Surface Transportation Project Delivery Program; Utah Department of Transportation Audit Report Publication: Federal Register Agency: Federal Highway Administration Byline: Stephanie Pollack Date: 3 November 2022 Subjects: American Government , Roads & Highways

[Federal Register Volume 87, Number 212 (Thursday, November 3, 2022)]
[Notices]
[Pages 66348-66352]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-23914]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

[FHWA Docket No. FHWA-2020-0012]


Surface Transportation Project Delivery Program; Utah Department 
of Transportation Audit Report

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

ACTION: Notice.

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SUMMARY: The Moving Ahead for Progress in the 21st Century Act (MAP-21) 
established the Surface Transportation Project Delivery Program that 
allows a State to assume FHWA's responsibilities for environmental 
review, consultation, and compliance under the National Environmental 
Policy Act (NEPA) for Federal highway projects. When a State assumes 
these Federal responsibilities, the State becomes solely responsible 
and liable for carrying out the responsibilities it has assumed in lieu 
of FHWA. This program mandates annual audits during each of the first 4 
years of State participation to ensure compliance with program 
requirements. This notice finalizes the findings of the third audit 
report for the Utah Department of Transportation (UDOT).

FOR FURTHER INFORMATION CONTACT: Mr. David Cohen, Office of Project 
Development and Environmental Review, (202) 366-8531, 
David.Cohen@dot.gov, or Mr. Patrick Smith, Office of the Chief Counsel, 
(202) 366-1345, Patrick.C.Smith@dot.gov, Federal Highway 
Administration, U.S. Department of Transportation, 1200 New Jersey 
Avenue SE, Washington, DC 20590. Office hours are from 8:00 a.m. to 
4:30 p.m., e.t., Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access

    An electronic copy of this notice may be downloaded from the 
specific docket page at www.regulations.gov.

Background

    The Surface Transportation Project Delivery Program, codified at 23 
United States Code (U.S.C.). 327, commonly known as the NEPA Assignment 
Program, allows a State to assume FHWA's environmental responsibilities 
for review, consultation, and compliance for Federal highway projects. 
When a State assumes these Federal responsibilities, the State becomes 
solely liable for carrying out the responsibilities in lieu of the 
FHWA. The UDOT published its application for NEPA assumption on October 
9, 2015, and made it available for public comment for 30 days. After 
considering public comments, UDOT submitted its application to FHWA on 
December 1, 2015. The application served as the basis for developing a 
Memorandum of Understanding (MOU) that identifies the responsibilities 
and obligations that UDOT would assume. The FHWA published a notice of 
the draft MOU in the Federal Register on November 16, 2016, with a 30-
day comment period to solicit the views of the public and Federal 
agencies. After the end of the comment period, FHWA and UDOT considered 
comments and proceeded to execute the MOU. Effective January 17, 2017, 
UDOT assumed FHWA's

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responsibilities under NEPA, and the responsibilities for other Federal 
environmental laws described in the MOU.
    Section 327(g) of Title 23, U.S.C., requires the Secretary to 
conduct annual audits during each of the first 4 years of State 
participation. After the fourth year, the Secretary shall monitor the 
State's compliance with the written agreement. The results of each 
audit must be made available for public comment. This notice finalizes 
the findings of the third audit report for UDOT participation in the 
NEPA Assignment program. The FHWA published a draft version of this 
report in the Federal Register on September 17, 2020, and made it 
available for public review and comment for 30 days in accordance with 
23 U.S.C. 327(g). The FHWA received one response to the Federal 
Register notice during the public comment period for the draft report. 
The only response, from the American Road and Transportation Builders 
Association, outlined their general support for the NEPA Assignment 
program to accelerate Federal-aid highway program and project delivery. 
The FHWA determined that the comment required no changes to the draft 
report. This notice finalizes the third NEPA Assignment audit report in 
Utah.
    Authority: Section 1313 of Public Law 112-141; Section 6005 of 
Public Law 109-59; 23 U.S.C. 327; 23 CFR 773.

Stephanie Pollack,
Acting Administrator, Federal Highway Administration.

