Washington Metropolitan Area Transit Authority: Actions Needed to Strengthen Capital Planning and Track Preventive Maintenance Program

Safety incidents in recent years on WMATA's rail system have raised questions about its processes for performing critical maintenance and replacing capital assets. WMATA initiated a new preventive maintenance program for its rail track in 2017, and is currently implementing a new capital planning process.

GAO was asked to examine issues related to WMATA's capital funding and maintenance practices. This report examines: (1) how WMATA spent its capital funds from fiscal years 2011 through 2017, (2) how WMATA's new capital planning process addresses weaknesses it identified in the prior process, and (3) WMATA's progress toward its track preventive maintenance program's goals and how the program aligns with leading program management practices. GAO analyzed WMATA's financial and program information, interviewed officials of WMATA, the Federal Transit Administration, and five transit agencies selected for similarities to WMATA. GAO compared WMATA's capital planning process and track maintenance program with leading practices.

From fiscal years 2011 through 2017, the Washington Metropolitan Area Transit Authority (WMATA) spent almost $6 billion on a variety of capital assets, with the largest share spent on improving its rail and bus fleet (see figure). Over this period, WMATA's capital spending was, on average, about $845 million annually.

WMATA's new capital planning process could address some weaknesses it identified in the prior process. WMATA established a framework for quantitatively prioritizing capital needs (investments to a group of related assets) over a 10-year period. However, WMATA has not established documented policies and procedures for implementing the new process, such as those for selecting specific projects for funding in its annual capital budget. WMATA is currently using its new capital planning process to make fiscal year 2020 investment decisions. WMATA has proposed a fiscal year 2020 capital budget of $1.4 billion. Without documented policies and procedures for implementing the new planning process, WMATA's stakeholders do not have reasonable assurance that WMATA is following a sound process for making investment decisions.

WMATA has made significant progress toward its track preventive maintenance program's goals, which are to reduce both track-defect and electrical-fire incidents by 50 percent in fiscal year 2019 compared with 2017. In fiscal year 2018, WMATA met its goal for reducing track defect incidents and reduced electrical fire incidents by 20 percent. However, in designing the program, WMATA did not fully assess risks. For example, WMATA did not quantitatively assess the impact of track defects or electrical fires on its ability to provide service, nor did it consider other risks such as non-electrical track fires, which represent about 30 percent of all fires on the system, or other factors, such as resources or track time. Without a comprehensive risk assessment, WMATA lacks reasonable assurance that the program is designed to address risks affecting the safety of the rail system or other risks that could hinder the new program's success.

GAO is making five recommendations, including that WMATA establish documented policies and procedures for the new capital planning process and conduct a comprehensive risk assessment for the track preventive maintenance program. WMATA described actions planned or underway to address GAO's recommendations. GAO believes the recommendations should be fully implemented, as discussed in the report.

The Washington Metropolitan Area Transit Authority (WMATA) is one of  the largest transit operators in the nation, providing service for nearly 1- million rail and bus passenger trips each day, making it critical to the  National Capital Area’s transportation infrastructure. In recent years  there have been questions about the safety of WMATA’s rail transit  system and whether it has effective processes in place to replace assets  and perform critical maintenance. For example, the National  Transportation Safety Board (NTSB) found that WMATA had ineffective  inspection and maintenance practices that contributed to a January 2015  smoke incident near L’Enfant Plaza station that resulted in one fatality  and 91 injuries. After investigations by the NTSB and the Federal Transit  Administration (FTA), among other actions, the FTA assumed direct  safety oversight of WMATA in October 2015. To address safety concerns  and recommendations from NTSB and FTA, WMATA conducted  SafeTrack, which was a large rehabilitation project that made emergency  repairs to WMATA’s track infrastructure between June 2016 and June  2017. At the conclusion of SafeTrack, WMATA implemented its new  track preventive maintenance program designed to better ensure the  long-term reliability of its infrastructure and to prevent the need for  another SafeTrack.

In addition to its efforts to improve safety, WMATA has also had a  growing maintenance backlog. In November 2016, WMATA reported that  it had about $17.4 billion in state-of-good-repair needs, up from the $7.6  billion it reported in February 2010. In 2018, the District of Columbia, the  state of Maryland, and the Commonwealth of Virginia each enacted  legislation that is expected to provide about $500 million combined  annually in additional funding to WMATA for capital purposes, a sum that  may help address this backlog. This funding is in addition to the $340  million contributed on average annually by state and local jurisdictions for  capital purposes from fiscal years 2011 through 2017, and almost $460  million received annually on average as grants from the federal  government for capital expenses over that period. WMATA is currently  developing a new capital planning process to improve its capital  investment decision-making and to address weaknesses WMATA  identified in its prior capital planning process.

You asked that we review WMATA’s capital funding and maintenance  practices. This report examines:  1.  How WMATA expended its capital funding from fiscal years 2011  2.  How WMATA’s new capital planning process addresses weaknesses  it identified in the previous process, and  3.  WMATA’s progress toward its track preventive maintenance program  goals and how the program aligns with leading program management  practices.

To assess WMATA’s capital spending from fiscal years 2011 through  2017, we reviewed WMATA’s annual budgets, fourth-quarter and year- end financial reports, budget reconciliation reports, comprehensive  annual financial reports, FTA grant awards, and other documents  provided by WMATA and FTA. We selected fiscal year 2011 because it  was the first year in which WMATA received federal funding authorized by  the Passenger Rail Investment and Improvement Act of 2008 (PRIIA),  and we selected fiscal year 2017 because it was the most recent year  that capital expenditure data were available at the time of our review. We  also interviewed officials from WMATA and FTA to identify how WMATA  budgets and spends its capital funds. To identify categories of capital  spending, we collected information from WMATA’s fourth-quarter reports  and year-end financial reports that were presented to WMATA’s board of  directors and classified capital expenditures according to spending  categories included in WMATA’s annual capital budgets and fourth- quarter financial reports. To identify annual capital funding received by  WMATA from fiscal years 2011 through 2017, we analyzed the  information provided by FTA on federal funding provided to WMATA and  reviewed financial reports from WMATA. We determined that these data  had some limitations but were sufficiently reliable for the purposes of our  review. An external audit report of WMATA financial information for fiscal  year 2016 noted a material weakness with WMATA’s process for  accounting acquisition costs of capital assets. Specifically, there were  inconsistencies between WMATA’s general ledger and sub-ledger, which  are used to record acquisition costs, depreciation, and other financial  information related to capital assets. As a result, additional steps were  required to reconcile the difference between the two sources and could  have resulted in a material error. However, after interviewing WMATA  officials about the weakness and assessing the available financial  information, we determined that the data we used were sufficiently  reliable for our purpose of showing general trends of capital  expenditures.

To assess WMATA’s new capital planning process, we reviewed WMATA  documentation, including its two most recent Capital Needs Inventory  reports prepared in 2010 and 2016. We also reviewed available WMATA  documentation on the new planning process, including guidance  documents on how WMATA intends to initiate capital projects, and  interviewed WMATA officials about capital planning and development of  the new capital planning process. Further, we compared WMATA’s new  capital planning process to leading practices identified in GAO’s  Executive Guide on capital decision-making, leading practices for  rehabilitating and replacing capital assets contained in the Transit  Cooperative Research Program Report 157, and project management  principles from the Project Management Institute, Inc. In addition, we  interviewed officials from five peer transit agencies that are similar to  WMATA to obtain information from them on how they conduct capital  planning. We selected these agencies based on a number of factors,  including those that were comparable to WMATA in terms of transit route  miles, system use, and capital spending. The transit agencies we  selected were: (1) Bay Area Rapid Transit; (2) Chicago Transit Authority;  (3) Massachusetts Bay Transportation Authority; (4) Metropolitan Atlanta  Rapid Transit Authority; and (5) Southeastern Pennsylvania  Transportation Authority. The results of these interviews are not  generalizable.

