Notice2024-24981
Surface Transportation Project Delivery Program; Arizona Department of Transportation Draft FHWA Audit Four Report
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 28, 2024
Issuing agencies
Transportation DepartmentFederal Highway Administration
Abstract
The Moving Ahead for Progress in the 21st Century Act (MAP-21) established the Surface Transportation Project Delivery Program that allows a State to assume FHWA's environmental responsibilities for environmental review, consultation, and compliance under the National Environmental Policy Act (NEPA) for Federal highway projects. When a State assumes these Federal responsibilities, the State becomes solely responsible and liable for carrying out the responsibilities it has assumed, in lieu of FHWA. This program mandates annual audits during each of the first 4 years of State participation to ensure compliance with program requirements. This is the fourth audit of the responsibilities assigned to the Arizona Department of Transportation (ADOT) under the Surface Transportation Project Delivery Program (NEPA Assignment Program). This notice announces and solicits comments on the fourth audit report for ADOT.
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<title>Federal Register, Volume 89 Issue 208 (Monday, October 28, 2024)</title>
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[Federal Register Volume 89, Number 208 (Monday, October 28, 2024)]
[Notices]
[Pages 85578-85584]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-24981]
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DEPARTMENT OF TRANSPORTATION
Federal Highway Administration
[FHWA Docket No. FHWA-2024-0017]
Surface Transportation Project Delivery Program; Arizona
Department of Transportation Draft FHWA Audit Four Report
AGENCY: Federal Highway Administration (FHWA), U.S. Department of
Transportation (DOT).
ACTION: Notice; request for comment.
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SUMMARY: The Moving Ahead for Progress in the 21st Century Act (MAP-21)
established the Surface Transportation Project Delivery Program that
allows a State to assume FHWA's environmental responsibilities for
environmental review, consultation, and compliance under the National
Environmental Policy Act (NEPA) for Federal highway projects. When a
State assumes these Federal responsibilities, the State becomes solely
responsible and liable for carrying out the responsibilities it has
assumed, in lieu of FHWA. This program mandates annual audits during
each of the first 4 years of State participation to ensure compliance
with program requirements. This is the fourth audit of the
responsibilities assigned to the Arizona Department of Transportation
(ADOT) under the Surface Transportation Project Delivery Program (NEPA
Assignment Program). This notice announces and solicits comments on the
fourth audit report for ADOT.
DATES: Comments must be received on or before November 27, 2024.
ADDRESSES: To ensure that you do not duplicate your docket submissions,
please submit all comments by only one of the following means:
<bullet> Federal eRulemaking Portal: Go to <a href="http://www.regulations.gov">www.regulations.gov</a> and
follow the online instructions for submitting comments.
<bullet> Mail: Docket Management Facility, U.S. Department of
Transportation, 1200 New Jersey Avenue SE, W12-140, Washington, DC
20590.
<bullet> Hand Delivery: West Building Ground Floor, Room W12-140,
1200 New Jersey Avenue SE, between 9:00 a.m. and 5:00 p.m., Monday
through Friday, except Federal holidays. The telephone number is (202)
366-9329.
<bullet> Instructions: You must include the agency name and docket
number at the beginning of your comments. All comments received will be
posted without change to <a href="http://www.regulations.gov">www.regulations.gov</a>, including any personal
information provided.
[[Page 85579]]
FOR FURTHER INFORMATION CONTACT: Owen Lindauer, Ph.D., RPA, Office of
Project Development and Environmental Review, (202) 633-0356,
<a href="/cdn-cgi/l/email-protection#335c44565d1d5f5a5d575246564173575c471d545c45"><span class="__cf_email__" data-cfemail="adc2dac8c383c1c4c3c9ccd8c8dfedc9c2d983cac2db">[email protected]</span></a>, Federal Highway Administration, U.S. Department
of Transportation, 1200 New Jersey Avenue SE., Washington, DC 20590, or
Mr. Silvio J. Morales, Office of the Chief Counsel, (202) 366-1345,
<a href="/cdn-cgi/l/email-protection#12617b7e647b7d3c7f7d60737e776152767d663c757d64"><span class="__cf_email__" data-cfemail="f3809a9f859a9cdd9e9c81929f9680b3979c87dd949c85">[email protected]</span></a>, 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 <a href="http://www.regulations.gov">www.regulations.gov</a>.
