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Surface Transportation Project Delivery Program; Arizona Department of Transportation Draft FHWA Audit Report Publication: Federal Register Agency: Federal Highway Administration Byline: Shailen P. Bhatt Date: 29 September 2023 Subjects: American Government  , Roads & Highways
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[Federal Register Volume 88, Number 188 (Friday, September 29, 2023)]
[Notices]
[Pages 67424-67430]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-21316]
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DEPARTMENT OF TRANSPORTATION
Federal Highway Administration
[FHWA Docket No. FHWA-2023-0005]
Surface Transportation Project Delivery Program; Arizona
Department of Transportation Draft FHWA 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
established the Surface Transportation Project Delivery Program
(referred to as National Environmental Policy Act (NEPA) Assignment
Program), allows a State to assume FHWA's environmental
responsibilities for environmental review, consultation, and compliance
under NEPA. 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 is the third audit
of the Arizona Department of Transportation's (ADOT) performance of its
responsibilities under the NEPA Assignment Program. This notice
announces and solicits comments on the third audit report for ADOT.
[[Page 67425]]
DATES: Comments must be received on or before October 30, 2023.
FOR FURTHER INFORMATION CONTACT: Ms. Colleen Vaughn, Office of Project
Development and Environmental Review, (202) 633-0356,
colleen.vaughn@dot.gov, Federal Highway Administration, U.S. Department
of Transportation, 1200 New Jersey Avenue SE, Washington, DC 20590, or
Ms. Michelle Andotra, Office of the Chief Counsel, (404) 562-3679,
michelle.andotra@dot.gov, Federal Highway Administration, U.S.
Department of Transportation, 1200 New Jersey Avenue SE, Washington, DC
20590. Office hours are from 8 a.m. to 4:30 p.m., EST, 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
Title 23, United States Code (U.S.C.), Section 327, commonly known as
the NEPA Assignment Program, allows a State to assume FHWA's
environmental responsibilities for review, consultation, and compliance
for Federal-aid 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 ADOT published
its application for NEPA assumption on June 29, 2018, and solicited
public comment. After considering public comments, ADOT submitted its
application to FHWA on November 16, 2018. The application served as the
basis for developing a memorandum of understanding (MOU) that
identifies the responsibilities and obligations that ADOT would assume.
The FHWA published a notice of the draft MOU in the Federal Register on
February 11, 2019, at 84 FR 3275, 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 ADOT considered comments and proceeded
to execute the MOU. Effective April 16, 2019, ADOT assumed FHWA's
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 to ensure compliance with the MOU during each of
the first 4 years of State participation and, after the fourth year,
monitor compliance. The FHWA must make the results of each audit
available for public comment. This notice announces and solicits
comments on the third audit report for ADOT.
Authority: Section 1313 of Public Law 112-141; Section 6005 of
Public Law 109-59; 23 U.S.C. 327; 23 CFR 773.
Shailen P. Bhatt,
Administrator, Federal Highway Administration.
Surface Transportation Project Delivery Program
Draft FHWA Audit #3 of the Arizona Department of Transportation
Executive Summary
This is Audit #3 of the Arizona Department of Transportation's
(ADOT) assumption of National Environmental Policy Act (NEPA)
responsibilities under the Surface Transportation Project Delivery
Program. Under the authority of Title 23, United States Code (U.S.C.),
Section 327, ADOT and the Federal Highway Administration (FHWA)
executed a memorandum of understanding (MOU) on April 16, 2019, to
define ADOT's NEPA responsibilities and liabilities for Federal-aid
highway projects and other related environmental reviews for highway
projects in Arizona. This MOU covers environmental review
responsibilities for projects that require the preparation of
environmental assessments (EA), environmental impact statements (EIS),
and unlisted (identified as individual by ADOT) categorical exclusions
(CE).