To assess WMATA’s track preventive maintenance program, we  reviewed WMATA documentation about the program, interviewed  WMATA officials, and analyzed track defect and wayside electrical fire  data provided by WMATA from fiscal years 2016 through 2018. We  interviewed WMATA officials about their procedures for collecting and  analyzing these data. To assess the accuracy of these data, we also  performed independent tests that included verifying WMATA’s final tally of  track-defect and fire incidents and verifying there were no extended  periods of time in which data were missing. We determined the data were  sufficiently reliable for the purposes of our report. We also interviewed  officials from the American Public Transportation Association and the  American Railway Engineering and Maintenance-of-Way Association to  discuss best maintenance practices in the transit industry. We then  compared WMATA’s track preventive maintenance program to leading  program management practices identified by the Project Management  Institute, Inc. and internal control standards related to risk assessment  published by the Committee of Sponsoring Organizations of the  Treadway Commission (COSO) and followed by WMATA. A more  detailed summary of our scope and methodology appears in appendix I.

We conducted our work from November 2017 to January 2019 in  accordance with generally accepted government auditing standards.  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. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

WMATA was created in 1967 through an interstate compact—matching  legislation passed by the District of Columbia, state of Maryland, and  Commonwealth of Virginia, and then ratified by Congress—to plan,  develop, finance, and operate a regional transportation system in the  National Capital area. A board of eight voting directors and eight  alternate directors governs WMATA. The directors are appointed by the  District of Columbia, Virginia, Maryland, and the federal government, with  each appointing two voting and two alternate directors. WMATA  operates six rail lines—the Red, Orange, Blue, Green, Yellow, and Silver  Lines—connecting various locations within the District of Columbia,  Maryland, and Virginia. WMATA’s rail system has 118 linear miles of  guideway: 51 miles of subway, 58 miles at ground level, and 9 miles on  aerial structures.

WMATA’s capital investments are funded through multiple sources.  These include a combination of grants it receives from the federal  government, along with matching funds and other contributions it receives  from the states and local jurisdictions in which it operates (see fig. 1).

From fiscal years 2011 through 2017, WMATA received about $5.8 billion  in capital funding. Over half of this funding came from the federal  government ($3.2 billion), and state and local jurisdictions provided 41  percent ($2.4 billion). WMATA also took on about $230 million in long- term debt to finance its capital program during this time period. The  federal funding included grant awards, in addition to annual  appropriations authorized under PRIIA. In 2008, PRIIA authorized $1.5  billion to WMATA, available in increments over 10 years beginning in  fiscal year 2009, or until expended, for capital improvements and  preventive maintenance. PRIIA funding and certain federal grants  require state or local jurisdictions to provide matching funds. Additionally,  a large portion of funding from state and local jurisdictions is governed by  capital-funding agreements, which are periodically negotiated between  WMATA and the states and localities. From fiscal years 2011 through  2017, state and local jurisdictions contributed on average about $340  million annually to WMATA, generally for capital purposes. The annual  capital contributions from the jurisdictions are expected to more than  double as a result of the recent legislation enacted by the District of  Columbia, Maryland, and Virginia in 2018. In addition, WMATA officials  told us that it will have the ability to further leverage this dedicated funding  and issue debt to finance its capital projects.

WMATA has several steps in its capital planning process. These include  developing the following:

Capital Needs Inventory. WMATA periodically identifies its capital  investment needs in this inventory. WMATA issued a Capital Needs  Inventory in February 2010 and another in November 2016, each  covering a 10-year period. According to WMATA, Capital Needs  Inventories help inform the annual capital budget and capital  improvement program.

Annual Capital Budget. Each year, WMATA prepares an annual  capital budget, which identifies projects WMATA plans to undertake in  the next fiscal year. WMATA’s fiscal year 2019 annual capital budget  was approved by the board of directors at $1.3 billion.

Six-Year Capital Improvement Program. Within WMATA’s annual  capital budget, WMATA includes a Six-Year Capital Improvement  Program identifying capital projects WMATA plans to implement over  a 6-year period. WMATA’s most recent Six-Year Capital Improvement  Program (covering the fiscal year 2019—2024 period) was approved  by the board of directors at $8.5 billion.

According to WMATA officials, WMATA is currently implementing a new  capital planning process through which it will develop its fiscal year 2020  Capital Budget and fiscal year 2020-2025 Six-Year Capital Improvement  Program. WMATA adopts and implements the capital budget by June 30  for the new fiscal year, which begins on July 1. The fiscal year 2020  Capital Budget is scheduled to be adopted and implemented by June 30,  2019. Among other things, the goals and objectives of this new capital  planning process are to  construct an objective, data-driven, and risk-based approach to  estimate major rehabilitation and capital asset replacement needs; build a capital investment prioritization methodology aligned with  WMATA’s strategic goals and grounded in asset inventory and  condition assessments; and develop a process that will support the construction and ongoing  stewardship of its Transit Asset Management Plan. The latter is  discussed in more detail below.

WMATA has also recently undertaken efforts to address issues related to  the condition and maintenance of its track. After SafeTrack concluded in  June 2017, WMATA implemented what officials describe as its first track  preventive maintenance program designed to incorporate industry-wide  best practices related to track maintenance, in order to improve the rail  system’s long-term safety and reliability. The new program commenced  in June 2017, and WMATA’s board reduced late-night service to allow for  longer maintenance work hours.

To make the best use of the extra maintenance hours, WMATA focused  its new program on six separate initiatives that together would address  what WMATA viewed as its two most pressing track maintenance  concerns—electrical fires caused by cable and insulator defects along the  track wayside, and defects to the track itself, including unsecured rail  fasteners and worn track switches (see table 1). These initiatives are  planned to cover the entire transit system and will take various amounts  of time to complete.

FTA also plays a role in WMATA activities by providing and directing the  use of federal funds, overseeing safety, and requiring transit asset  management. FTA provides grants that support capital investment in  public transportation, consistent with locally developed transportation  plans, and has provided such funding to WMATA as noted above.  Additionally, though states play a role in safety oversight of rail transit  systems through state safety oversight programs, FTA also has the  authority to conduct various safety oversight activities such as inspections  and investigations. Furthermore, FTA has the authority to assume  temporary, direct safety oversight of a rail transit system if it finds the  state safety oversight program is inadequate, among other things. After  FTA conducted a safety management inspection and issued a safety  directive with 91 required actions, it found WMATA’s state safety- oversight program to be inadequate and assumed direct safety-oversight  of WMATA in October 2015. Finally, FTA is responsible for assisting  public transportation systems to achieve and maintain their infrastructure,  equipment, and vehicles in a state of good repair. Specifically, in July  2016, FTA issued regulations establishing a National Transit Asset  Management System. Applicable transit agencies were required to  have an initial transit asset management plan completed by October 1,  2018. For “tier I providers,” such as WMATA, this plan is to contain  nine elements, including an inventory of the number and type of capital  assets, and a condition assessment of those inventoried assets for which  a provider has direct capital responsibility. WMATA completed its  Transit Asset Management plan, dated October 1, 2018. This plan  outlines WMATA’s policy, approach, and targeted actions to improve its  asset management practices over the next 4 years.

WMATA Has Focused Recent Capital Expenditures on Its Vehicle Fleet and Expects Future Expenditures to Increase to Meet State-of-Good-Repair Needs

Since Fiscal Year 2011, WMATA Has Expended the Largest Share of Its Capital Funds on Replacing and Maintaining Its Rail and Bus Fleets

WMATA expends its capital funds on a variety of capital assets as part of  its capital budget and Capital Improvement Program. From fiscal year  2011 through 2017, WMATA expended approximately $5.9 billion on  capital investments. Of this amount, WMATA expended the largest  portion on assets related to the replacement, rehabilitation, and  maintenance of its revenue vehicles (railcars, buses, and vans) and  lesser amounts on other categories of assets, as discussed below and  shown in figure 2.