Background
The Surface Transportation Project Delivery Program, codified at 23
United States Code (U.S.C.) 327, commonly known as the NEPA Assignment
Program, allows a State to assume FHWA's environmental responsibilities
for review, consultation, and compliance for Federal-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 audit report reflects the findings at
the time of the review and does not capture specific actions taken
after the review. This notice announces and solicits comments on the
fourth 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.
Kristin R. White,
Acting Administrator, Federal Highway Administration.
Surface Transportation Project Delivery Program Draft FHWA Audit #4 of
the Arizona Department of Transportation
Executive Summary
This is Audit #4 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 23 U.S.C. 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 the fourth audit of ADOT's performance
according to the terms of the MOU from March 27 to March 31, 2023.
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 fourth audit, the
audit team conducted interviews with staff from ADOT's Office of
Environmental Planning (EP), Civil Rights Office (CRO), Construction
Districts, Right-of-Way, Alternative Delivery Group, and the Deputy
Director, as well as the Salt River Pima-Maricopa Indian Community
Tribal Historic Preservation Office (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 EP leadership
on March 30, 2023, and to ADOT leadership on April 7, 2023.
The audit team found that ADOT has carried out the
responsibilities it assumed consistent with the terms 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
pursuant to MOU Part 13.2.2. This report concludes with the status
of FHWA's observations from the third audit review. After the fourth
year of ADOT's participation in the program, FHWA will continue to
monitor ADOT's compliance with the terms of this MOU, in accordance
with 23 U.S.C. 327(h).
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
entails the need 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 fourth 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 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 93
for project-level conformity; the procedures for environmental
justice evaluations (Environmental Justice per Executive Order
(E.O.) 12898, Federal Actions to Address Environmental Justice in
Minority Populations and Low-Income Populations); the Section 106
consultation procedures contained in the National Historic
Preservation Act of 1966, 36 CFR 800 et seq.; and ADOT's
environmental commitment tracking and implementation process. This
report concludes with a status update for FHWA's observations from
the second and third audit reports.
The audit team conducted a careful examination of ADOT policies,
guidance, and manuals pertaining to NEPA responsibilities,
[[Page 85580]]
as well as a representative sample of the ADOT 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, the Arizona AGO and Tribal THPO staff, as well as
the Arizona SHPO in person and via videoconference.
The timeframe defined for this fourth audit includes highway
project environmental approvals completed between January 1 and
December 31, 2022. During this timeframe, ADOT completed NEPA
approvals and documented NEPA decision points for seven projects.
Due to the small sample size, the audit team reviewed all seven
projects. This consisted of three EA re-evaluations, one EA with a
Finding of No Significant Impact, one draft EA that completed the
public hearing and review process, and two 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 responses to the PAIR. The audit team conducted a
total of 18 interviews. Interview participants included staff from
ADOT, a Tribal THPO and 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 that ADOT has carried out the
responsibilities it has assumed consistent with the terms of the
MOU. The FHWA is notifying ADOT of three non-compliance observations
identified in this audit that require ADOT to take corrective
action. The ADOT must address these non-compliance observations per
MOU Part 13.2.2 and continue making progress on non-compliance
observations in the previous audits as a section of the 327 MOU
renewal process. Future monitoring reviews will continue to report
on ADOT's corrective actions. 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. While not accounting for all
the successful practices used by ADOT in implementing the NEPA
Assignment Program, the audit team identified four successful
practices in this report.
Observations are items the audit team would like to draw ADOT's
attention to, which may improve processes, procedures, and/or
outcomes. The audit team identified 13 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 three non-compliance observations in this report.
Program Management
Successful Practice #1
The ADOT EP meets monthly with the Arizona (AZ) Division. This
has resulted in improved communication and contributes to the
tracking and ultimate resolution of issues.
Successful Practice #2
The audit team acknowledges the efforts to address lessons
learned on alternative delivery projects through the development of
NEPA and Public Private Partnership Guidance. These include
improving communication with ADOT EP and advancing environmental
commitment activities earlier for more successful projects.
Successful Practice #3
The ADOT has taken steps over the past year to improve Tribal
engagement. The ADOT EP sent letters to Tribes introducing the EP
Tribal Liaison and offered to meet. The ADOT created and filled a
Native Nations Ambassador for Infrastructure position in the State
Engineer's Office to improve communication with the Tribes and be a
point of contact for them regarding any issues. And finally, ADOT EP
developed the first project-specific Tribal Environmental Engagement
Plan which outlines communication protocols, outreach practices and
points of contact for a project that crosses into Tribal land.
