Internal Audit Report. Unified Transportation Program TxDOT Office of Internal Audit

Transcription

1 Internal Audit Report Unified Transportation Program TxDOT Office of Internal Audit

2 Objective To determine if legislative changes to the Unified Transportation Program process have been implemented effectively and efficiently. Opinion Based on the audit scope areas reviewed, control mechanisms are effective and substantially address risk factors and exposures considered significant relative to impacting operational execution and compliance. The organization's system of internal controls provides reasonable assurance that most key goals and objectives will be achieved despite significant control gap corrections and improvement opportunities identified. Control gap corrections and improvement opportunities identified are likely to impact the achievement of the organization's business/control objectives, but management has agreed to corrective action plans to address the relevant risks within 6 months. Overall Engagement Assessment Satisfactory Title Findings Control Design Operating Effectiveness Finding 1 Optimizing Public Involvement x x Needs Improvement Rating Management concurs with the above finding and prepared management action plans to address deficiencies. Control Environment The Transportation Planning and Programming Division (TPP) is the Office of Primary Responsibility for the collection, analysis, and reporting of projects incorporated into the Unified Transportation Program (UTP). TPP also utilizes District staff across the state to assist in the UTP development. Both TPP and District staff recognize the importance of the overall process and its impact to TxDOT and state-wide communities. August 25,

3 Summary Results Finding Scope Area Evidence Efforts to engage the public have primarily relied on the districts across the state to develop their own process for how to notify the public of UTP meetings: 6 of 6 (100%) Districts sampled had no general public in attendance. UTP meetings did have other people in attendance, but most were TxDOT employees: o 22 of 27 (81%) attendees were TxDOT employees 1 o 4 of 27 (15%) attendees were MPO employees Public o 1 of 27 (4%) attendees was a Local Government or Involvement County Representative Each UTP meeting is recorded by TPP and uploaded to the TxDOT website so the public can view the meeting after it has occurred: o From January 2014 July 2014, 10 viewings have occurred from all 4 UTP meetings conducted during the year. Audit Scope The scope of the audit work focused on UTP development activities, including Public Involvement and Project Ranking activities, in the TPP. Additional testing was conducted in the Atlanta, Childress, El Paso, Ft. Worth, Odessa, and Pharr districts. The audit was performed by Kathy Baca, Catherine Edwards, Letta Hinton, Augustine Nwoko, and Jack Timmins (Engagement Lead). The audit was conducted during the period from June 11, 2014 to August 4, Methodology The methodologies used to complete the objectives of this audit included: Reviewing TxDOT policies and procedures, manuals, and organizational charts Reviewing state and federal regulations Interviewing key personnel, including TPP and District employees Reviewing internal documents and memos Evaluating risks and controls associated with the UTP process Evaluating the UTP public involvement process by reviewing its design and effectiveness Assessing the classification and prioritization of selected projects in the UTP These procedures were applied as necessary to perform the audit fieldwork. August 25,

4 Background This report is prepared for the Texas Transportation Commission, TxDOT Administration, and Management. The report presents the results of the Unified Transportation Program (UTP) Audit which was conducted as part of the Fiscal Year 2014 Audit Plan. The UTP is the state s 10-year plan to guide transportation project development and is part of a comprehensive planning and programming process flowing from TxDOT s agency mission to project-level implementation. The UTP is developed annually and is approved by the Texas Transportation Commission annually prior to August 31. The UTP includes projects involving highways, aviation, public transportation, and state and coastal waterways. The UTP is not a budget nor a guarantee that projects will or can be built. The UTP process requires public involvement and ranking of projects. Public involvement is done by holding meetings throughout the state (that can also be accessed via the Internet through an application called WebEx) to obtain input on the projects being considered for the UTP. Projects in the UTP must be ranked and put into either Tier 1, 2, or 3. The ranking is determined by project readiness (i.e., funding and development) and the project s alignment with TxDOT strategic goals. We conducted this performance audit in accordance with Generally Accepted Government Auditing Standards and in conformance with the International Standards for the Professional Practice of Internal Auditing. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. Recommendations to mitigate risks identified were provided to management during the engagement to assist in the formulation of the management action plans included in this report. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. The Office of Internal Audit transitioned to Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control Integrated Framework version 2013 in December A defined set of control objectives was utilized to focus on operational and compliance goals for the identified scope areas. Our audit opinion is an assessment of the health of the overall control environment based on (1) the effectiveness of the enterprise risk management activities throughout the audit period and (2) the degree to which the defined control objectives were being met. Our audit opinion is not a guarantee against operational sub-optimization or non-compliance, particularly in areas not included in the scope of this audit. August 25,