Rail and Bus Vehicle Fleet: WMATA expended approximately $2.16  billion (36 percent) of the total $5.9 billion on projects related to its rail  and bus fleet from fiscal years 2011 through 2017. The $2.16 billion  included approximately $1.1 billion (51 percent) on replacing,  expanding, and rehabilitating its rail fleet and approximately $956  million (44 percent) on its bus fleet. According to WMATA, it initiated  its railcar replacement program in 2005 to increase capacity and  reduce maintenance costs. In addition, a June 2009 Red Line collision  of two trains near Fort Totten resulted in nine deaths and led the  NTSB to recommend that WMATA retire and replace all 1000 series  railcars. From fiscal year 2011 through 2017, WMATA expended  almost $656 million on replacing these and other railcars and  expanding its overall fleet. This effort includes WMATA’s planned  purchase of a total of 748 new 7000-series railcars (see fig. 3).  Approximately $530 million was expended on replacing vehicles from  fiscal years 2015 through 2017. For example, in fiscal year 2017  WMATA accepted delivery of about 50 percent (364 railcars) of its  planned purchase of 748, 7000-series railcars. WMATA expects to  complete its current railcar replacement program by fiscal year 2024,  with an estimated total program cost of about $1.7 billion.

Fixed Rail Infrastructure: WMATA expended about $1.23 billion of the  total $5.9 billion (21 percent) to maintain its fixed-rail infrastructure. Of  this $1.23 billion, WMATA expended about $650 million (53 percent)  on rail infrastructure and rehabilitation projects and $573 million (47  percent) on improvements to its track and structures (e.g., bridges  and tunnels). According to WMATA, the rail infrastructure and  rehabilitation projects began in 2009 and were the first comprehensive  rehabilitation of WMATA’s rail infrastructure in its history. Typical  projects included rehabilitating WMATA’s water drainage pumps and  tunnel ventilation, fire, and communications systems, among other  things. WMATA work related to track and structures involved the  maintenance and rehabilitation of the steel rail that guides railcars, the  cross ties and fasteners that hold the rail in place, the third rail that  provides power to trains, and the bridges and tunnels the track runs  on or through. The share of WMATA’s total capital expenditures going  to track and structures increased from about $80 million in fiscal year  2016 to $158 million in fiscal year 2017. This expenditure was  primarily to implement SafeTrack.

Maintenance Facilities and Equipment: WMATA expended  approximately $1.1 billion of the total $5.9 billion (19 percent) on  assets related to maintenance facilities and equipment, which include  rail yards, bus garages, and equipment used to rehabilitate and  maintain WMATA’s track and vehicle fleet. For example, from fiscal  years 2011 through 2017 WMATA expended approximately $75  million in constructing the Cinder Bed Road bus maintenance facility  in Lorton, Virginia.

Passenger and Other Facilities: WMATA expended about $814 million  of the total $5.9 billion (14 percent) on passenger, business, and  security support facilities. Such facilities include rail and bus stations,  police facilities, and elevator and escalator rehabilitation.

Business Systems and Project Management Support: WMATA also  expended about $628 million of the total $5.9 billion (11 percent) on  assets related to operations and business support software and  equipment.

Prior to Fiscal Year 2017, WMATA Did Not Fully Expend Its Total Annual Capital Budget but Expects to Increase Expenditures to Address Repairs

From fiscal years 2011 through 2017, WMATA frequently over-estimated  in its annual budgets the annual amount of capital investments it could  implement (see fig.4). Out of the approximately $7.5 billion that WMATA  budgeted for capital investments over this period, it expended  approximately $5.9 billion (80 percent). WMATA’s ability to fully expend  its capital budget has varied from year to year. Specifically, WMATA  expended about 65 percent ($700 million) of its $1.1 billion capital budget  in fiscal year 2015, compared with 85 percent ($1.1 billion) of its $1.2  billion capital budget in fiscal year 2016. In fiscal year 2017, WMATA  expended nearly 100 percent of its $1.18 billion capital budget. WMATA  attributed the increased expenditures to intensified efforts to address  deferred maintenance, primarily through the SafeTrack initiative and an  increased delivery and acceptance rate for the new 7000-series railcars,  among other things. The total amount expended in fiscal year 2017 to  replace the older railcars with new vehicles totaled about $335 million.

According to WMATA, there are a number of reasons why it has not fully  expended its capital budget in any given year:

Contracting and Scheduling Issues: WMATA officials stated that there  were contract and scheduling delays in the implementation of planned  capital projects. For example, WMATA officials said contracts were  sometimes not executed during the fiscal year in which funds were  originally budgeted for the work, and in other instances contract work  was not carried out according to schedule and expenditures were  delayed.

Changing Priorities: WMATA officials stated that in some instances,  the reevaluation and reprioritization of contracted projects affected  WMATA’s ability to expend its capital budget. In such cases, new  capital needs were sometimes identified and prioritized over other  needs, which caused delays in work schedules and potential financial  claims by contractors due to delays. For example, WMATA stated that  in fiscal year 2011 the initiation of the Red Line rehabilitation program  was delayed as a result of the prioritization of the safety needs in  response to the 2009 Fort Totten accident.

Federal Reimbursement Restrictions: WMATA officials cited FTA  restrictions on its reimbursement of federal funds between fiscal years  2014 and 2015 as a reason for its inability to expend budgeted capital  funds in those years. In a financial management oversight review  completed by FTA in 2014, FTA found material weaknesses and  significant deficiencies in WMATA’s financial management controls,  policies, and procedures regarding its receipt of federal grant funds.  Based on these preliminary findings, FTA restricted WMATA’s ability  to automatically access federal grant reimbursements until WMATA  undertook corrective actions. During these years, WMATA reported its  management slowed expenditures on targeted capital projects due to  concerns over reimbursement of grants. By October 2017, after  WMATA implemented an action plan to improve its financial controls,  FTA reinstated WMATA’s ability to automatically receive all awarded  federal funds on a regular schedule.

Unpredictable Funding: WMATA officials stated that unpredictable  funding affected the level of its capital expenditures from year to year.  Since WMATA had multi-year capital projects with multi-year  procurements, according to WMATA officials, uncertainty with regard  to how much capital funding would be received on an annual basis  affected the implementation of projects.

Inadequate Capital Planning Process: WMATA attributed some of its  inability to expend budgeted capital funds to the absence of a uniform  and efficient capital planning process. According to WMATA, it lacked  formal procedures to initiate projects and newer projects often  experienced delays in implementation, which delayed expenditures on  these projects. Later in this report, we discuss WMATA’s efforts to  develop a new capital planning process.

Although WMATA expended more of its capital budget in fiscal year 2017  than it had in prior years, it estimated that capital spending will need to  increase even more to address state-of-good-repair needs. In 2016,  WMATA projected that its state-of-good-repair needs amounted to about  $17.4 billion from 2017 through 2026. This level is almost $10 billion more  than WMATA estimated for its state-of-good-repair needs from 2011  through 2020 in its February 2010 Capital Needs Inventory. WMATA  officials attributed the increase to a capital planning process insufficient to  identify capital needs and an increase in cost of needs that were  previously unmet. In addition, WMATA officials said the quality and  quantity of asset data had improved over time. To address its state-of- good-repair needs, in November 2016 WMATA estimated that it will need  to expend about $1.74 billion annually on capital expenditures from 2017  through 2026. This is more than twice the $845 million average annual  capital expenditures from fiscal year 2011 through fiscal year 2017.

WMATA’s New Capital Planning Process Could Address Some Previous Weaknesses WMATA Identified, but the Process Does Not Have Documented Policies and Procedures and Has Other Weaknesses

WMATA’s new capital planning process could address some of the  weaknesses it identified in the previous process, such as better  distinguishing capital needs (investments in groups of related assets)  from capital projects (investments in specific assets). However, WMATA  has not established documented policies and procedures to guide the developed performance measures to assess capital projects and the  capital planning process; and developed a plan to obtain complete information about the inventory  and condition of WMATA assets.