Surface Transportation Project Delivery Program

FHWA Audit of the Utah Department of Transportation--Final Report

July 1, 2018-June 30, 2019

Executive Summary

    This report summarizes the results of the Federal Highway 
Administration's (FHWA) third audit of the Utah Department of 
Transportation's (UDOT) National Environmental Policy Act (NEPA) review 
responsibilities and obligations that FHWA assigned and UDOT assumed 
pursuant to 23 United States Code (U.S.C.) 327. Throughout this report, 
FHWA uses the term ``NEPA Assignment Program'' to refer to the program 
codified at 23 U.S.C. 327. Pursuant to 23 U.S.C. 327, UDOT and FHWA 
executed a memorandum of understanding (MOU) on January 17, 2017, to 
memorialize UDOT's NEPA responsibilities and liabilities for Federal-
aid highway projects and certain other FHWA approvals in Utah. The 
section 327 MOU covers environmental review responsibilities for 
projects that require the preparation of environmental assessments 
(EA), environmental impact statements (EIS), and non-designated 
documented categorical exclusions (DCE). A separate MOU, pursuant to 23 
U.S.C. 326, authorizes UDOT's environmental review responsibilities for 
other categorical exclusions (CE), commonly known as CE Program 
Assignment. The scope of this audit did not include the CE Program 
Assignment responsibilities and projects.
    As part of FHWA's review responsibilities under 23 U.S.C. 327, FHWA 
formed a team (the ``Audit Team'') in June 2019 to plan and conduct an 
audit of NEPA responsibilities UDOT assumed. The Audit Team conducted 
an on-site review during the week of October 7 to October 10, 2019. 
Prior to the on-site visit, the Audit Team reviewed UDOT's NEPA project 
files, UDOT's response to FHWA's pre-audit information request (PAIR), 
UDOT's NEPA Assignment Self-Assessment Report, UDOT's NEPA Quality 
Assurance/Quality Control (QA/QC) Guidance, and UDOT's NEPA Assignment 
Training Plan. The Audit Team conducted interviews with four members of 
UDOT central office staff, three of UDOT's legal counsel (one Assistant 
Attorney General (AG) assigned to UDOT and two outside counsel), and 
seven staff members from the U.S. Army Corps of Engineers (USACE) as 
part of this on-site review.
    Overall, the Audit Team found that UDOT continues to carry out the 
assigned environmental review and transportation decisionmaking 
responsibilities successfully. The UDOT has made efforts to respond to 
the FHWA findings from the second audit, including improving document 
management and QA/QC procedures. In the first and second audits, the 
FHWA Audit Team observed inconsistent understanding of QA/QC procedures 
among UDOT staff and lack of adherence to its QA/QC procedures. In the 
third audit, the Audit Team found that UDOT issued an environmental 
document without a final legal sufficiency finding, and observed that 
there were some ways UDOT could improve their training.
    The Audit Team identified one non-compliance observation and one 
observation as well as several successful practices. The Audit Team 
found UDOT has been carrying out the responsibilities it has assumed in 
compliance with the provisions of the Section 327 MOU.

Background

    The NEPA Assignment Program allows a State to assume FHWA's 
environmental responsibilities for review, consultation, and compliance 
for Federal-aid highway projects and certain other FHWA actions. Under 
23 U.S.C. 327, a State that assumes these Federal responsibilities 
becomes solely responsible and solely liable for carrying them out. 
Effective January 17, 2017, UDOT assumed FHWA's responsibilities under 
NEPA and other Federal environmental laws. Examples of responsibilities 
UDOT has assumed in addition to NEPA include section 7 consultation 
under the Endangered Species Act and consultation under section 106 of 
the National Historic Preservation Act.
    After this third audit, FHWA conducted the fourth and last annual 
audit in November 2020 to satisfy provisions of 23 U.S.C. 327(g) and 
Part 11 of the MOU. Audits are the primary mechanism through which FHWA 
may oversee UDOT's compliance with the MOU and the NEPA Assignment 
Program requirements. This includes ensuring compliance with applicable 
Federal environmental laws and policies, evaluating UDOT's progress 
toward achieving the performance measures identified in MOU Section 
10.2, and collecting information needed for the Secretary's annual 
report to Congress. The FHWA must present the results of each audit in 
a report and make it available for public comment in the Federal 
Register.
    The Audit Team consisted of NEPA subject matter experts from the 
FHWA Utah Division as well as additional FHWA Division staff from 
California, Georgia, Alaska, and FHWA Headquarters. The subject matter 
experts received training on how to assess UDOT's compliance and assess 
the levels of accomplishment associated with the implementation of the 
NEPA Assignment Program in Utah.

