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Surface Transportation Project Delivery Program; Arizona Department of Transportation Final FHWA Audit Report Publication: Federal Register Agency: Federal Highway Administration Byline: Shailen P. Bhatt Date: 2 July 2024 Subjects: American Government  , Roads & Highways
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[Federal Register Volume 89, Number 127 (Tuesday, July 2, 2024)]
[Notices]
[Pages 54952-54957]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-14501]
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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 Final FHWA 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
established the Surface Transportation Project Delivery Program
(referred to as National Environmental Policy Act (NEPA) Assignment
Program), which 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 the final third audit report for ADOT.
FOR FURTHER INFORMATION CONTACT: Owen Lindauer, Ph.D., RPA, Office of
Project Development and Environmental Review, (202) 633-2655,
owen.lindauer@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 8:00 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 Sates 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. The FHWA published a notice in the
Federal Register at 88 FR 67424 on September 29, 2023, soliciting
comments for 30 days pursuant to 23 U.S.C. 327(g). As a result of the
notice one non-substantive comment was submitted. The FHWA removed what
was Observation #4 because, on reflection, ADOT's Section 4(f) manual
adequately explained the expected documentation. This notice makes
available the final report of ADOT's third audit under the program. The
final audit report is available for download at www.regulations.gov
under FHWA-2023-0005.
Authority: Section 1313 of Public Law 112-141; Section 6005 of
Public Law 109-59; 23 U.S.C. 327; 23 CFR 773.
Shailen P. Bhatt,
Administrator, Federal Highway Administration.
Surface Transportation Project Delivery Program FHWA Audit #3 of the
Arizona Department of Transportation
Executive Summary
This is Audit #3 of the Arizona Department of Transportation's
(ADOT) assumption of
[[Page 54953]]
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 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 and
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, the 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 nine 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
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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 upon 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 complete procedures for
EA or EIS-level re-evaluations. The EA/EIS Manual instead points to
the ADOT Categorical Exclusion (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 (FAST)
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
[[Page 54955]]
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 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):
``By law, transportation projects involving federal actions and/
or funding require assessment in accordance with Section 4(f) of the
Department of Transportation Act (PL 89-670) and its implementing
regulations at 23 CFR part 774. In compliance with this statute,
ADOT is obligated to assess archaeological sites from a purely
Western, science-based perspective. In doing so, ADOT has found that
Site X derives its primary statutory importance from its data
potential, the nature and extent of which do not warrant
preservation in place. If your office has no objection to this
finding, ADOT will determine, in accordance with 23 CFR 774.13, that
site X meets the archaeological exception from Section 4(f)
consideration. ADOT understands and acknowledges that while legally
necessary, Western approaches to the identification, interpretation,
and valuation of archaeological sites Native American places are but
one of many voices regarding the significance of these resources. As
part of the ongoing Section 106 consultation process, ADOT has
sought, and continues to seek information from the State Historic
Preservation Office (SHPO), Section 106 Consulting Parties, Tribes,
and the public, as necessary, affiliated tribes with regard to this
and other affected cultural resources.''
Observation #4: 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 an FHWA
conformity determination.
Observation #5: 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 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 #6: 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 #7: 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.
[[Page 54956]]
Performance Measures
Successful Practice #3
The ADOT Environmental Programs Manager identified team-level
internal performance measures used by ADOT EP 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 #8: 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 DOTs (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 AGO 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 #9: Training Gaps
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
[[Page 54957]]
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 the 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 the final audit report. The FHWA considered 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. 2024-14501 Filed 7-1-24; 8:45 am]
BILLING CODE 4910-22-P