These remaining weaknesses could hinder sound capital investment  decisions.

WMATA’s New Capital Planning Process Could Facilitate Better Identification of Capital Investment Needs

WMATA’s new capital planning process could facilitate better  identification of capital investment needs. Leading practices for capital  planning, among other things, call for an organization to conduct a  comprehensive assessment of its needs to meet its mission. WMATA  uses the Capital Needs Inventory to assess its capital needs over a 10- year period across its various assets and help identify specific projects to  include on subsequent capital improvement programs. In November  2016, WMATA issued its most recent Capital Needs Inventory, covering  calendar year 2017 through 2026, and reported there were weaknesses  and limitations in the process used to prepare the previous Capital Needs  Inventory, issued in 2010. Those weaknesses and the actions WMATA  has taken to address them include the following:

Distinguishing capital needs from capital projects. WMATA reported in  2016 that the 2010 Capital Needs Inventory was primarily a list of  proposed projects and did not provide proper attention to evaluating  WMATA’s overall asset needs and the readiness of projects for  programming in the capital improvement program. WMATA has taken  actions to potentially address this weakness. In April 2016, WMATA  issued a policy/instruction document that established policies and  procedures for preparing capital needs inventories. This document  defined the process for capital needs identification and established a  framework evaluating and prioritizing capital investment needs.  Among other things, this framework requires that WMATA  departments develop capital needs justification packages and that  these packages be reviewed by the Capital Program Advisory  Committee for completeness and accuracy before being forwarded for  further review. The guidance also requires that WMATA’s strategic  objectives be considered when identifying and prioritizing capital  projects.

Qualitative rather than quantitative prioritization of needs. In 2016,  WMATA reported that the prioritization of capital needs in the 2010  Capital Needs Inventory was primarily based on qualitative  assessments by management rather than being driven by quantitative  information and condition assessments. According to WMATA, the  2010 Capital Needs Inventory was largely based on the professional  judgment of staff in consideration of WMATA’s strategic goals but was  not data-driven. WMATA has taken actions to address this weakness  by issuing a policy that requires WMATA’s senior management  serving on the Capital Program Advisory Committee to use a more  quantitative-based capital prioritization formula in preparing the  Capital Needs Inventory. For example, the November 2016 Capital  Needs Inventory used a quantitative approach to rank and prioritize  capital needs. This approach included the use of four criteria—asset  condition, safety and security, service delivery, and ridership impact— to numerically score capital needs and WMATA then used a risk- based weighting approach to combine these criteria into a single  overall prioritization score.

WMATA Has Not Yet Established Documented Policies and Procedures, or Developed Performance Measures and Complete Asset Inventory Information

While WMATA has addressed some weaknesses it identified in its prior  planning, it has not established documented policies and procedures to  guide the annual capital planning process, or developed measures to  assess capital project and program performance and a plan to obtain  complete information on its assets and their physical condition.

Policies and Procedures to Guide the New Capital Planning Process

Although WMATA established policies and procedures for prioritizing  capital needs—that is, investments in groups of related assets—for the  2016 Capital Needs Inventory, it has not established documented policies  and procedures for the new capital planning process, including how  WMATA will rank and select individual projects to address those needs  through its annual capital budgets and Six-Year Capital Improvement  Program. For example, through its Capital Needs Inventory WMATA  stated it needed to invest $17.4 billion over a 10-year period to address  its state-of-good-repair needs, including replacing vehicles, rehabilitating  stations, and investing in other types of assets. WMATA uses the annual  capital budget and Six-Year Capital Improvement Program to identify the  specific projects to be funded to meet the 10-year investment needs.  However, because WMATA has not established documented policies and  procedures for the new capital planning process, it has not yet identified  the specific methodologies to rank and select projects for funding on an  annual basis.

According to WMATA officials, the legacy annual capital planning process  was based on implementing the list of projects that resulted from its 2010  Capital Needs Inventory and WMATA did not have a documented capital  planning process that it followed on an annual basis. WMATA officials told  us that the legacy capital planning process was “ad hoc” in nature, in part  because WMATA was reacting to emergencies. For example, because  WMATA needed to address the NTSB recommendation to replace the  1000-series railcars and address FTA safety directives after the 2015  smoke incident at the L’Enfant Plaza Station, it did not adhere to a formal  annual-planning process.

The COSO internal control standards point out the importance of  organizations documenting their processes to facilitate retention and  sharing of organizational knowledge. Leading practices contained in the  Executive Guide also recommend that organizations have defined  processes for ranking and selecting projects for capital funding. In  addition, the Executive Guide noted that organizations find it beneficial to  rank projects because the number of requested projects often exceeds  available funding.

Officials from all five of the peer transit agencies we spoke with told us  they had or planned to develop documented processes for making capital  investment decisions. For example, officials from four of the five peer  transit agencies we spoke with said they use a project scoring and  ranking system in their capital planning process, and officials from the fifth  agency told us it plans to develop such a system. Officials from one  agency provided us with its project evaluation and scoring system that  assigns scores using eight selection criteria that are tied to the agency’s  strategic business plan and state priorities. The selection criteria include  such things as system preservation, safety, and cost-effectiveness.  Officials from another agency told us they use an analytical tool to score  projects and that every project (new or existing) gets re-scored annually.

As a result of WMATA not having documented policies and procedures  for its capital planning process, it is unclear how important parts of the  process will work and the basis for WMATA’s investment decisions.  WMATA has outlined some high-level policies for the capital planning  process and prepared limited guidance for certain parts of the process.  For example, WMATA officials told us that its recently issued Transit  Asset Management Plan contains asset management policies that  address the ranking and selecting of capital projects. Although the Transit  Asset Management Plan discusses the process for estimating and  prioritizing capital needs and, which are precursors of projects, the plan  does not specifically address how projects would be selected for annual  capital budgets and the capital improvement program. In addition,  WMATA developed limited guidance for staff to use in developing new  capital projects. Under this guidance, capital funds could be provided to  evaluate, plan, and develop projects. While this guidance may be useful  for developing projects, it does not establish the policies and procedures  WMATA will follow to decide which projects will be funded through the  annual capital budget and the capital improvement program.

Further, the documentation prepared by WMATA to date does not  establish policies and procedures for the entire capital planning process  and how decisions will be made throughout the process. WMATA  reported in its fiscal year 2019 annual budget that it had created a capital  program manual that identifies the roles, responsibilities, processes, and  calendars of events to inform the fiscal year 2020 capital program.  WMATA officials told us that the previous Director of the Capital Planning  and Program Management Department had included this information in  the draft budget proposal when these documents were being developed.  However, WMATA officials told us that these documents were not  completed, and that the information was mistakenly not removed from the  budget before the previous director of the department left the agency.

WMATA officials told us they plan to formalize policies, procedures, and  manuals for the fiscal year 2021–2026 capital-investment program cycle.  The current leadership of the Capital Planning and Program Management  Department told us that given the time-constraints facing WMATA in the  current fiscal year 2020 planning cycle, WMATA decided not to formally  document the new capital planning process until after WMATA has had a  chance to test it through the current planning cycle to see how it works.  According to the official, the department’s leadership has instructed staff  to document steps taken in implementing the new process so that  WMATA will have the opportunity to learn from the new process and  make necessary changes before developing formal, written procedures  that will guide future planning cycles.