5 Detailed Findings and Management Action Plans (MAP) Finding No. 1: Optimizing Public Involvement Condition While efforts have been made by the Transportation Planning and Programming Division (TPP) to engage and receive input from the general public on the development of the Unified Transportation Program (UTP), actual public involvement has been limited in the past year. Efforts to engage the public have primarily relied on the districts across the state to develop their own process for notifying the public of UTP meetings. Effect/Potential Impact Without effective general public involvement in the development of the UTP, it is more difficult to gauge if the projects being considered are meeting the public s needs and the UTP may not reflect the needs of the state. Limited general public involvement can also lead to the perception that the UTP development has not achieved the desired level of transparency. Criteria 43 Texas Administrative Code states that the department will seek to effectively engage the general public and stakeholders in development of the UTP to allow the opportunity for a free exchange of ideas, views, and concerns relating to project selection, funding categories, level of funding in each category, the allocation of funds for each year of the program, and the relative importance of the various selection criteria. The department will publish notice of their meetings to maximize attendance. Cause A formalized and documented process that includes better coordination with the Office of Public Involvement (OPI) regarding effectively engaging and notifying the public of UTP meetings has not been fully utilized. The OPI and TPP have not worked together on developing a better strategy for improving public engagement. Evidence During the last four public UTP meetings held in the districts, between July 2013 and July 2014, the following was noted: 6 of 6 (100%) Districts sampled had no general public attendees (i.e., noted via signin sheets) at any of the UTP meetings conducted: o 22 of 27 (81%) attendees were TxDOT employees o 4 of 27 (15%) attendees were MPO employees 1 of 27 (4%) attendees were a Local Government or County Representative Each UTP meeting is recorded by TPP and uploaded to the TxDOT website so the public can view the meeting after it has occurred: o From January 2014 July 2014, 10 viewings have occurred from all 4 UTP meetings conducted during the year. August 25,

6 Management Action Plan (MAP): MAP Owner: James Koch, Director, Transportation Planning and Programming Division MAP 1.1: The Transportation Planning and Programming Division (TPP) will convene a working group made up of representatives from a cross section of districts as well as representatives from the Office of Public Involvement and Media Relations. This working group will review existing public involvement practices and develop a formalized process that will define the expected participation of the districts and divisions. The working group will also review the timing and schedule of public involvement activities to determine the sufficiency of existing public notices. TPP will work with this group to ensure that processes are developed with the aim of improving and maximizing public participation. Completion Date: February 15, 2015 MAP Owner: Jefferson Grimes, Director, Office of Public Involvement MAP 1.2 The Office of Public Involvement (OPI) will coordinate with the Transportation Planning and Programming Division (TPP) to develop a process that defines actions expected by our districts. This will include identifying appropriate audiences and methods for informing the public about opportunities to participate, as well as, ensuring that efforts to involve the public in the Unified Transportation Program (UTP) can be measured and have been maximized. OPI and TTP will provide guidelines and recommend a step-by-step process to be followed by TPP staff. However, a robust effort will not guarantee that the public will take advantage of the opportunity to provide input. Completion Date: February 15, 2015 MAP Owner: James Koch, Director, Transportation Planning and Programming Division MAP 1.3: The Transportation Planning and Programming Division (TPP) will work with representatives from the Finance Division as well as representatives from the Office of General Council to review existing requirements for public involvement pertaining to the Unified Transportation Program (UTP) in the Texas Administrative Code (TAC). TPP will work with this group to recommend potential changes to the TAC that would clarify what constitutes changes requiring Commission action and public involvement and what constitutes administrative changes, thereby ensuring clear and early public notification of substantive changes to the UTP. In addition, this group will make recommendations for timing of proposed Commission August 25,

7 actions such that there will be sufficient public notice to allow for effective and informed public involvement. Completion Date: February 15, 2015 MAP Owners: James Koch, Director, Transportation Planning and Programming Division Jefferson Grimes, Director, Office of Public Involvement MAP 1.4: The Transportation Planning and Programming Division (TPP) has begun the process of updating of the Transportation Planning and Programming Manual, and based on the findings of the working group identified in MAP 1.1 and MAP 1.3, TPP will review all processes and procedures currently identified in the draft manual and incorporate the new processes, as appropriate. The Office of Public Involvement (OPI) will work closely with TPP staff to update and rewrite the Transportation Planning and Programming Manual with appropriate content and guidance based on best practices industry-wide. OPI will work with TPP to address Unified Transportation Program (UTP)-specific public involvement challenges, including the complexity of this 10-year planning document and the long-term nature of the UTP, as everyday citizens are often more interested in imminent activities in their specific locale. Completion Date: February 15, 2015 August 25,

8 Summary Results Based on Enterprise Risk Management Framework Closing Comments The results of this audit were discussed with James Koch, Director of the Transportation Planning and Programming Division, and Jefferson Grimes, Director of Office of Public Involvement; and the Atlanta, Childress, El Paso, Ft. Worth, Odessa, and Pharr Transportation Planning Directors or their designees in each District. The audit team would like to express our appreciation to all the Division and District employees for the assistance and cooperation received throughout this audit. August 25,