National Aging and Disability  Transportation Center with efforts that include developing online  courses and training materials to assist certain FTA grant  recipients with providing transportation services to older adults  and people with disabilities. The funds were also used to present  a podcast, as part of an online course on the Americans with  Disabilities Act of 1990 (ADA). The podcast addressed common  ADA questions related to customer service, wheelchairs on  vehicles, and service animals.

Over $8.3 million (approximately 28 percent) funded 17 active  transit workforce development projects from the fiscal year 2015  transit workforce grants discussed previously for developing new  training curriculums, or seeking to recruit and train specific groups,  especially those who are underrepresented in the transit  workforce. $5 million (approximately 17 percent) funded NTI development  and delivery of training programs for federal, state, and local  transportation employees. For example, NTI delivered 270 training  courses throughout the U.S. to 7,298 participants in fiscal year  2017. NTI also supported a workshop to help address industry  issues as they arise, such as workforce shortages and issues in  recruitment and retention. $2.5 million (approximately 9 percent) funded a Transit Standards  Development Program at the Center for Urban Transportation  Research (University of South Florida) to provide research and  analysis on needs and gaps, and recommendations for new  standards, or to modify existing standards. For example, one of  the reports discussed fatigue management, among other things.  According to FTA, the ultimate effects of this program are  increased safety and reduced injuries and fatalities.

FTA is collaborating with NTI to conduct an industry workforce needs  assessment aimed at identifying training, skills, and educational gaps  that exist in the industry as well as within current NTI programs. They  are conducting this assessment because of transit’s changing  workforce, technologies, and operating environment. This assessment  is intended to result in a report that provides a road map for the transit  workforce’s development and training and may identify some of the  gaps in transit workforce needs. As of November 2018, NTI has held  focus groups at key transit conferences, which have provided a  preliminary picture of the transit industry’s critical need, according to  FTA. NTI has also completed a draft of a survey of transit agency  needs and FTA is reviewing it, according to an NTI official. The next  steps include conducting the survey, mapping NTI’s curriculum and  courses to desired key skills, and developing a national transit  competency framework. The researchers are planning to use a  statistically significant sample that represents the needs of the  industry, both for urban and rural agencies, with estimated completion  of the survey and analysis in early 2019.

FTA is evaluating the effectiveness of the transit workforce grant  program. FTA funded an evaluation of the 12 fiscal year 2011 transit  workforce grants. The report discussed whether the projects met  goals, the effect of the programs, and whether the programs were  worth further investment. The report noted a number of outcomes  including introducing 2,608 youth to transit, and training 1,527 people.  FTA also plans to evaluate transit workforce grants awarded in fiscal  years 2012 and 2015 and to create outreach materials from the grant  projects for transit stakeholders. The evaluation is also intended to  provide important best practices and lessons learned for other transit  operators.

FTA is researching the potential effects of automation on the transit  workforce. In January 2018, FTA released the Strategic Transit  Automation Research Plan, which established a research and  demonstration framework. One of the research projects in the plan  is an assessment of the effect of automation on the transit workforce.  Specifically, the assessment is planned to provide a qualitative  analysis of labor-related considerations with transit bus automation  including potential workforce changes, perspectives of organized  labor, statutory and regulatory provisions, and other societal factors. A  follow-on project is planned to evaluate changes in staffing levels, job  responsibilities, labor hours, and training needs to provide a  quantitative approach to estimating automation’s effects on transit  employment levels, workforce needs, and wages.

FTA’s Transit Workforce Development Efforts Are Not Guided by a Strategy, Performance Goals, and Measures

Although FTA has assisted transit stakeholders with workforce needs, it  lacks key strategic planning practices that could ensure its efforts are as  effective as possible. FTA reported in its fiscal years 2016 and 2017  annual reports to Congress that it planned to develop a transit workforce  strategic plan. Federal Internal Control Standards indicate that plans,  such as strategic plans, should set up the effective and efficient  operations necessary to fulfill desired objectives. Effective operations  produce the intended results from operational processes, while efficient  operations do so in a manner that minimizes the waste of resources.  However, FTA does not have a comprehensive strategy showing the  operations and processes to be developed to guide FTA’s efforts to assist  transit agencies with addressing future transit workforce needs.

