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

Nicole R. Nason
Federal Highway Administration
17 September 2020

[Federal Register Volume 85, Number 181 (Thursday, September 17, 2020)]
[Notices]
[Pages 58102-58106]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-20530]


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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), U.S. Department of 
Transportation (DOT).

ACTION: Notice; request for comment.

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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 NEPA 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

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each of the first 4 years of State participation to ensure compliance 
with program requirements. This notice announces and solicits comments 
on the third audit report for the Utah Department of Transportation 
(UDOT).

DATES: Comments must be received on or before October 19, 2020.

ADDRESSES: Mail or hand deliver comments to Docket Management Facility: 
U.S. Department of Transportation, 1200 New Jersey Avenue SE, Room W12-
140, Washington, DC 20590. You may also submit comments electronically 
at www.regulations.gov. All comments should include the docket number 
that appears in the heading of this document. All comments received 
will be available for examination and copying at the above address from 
9 a.m. to 5 p.m., e.t., Monday through Friday, except Federal holidays. 
Those desiring notification of receipt of comments must include a self-
addressed, stamped postcard or you may print the acknowledgment page 
that appears after submitting comments electronically. Anyone can 
search the electronic form of all comments in any of our dockets by the 
name of the individual submitting the comment (or signing the comment, 
if submitted on behalf of an association, business, or labor union). 
The DOT posts these comments, without edits, including any personal 
information the commenter provides, to www.regulations.gov, as 
described in the system of records notice (DOT/ALL-14 FDMS), which can 
be reviewed at www.dot.gov/privacy.

FOR FURTHER INFORMATION CONTACT: Ms. Lana Lau, Office of Project 
Development and Environmental Review, (202) 366-2052, Lana.Lau@dot.gov, 
or Mr. Jay Payne, Office of the Chief Counsel, (202) 366-4241, 
James.o.Payne@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 
U.S.C. 327, commonly known as the NEPA Assignment Program, allows a 
State to assume FHWA's environmental responsibilities for review, 
consultation, and compliance for Federal highway projects. When a State 
assumes these Federal responsibilities, the State becomes solely liable 
for carrying out the responsibilities it has assumed, in lieu of FHWA. 
The 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 identified 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 close of the comment period, FHWA and UDOT 
considered comments and proceeded to execute the MOU. Effective January 
17, 2017, UDOT assumed FHWA's responsibilities under NEPA, and the 
responsibilities for NEPA-related Federal environmental laws described 
in the MOU.
    Section 327(g) of title 23, U.S.C., requires the Secretary to 
conduct annual audits to ensure compliance with the MOU during each of 
the first 4 years of State participation and, after the fourth year, 
monitor compliance. This section also requires FHWA to make the audit 
available for public comment. The FHWA published the first audit report 
of UDOT compliance on September 17, 2018, and published the second 
report on November 13, 2019. This notice announces the availability of 
the third audit report for UDOT and solicits public comments.

    Authority: Section 1313 of Public Law 112-141; Section 6005 of 
Public Law 109-59; 23 U.S.C. 327; 23 CFR 773.

Nicole R. Nason,
Administrator, Federal Highway Administration.

Surface Transportation Project Delivery Program; Draft FHWA Audit of 
the Utah Department of Transportation; 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 has assigned and UDOT has 
assumed pursuant to 23 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. This audit does not 
cover the UDOT's CE Program Assignment MOU 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 successfully 
carry out its DCE, EA, and EIS project review responsibilities. 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 has made efforts to respond to FHWA findings of the 
second audit, including improving document management and QA/QC 
procedures. The Audit Team also 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, one 
observation, and several successful practices. Overall, UDOT has 
carried out the environmental responsibilities it

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assumed through the MOU and the application for the NEPA Assignment 
Program, and as such the Audit Team finds UDOT is substantially 
compliant with the provisions of the 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 FHWA approvals. 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 related 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.
    Following this third audit, FHWA will conduct one more annual audit 
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 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. These experts 
received training on how to evaluate implementation of the NEPA 
Assignment Program.

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 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.

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 will consider 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 progress since the last 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 helps 
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

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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 project managers do a good job of 
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 
consistently monitors the effectiveness of its wetland mitigation as 
required for permits issued by USACE under Section 404 of the Clean 
Water Act, and sends 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 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 has revised the Environmental 
Document Review Tool to differentiate requirements for EAs and EISs. 
The UDOT has 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 works 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 resulted in a reduction 
in the time needed to complete DCEs, EAs, and EISs. The UDOT's 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

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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.

Next Steps

    The FHWA provided this draft audit report to UDOT for a 30-day 
review and comment period. The Audit Team considered UDOT comments in 
developing this draft audit report. The FHWA will publish a notice in 
the Federal Register for a 30-day comment period in accordance with 23 
U.S.C. 327(g)(2)(A). No later than 60 days after the close of the 
comment period, FHWA will respond to all comments submitted to finalize 
this draft audit report pursuant to 23 U.S.C. 327(g)(2)(B). Once 
finalized, FHWA will publish the final audit report in the Federal 
Register.

[FR Doc. 2020-20530 Filed 9-16-20; 8:45 am]
BILLING CODE 4910-22-P