The FHWA conducted a third audit of ADOT's performance according to
the terms of the MOU from March 28 to April 1, 2022. Prior to the
audit, the FHWA audit team reviewed ADOT's environmental manuals and
procedures, NEPA project files, ADOT's response to FHWA's pre-audit
information request (PAIR), and ADOT's NEPA Assignment Self-Assessment
Report. During the third audit, the audit team conducted interviews
with staff from ADOT's Environmental Planning (EP), Civil Rights
Office, Communications, Construction Districts, Contracts &
Specifications, as well as the Gila River Indian Community Tribal
Historic Preservation Office (THPO), the Hopi THPO, the Salt River
Pima-Maricopa Indian Community THPO, the Arizona State Historic
Preservation Officer (SHPO), and the Arizona Attorney General's Office
(AGO), and prepared preliminary audit results. The audit team presented
these preliminary results to ADOT leadership on April 1, 2022.
The audit team found that ADOT has carried out the responsibilities
it assumed consistent with the intent of the MOU and ADOT's
application. The ADOT continues to develop, revise, and implement
procedures and processes required to deliver its NEPA Assignment
Program. This report describes several general observations and
successful practices, as well as identified non-compliance observations
where ADOT must implement corrective actions prior to the next audit.
While ADOT has expressed lack of full agreement on some of the past
audit observations, the audit team does recognize that ADOT continues
to act on those past observations. By doing so, ADOT continues to
assure successful program assignment.
Background
The purpose of the audits performed under the authority of 23
U.S.C. 327 is to assess a State's compliance with the provisions of the
MOU as well as all applicable Federal statutes, regulations, policies,
and guidance. The FHWA's review and oversight obligation requires FHWA
to collect information to evaluate the success of the NEPA Assignment
Program; to evaluate a State's progress toward achieving its
performance measures as specified in the MOU; and to collect
information for the administration of the NEPA Assignment Program. This
report summarizes the results of the third audit in Arizona and ADOT's
progress towards meeting the program review objectives identified in
the MOU.
Scope and Methodology
The overall scope of this audit review is defined both in statute
(23 U.S.C. 327) and the MOU (Part 11). The definition of an audit is
one where an independent, unbiased body makes an official and careful
examination and verification of accounts and records. Auditors who have
special training with regard to accounts or financial records may
follow a prescribed process or methodology in conducting an audit of
those processes or methods. The FHWA considers its review to meet the
definition of an audit because it is an unbiased, independent,
official, and careful examination and verification of records and
information about ADOT's assumption of environmental responsibilities.
The audit team consisted of NEPA subject matter experts (SME) from
FHWA Headquarters, Resource Center, Office of the Chief Counsel, and
staff from FHWA's Arizona Division. This audit is an unbiased official
action taken by FHWA, which included an audit
[[Page 67426]]
team of diverse composition, and followed an established process for
developing the review report and publishing it in the Federal Register.
The audit team reviewed six NEPA Assignment Program elements:
program management; documentation and records management; quality
assurance/quality control (QA/QC); performance measures; legal
sufficiency; and training. The audit team considered four additional
focus areas for this review: the procedures contained in 40 CFR part 93
for project-level conformity; the procedures contained in Section 4(f)
of the U.S. Department of Transportation Act of 1966, codified at 49
U.S.C. 303 and 23 U.S.C. 138 (otherwise known as Section 4(f));
environmental justice evaluations (Environmental Justice per Executive
Order (E.O.) 12898, Federal Actions to Address Environmental Justice in
Minority Populations and Low-Income Populations, and Tribal
consultation per the National Historic Preservation Act (NHPA) of 1966,
36 CFR 800 et seq., E.O. 13175, Consultation with Indian Tribal
Governments); and additionally, ADOT's environmental commitment
tracking process. This report concludes with a status update for FHWA's
observations from the first and second audit reports.
The audit team conducted a careful examination of ADOT policies,
guidance, and manuals pertaining to NEPA responsibilities, as well as a
representative sample of ADOT's project files. Other documents, such as
ADOT's PAIR responses and ADOT's Self-Assessment Report, also informed
this review. In addition, the audit team interviewed ADOT, Arizona AGO,
Tribal THPO staff, as well as the Arizona SHPO via videoconference.
The timeframe defined for this third audit includes highway project
environmental approvals completed between January 1 to December 31,
2021. During this timeframe, ADOT completed NEPA approvals and
documented NEPA decision points for six projects. Due to the small
sample size, the audit team reviewed all six projects. This consisted
of one Tier 1 EIS, one EA with a Finding of No Significant Impact, and
four unlisted CEs. The FHWA also reviewed information pertaining to
project tracking and mitigation commitment compliance for all projects
that have been processed by ADOT since the initiation of the NEPA
Assignment Program.