Although delaying formal development of policies and procedures may  provide an opportunity to learn from the process while implementing it, it  does not provide the guidance necessary now as WMATA uses its new  capital planning process to develop the fiscal year 2020 capital program.  In particular, because WMATA has not established policies and  procedures for ranking and selecting projects, WMATA does not have a  framework or clear criteria for programming projects in the annual capital  budget for fiscal year 2020. WMATA has proposed a fiscal year 2020  capital budget of $1.4 billion. In addition, WMATA’s plan to document  steps taken in implementing the new process as it is occurring does not  provide reasonable assurance that WMATA is making decisions using a  consistent process to direct investments toward WMATA’s highest priority  needs. A consistent process is all the more important to ensure that  WMATA does not continue to use an ad-hoc process for capital  investment decisions, as it did in its legacy process. WMATA’s annual  capital spending is anticipated to increase substantially over the fiscal  year 2020-2025 period, as WMATA expects to be programing the  additional $500 million annually for capital purposes committed by the  District of Columbia, Maryland, and Virginia. Without a documented  planning process that includes procedures for ranking and selecting  projects for funding in the fiscal year 2020 capital budget, WMATA’s  stakeholders lack reasonable assurance that WMATA’s capital  investment decisions will be made using a sound and transparent  process.

Performance Measures to Assess Capital Projects and the Capital Planning Process

WMATA has also not developed performance measures to assess capital  projects and the capital planning process. Leading practices from the  Executive Guide suggest that one way to determine if a capital  investment achieved the benefits that were intended when it was selected  is to evaluate its performance using measures that reflect a variety of  outcomes and perspectives. By looking at a mixture of measures, such as  financial improvement and customer satisfaction, managers can assess  performance based on a comprehensive view of the needs and objectives  of the organization. Leading organizations we studied in preparing the  Executive Guide, such as private sector companies, use financial and  non-financial criteria for success that are tied to organizational goals and  objectives. According to the Executive Guide, project-specific  performance measures are then used to develop unit performance  measures and goals, which are ultimately used to determine how well an  organization is meeting its goals and objectives.

WMATA officials told us they have not developed performance measures  for assessing the performance of individual projects or the capital  planning process as a whole.  One WMATA official told us that WMATA  would like to evaluate results of the new capital planning process to  determine whether organizational goals have been met. The official  suggested that WMATA would work with a consultant to demonstrate a  linkage between capital planning goals and WMATA’s organizational  goals. However, the official did not indicate when this step would occur or  provide additional information. Moreover, it is unclear whether the  official’s intentions for this effort would result in measures for assessing  individual projects as well as the overall capital planning process. By  developing measures, WMATA will be better positioned to assess  whether specific capital investments met their intended outcomes or if the  capital planning process itself is helping WMATA achieve its strategic  goals and objectives and effectively using taxpayer funds.

Information on Asset Inventories and Physical Condition Assessments

WMATA also does not have a complete inventory or physical condition  assessments of its assets. Leading practices for good capital decision- making call for organizations to conduct a comprehensive assessment of  their needs and identify the organization’s capabilities to meet these  needs. This process includes taking an inventory of assets and their  condition and assessing where there are gaps in meeting organizational  needs. The Transit Cooperative Research Program has also identified  asset inventory and condition assessments as the first step in determining  what asset rehabilitations and replacements are needed as transit  providers address their state-of-good-repair requirements. Asset  inventories and condition assessments provide critical information for  capital-investment decision making.

WMATA has initiated various efforts to obtain better information about its  assets and their condition. These efforts have included:

Transit Asset Inventory and Condition Assessment Project. In 2016,  WMATA began this project to provide a physical inventory of WMATA  assets and their condition, in part to comply with FTA’s Transit Asset  Management regulations. According to WMATA, this project was to be  the cornerstone in ensuring a complete, consistent, accurate, and  centralized repository of relevant asset-related data. However,  WMATA officials said that the project primarily focused on obtaining  an inventory and condition assessment of WMATA facilities and  equipment. A February 2018 WMATA memo to senior management  stated that even when the project was completed, WMATA would still  lack a robust database of track, guideway, infrastructure (e.g., tunnels  and bridges), systems, and communication assets—elements that the  November 2016 Capital Needs Inventory noted were the largest gaps  in the asset information used to support capital needs forecasting.  According to WMATA, this project produced inventory and condition  assessments for about 30 percent of WMATA’s asset base. As of  October 2018, WMATA considered the project complete since it  provided information to help prepare WMATA’s completed Transit  Asset Management Plan, dated October 1, 2018. WMATA officials  noted that they will continue to develop their asset inventories and  condition assessments through its new Enterprise Asset Management  Program, described below.

Enterprise Asset Management Program. In December 2017, WMATA  began development of an Enterprise Asset Management Program.  According to WMATA, this program is an effort to institutionalize asset  management practices that are aligned with industry best practices to  provide, among other things, high quality asset data for informed  decision-making, including for capital planning. Expected program  tasks include updating asset records and improving and consolidating  asset inventories in WMATA’s asset system of record (called  Maximo).

WMATA’s efforts to develop more complete asset inventory and condition  assessments are not complete. Among other things, WMATA  documentation on the Enterprise Asset Management Program cited  “inattention, poor standardization, and organizational silos” as factors that  have resulted in WMATA having multiple sets of asset records in various  states of accuracy and usefulness. The Enterprise Asset Management  Program, according to WMATA, is an effort to help address this situation  and improve asset data quality, including inventory and condition  assessments.

Although WMATA is developing a new Enterprise Asset Management  Program, it has yet to develop a plan for obtaining a complete inventory  or physical condition assessments of its assets. The Project Management  Institute’s Guide to the Project Management Body of Knowledge,  PMBOK® Guide describes the elements of good project management  and their importance in achieving organizational goals. Among these  elements are:

Having a project charter that formally authorizes a project, that  commits resources to the activity, and that provides a direct link to  organizational strategic objectives;

Preparing a project plan to define the basis of the project’s work and  how the work will be performed; and

Establishing a monitoring and control process to track, review, and  report overall progress in meeting the plan’s objectives.

WMATA has prepared draft documents that describe how it will  implement the Enterprise Asset Management Program and that contain  some elements of good project management. For example, in January  2018 WMATA circulated a proposed charter that once approved would  authorize the Enterprise Asset Management program, identify needed  resources, and link to WMATA’s strategic goals. As of October 2018, this  proposed charter had not yet been finalized. Draft program documents  also indicate there would be a monitoring and control process that would  establish regular reporting to internal stakeholders to assess program  accomplishments and progress implementing the program.

While WMATA has developed a proposed charter and a monitoring and  control process for its Enterprise Asset Management Program, it has not  established a plan for collecting asset inventory and condition  assessment information. The draft program charter includes general tasks  for updating asset records and improving and consolidating asset  inventory data in Maximo. However, a plan would provide more specific  details for how the work would be completed, such as the information to  be collected on different assets, how and when this information would be  consolidated into Maximo, milestones for completing the work, or how the  effort would be funded. Without a plan to obtain asset inventory and  condition assessment information WMATA will continue to lack critical  information needed for good capital planning and sound investment  decision-making.

WMATA Reported Significant Progress toward Goals, but the Track Preventive Maintenance Program Does Not Fully Align with Leading Practices

WMATA Has Reduced Both Track Defect Incidents and Electrical Fires but Faces Challenges Implementing Its Track Preventive Maintenance Program

WMATA has reported significant progress toward its goals of reducing  track defects and fire incidents, but still faces several challenges with  implementing its track preventive maintenance program. WMATA defines  an incident as any unplanned event that disrupts rail revenue service.  According to WMATA officials, within the track preventive maintenance  program WMATA seeks to reduce incidents specifically caused by  electrical wayside fires and track defects each by 50 percent from fiscal  year 2017 to fiscal year 2019. WMATA reported that in fiscal year 2018 it  had met its goal for track defect incidents but not for electrical wayside  fires. According to officials, track defect incidents—which include  incidents caused by defective fasteners, switches, and “ballast”—were  reduced by 50 percent from a total of 778 in fiscal year 2017 to 387 in  fiscal year 2018. Electrical-wayside-fire incidents—including incidents  caused by cable and insulator fires—went down 20 percent from a total of  55 in fiscal year 2017 to 44 in fiscal year 2018 (see fig.5).