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 Part 8.5.1. During the time period
covered by this audit, the audit team reviewed the Dashboard and
found that it did not include all Federal permit and authorization
information for the applicable projects assigned to ADOT. In
addition, the audit team found that not all active projects were
included, updates appeared in draft form or were not published. The
audit team also found that milestone dependencies, which are
milestone dates on the Permitting Dashboard that are contingent on
the completion of another milestone found in the permitting
timetable, were not identified and there were misidentifications of
Major Infrastructure Projects which no longer applied due to the
recission of E.O. 13807, Establishing Discipline and Accountability
in the Environmental Review and Permitting Process for
Infrastructure Projects. 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. In accordance with the Office of the Secretary of
Transportation Dashboard reporting standards, ADOT must take
corrective action to address this issue.
Observation #1: Deficiencies and Gaps in ADOT's Manuals and Procedures
The audit team reviewed ADOT's manuals and procedures. Part
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:
<bullet> The EA/EIS Manual and the CE Manual do not identify
what the minimum requirements or procedures are for public
involvement when there is a low-income or minority population in the
project area, or when these populations have expressed an interest
in the project.
<bullet> The ADOT manuals and procedures do not make a clear
statement that the 23 U.S.C. 327 MOU disclosure language is required
in the consultation that is completed as part of the NEPA process
for Local Public Agency (LPA)/Certified Acceptance Agency (CAA)
projects per MOU Parts 3.1.2 and 3.2.6.
<bullet> The ADOT EA/EIS Manual should be updated to clearly
indicate that a purpose and need statement should not include
discussion of the build alternative nor use the build alternative as
justification for the need to construct a transportation facility.
The FHWA recommends an update to the ADOT EA/EIS Manual related
to the public involvement process for re-evaluations. While public
circulation is not required for re-evaluations, FHWA recommends ADOT
institute a review process for ADOT to determine if controversial or
projects of public concern require public outreach or at a minimum,
post the NEPA document for public and stakeholder review.
Observation #2: Improvements to Tribal Engagement Are Warranted
Interviews with ADOT staff, the SHPO and a THPO identified the
need for ADOT to continue efforts to improve Tribal consultation
practices and relationships with Tribes. The SHPO encourages ADOT to
listen to Tribes, consult earlier and improve trust with Tribes, and
identifies the need for more training of ADOT staff. The THPO
expressed continued communication and transparency issues with ADOT,
such as that ADOT lacked an understanding of what Tribal
consultation should consist of, frustration with continued
[[Page 85581]]
violations of cultural commitments during construction, and
continued lack of trust. The audit team acknowledges that ADOT seems
to be attempting to work on some of these issues, but the actions
are inconsistent. The FHWA recommends:
<bullet> ADOT seek input from THPOs and AZ SHPO on the
specification developed to address cultural resource commitment non-
compliance by construction contractors and advance the specification
to implementation.
<bullet> ADOT improve transparency regarding project information
for projects in Tribal land or of Tribal interest.
<bullet> ADOT build and maintain relationships with the Tribes.
<bullet> ADOT fully implement the FHWA/ADOT Tribal Consultation
Letter Agreement executed on August 5, 2022.
Observation #3: Incomplete Identification and Reporting of
Responsibilities Under the 327 MOU Assigned to Additional Divisions
Independent of ADOT EP
During Audit #3, the previous audit team identified that ADOT
divisions outside of EP have NEPA responsibilities and these
divisions have not been identified or addressed in the ADOT EP
procedures; nor were they included in the ADOT documentation and
reporting. Based on interviews of ADOT staff, the PAIR responses and
review of ADOT's manuals for this audit, ADOT has not taken
corrective actions to develop or implement procedures to apply the
327 MOU provisions to all divisions of ADOT in accordance with MOU
Part 1.1.2. In addition, the audit team identified a lack of
training and awareness of NEPA assignment and MOU responsibilities
within the other divisions, in particular at management levels. The
ADOT should identify methods to ensure future compliance.