The PAIR submitted to ADOT contained 25 questions covering all 6
NEPA Assignment Program elements. The audit team developed specific
follow-up questions for the interviews with ADOT staff and others based
on ADOT's responses to the PAIR. The audit team conducted a total of 23
interviews. Interview participants included staff from ADOT, Tribal
THPOs, Arizona AGO, as well as the Arizona SHPO.
The audit team compared ADOT manuals and procedures to the
information obtained during interviews and project file reviews to
determine if ADOT's performance of its MOU responsibilities is in
accordance with ADOT procedures and Federal requirements. The audit
team documented individual observations and successful practices during
the interviews and reviews, and combined these under the six NEPA
Assignment Program elements. The audit results are described below by
program element.
Overall Audit Opinion
The audit team found ADOT has carried out the responsibilities it
has assumed consistent with the intent of the MOU and ADOT's
application. The FHWA is notifying ADOT of five non-compliance
observations identified in this audit that require ADOT to take
corrective action. The ADOT must address these non-compliance
observations and continue making progress on non-compliance
observations in the previous audits prior to the next audit. By
addressing the observations cited in this report, ADOT will continue to
ensure a successful program.
Successful Practices and Observations
Successful practices are practices that the team believes are
positive and encourages ADOT to consider continuing or expanding the
use of those practices in the future. The audit team identified
successful practices in this report.
Observations are items the audit team would like to draw ADOT's
attention to, and for which ADOT may consider improving processes,
procedures, and/or outcomes. The team identified 10 general
observations in this report.
Non-compliance observations are instances where the audit team
finds the State is not in compliance or is deficient with regard to a
Federal regulation, statute, guidance, policy, State procedure, or the
MOU. Non-compliance may also include instances where the State has
failed to secure or maintain adequate personnel and/or financial
resources to carry out the responsibilities they have assumed. The FHWA
expects the State to develop and implement corrective actions to
address all non-compliance observations. The audit team identified five
non-compliance observations in this report.
Program Management
Successful Practice #1
The ADOT's PAIR response indicated, and interviews confirmed, that
ADOT EP is working with the ADOT Civil Rights Office (CRO) to develop
an environmental justice standard work process. This will establish the
roles and responsibilities between the two ADOT offices and ensure the
CRO's technical review of the environmental justice analysis is
completed.
Observations
Non-compliance Observation #1: Incomplete Reporting to the Federal
Infrastructure Permitting Dashboard.
The ADOT is responsible for inputting project information for
assigned projects into the Federal Infrastructure Permitting Dashboard
(Dashboard), per MOU Section 8.5.1. During the audit, the audit team
reviewed the Dashboard and found that it did not include Federal permit
and authorization information for any of the applicable projects
assigned to ADOT beyond NHPA Section 106 consultation. The audit team
confirmed during interviews that ADOT had identified the need for
additional permits and authorizations for these projects but had not
uploaded the permit information in the Dashboard because those
activities were planned far in the future. Per the Office of the
Secretary of Transportation Dashboard reporting standards, ADOT is
required to identify all Federal permits and authorizations that are
anticipated to be needed for the project to complete construction, and
to input target and actual milestone completion dates for those permits
and authorizations. Target dates for milestones shall be based on the
best available information. The ADOT must take corrective action to
address this issue by the next audit.
Observation #1: Deficiencies and gaps in ADOT's manuals and
procedures.
The audit team reviewed ADOT's manuals and procedures. Section
4.2.4 of the MOU specifies that ADOT must implement procedures to
support appropriate environmental analysis and decisionmaking under
NEPA and associated laws and regulations. The audit team identified the
following deficiencies in ADOT's manuals and procedures which may
result in incomplete project documentation or analysis and increase the
risk for non-compliance:
In Audit #2, the audit team identified an observation that
the ADOT EA/EIS Manual does not contain
[[Page 67427]]
complete procedures for EA or EIS-level re-evaluations. The EA/EIS
Manual instead points to the ADOT CE Manual for direction, therefore
the process for EA/EIS re-evaluations continues to be incomplete and
not well-defined. The FHWA requested the correction of the EA or EIS-
level re-evaluation section of the EA/EIS Manual in Audit #2. To date,
ADOT has not made the correction as requested by FHWA, therefore, this
is a continuing observation.