Scope and Methodology

    The MOU (Part 3.1.1) states that ``[p]ursuant to 23 U.S.C. 
327(a)(2)(A), on the Effective Date, FHWA assigns, and UDOT assumes, 
subject to the terms and conditions set forth in 23 U.S.C. 327 and this 
MOU, all of the USDOT Secretary's responsibilities for compliance with 
the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et 
seq. with respect to the highway projects specified under subpart 3.3. 
This assignment includes statutory provisions, regulations, policies, 
and guidance related to the implementation of NEPA for highway projects 
such as 23

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U.S.C. 139, 40 CFR parts 1500-1508, DOT Order 5610.1C, and 23 CFR 771 
as applicable.'' Also, the performance measure in MOU Part 10.2.1(A) 
for compliance with NEPA and other Federal environmental statutes and 
regulations commits UDOT to maintaining documented compliance with 
requirements of all applicable statutes and regulations, as well as 
provisions in the MOU.
    The Audit Team conducted an examination of UDOT's NEPA project 
files, UDOT's responses to the PAIR, and UDOT's self-assessment. The 
audit also included interviews with staff and reviews of UDOT policies, 
guidance, and manuals pertaining to NEPA responsibilities. All reviews 
focused on objectives related to the six NEPA Assignment Program 
elements: program management; documentation and records management; QA/
QC; legal sufficiency; training; and performance measurement.
    The focus of the audit was on UDOT's process and program 
implementation. Therefore, while the Audit Team reviewed project files 
to evaluate UDOT's NEPA process and procedures, the Audit Team did not 
evaluate UDOT's project-specific decisions to determine if they were, 
in FHWA's opinion, appropriate or not. The Audit Team reviewed 11 NEPA 
Project files with DCEs, EAs, and EISs, representing all projects with 
decision points or other actionable items between July 1, 2018, and 
June 30, 2019. The Audit Team also interviewed environmental staff in 
UDOT's headquarters office.
    The PAIR consisted of 26 questions about specific elements in the 
MOU. The Audit Team used UDOT's response to the PAIR to develop 
specific follow-up questions for the on-site interviews with UDOT 
staff.
    The Audit Team conducted four in-person interviews with UDOT 
environmental staff, one in-person interview with seven staff members 
of the USACE, two phone interviews with UDOT's outside legal counsel, 
and one phone interview with legal counsel from the Utah Attorney 
General's office.
    Throughout the document reviews and interviews, the Audit Team 
verified information on the UDOT NEPA Assignment Program including UDOT 
policies, guidance, manuals, and reports. This included the NEPA QA/QC 
Guidance, the NEPA Assignment Training Plan, and the NEPA Assignment 
Self-Assessment Report.
    The Audit Team compared the procedures outlined in UDOT 
environmental manuals and policies to the information obtained during 
interviews and project file reviews to determine if there were 
discrepancies between UDOT's performance and documented procedures. The 
Audit Team documented observations under the six NEPA Assignment 
Program topic areas. Below are the audit results.
    Overall, UDOT successfully carried out the environmental 
responsibilities it had assumed through the MOU and the application for 
the NEPA Assignment Program, and, as such, the Audit Team found UDOT 
was substantially compliant with the provisions of the MOU.

Observations and Successful Practices

    This section summarizes the Audit Team's observations of UDOT's 
NEPA Assignment Program implementation, including successful practices 
UDOT may want to continue or expand. Successful practices are positive 
results FHWA would like to commend UDOT for developing. These may 
include ideas or concepts that UDOT has planned but not yet 
implemented. Observations are items the Audit Team would like to draw 
UDOT's attention to, which may benefit from revisions to improve 
processes, procedures, or outcomes. The UDOT may have already taken 
steps to address or improve upon the Audit Team's observations, but at 
the time of the audit, they appeared to be areas where UDOT could make 
improvements. This report addresses all six MOU topic areas as separate 
discussions. Under each area, this report discusses successful 
practices followed by observations.
    This audit report provides an opportunity for UDOT to implement 
actions to improve their program. The FHWA considered the status of 
areas identified for potential improvement in this audit's observations 
as part of the scope of Audit #4. The fourth audit report will include 
a summary discussion that describes UDOT's progress since this third 
audit.