Non-Compliance Observation #2: Inadequate or Incomplete Documentation
and Implementation of Environmental Commitments
The ADOT is obligated to implement all committed environmental
impact mitigation measures (23 CFR 771.109(b)(2)) for projects
funded with Federal-aid. Therefore, it is also responsible for
environmental commitment tracking. The ADOT does not have a process
manual or consolidated report which documents the tracking of all
environmental commitments made during the environmental review
process. Based on the ADOT interviews, ADOT has taken steps to
establish some tracking mechanisms to cover environmental
commitments which are the responsibility of ADOT EP or the
contractors. This includes official use of the Environmental,
Permits, Issues, and Commitments (EPIC) Tracking sheet. The ADOT
Districts are inconsistent in how they describe tracking
commitments, and reporting whether they prepare documentation
demonstrating implementation of the remaining types of environmental
commitments. These gaps include commitment tracking that are the
responsibility of other divisions of ADOT, LPA/CAA, and those
covered by a standard specification. Project file reviews indicated
that environmental commitments were not clearly stated or if they
were identified in environmental documentation, ADOT's record
keeping did not demonstrate how, when, and who is responsible for
environmental commitment documentation. The ADOT will need to take
corrective actions to address the lack of documentation,
implementation and tracking of environmental commitments and
mitigation compliance.
Documentation and Records Management
Observations
Observation #4: Incomplete Project File Submission Based on a FHWA
Request for Information and Standard Folder Structure Issues
For this audit, FHWA requested all project files pertaining to
the NEPA approvals and documented NEPA decision points completed
during the audit review period. The audit review team received
project file information from ADOT, but this information was found
to be incomplete with attachments or other supporting information
missing. The FHWA worked with ADOT Information Technology (IT) Group
to ensure that project file issues were not due to technology
challenges resulting from the transfer of electronic files between
ADOT and FHWA. While FHWA had fewer issues when attempting to access
the files ADOT provided for the audit than in past years, the audit
team still found several inconsistences between ADOT's procedures
for maintaining project files and the project file documentation
provided to FHWA. Examples of missing documentation included: public
involvement plan (PIP); public involvement summary report; signed
noise analysis form; Section 404 and 408 documentation; Section 106
Closeout Memorandum; 327 air quality EA/EIS checklist; authorization
letters/NEPA certification approval; Statewide Transportation
Improvement Program/Transportation Improvement Program verification;
and email communication. In addition, there were instances of
missing or incomplete QC reviews, and environmental commitments
resulting from technical analysis or consultation that were not
included in the NEPA document. In these instances, the
determinations were not adequately supported by the project file.
The audit review team could not reconcile information about project
file completeness and QC provided through interviews with the
content of project files supplied by ADOT. It may also be the case
that there is a shortfall in ADOT filing practices performed by an
individual developing a project file to ensure a project file is
complete. By this observation the audit review team is making ADOT
aware that both by (1) implementing sound internal controls related
to project filing and records retention, and (2) improving QCs,
fewer ADOT files would contain errors or omissions once the reviews
are complete.
Observation #5: Deficiencies in Section 4(f) Analyses
The ADOT has a number of manuals and procedures that describe
the requirements for Section 4(f) analyses, consultation, and
documentation. Based on those requirements, the review team found
some of the project files to be deficient. Observations based on
project file reviews included: (1) no Section 4(f) form or
memorandum; (2) lack of documented communication with the official
with jurisdiction; (3) no research documentation to support the
determinations; (4) an empty Section 4(f) file folder; (5) a Section
4(f) resource that was not accounted for in the project
documentation; and (6) one instance where the consultation letter
did not determine whether the Section 4(f) archeological resource
had value for preservation in place. The FHWA recommends that ADOT
personnel who have Section 4(f) training identified as a requirement
for their position take the training within a year and that ADOT EP
updates the Section 4(f) manual to increase reviews and oversight of
decisions made.
Observation #6: Continuing Issues With Air Quality Conformity Analysis
While ADOT has made progress regarding the level of
communication and coordination with FHWA and EPA on project-level
air quality conformity analysis, the audit team identified areas in
need of improvement. Per MOU Part 3.2.4, FHWA retained
responsibilities for conformity determinations. This authority
includes whether a conformity determination remains valid under 40
CFR 93.104(d). The ADOT does not include FHWA in the decisionmaking
process when it determines that project level conformity
determinations remain valid for re-evaluations, which conflicts with
FHWA authority under 40 CFR 93.104(d). In addition, no interagency
consultation is conducted by ADOT for those decisions. Re-
evaluations should be shared with interagency consultation partners
as early as possible so their input can inform the FHWA
determination of whether a conformity determination remains valid.