The ADOT EA/EIS Manual and the current 2017 ADOT Public
Involvement Plan approved prior to NEPA assignment do not contain
procedures detailing the criteria ADOT uses to make the determination
on when to hold public hearings for EA-level projects and what criteria
will be used to make determinations on whether to hold a public hearing
when one is requested, as specified in 23 CFR 771.111(h)(2)(iii). The
ADOT has indicated in its response to the PAIR and in interviews that
they are in the process of updating the ADOT Public Involvement Plan to
include more specificity on, and fulfilling the requirements for,
public involvement under NEPA. The procedures should also be referenced
in the ADOT EA/EIS Manual.
The ADOT acknowledged the need for improvement regarding manuals/
guidance and version control. The FHWA recommended that ADOT revisit
their current procedures for updating manuals/guidance, from use of
amendment tables to use of document dates to reflect the latest/most
current version.
Observation #2: Improvements to Tribal engagement warranted.
Interviews with ADOT staff and THPOs identified the need for
improvements to Tribal consultation practices. The THPOs expressed
frustration that ADOT's approach to engagement with the Tribes was
lacking outside of Section 106, and engagement completed under Section
106 did not constitute meaningful engagement.
The ADOT should develop procedures that identify their
responsibilities to coordinate and consult with Tribes in all phases of
project development from planning through construction. The FHWA
recommends:
ADOT improve transparency regarding project information;
ADOT provide the Tribes with any SHPO Section 4(f)
consultation as part of the Tribal consultation package for individual
projects; and
All ADOT personnel with visibility on projects or who
participate in meetings with Tribes complete sensitivity training as
well as training regarding the Federal Government's relationship to
Tribes under Government-to-Government consultation, per MOU Section
3.2.3.
The FHWA recommendations listed above are outlined in the FHWA/ADOT
Tribal Consultation Letter Agreement executed on August 5, 2022. The
ADOT accepted FHWA's recommendations and added a Tribal Liaison
position.
Non-compliance Observation #2: Responsibilities under the 327 MOU
assigned to additional divisions independent of ADOT EP.
Based on interviews of ADOT staff, the PAIR responses, and review
of ADOT's 327 application, it was identified that ADOT divisions
outside of EP have responsibilities under NEPA Assignment. These
divisions have not been identified or addressed in the ADOT EP
procedures, manuals, or plans. These responsibilities include
environmental commitment tracking, environmental review in the field,
and completion of the necessary training associated with those
responsibilities. The ADOT must take corrective actions to develop and
implement procedures to apply the 327 MOU provisions to all divisions
of ADOT, per MOU Section 1.1.2 and ADOT Final Application for
Assumption of FHWA NEPA Responsibilities, by the next audit.
Non-compliance Observation #3: Deficiencies in environmental
commitment tracking.
The ADOT was unable to provide FHWA with a process manual or any
type of consolidated report which documents the tracking of
environmental commitments made during the environmental review process.
The ADOT was unable to identify a meaningful tracking and monitoring
system for environmental commitments and mitigation compliance. The
ADOT has stated that this NEPA requirement is the responsibility of the
ADOT District Offices, which are outside the supervisory authority of
ADOT's EP Office. Per MOU Section 1.1.2 and the ADOT Final Application
for Assumption of FHWA NEPA Responsibilities, ADOT is responsible for
environmental commitment tracking, and all divisions that have
identified and assumed FHWA NEPA responsibilities must comply with all
provisions of the 327 MOU and ADOT's NEPA application requesting
assignment. The ADOT must take corrective actions to address the
tracking of environmental commitments and mitigation compliance by the
next audit.
The ADOT does complete monitoring of environmental commitments
associated with contractor responsibilities that have funding line
items. This is completed using their Field Automated System payment
system, but that is only a small subset of project commitments. The
ADOT EP has begun taking measures to establish a procedure or mechanism
for tracking environmental commitments and mitigation compliance,
including hiring an Environmental Commitments Coordinator and through
development of the Environmental, Permits, Issues, and Commitments
Tracking sheet.