FTA has had a number of starts and stops in producing a transit  workforce strategy since it first reported this intention to Congress in  2016, but no clear action has been taken to develop a strategy so far. In  July 2018, FTA officials told us that the reason they had not yet drafted a  comprehensive strategy is because they considered developing their  strategy as part of an overall DOT strategy, rather than a transit workforce  strategy as a stand-alone product. However, DOT does not currently plan  to develop a comprehensive department-wide transportation workforce  strategy. Nevertheless, DOT has consistently identified addressing the  transportation workforce as a priority over time in key DOT documents,  including its last three strategic plans and the last two performance plans.  DOT officials told us that the strategic plan is not intended to provide such  detail; rather, it is designed to be a top-level strategic plan that provides a  broad framework for DOT. In November 2018, FTA officials told us that  they intend to create a “workforce consortium” and a new technical  assistance project that would result in a strategy. However, FTA officials  did not provide a time frame for when these actions would be taken.

Considering the importance of the transit workforce to efficient operation  of the transit infrastructure, a transit workforce strategy would be  consistent with internal controls, such as setting up effective operations,  whether this strategy is developed as part of a department-wide strategy,  as a stand-alone project, or through a workforce consortium. Without a  comprehensive strategy to guide FTA’s ongoing activities to assist with  transit workforce needs, FTA lacks a roadmap to ensure it is effectively  leveraging its resources to help address future transit workforce needs. In  addition, it may be difficult for Congress to understand the merits of  investing in future transit workforce programs because it may not be clear  absent a vision of how individual programs fit within the overall transit  workforce strategy.

In addition to not having a comprehensive strategy, FTA lacks key tools to  demonstrate the extent to which individual workforce development efforts  are addressing future transit workforce needs. In particular, FTA has not  established clearly defined performance goals and measures for its transit  workforce assistance efforts. Establishing clear goals and measuring  progress toward them are consistent with the management principles set  forth in GPRA, as enhanced by the GPRA Modernization Act of 2010, and  our previous work.

Setting long-term strategic goals is essential for results-oriented  management, because such goals explain with greater specificity the  results an agency is intending to achieve, as we have previously  reported. FTA discussed the pending development of transit workforce  goals at an October 2016 summit with transit stakeholders, but these  goals were not finalized. Further, there are no performance goals for  transit workforce development efforts in DOT’s current annual  performance plan, and none is referenced in the current strategic plan.

FTA has developed some performance measures for evaluating the  outcomes of transit workforce grants—but not for its transit workforce  development efforts at large. In addition, these measures are not tied to  performance goals that FTA expects the grants to achieve. We have  previously reported that results-oriented organizations first set  performance goals to clearly define desired outcomes and then they  develop performance measures that are clearly linked to the program  goals and demonstrate the degree to which the desired results are  achieved. For example, two of the performance measures for transit  workforce grants are “total projected cost per direct participant,” and  “number of people expected to be trained overall,” but FTA has not set a  goal for what the projected cost per participant should be or the number  of people who should be trained by grant awards. By establishing  performance measures before establishing specific performance goals  that FTA seeks to achieve, FTA may not ensure that the data gained from  these performance measures are an effective use of resources.

DOT officials said that performance goals and measures for FTA’s transit  workforce grant program were not finalized because no funding has been  identified for a subsequent round of these grants. However, FTA’s efforts  to assist with transit workforce issues are larger than one grant program.  Performance goals and measures are consistent with effective  management practices with or without funding for a specific grant  program.

Without documented, clearly defined goals and performance measures  linked to those goals, FTA is limited in its ability to make informed  decisions about transit workforce development efforts. As a result, FTA  risks expending resources on efforts that it may not be able to  demonstrate are meeting intended goals. Focusing on the intended  results of FTA’s transit workforce efforts can promote strategic and  disciplined management decisions that are more likely to be effective  because managers are better able to target areas most in need of  improvement and to select appropriate interventions. Further, agency  accountability can be enhanced when both agency management and  external stakeholders—such as Congress—can assess an agency’s  progress toward meeting its goals. Without performance goals and  related performance measures, it will be more difficult for FTA to  determine the success of its strategies, adjust its approach when  necessary, and remain focused on results.