The FHWA also recommends that for interagency consultation, when a
consultation period ends, ADOT summarizes who responded, who did
not, and what follow-up ADOT did with those agencies that did not
provide a response. The ADOT should continue to build on the
progress made with the air quality conformity process and maintain
communication amongst all the interagency consultation partners.
Observation #7: Inconsistent Use and Absence of the 327 MOU Disclosure
Statement
Part 3.1.3 of the MOU specifies that ADOT shall include a
disclosure statement to the public, Tribes and agencies as part of
agency outreach and public involvement procedures. The audit team
project file reviews found the absence of the statement in agency
correspondence and technical reports, and public involvement
materials, as well as the wrong MOU reference when the statement was
present. The audit team found no consistent process or procedure for
inclusion of the 327 MOU disclosure statement in the current ADOT
manuals or guidance as required by MOU Part 3.1.3. The ADOT should
strive to achieve consistency in the placement of disclosure
statements in documents. The audit team acknowledges that the new
ADOT PIP has updated requirements and details to prevent instances
in future public involvement materials.
[[Page 85582]]
Non-Compliance Observation #3: Inconsistencies and Deficiencies in
Analysis of Environmental Impacts on Low-Income and Minority
Populations (Environmental Justice Populations)
During Audit #3, the audit team identified deficiencies in
ADOT's procedures and analyses of environmental impacts on low-
income and minority populations. In response, ADOT drafted new
procedures, a checklist and process flowcharts which were provided
to FHWA as part of the PAIR response to this audit. In addition,
FHWA provided a National Highway Institute Environmental Justice
training course for ADOT in December 2022. The audit team for this
audit identified inconsistencies in ADOT's new procedures, EA/EIS
Manual, CE Manual, PAIR response, and interview responses regarding
how ADOT completes environmental justice analyses. The procedural
guidance is still not fully compliant with the MOU and the U.S
Department of Transportation environmental justice responsibilities
because of incorrect definitions of environmental justice
populations. The review team could not assess compliance for several
project files because they lacked supporting documentation for the
identification, presence/absence of the populations, and meaningful
public involvement. In addition, ADOT EP's coordination with the
ADOT CRO was inconsistent with the ADOT procedures according to the
interviews. Information presented in the CE Manual and ADOT's PAIR
response, indicates that the CRO is to be consulted on all
environmental justice analyses. The ADOT must take corrective action
to ensure that environmental justice analysis and assessments comply
with E.O. 12898, DOT Order 5610.2C and FHWA policy and guidance in
advance of or as part of the 327 MOU renewal application. This can
be done by obtaining FHWA review of the updated environmental
procedures prior to ADOT approval.
Observation #8: Deficiencies in Re-Evaluation Analyses and
Documentation
The ADOT has an EA/EIS Guidance manual that contains EA re-
evaluation procedures. The manual states, ``the re-evaluation should
consider the entire project analyzed in the original NEPA document.
All environmental sections require re-evaluation to review whether
impacts have changed as compared with the previous NEPA document and
whether any impact changes result in new or significant impacts . .
. Documentation should be appropriate to the project changes,
environmental impacts from the changes, potential for controversy,
and length of time since the last NEPA document was completed.''
Observations based on project file reviews included (1) lack of
supporting documentation in the project files for all analyses
summarized in EA re-evaluation errata that support the outcome of
the re-evaluation, and (2) two project files with purpose and need
statements that changed from the original EA and did not document
whether that change affected the validity of the re-evaluation
conclusion. Based on the required procedures, the review team found
some of the project files to be deficient.
Observation #9: Inappropriate Purpose and Need Statement
The review team found that a draft EA purpose and need statement
contained a discussion of the build alternative throughout. The
purpose and need statement had a figure with the build alternative
in it, travel demand data that included the build alternative, and
the connectivity discussion referenced the build alternative. The
purpose and need statement serves as the basis for the alternatives
analysis and should not discuss alternatives. The alternatives
analysis is the section of the document to explain how the
considered range of alternatives meet the purpose and need. In
addition, the purpose section of the draft EA used population and
employment growth as a justification but presented no data.