Although WMATA has reduced both track defect incidents and electrical  fires, the track preventive maintenance program is not intended to  address the full range of all defects and track fires that may occur on the  system. WMATA officials told us that the track preventive maintenance  program specifically seeks to reduce electrical-wayside-fire incidents,  which are a specific sub-set of overall track fires, and does not include  non-electrical fires or smoke incidents, such as the ones caused by  railcars or debris. WMATA captures and publicly reports the non-electrical  fires as part of its quarterly Metro Performance Report, but according to  WMATA officials, these fires are not specifically addressed through the  track preventive maintenance program. While electrical fires decreased in  fiscal year 2018, non-electrical fires did not change, as WMATA reported  23 non-electrical fires for both fiscal years 2017 and 2018. Additionally  the track preventive maintenance program addresses a certain sub-set of  track defect incidents such as those caused by loose fasteners and  defective switches. According to WMATA, these track defect incidents  can be addressed through its track geometry, torqueing, and switch  maintenance initiatives. WMATA addresses other types of track defects,  such as rail breaks and third-rail defects, through its capital program.  However, according to WMATA, track defects attributable to the capital  program are still included as part of the overall goal to reduce all track  defect incidents by 50 percent by fiscal year 2019.

WMATA established goals for completing each of the six track preventive  maintenance initiatives within a certain time period and reported that in  fiscal year 2018 it was on-track to meet or exceed those goals for four of  the initiatives. For example, in implementing its “cable meggering”  initiative, WMATA established a goal to inspect and replace electric  cables across its entire rail system within 4 years. According to WMATA,  it met its target for fiscal year 2018 by completing 25 percent of the entire  system in that year. In addition to cable meggering, WMATA also met its  annual targets for the switch maintenance, track bed cleaning, and stray  current-testing initiatives. As for the two initiatives behind schedule, the  torqueing initiative was 70 percent complete and the tamping initiative  stood at 90 percent for the 2018 target (see table 2). Officials told us they  have developed various ways to improve efficiency with these initiatives.  For instance, WMATA improved the productivity of its switch maintenance  initiative by separating the work to inspect the switches from the follow-up  repair work to grind and weld them. These activities had previously been  conducted by the same team.

However, WMATA faces challenges in implementing the track preventive  maintenance program moving forward. WMATA officials described track  preventive maintenance as a necessary operation that must be  continuously performed and balanced in conjunction with regular train  operations that provide service to their customers. According to WMATA  officials, executing this new program requires regular refinements to  ensure it continues to progress toward its desired outcomes. Among the  implementation challenges identified by WMATA officials were the  following:

Securing Sufficient Track Time. WMATA officials told us that getting  adequate time to perform track maintenance is difficult because it  requires reducing the number of hours in which WMATA provides  service to customers. Consequently, increased maintenance hours  can result in lost revenue. Officials from the peer transit agencies we  interviewed stated that the tension between conducting maintenance  and providing service is common in the transit industry. According to  WMATA officials, prior to SafeTrack, windows for performing track  maintenance were not sufficient to complete all necessary work,  partially because of this need to balance maintenance hours and  service hours. To address this issue, WMATA increased its weekly  overnight work hours from 33 hours to 39 hours during SafeTrack.  After SafeTrack was complete, WMATA extended weekly overnight  work hours again to a total of 41 hours. However, maintaining these  extended overnight work hours past fiscal year 2019 requires  approval from WMATA’s board of directors. As a result, the long-term  viability of WMATA’s track preventive maintenance program is  partially dependent on the board’s decision to balance the competing  demands for service hours and maintenance time.

Work Time Productivity. To maintain extended track-maintenance  hours into succeeding years, it will be important for WMATA to  demonstrate the new program’s productivity. According to WMATA  officials, making the most productive use of the extended working  hours is a challenge, but it will be necessary to justify the extended  maintenance windows. WMATA officials told us that only a portion of  overnight work hours yields productive maintenance time. For  example, once a line ceases operations, it takes an additional hour for  all trains to reach their final destination, and another hour after that to  safely turn off all power running to the track and then establish a work  zone. Once maintenance work is completed, additional time must be  allotted for restoring power and allowing trains to move back into  position. Because of these requirements, a five-hour work window  may only yield two hours of productive work time (called “wrench  time”). For this reason, WMATA began tracking its wrench time at the  beginning of fiscal year 2018. As of June 2018, WMATA reported that  average wrench time had increased from about 2.0 hours per day in  July 2017 to 2.37 hours.

Resource Constraints. According to WMATA officials, having sufficient  people with the necessary skills and experience to perform track  maintenance work is a significant challenge. For instance, expanded  maintenance windows have increased WMATA’s workforce  requirements. As a result, WMATA has used contractors to assist with  its stray-current testing and track bed cleaning initiatives. In another  example, WMATA’s torqueing initiative is particularly resource  intensive as the entire rail system contains 135 miles of “direct  fixation” track, where the torqueing work is being done, and over  504,000 fasteners to check and tighten as necessary. According to  WMATA officials, bolts and fasteners are torqued during their initial  installment and then again 90 days afterward as part of the initial  capital expenditure. After that, any subsequent torqueing is executed  as part of the new track preventive maintenance program. WMATA  stated that the torqueing initiative seeks to torque all 135 miles of  direct fixation track annually. WMATA officials said the torqueing  initiative is a mix of contractor and in-house staff, with contractors  supplementing WMATA forces as needed.

WMATA’s Track Preventive Maintenance Program Does Not Fully Align with Leading Program Management Practices

WMATA’s track preventive maintenance program has followed certain  leading program management practices such as establishing key  performance metrics and monitoring progress toward them. Leading  practices recommend that organizations establish performance baselines  for their programs and communicate performance metrics to key  stakeholders. For instance, as previously noted, WMATA established a  measureable program goal to reduce track-defect and electrical-wayside- fire incidents by 50 percent within 2 years, and WMATA also established  time periods to complete its system-wide preventive maintenance  initiatives. In addition, WMATA’s Rail Services Department—which  manages the track preventive maintenance program—among other  things, holds a monthly “RailSTAT” meeting in which the teams leading  the preventive maintenance initiatives report their progress toward these  goals to WMATA’s management.

However, WMATA’s program does not fully align with other applicable  internal-control standards or leading program-management practices.  Specifically, COSO internal control standards and leading practices  identified by the Project Management Institute’s The Standard for  Program Management stresses the importance of identifying and  assessing program risks and developing a program management plan.

COSO recommends that organizations identify risks to the  achievement of its objectives and analyze risks as a basis for  determining how the risks should be managed. Furthermore, the risk  identification is to be comprehensive.

The Standard for Program Management also recommends that when  identifying risks, the assessments be both qualitative and quantitative  in nature.

The Standard for Program Management recommends that  organizations develop program management plans that align with  organizational goals and objectives. This includes aligning the  program management plan with the organization’s overall strategic  plan. Elements of the plan are to provide a roadmap that identifies  such things as milestones and decision points to guide program  activities.

In developing the track preventive maintenance program, WMATA did not  fully identify or quantitatively assess risks associated with the program.  WMATA officials told us that in developing the track preventive  maintenance program they used their professional judgment to identify  track-defect and fire incidents as the most significant risks that they  needed to address through the program. However, WMATA’s risk  identification was not comprehensive in nature, as it only considered two  technical aspects of track maintenance: electrical fires and track defects.  As previously mentioned, non-electrical fires—which were not included in  the scope of the program or risk assessment—did not change from fiscal  year 2017 through 2018 and represent approximately 30 percent of all  fires on the system over those years. Although WMATA officials told us in  designing the program they reviewed track-related incident data from  2016, they did not quantitatively analyze the impact of these incidents on  service or safety. In addition, WMATA did not consider broader strategic  risks to its program, such as the availability of a program’s funding and stakeholders’ support for the continuation of the program. Specifically,  while WMATA has identified several challenges with implementing the  program—such as securing sufficient track time, demonstrating work time  productivity, and overcoming resource constraints—none of these factors,  or potential mitigations, were documented in a risk assessment in  developing the program.