Much is unknown about the workforce needed in the future to operate the  nation’s transit systems and to transport people to and from work, school,  and other destinations. Disaggregating transit workforce data from other  transportation data has proved to be challenging, and the best projections  of the future transportation workforce needs will expire in 2022.  Additionally, how vehicle automation and other technology advances will  affect the future transit workforce is unclear, and FTA’s presentations on  the transit workforce projections that do exist may have contributed to the  lack of clarity on the future needs of the industry. Whether additional,  refined data on transit workforce needs—for example, an updated version  of the Transportation Industry Report—would provide greater benefits to  the industry than the cost of collecting these data is something FTA can  determine when it better understands the information the industry needs  to make effective workforce decisions. At that point, FTA can decide what  additional data need to be collected strategically, if any, and at what cost,  as part of strategic planning efforts.

FTA has identified the need to create a transit workforce strategy, and  has expressed its intention to create one in a number of different ways,  but has taken no clear action yet to ensure that FTA’s intention will be  realized. By taking the initiative to develop a strategy to help address  future transit workforce needs, FTA will be in a position to better manage  its ongoing transit workforce activities. FTA is undertaking a number of  efforts that could provide the foundation for sound strategic planning,  including sponsoring an assessment of transit workforce needs, hiring a  data scientist, starting a workforce consortium, and initiating research on  future automation that could provide more clarity regarding a key aspect  of future transit that is, as of now, an unknown factor. Further, FTA has  already drafted some performance measures for its transit workforce  grants that it may be able to use as a foundation for creating goals and  measures for transit workforce development at large. However, more  specific strategic planning efforts that include developing a strategy and  performance goals and measures can better enable FTA to effectively  help transit agencies identify, prepare, and provide a sufficient workforce  for the future.

We are making three recommendations to the FTA Administrator:

The FTA Administrator should determine, in collaboration with transit  stakeholders, whether additional transit workforce data are needed to  identify potential future occupational shortages in the transit industry  and whether the benefits of this collection would outweigh the cost of  gathering it. (Recommendation 1)

The FTA Administrator should develop and document a strategy that  outlines how FTA will help address future transit workforce needs.  (Recommendation 2)

The FTA Administrator should develop and document clearly defined  performance goals and measures for its transit workforce  development efforts. (Recommendation 3)

We sent a copy of this draft report to DOT for review and comment. DOT  responded with a letter in which it concurred with our recommendations  and discussed the successes of its Innovative Workforce Development  Program. The letter is reprinted in appendix II. DOT also provided  technical comments, which we incorporated in the report as appropriate.

We are sending copies of this report to appropriate congressional  committees and to the Secretary of Transportation. In addition, the report  is available at no charge on the GAO website at http://www.gao.gov. If  you or your staffs have any questions about this report, please contact  me at (202) 512-2834 or goldsteinm@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who contributed to this report are  listed in appendix II.

Appendix I: Objectives, Scope, and Methodology

This report addresses: (1) the extent to which information exists about  future transit workforce needs, (2) the actions selected transit  stakeholders are taking to address current and future transit workforce  needs, and (3) the extent to which the Federal Transit Administration  (FTA) assists with identifying and addressing current and future transit  workforce needs.

For all objectives, we analyzed key Department of Transportation (DOT)  and FTA documents such as DOT strategic plans, annual reports to  Congress in fiscal years 2017 and 2016, and public presentations, which  discussed workforce needs, grant programs, and data involving the transit  industry. We also interviewed government officials from DOT, including  from FTA, the Office of the Secretary, and the Federal Highway  Administration; from the Department of Labor (DOL) and its Bureau of  Labor Statistics (BLS); and from the Department of Education. Further,  we interviewed three transit stakeholders—the Eno Center for  Transportation, the National Transit Institute (NTI), and the American  Public Transportation Association (APTA) to understand available data  sources, relevant studies, and grant programs focused on the transit  workforce. Based on our research and recommendations from those  interviews with those three stakeholders and FTA, we selected a non- generalizable sample of an additional eight transit stakeholders for  interviews. These selected stakeholders included:  two research organizations (Transportation Learning Center and the  Transportation Research Board, which includes the Transit  Cooperative Research Program and the Transit Research Analysis  Committee);  two unions (Amalgamated Transit Union and Transport Workers  Union of America);  two trade groups (Community Transportation Association of America  and Conference of Minority Transportation Officials); and one membership association of workforce boards (National  Association of Workforce Boards); one transportation subject-matter expert (Mort Downey Consulting,  LLC).