Documentation and Records Management
Successful Practice #2
The ADOT staff identified a Historic Preservation Team tracking
spreadsheet maintained by ADOT's Cultural Resources Program Manager.
This spreadsheet is used to track and verify that all cultural resource
environmental commitments on projects are implemented from
identification to completion. If ADOT finds this tracking method to be
effective, they could consider implementing it more widely to other
environmental commitments throughout their program.
Observations
Non-compliance Observation #4: Incomplete project file submission
and standard folder structure issues.
Pursuant to MOU Sections 8.2.2 and 8.2.3, FHWA requested all
project files pertaining to the NEPA approvals and documented NEPA
decision points to be completed during the audit review period. The
audit team found several inconsistencies between ADOT's procedures for
maintaining project files and the project file documentation provided
to FHWA. The FHWA continues to experience issues when attempting to
access the files ADOT provided for the audit, as they are either not in
a format that can be opened, or they are inaccessible because they are
saved as a link to the internal ADOT system and not the actual
document. The MOU Sections 11.1.2 and 11.1.3 detail ADOT's
responsibilities to provide FHWA any information FHWA reasonably
considers necessary to ensure that ADOT is adequately carrying out the
responsibilities assigned, and ADOT's agreement to cooperate with FHWA
in conducting audits including providing access to all necessary
information.
The ADOT's procedures specify utilizing a standard folder structure
for all projects and saving all project
[[Page 67428]]
documentation and supporting information in the project files. The
project files submitted by ADOT were incomplete, did not include all
supporting documentation, and the files were not organized in
accordance with the ADOT standard folder structure. It is unclear how
ADOT is maintaining electronic project files and administrative records
in compliance with its procedures and the terms of the 23 U.S.C. 327
MOU as they apply to records retention. The ADOT must take corrective
action by the time of the next audit to ensure that the complete
project file is provided to FHWA upon request. The documentation must
support all determinations made. It is FHWA's expectation that
documentation to support a project's decision will be included in
ADOT's project files. The ADOT will also provide complete documentation
to FHWA upon request.
Observation #3: Minor edits needed to resolve deficiency in Section
4(f) evaluation of archaeological resources.
The ADOT's Section 4(f) Manual (Sections 3.3 and 3.4.2) and FHWA
regulations, policies, and guidance provide information on determining
the applicability of Section 4(f) to archaeological resources and
determining if there is an exception or potential use. The ADOT's
Section 4(f) Manual (Sections 5.2 and 5.3) specify procedures for
documenting Section 4(f) uses of archaeological sites, exceptions per
23 CFR 774.13(b), and ``no use'' determinations.
During Audit #1, FHWA identified inconsistencies with ADOT's
Section 4(f) evaluation and documentation of archaeological sites. In
Audit #2, the audit team observed similar inconsistencies during the
project file reviews and identified procedural deficiencies relating to
ADOT's Section 4(f) evaluation and documentation. In response to the
Audit #2 finding, ADOT updated their Section 106 Federal-aid
Programmatic Agreement Manual (which also contains the Section 4(f)
guidance) with new preservation in place language. The FHWA recommends
the following edits to the new language (identified in italics and
strikeouts):
[GRAPHIC] [TIFF OMITTED] TN29SE23.011
Observation #4: Deficiencies in Section 4(f) documentation of de
minimis impact to historic properties.
The ADOT's procedures (ADOT Section 4(f) Manual Sections 5.1 and
5.4.2 and ADOT QA/QC Plan Section 5.1.1) specify obtaining written
concurrence from the official with jurisdiction when ADOT determines a
project will involve the de minimis use of a historic property
protected by Section 4(f), per 23 U.S.C. 303(d) and 23 CFR 774.5. After
completing the project file review, the audit team identified the
following procedural deficiency relating to ADOT's procedures: the use
of a single concurrence signature for both the Section 106 effect
finding concurrence and the Section 4(f) de minimis application
concurrence. The ADOT needs to either use separate concurrence
signature lines for the two decisions being documented or to draft a
Letter Agreement between the Arizona SHPO and ADOT that applies program
wide. This agreement would state that when the SHPO concurs with a no
adverse effect finding that the single SHPO concurrence signature
confirms that they concur with both decisions if ADOT details in the
letter their intent to make a de minimis finding as well.