Program Management

Successful Practices
    During the kickoff meeting, the Audit Team learned that UDOT has 
placed the Environmental Services Division under Program Development 
rather than Project Development. This re-organization helped 
environmental services align their work with planning staff. The UDOT 
described their interest in advancing a linking planning and 
environment approach related to their corridor planning process. The 
UDOT plans to pilot this approach on some corridors studies. 
Implementing this linking planning and environment approach could help 
address new environmental requirements and initiatives to accelerate 
project delivery. The FHWA and UDOT jointly discussed the opportunity 
and potential benefits that could result from hosting a peer exchange 
on this subject. In interviews with the USACE, the Audit Team learned 
that they have had recent discussions with UDOT about this type of 
approach.
    Within the last auditing period, UDOT initiated bi-monthly meetings 
with USACE to discuss upcoming projects. Early coordination with 
interested agencies can be effective in early identification and 
resolution of issues, and help to accelerate project delivery. The 
USACE supports continuing these early coordination efforts. In 
addition, USACE noted that UDOT's project managers were diligent and 
effective in documenting discussions in meetings and sending project-
specific meeting notes to them for review and concurrence.
    Through interviews with USACE, the Audit Team learned that UDOT had 
consistently monitored the effectiveness of its wetland mitigation as 
required for permits issued by USACE under Section 404 of the Clean 
Water Act, and they sent timely and complete monitoring reports to the 
USACE.
    The UDOT uses varying methods of communication for its public 
involvement, which UDOT customizes to the context of each project and 
the surrounding community. Communication methods include, but are not 
limited to, one-on-one discussions with the public, emails and phone 
calls UDOT receives from the public through project websites, 
neighborhood gatherings, and placing door hangers throughout 
communities. Public involvement plans evolve throughout the NEPA 
process, and UDOT environmental and public involvement staff meet as a 
team to decide how to address public concerns as they arise. Through 
interviews, the Audit Team learned that UDOT is exploring the use of 
virtual public involvement strategies on some of its projects, such as 
the use of videos and mapping tools, as a means of further enhancing 
public engagement.

Documentation and Records Management

Successful Practices
    The UDOT continues to improve implementation of its project file 
system. The UDOT uses ProjectWise as its environmental file system of 
record for NEPA Assignment Program projects. The folder structure in 
ProjectWise outlines the potential components of a

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complete project file that consultants and staff should populate, and 
UDOT's Environmental Document File Management guidance explains methods 
for organizing project files. In addition, the Environmental 
Performance Manager reviews project folders in ProjectWise to ensure 
that all project files are organized in accordance with the file 
structure. These measures have noticeably improved the organization and 
completeness of project files since the first two audits.

Quality Assurance/Quality Control

Successful Practices
    The Audit Team learned through the PAIR response and interviews 
that, in response to Audit #2, UDOT had revised the Environmental 
Document Review Tool to differentiate requirements for EAs and EISs. 
The UDOT had also created a new checklist for QA/QC. In interviews, 
UDOT staff recognized that they may need to further revise procedures 
to ensure documentation is complete, and stated that they are committed 
to continuing to revise and implement their process to document legal 
sufficiency findings on all documents requiring findings in accordance 
with UDOT's Manual of Instruction (MOI) and QA/QC plan. The UDOT 
staff's weekly project meetings, as well as their biweekly meetings to 
talk about issues that arise in the environmental program, are ways 
they can continue to refine their processes.

Legal Sufficiency

Successful Practice
    The UDOT Environmental Managers work directly with outside counsel. 
The UDOT Environmental Managers, an Assistant AG, and outside counsel 
hold quarterly meetings during which UDOT apprises counsel of upcoming 
project reviews and anticipated review deadlines. These quarterly 
meetings are one of UDOT's strategies for keeping the Assistant AG 
assigned to UDOT apprised of all communications between UDOT staff and 
outside counsel.