WMATA has also not prepared a program management plan for the track  preventive maintenance program. Although WMATA has identified  program goals, officials told us that WMATA has not formally documented  the overall structure of the program or how it would be implemented.  Instead, the officials said the presentations they provide to WMATA’s  board of directors, along with their ongoing staff and executive team  meetings, regarding the track preventive maintenance program cover the  relevant information needed for running the program. While providing  such information to the WMATA board of directors provides some  accountability for the program, these presentations do not represent a  formal program management plan that links with WMATA’s strategic plan  or that identifies milestones and decision points necessary to guide the  program. As we previously reported, WMATA did not develop a project  management plan before starting its SafeTrack work, and due to this  omission and other issues, we found that WMATA lacked assurance that  the approach taken with SafeTrack was the most effective way to identify  and address safety issues. Furthermore, as this is the first time WMATA  has implemented a track preventive maintenance program, a program  management plan could help formally establish the program, provide  strategic guidance for this new program by providing accountability for  both internal and external stakeholders, and ensure that program goals  are met. A program management plan could also provide practical  benefits, such as helping ensure that WMATA’s extended overnight work  hours are efficiently implemented and that sufficient resources are  devoted to the program.

Without the strategic direction provided by a comprehensive risk  assessment and a formal program management plan, WMATA lacks a  documented vision for how the track preventive maintenance program  should be structured and implemented in order to meet the agency’s  strategic goals and improve track safety. Specifically, without a risk  assessment that uses quantitative and qualitative data to assess risks— such as data for all fires on the system and qualitative risks such as  securing sufficient time for maintenance—WMATA lacks assurance that  the program is comprehensively designed to address risks affecting the  safety of the rail system or other risks that could hinder the program’s  success. Moreover, a program management plan that draws on  information from a comprehensive risk assessment would provide  WMATA officials with the assurance that they are prepared to respond to  current and future challenges that could threaten the long-term viability of  the program.

Finally, although WMATA developed the track preventive maintenance  program to prevent the need for another emergency repair project like  SafeTrack, without a formal program management plan, the WMATA  employees charged with managing and implementing the program lack  an important document to guide their decision-making to meet that  objective and the agency’s overall strategic objectives. Developing a  program management plan would outline the specific requirements to  successfully implement the program, including necessary track time,  expected productivity of program initiatives, and required resources.  Furthermore, it would provide WMATA’s board of directors with  confidence that the program has a clear roadmap with milestones and  decision points as the board considers maintaining the extended  overnight work hours necessary to implement the program.

WMATA’s rail and bus systems provide nearly a million passenger trips  each day, and those passengers rely on WMATA for safe and reliable  public transportation in the nation’s capital and the surrounding areas.  The federal, state, and local jurisdictions that fund WMATA expect  WMATA to wisely use taxpayer funds to ensure the system is safe and  reliable. WMATA can better meet these expectations by establishing  documented policies and procedures that outline how the new capital  planning process will work and the basis of investment decisions. In  addition, developing measures to assess the performance of individual  projects and the capital planning process would provide greater  assurance to WMATA’s funding partners that its investment decisions  result in a measurable improvement in operating performance, reliability,  or other metrics. Furthermore, WMATA’s recent efforts to establish an  Enterprise Asset Management Program, once finalized, could help  WMATA develop a more complete inventory of its assets and collect  critical information on their condition—both of which are consistent with  sound capital planning. However, without a plan that provides specific  details for obtaining this information, WMATA will continue to lack the  critical asset information necessary to make lasting improvements in its  capital planning process and make sound capital-investment decisions.

Similarly, track preventive maintenance plays a critical role as WMATA  works to reduce the track defects and fires that have endangered safety  and service reliability. WMATA could better demonstrate the direction of  the track preventive maintenance program and how it can improve track  safety by more comprehensively assessing the technical and broader  risks facing the program and by developing a formal plan that provides  greater assurance WMATA is prepared to address challenges that could  threaten the long-term viability of the program. Both actions would help  WMATA better focus the program on critical maintenance needs and  demonstrate its value to WMATA’s board of directors and other  stakeholders as WMATA endeavors to provide safe, reliable, and quality  service to its riders.

We are making the following five recommendations to WMATA.

The General Manager of WMATA should establish documented  policies and procedures for the new capital planning process. These  policies and procedures should include methodologies for ranking and  selecting capital projects for funding in WMATA’s fiscal year 2020  capital budget and fiscal years 2020-2025 Capital Improvement  Program and for future planning cycles. (Recommendation 1)

The General Manager of WMATA should develop performance  measures to be used for assessing capital investments and the capital  planning process to determine if the investments and planning  process have achieved their planned goals and objectives.  (Recommendation 2)

The General Manager of WMATA should develop a plan for obtaining  complete information regarding WMATA’s asset inventory and  physical condition assessments, including assets related to track and  structures. (Recommendation 3)

The General Manager of WMATA should conduct a comprehensive  risk assessment of the track preventive maintenance program that  includes both a quantitative and qualitative assessment of relevant  program risks. In addition to considering technical program risks,  WMATA should also consider broader program risks, such as the  availability of funding for the program and stakeholders’ support.  (Recommendation 4)

The General Manager of WMATA should prepare a formal program  management plan for the track preventive maintenance program that  aligns with WMATA’s strategic plan, addresses how the program is  linked to overall strategic goals and objectives, and includes program  milestones and decision points. (Recommendation 5)

We provided a draft of this report to WMATA and the Department of  Transportation for review and comment. WMATA provided written  comments, which are reprinted in appendix II, and technical comments,  which we incorporated as appropriate in the report. The Department of  Transportation provided technical comments, which we incorporated as  appropriate.

WMATA concurred in part, or with the intent of four of the  recommendations, and disagreed with a fifth. Specifically, regarding the  first recommendation, which is  that WMATA establish documented policies and procedures for  the new capital planning process, and  that the policies and procedures include methodologies for  ranking and selecting capital projects for the fiscal year 2020  capital budget and fiscal year 2020—2025 capital-improvement  program.

WMATA stated that it agreed with the recommendation, in part. WMATA  said it will continue its efforts to finalize and document policies and  procedures for the capital planning process for fiscal year 2021 and  beyond. WMATA noted that it already has in place numerous planning  tools, such as the 2016 Capital Needs Inventory assessment, which  helped inform the fiscal year 2020 capital planning process. According to  WMATA, it is currently reviewing policies, procedures, training materials,  and other documents for the fiscal year 2020 planning process, and those  documents will be updated and formalized through final documentation in  fiscal year 2021. WMATA noted that it anticipates that many of the  elements we recommend regarding the capital planning process will be  part of the process documented in fiscal year 2021. For example,  WMATA expects that additional automation, decision-making,  governance, and reporting capabilities, will be part of the process that will  be documented for fiscal year 2021. However, while WMATA has tools  available to inform the capital planning process, it has not prepared  documented policies and procedures for this process in fiscal year 2020.  As we reported, without documented policies and procedures, including  those for ranking and selecting projects for the fiscal year 2020 capital  budget, WMATA’s stakeholders do not have reasonable assurance that  capital investment decisions are made using a sound and transparent  process. Taking action now to establish methodologies for ranking and  selecting projects for the fiscal year 2020 capital budget would provide  WMATA with an opportunity to improve upon those methodologies for the  fiscal year 2021 capital planning process to better ensure investments are  directed to WMATA’s highest priority needs. As such, we continue to  believe this recommendation is valid and that WMATA should fully  implement it.