Observation #5: Continued improvement in Air Quality Conformity
communication.
The ADOT has made progress regarding the level of communication and
coordination with FHWA on project-level air quality conformity
analysis. The ADOT should continue to build on that progress and keep
the lines of communication open among all the interagency consultation
partners. It would be good practice for ADOT to share re-evaluations
requiring conformity determinations with interagency consultation
partners for their input before requesting a FHWA conformity
determination.
Observation #6: Inconsistent use and absence of the 327 MOU
disclosure statement.
Section 3.1.3 of the MOU specifies that ADOT shall disclose the
disclosure statement to the public, Tribes, and agencies as part of
agency outreach and public involvement procedures. The audit team
project file reviews found inconsistent use of the disclosure statement
on agency correspondence and technical reports, as well as absence of
the statement in public involvement materials. The audit team found no
consistent process or procedure for inclusion of the 327 MOU disclosure
statement in the ADOT manuals/guidance as required by MOU Section
3.1.3. The ADOT should strive to achieve consistency in the placement
of disclosure statements in documents.
Non-compliance Observation #5: Deficiencies in analysis of
environmental impacts on low-income and minority populations
(environmental justice).
The ADOT's EA/EIS Manual, CE Manual, and FHWA E.O., policies, and
guidance provide information on completing the environmental justice
analysis required for projects. The FHWA identified inconsistencies in
[[Page 67429]]
ADOT's Section EA/EIS Manual, CE Manual, PAIR response, and interview
responses regarding how ADOT completes environmental justice analyses.
The methodology described by ADOT is not in compliance with FHWA policy
and guidance because ADOT analyzes the effect prior to identifying
environmental justice populations in the project area. In addition, the
CE Manual describes evaluating census data, but no additional sources
for environmental justice population identification. The CE Manual also
infers a default position that there will be no disproportionately high
and adverse impacts on low-income or minority populations with CE-level
projects. The audit team observed similar inconsistencies during the
project file reviews for this audit and identified the same
environmental justice analysis procedural deficiencies in the project
documentation, as well as project files with little or no analysis
documentation. In addition, there were inconsistent degrees of
coordination with the ADOT CRO, who, according to the CE Manual and the
PAIR response, is to be consulted on all environmental justice
analyses. Based on these findings and a review of the ADOT Training
Plan, additional environmental justice training is needed, and ADOT's
manuals and procedures should be brought into compliance with FHWA
requirements. The ADOT must take corrective action to ensure that
environmental justice analysis and assessments are in compliance with
E.O. 12898, DOT Order 5610.2C, and FHWA policy and guidance by the next
audit.
Quality Assurance/Quality Control
Observations
Observation #7: QA/QC procedures lack assessment of compliance.
The ADOT has procedures in place for QA/QC which are described in
the ADOT QA/QC Plan and the ADOT Project Development Procedures. When
implemented, ADOT focuses on completeness of the project files, not the
accuracy or technical merits of the decisions documented by those
files. The ADOT does not check for compliance of the decisionmaking and
it is therefore unclear how the project-level QC reviews inform the
program. These observations were also found with Audits #1 and #2. The
audit team continues to be unable to fully assess the implementation of
project-level QC procedures. The ADOT does not appear to have a process
in place for assessing the effectiveness of its QA/QC procedures to
identify opportunities to improve the processes and procedures in their
program, in ways that could help ensure better compliance with MOU
requirements.
Observation #8: QA/QC procedures do not inform the performance
measures.
It is unclear how the QA/QC procedures, such as the use of QC
checklists, are informing ADOT about the technical adequacy of the
environmental analyses conducted for projects (MOU Section 10.2.1.B.c)
and how the timing of QA/QC reviews influences timeliness and
efficiency in completion of the NEPA analysis. The QA/QC process as
documented does not include a review of the adequacy of the technical
analyses completed. The current performance measures do not provide QA/
QC completion dates to create meaningful datasets that allow assessment
of the timeliness of QA/QC actions. The FHWA recommends that a column
be added to the current performance data matrix that measures the
adequacy of technical documentation, as well as date columns for the
completion of the draft QC, final QC, and QA checklists.