Quality Assurance/Quality Control
Observations
Observation #10: 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 the completeness of the project
files, not the accuracy or technical merits of the decisions
documented by those files. The ADOT does not appear to have an
adequate process to review and confirm compliance of the
decisionmaking according to its own procedures and it is therefore
unclear how the project-level QC reviews inform the program. These
observations were also found with Audits #1, #2, and #3, and no
updates were made to the ADOT QA/QC procedures in response. 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 its program, in ways that
could help ensure improved compliance with MOU requirements.
Performance Measures
Observations
Observation #11: 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. This observation was made in Audits #1, #2, and
#3. The FHWA recommends the creation of new performance measures in
the 327 renewal MOU that ADOT would use to evaluate and improve
their program.
Legal Sufficiency
During the audit period, ADOT had no formal legal sufficiency
reviews of assigned environmental documents. This is based on the
information provided by ADOT and interviews of the Assistant
Attorneys General (AAG) assigned to ADOT's NEPA Assignment Program.
Currently, ADOT retains the services of two AAGs for NEPA Assignment
reviews and related matters. The assigned AAGs have received formal
and informal training in environmental law matters and participated
in a legal sufficiency training conducted by FHWA Office of Chief
Counsel in May 2023. 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
Through the interviews, the audit team learned 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, which
typically involve a 30-day review period, and the AAGs coordinate
with ADOT to ensure timely completion of legal sufficiency reviews.
For this audit period, the AAGs both cited an emphasis on
environmental justice compliance. In addition, the AAGs regularly
notify ADOT of relevant changes in Federal law and guidance
applicable to the NEPA Assignment Program.
Observations
Observation #12: Assertion of Attorney-Client Privilege Limits NEPA
Assignment Program Assessment
Since FHWA began auditing ADOT in 2020, the AGO has regularly
cited attorney-client privilege when answering interview questions
posed by FHWA Office of Chief Counsel (HCC) staff about the legal
sufficiency process it employs when reviewing ADOT NEPA documents.
The ADOT's position is unique as compared to its peer NEPA
Assignment States in the West. The FHWA's HCC interviewers have
consistently affirmed that they seek only to understand the role of
the AGO in implementing ADOT's NEPA Assignment Program and do not
seek privileged communications or advice. Nevertheless, the AGO has
maintained that disclosing any specific information about its role
in advising on legal issues would constitute a waiver of attorney-
client privilege under the State's open records act and could
present legal risks to their clients. As a result, FHWA interviews
of the AAG's have produced a somewhat informative, but limited and
incomplete
[[Page 85583]]
understanding of the AGO's role in NEPA Assignment matters in AZ.
Training
Observation #13: Training Gaps
The audit team reviewed ADOT's 2023 Training Plan, interview
responses, and ADOT's PAIR responses pertaining to its training
program. The ADOT's EP staff training matrix indicates that many
staff have not taken the required training. In addition, there is no
data regarding training from the other divisions within ADOT who
have 327 MOU responsibilities. The ADOT made no changes to the ADOT
training plan in response to FHWA's previous training gap
observations.
Status of Previous General Observations and Non-Compliance Observations
From the Audit #3 Report
This section describes the actions ADOT has taken or is taking
in response to observations made during the third audit. The ADOT
was provided the third audit draft report for review and provided
comments to FHWA on November 17, 2022.
Non-Compliance Observation #1: Incomplete Reporting to the Federal
Infrastructure Permitting Dashboard
During Audit #3, the audit team identified deficiencies in the
information ADOT is required to post on the Dashboard. The ADOT did
post some of the additional projects and missing project information
to the Dashboard but not until the week before audit week. The ADOT
needs to establish a consistent and ongoing process to maintain the
project information required to be inputted into the Dashboard.
Observation #1: Deficiencies and Gaps in ADOT's Manuals and Procedures
During Audit #3, 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. The other was that neither the ADOT EA/EIS Manual nor
the current 2017 ADOT PIP approved prior to NEPA assignment
contained 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 EA/EIS Manual was not updated to
address this deficiency and the updated PIP was not approved at the
time of the audit. The deficiencies identified in Audit #3 were not
addressed by ADOT, and additional related issues were identified by
the audit team in Audit #4.