Training

Observation #1
    The UDOT continues to update its training plan on an annual basis, 
as required under Section 12.2 of the MOU. During the audit period UDOT 
provided its staff 12 training opportunities on NEPA and other 
environmental requirements, in accordance with the training plan. 
Section 12.2 of the MOU states that ``UDOT and FHWA, in consultation 
with other Federal agencies as deemed appropriate, will assess UDOT's 
need for training and develop a training plan.'' During interviews, 
however, USACE, staff stated they have not had the opportunity to 
provide input on UDOT's training plan. The USACE expressed that their 
staff may benefit from training to better understand UDOT's highway 
design standards, requirements, and policies. Interagency discussions 
regarding training needs may identify opportunities for cross-training 
with the potential to improve interagency communication and 
coordination, and lead to more efficient permit review and consultation 
processes.

Performance Measures

Successful Practices
    The UDOT's self-assessment documented the performance management 
details of the NEPA Assignment Program in Utah, which demonstrates 
UDOT's procedures under NEPA assignment have resulted in a reduction in 
the time needed to complete DCEs, EAs, and EISs. The average time to 
complete environmental documents is 7 months for DCEs, 24 months for 
EAs, and 37 months for EISs. Although these data are based on a limited 
number of completed UDOT NEPA reviews since January 2017, UDOT's 
initial timeliness results are promising.
    The UDOT regularly updates their MOI to continuously improve their 
policies and procedures. During this audit period, UDOT updated their 
MOI in September 2018. The UDOT has polled resource agencies every year 
to get feedback on their performance. The UDOT's self-assessment 
documents that, although they had a lower response rate to their annual 
resource agency poll this year (24 percent) compared to last year (50 
percent), the overall evaluation rating is 4 percent higher than the 
ratings prior to NEPA assignment. The UDOT recognized that the low 
response rate may be due to timing (UDOT sent the surveys in the summer 
and allowed 2 weeks for responses). In interviews with the USACE, the 
Audit Team heard that the distribution method may also be a factor. The 
USACE suggested that UDOT find a way to give the survey more visibility 
(e.g., discuss it at the bimonthly meeting, phone call in advance of 
the email, have it come from someone they work with regularly).

Non-Compliance Observation

    Non-compliance observations are instances where the Audit Team 
found UDOT was out of compliance or deficient in proper implementation 
of a Federal regulation, statute, guidance, policy, the terms of the 
MOU, or UDOT's own procedures for compliance with the NEPA process. 
Such observations may also include instances where UDOT has failed to 
maintain technical competency, adequate personnel, and/or financial 
resources to carry out the assumed responsibilities. Other non-
compliance observations could suggest a persistent failure to 
adequately consult, coordinate, or consider the concerns of other 
Federal, State, Tribal, or local agencies with oversight, consultation, 
or coordination responsibilities. The FHWA expects UDOT to develop and 
implement corrective actions to address all non-compliance 
observations.
    The following non-compliance observation relates to UDOT not 
complying with the State's environmental review procedures.

Non-Compliance Observation #1--Issuing a Document Without Final Legal 
Sufficiency Finding

    As noted in UDOT's Self-Assessment and confirmed through audit 
interviews and project file reviews, the Audit Team learned that in the 
case of one project's individual Section 4(f) evaluation, while outside 
counsel reviewed and commented on the draft evaluation prior to its 
release, the project file contained no documentation demonstrating that 
the required legal sufficiency review was completed pursuant to 23 CFR 
771.125(b) and/or 23 CFR 774.7(d) prior to UDOT's approval of the 
evaluation. This was also not in accordance with UDOT's QA/QC plan, 
Section 4.1.B, which requires the reviewing attorney provide the 
Environmental Program Manager with written documentation that the legal 
sufficiency review has been completed. The UDOT's response to the draft 
audit report indicated that they have since implemented a standard 
checklist form, to be completed by legal counsel, to document their 
project review to clarify the documentation of legal sufficiency 
reviews.

Response to Public Comments on the Draft Report and the Final Report

    The FHWA received one comment from the American Road & 
Transportation Builders Association (ARTBA) in general support of 
UDOT's implementation of the NEPA Assignment Program to accelerate 
Federal-aid highway program and project delivery in Utah. The FHWA 
appreciates ARTBA's input and determined that there is no need to 
revise the draft audit report in response to ARTBA's comment. 
Therefore, FHWA is finalizing UDOT's third NEPA

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Assignment audit report with this Federal Register notice.

[FR Doc. 2022-23914 Filed 11-2-22; 8:45 am]
BILLING CODE 4910-22-P