Performance Measures
Successful Practice #3
The ADOT Environmental Programs Manager identified team-level
internal performance measures used by her team to track timelines on
biological decisions, improve coordination with U.S. Fish and Wildlife
Service, and inform the prioritization of projects. The ADOT EP has
made beneficial documentation changes based on these internal leading
performance measures for the quality and timeliness of biological
consultation. These could serve as an example of meaningful metrics
that could be integrated into the performance measures that ADOT is
currently tracking.
Observations
Observation #9: Incomplete development and implementation of
performance measures to evaluate the quality of ADOT's program.
The audit team reviewed ADOT's development and implementation of
performance measures to evaluate their program as required in the MOU
(Part 10.2.1). The ADOT's QA/QC Plan, PAIR response, and self-
assessment report identified several performance measures and reported
the data for the review period. The ADOT's reporting data primarily
dealt with increasing efficiencies and reducing project delivery
schedules rather than measuring the quality of relationships with
agencies and the general public, and decisions made during the NEPA
process. The metrics ADOT has developed are not being used to provide a
meaningful or comprehensive evaluation of the overall program.
The FHWA was unable to determine how the ADOT QA/QC process is
informing the improvement of the NEPA procedures used by ADOT, nor how
it demonstrates meeting their performance measures. One area of concern
is the lack of dates on key actions and when determinations are made.
The FHWA recommends that ADOT evaluate the current performance measures
matrix of other NEPA Assignment States department of transportation
(such as Utah and Ohio) to assist in making meaningful changes in their
current performance measures tracking. This observation was also made
in Audit #1 and Audit #2.
Legal Sufficiency
The ADOT had completed one formal legal sufficiency review of an
assigned environmental document during the audit period. The EIS
received a formal legal sufficiency finding, which was included in the
project file. Currently, ADOT retains the services of two Assistant
Attorneys General (AAG) for NEPA Assignment reviews and related
matters. The assigned AAGs have received formal and informal training
in environmental law matters. The ADOT and the Attorney General's (AG)
Office also have the option to procure outside counsel in accordance
with 23 U.S.C. 327(a)(2)(G), but this was not necessary during the
audit period.
Successful Practice #4
The ADOT seeks to involve lawyers early in the environmental review
phase, with AAGs participating in project coordination team meetings
and reviews of early drafts of environmental documents. The AAGs will
provide legal guidance at any time ADOT requests it throughout the
project development process. For formal legal sufficiency reviews, the
process includes a submittal package from ADOT's NEPA program manager
containing a request for legal sufficiency review. Various ADOT manuals
set forth legal sufficiency review periods, and the AAGs coordinate
with ADOT to ensure timely completion of legal sufficiency reviews. In
addition, one of the AAGs has recently taken an active role in Tribal
matters, including participating in meetings with Tribes and handling
legal questions related to Tribal issues.
Training
Observation #10: Training Gaps.
[[Page 67430]]
The audit team reviewed ADOT's 2021 Training Plan and ADOT's PAIR
responses pertaining to its training program. The ADOT's EP staff
training matrix indicates that, while ADOT identifies the availability
of staff needing training, many staff have not taken advantage of the
opportunity for training, including other ADOT divisions subject to the
327 MOU provisions. The ADOT's training plan identifies that the
training interval for some topics, such as the NEPA Assignment Program,
is only once per staff member regardless of the period of time since
the previous round of training. Staff may benefit from regular
``refresher'' type training, especially as regulatory requirements and
policy may change over time.
Status of Previous General Observations and Non-Compliance Observations
From the Audit #2 Report
This section describes the actions ADOT has taken (or is taking) in
response to observations made during the second audit. The ADOT was
provided the second audit draft report for review and provided comments
to FHWA on August 2, 2021.
Observation #1: Deficiencies and gaps in ADOT's manuals and
procedures.