Observation #2: Improvements to Tribal Engagement Are Warranted
The audit team observed in Audit #3 the need for improved
engagement with the Tribes for ADOT to develop procedures that
identify its responsibilities to coordinate and consult with Tribes
in all phases of project development, and implementation of the
FHWA/ADOT Tribal Consultation Letter Agreement executed on August 5,
2022. The deficiencies identified in Audit #3 were not completely
addressed by ADOT, as the Letter Agreement was not fully
implemented, and continued issues were identified by the audit team
in Audit #4. The ADOT staff participated in the Section 106 and
Tribal Consultation Training given by the Advisory Council on
Historic Preservation and FHWA staff on June 13 and June 14, 2023.
Non-Compliance Observation #2: Responsibilities Under the 327 MOU
Assigned to Additional Divisions Independent of ADOT EP
During Audit #3, the team identified ADOT divisions outside of
EP that have responsibilities under NEPA Assignment. These divisions
have not been identified by ADOT EP during the past review processes
or addressed in the ADOT EP procedures, manuals, or plans. The ADOT
was directed to develop and implement procedures to apply the 327
MOU provisions to all divisions of ADOT who have responsibilities
under the 327 MOU. The current audit team did not observe any
progress on this corrective action.
Non-Compliance Observation #3: Deficiencies in Environmental Commitment
Tracking
During Audit #3, ADOT was unable to provide FHWA with a process
manual or consolidated report documenting 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. Since the last audit, ADOT has developed a spreadsheet
for EP responsibilities and has rolled out the EPIC Tracking sheet
process which covers the Contractor responsibilities--non-standard
specification commitments only. There is still no process manual or
consolidated reporting of all environmental commitments required for
each project.
Non-Compliance Observation #4: Incomplete Project File Submission and
Standard Folder Structure Issues
As was observed in previous audits, during Audit #3, the audit
team found several inconsistencies between ADOT's procedures for
maintaining project files and the project file documentation
provided to FHWA. Since that audit, ADOT's IT Group worked with the
AZ Division to resolve the project file issue on the technological
side. The ADOT IT Group determined that the electronic transfer
process is working and is therefore not the cause of the incomplete
project file submissions.
Observation #3: Minor Edits Needed To Resolve Deficiency in Section
4(f) Evaluation of Archaeological Resources
During Audit #1 and #2, FHWA identified inconsistencies with
ADOT's Section 4(f) evaluation and documentation of archaeological
sites. In response to the Audit #2 finding, ADOT updated their
Section 106 Federal-aid Programmatic Agreement Manual with new
preservation in place language and in Audit #3 FHWA recommended
edits to the new language. The ADOT has made the recommended edits.
Observation #5: Inconsistent Use and Absence of the 327 MOU Disclosure
Statement
During Audit #3, the audit team project file reviews found
inconsistent use of the disclosures 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 and guidance as required by
MOU Part 3.1.3. The ADOT has drafted a new PIP that contains
disclosure statement guidance, but no updates were found in the ADOT
EP manuals.
Non-Compliance Observation #5: Deficiencies in Analysis of
Environmental Impacts on Low-Income and Minority Populations
(Environmental Justice)
The Audit #3 team identified inconsistencies in ADOT's manuals,
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 and the CE Manual
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. Since Audit #3, ADOT participated in a FHWA-
led pilot environmental justice training and drafted some new
environmental justice guidance materials.
Observation #6: QA/QC Procedures Lack Assessment of Compliance and
Observation #8: QA/QC Procedures Do Not Inform the Performance Measures
The audit team identified continuing issues with ADOT's QA/QC
procedures, including the fact that 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, #2, and #3. In addition, 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 and thereby inform the performance
measures. No updates to the ADOT QA/QC procedures were made.
Observation #8: Incomplete Development and Implementation of
Performance Measures
During Audit #2 and #3, 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 #4, FHWA
continues to identify this
[[Page 85584]]
program objective as an area of concern, described in the
observations above, and will continue to evaluate this area in
subsequent audits.
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 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. No changes
in response to this observation were made to the 2023 training plan.
Finalizing This Report
The FHWA provided a draft of the audit report to ADOT for a 14-
day review and comment period pursuant to Part 11.4.1 of the MOU, 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. This
includes an action plan defined by ADOT and the AZ Division Office
to address non-compliance observations identified in the AZ Program
reviews to date. 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.
[FR Doc. 2024-24981 Filed 10-25-24; 8:45 am]
BILLING CODE 4910-22-P
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