In addition, we selected and interviewed officials from six transit agencies  to understand their perspectives regarding workforce issues such as  recruiting and retention challenges, and efforts to address those  challenges.

We selected and interviewed three urban transit agencies: Los  Angeles County Metropolitan Transportation Authority (CA); Regional  Transportation District—Denver (CO); and the Jacksonville  Transportation Authority (FL). We selected these agencies because  (1) each was recommended by more than one transit stakeholder we  interviewed for taking specific actions to address workforce issues; (2)  as a group, they represented geographic diversity (western, central,  and eastern United States); and (3) each was awarded at least one  FTA transit workforce grant.

In order to find smaller, more rural agencies for balance we selected  three transit agencies: Advance Transit (Wilder, Vermont); Cache  Valley Transit District (Logan, Utah); and the Ki Bois Area Transit  System (Stigler, Oklahoma) based primarily on recommendations  from the Community Transportation Association of America, which  represents thousands of the rural and tribal transit agencies, and then  considered geographic diversity (western, central, and eastern United  States) and a mix of services offered.

Although the views of these selected officials and stakeholders are not  generalizable to those of all transit agencies and stakeholders, they  represent a range of perspectives and expertise regarding the transit  workforce.

To determine the extent to which information exists about the future  transit workforce, we evaluated the Transportation Industry Report, which  projected the employment and skill needs of the transportation industry  from 2012 to 2022. We evaluated the scope, methodology, and  limitations of the Transportation Industry Report’s workforce projections, as that report provided the best available information according to FTA  officials. We analyzed the report’s projected job openings data in the  transit and ground passenger transportation sector to understand the  extent to which the data represented transit-specific data. In addition, we  reviewed FTA’s annual reports to Congress for fiscal years 2016 and  2017, and public presentations to document communication to the public  involving transit workforce data. We also reviewed FTA’s National Transit  Database (NTD) 2017 and 2016 calendar year data on transit agency  employees. Further, we interviewed BLS officials and reviewed the most  recent BLS employment projections from 2016–2026 to understand the  extent to which the data could be separated to represent only transit- specific data. We reviewed the Standards for Internal Control in the  Federal Government on communicating and preparing quality information  and compared FTA actions to this information.

To determine what actions selected transit stakeholders are taking to  address current and future transit needs, we reviewed efforts to address  transit workforce needs taken by stakeholders whom we interviewed. We  also reviewed challenges involving recruiting and retaining transit workers  discussed during our interviews with those stakeholders. We judgmentally  included examples in our report to demonstrate the breadth of actions  that are being taken. We analyzed various FTA reports on transit  workforce grants awarded in fiscal years 2011, 2012, and 2015 and  included examples to demonstrate the variety of projects that the transit  workforce grants covered. We also included examples in our report of  challenges that transit stakeholders we spoke with generally discussed,  grouped under common themes. Themes that we included in the report  were cited multiple times by stakeholders we interviewed.

To determine the extent to which FTA is assisting transit agencies with  identifying and addressing current and future workforce needs, we  interviewed officials from FTA and DOT’s Office of the Secretary to  document their efforts to identify and address current and future transit  workforce needs. We compared FTA’s actions to address transit  workforce needs to Federal Internal Control Standards, the Government  Performance and Results Act of 1993 (GPRA), the GPRA Modernization  Act of 2010, and our previous work.

We conducted this performance audit from January 2018 to March 2019  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

Appendix II: Comments from the Department of Transportation

In addition to the contact named above, Heather MacLeod (Assistant  Director); Amy Higgins (Analyst-in-Charge); Nelsie Alcoser; Melissa  Bodeau; Lacey Coppage; Terence Lam; Josh Ormond; Pamela Vines;  and Elizabeth Wood made key contributions to this report.

The nation's transit agencies are having a hard time finding the qualified workers and managers needed to keep buses, trains, and ferries moving.

We examined the outlook for the transit workforce. We found:

Current federal projections of future workforce needs either don’t include or aren’t specific to the transit workforce

The Federal Transit Administration's strategic planning could be more effective in assisting transit agencies with workforce issues

We made 3 recommendations, including that FTA consider whether more specific workforce projections would be worthwhile and develop a strategy to address future workforce needs.