During Audit #2, the audit team identified deficiencies in ADOT's
manuals and procedures which may result in incomplete project
documentation or analysis and increase the risk for non-compliance. The
first was in the ADOT CE Checklist Manual and the EA/EIS Manual,
specifically the process for re-evaluations for EAs and EISs was not
well-defined. Although the team observed some improvements to the
manuals in Audit #3, the deficiency identified in Audit #2 was not
resolved and is an observation again in Audit #3. The other was the
ADOT Section 4(f) Manual, documentation forms, and desk reference/
matrix containing information inconsistent with FHWA guidance and
regulation. The deficiencies identified in Audit #2 were addressed by
ADOT, but additional issues were identified by the audit team in Audit
#3.
Non-compliance Observation #1: Deficiencies in Section 4(f)
evaluation of archaeological resources.
The audit team observed similar inconsistencies as were observed in
Audit #1 during the project file reviews for Audit #2 and identified
procedural deficiencies relating to ADOT's Section 4(f) evaluation. The
consultation letter sent to the Arizona SHPO did not state ADOT's
intent to apply the archaeological exception to sites or include other
Section 4(f) information regarding the sites identified. In Audit #3,
the audit team acknowledges changes were made to ADOT's Section 106
Federal-aid Programmatic Agreement Manual, but FHWA provided
corrections to the draft language for ADOT to incorporate.
Non-compliance Observation #2: Deficiencies in analysis of right-
of-way impacts.
The ADOT's procedures (ADOT EA/EIS Manual) and FHWA's regulations,
policies, and guidance provide information on how to consider right-of-
way impacts in the NEPA analysis. The FHWA's regulations, policies, and
guidance provide additional information for how early property
acquisitions should be considered with the right-of-way impacts
analysis. In Audit #2 for the 327 MOU, the audit team found one project
file did not demonstrate that early acquisition of properties and
previous relocations were adequately addressed in the impact analysis
in the NEPA document. The ADOT submitted a letter to FHWA on April 28,
2022, detailing the steps ADOT will take within 60 days as a corrective
action to address the right-of-way non-compliance observation. On May
23, 2022, ADOT submitted to FHWA updated procedures regarding right-of-
way impacts in their NEPA analyses and FHWA provided technical
assistance to ADOT regarding these procedures. This corrective action
by ADOT resolves the non-compliance observation.
Observation #3: Inconsistencies in interagency consultation
documentation.
After completing the project file review in Audit #2, the audit
team found several inconsistencies with ADOT's documentation of
compliance with interagency consultation requirements (per 40 CFR
93.105). It is unclear if interagency consultation occurred for some
projects since the project files did not include information on agency
responses, concurrence, and the comment resolution process. Therefore,
it is unknown if the interagency consultation agencies had an
opportunity to participate in consultation or if ADOT provided them an
opportunity to review and comment on the materials as required by 40
CFR 93.105 and MOU Section 7.2.1. During Audit #3, the audit team found
an increased amount of documentation providing evidence of interagency
consultation efforts by ADOT in the project files reviewed.
Observation #4: Incomplete development and implementation of
performance measures.
During Audit #2, the audit team reviewed ADOT's performance
measures and reporting data submitted for the review period and
concluded that ADOT had made progress toward developing and
implementing its performance measures. For Audit #3, FHWA continues to
identify this program objective as an area of concern, described in the
observations above and will continue to evaluate this area in
subsequent audits.
Finalizing This Report
The FHWA provided a draft of the audit report to ADOT for a 14-day
review and comment period, as well as notification of the non-
compliance observations. The ADOT provided comments which the audit
team considered in finalizing this draft audit report. The audit team
acknowledges that ADOT has begun to address some of the observations
identified in this report and recognizes ADOT's efforts toward
improving their program. The FHWA is publishing this notice in the
Federal Register for a 30-day comment period in accordance with 23
U.S.C. 327(g). No later than 60 days after the close of the comment
period, FHWA will address all comments submitted to finalize this draft
audit report pursuant to 23 U.S.C. 327(g)(2)(B). Subsequently, FHWA
will publish the final audit report in the Federal Register. The FHWA
will consider the results of this audit in preparing the scope of the
next annual audit. The next audit report will include a summary that
describes the status of ADOT's corrective and other actions taken in
response to this audit's conclusions.
[FR Doc. 2023-21316 Filed 9-28-23; 8:45 am]
BILLING CODE 4910-22-P