Regarding the second recommendation that WMATA develop  performance measures for assessing capital investments and the capital  planning process, WMATA stated that it agreed with the intent of the  recommendation. WMATA also stated that it has developed such  measures through compliance with federal requirements, including the  FTA’s performance-based planning requirements and the requirement  under MAP-21 that tier I transit providers, such as WMATA, establish  state-of-good-repair targets that are linked to the capital program.  WMATA noted these targets are set forth in its Transit Asset  Management Plan. Although WMATA’s October 2018 Transit Asset  Management plan includes some broad performance measures and  targets for the state-of-good-repair for its various asset classes, as we  reported, WMATA has not developed performance measures to assess  individual capital projects or the capital planning process itself, as  suggested by leading practices in the Executive Guide. As discussed in  the report, such measures are important to determine if capital  investments have achieved their expected benefits and if they have  achieved organizational goals. Leading practices also indicate that by  using a mixture of measures managers can assess performance based  on a comprehensive view of the needs and objectives of an organization.  These needs and objectives can go beyond just the state-of-good-repair  to include such things as measures for assessing projects that would  improve service reliability, expand capacity, or achieve financial  objectives. We continue to believe that fully implementing this  recommendation would help ensure that capital investments meet their  intended outcomes and that the capital planning process helps WMATA  achieve its strategic goals and objectives.

Regarding the third recommendation that WMATA develop a plan for  obtaining complete information about asset inventories and condition  assessments, WMATA stated that it agreed with the intent of the  recommendation and that its 2018 Transit Asset Management Plan  outlines plans for continuing its asset inventory update. WMATA also said  that it is working to ensure it has a complete asset inventory that  addresses legacy information and that includes accurate, up-to-date  condition assessments. As we reported, the Enterprise Asset  Management Program—the program that WMATA told us it plans to use  to continue development of asset inventories and condition  assessments—includes some elements of good project management, but  it also lacks an established plan for collecting asset inventory and  condition assessment information. Without a plan to obtain asset  inventory and condition assessment information WMATA will continue to  lack critical information needed for good capital planning and sound  investment decision-making. Thus, we continue to believe that this  recommendation is valid and that WMATA should fully implement it.

Regarding the fourth recommendation that WMATA conduct a  comprehensive risk assessment of the track preventive maintenance  program that includes both quantitative and qualitative assessment of  relevant program risks, WMATA stated that it agreed with the intent of the  recommendation and is putting in place a new process that will address it.  Specifically, WMATA stated it is in the process of developing a new  Reliability Centered Maintenance process that will include a  comprehensive risk assessment of track infrastructure that includes  consideration of broader risks such as costs, funding, and track access.  According to WMATA, the new process is an engineering framework that  will define the maintenance regimen, including preventive maintenance,  and improve safety, reliability, and cost-effectiveness. During our review,  WMATA officials did not discuss the Reliability Centered Maintenance  process in detail or provide documentation that allowed us to evaluate  how this process might interface with the current track preventive  maintenance program. As a result, we were not able to evaluate how it  might address identification and assessment of risks associated with track  preventive maintenance. As we reported, going forward track preventive  maintenance will play a critical role as WMATA works to reduce track  defects and fires. We will review WMATA’s actions to conduct a  comprehensive risk assessment as part of our routine recommendation  follow-up process.

Regarding the fifth recommendation that WMATA prepare a formal  program management plan for the track preventive maintenance  program, WMATA stated that it disagreed with the recommendation.  WMATA noted that specific technical details of the track preventive  maintenance program are evolving as it better understands the most  effective maintenance regime through implementation of the Reliability  Centered Maintenance process. WMATA stated that it believes the  framework of Reliability Centered Maintenance is better suited to the  ongoing mission of physical asset management than traditional project  and program management tools. According to WMATA, the purpose of  Reliability Centered Maintenance is to ensure that all efforts are focused  on the safety, reliability, and cost-effectiveness of assets through their  lifecycle, which is more relevant and applicable to WMATA’s strategic  plan than any individual preventive maintenance program. As stated  above, WMATA did not provide details about Reliability Centered  Maintenance during our review so we are not able to evaluate this  process in relation to the track preventive maintenance program. We will  review WMATA’s actions related to implementation of the Reliability  Centered Maintenance process as part of our routine recommendation  follow-up process. We continue to believe this recommendation is valid  and that WMATA should fully implement it.

We will send copies of this report to appropriate congressional  committees, the Secretary of Transportation, the Administrator of the  Federal Transit Administration, and the General Manager of WMATA. In  addition, we will make copies available to others upon request, and the  report will be available at no charge on the GAO website at  http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-2834 or goldsteinm@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix III.

Appendix I: Objectives, Scope and Methodology

This report examines: (1) How WMATA expended its capital funding from  fiscal years 2011 through 2017; (2) How WMATA’s new capital planning  process addresses weaknesses it identified in the previous process; and  (3) WMATA’s progress toward its track preventive maintenance goals and  how the program aligns with leading program management practices.

For each of our objectives we reviewed pertinent federal statutes and  regulations as well as WMATA and FTA policies and documents. We also  selected a non-generalizable sample of five similar U.S. transit agencies  based on similarity to WMATA in transit route mileage, system use,  capital spending, system age, and rail fleet age. We also factored  geographical diversity into our selection process. We then interviewed the  officials from these selected transit agencies using a standard set of  questions to learn how they utilize their capital funds, conduct capital  planning, and oversee maintenance; and then we compared their  processes to WMATA. Transit route mileage, system use, capital  spending, and rail fleet age were measured using data from FTA’s  National Transit Database. We measured system age according to data  available within the American Public Transportation Association’s 2017  Public Transportation Fact Book, and geographical diversity was  determined through data available from the U.S. Census Bureau. The  transit agencies we selected were: (1) Bay Area Rapid Transit, Oakland,  California; (2) Chicago Transit Authority, Chicago, Illinois; (3)  Massachusetts Bay Transportation Authority, Boston, Massachusetts; (4)  Metropolitan Atlanta Rapid Transit Authority, Atlanta, Georgia; and (5)  Southeastern Pennsylvania Transportation Authority, Philadelphia,  Pennsylvania.

To assess WMATA’s capital spending from 2011 through 2017, we  interviewed knowledgeable officials from WMATA and FTA and also  reviewed WMATA annual budgets, fourth-quarter and year-end financial  reports, budget reconciliation reports, comprehensive annual financial  reports, and FTA grant awards. We selected fiscal year 2011 because it  was the first year in which WMATA received federal funding authorized by  the Passenger Rail Investment and Improvement Act of 2008 (PRIIA),  and we selected fiscal year 2017 because it was the most recent year  that capital expenditure data were available at the time of our review. By  analyzing this information we determined that the following sources  provided the most comprehensive and reliable available data on each of  the following topics for our report (see table 3):  We collected the aforementioned data, analyzed them to identify errors or  other anomalies, and interviewed officials to determine how the data are  compiled and checked for accuracy. We determined that these data had  some limitations, as an external audit report of WMATA financial  information for fiscal year 2016 noted a material weakness with WMATA’s  process for accounting acquisition costs of capital assets. Specifically,  there were inconsistencies between WMATA’s general ledger and sub- ledger, which are used to record acquisition costs, depreciation, and other  financial information related to capital assets. As a result, additional steps  were required to reconcile the differences between the two sources and  could have resulted in a material error. However, after interviewing  WMATA officials about the weakness and assessing the available  financial information, we determined that the data we used were  sufficiently reliable for our purpose of showing general trends of capital  expenditures.

Our analysis sought to depict how WMATA allocates and expends funds  according to major asset categories within its capital-improvement plan.  However, these asset categories only remained consistent from 2011  through 2015, and were revised during 2016 and 2017. However, we  determined that each asset category consisted of Capital Improvement  Projects that were each assigned a number. These projects and their  corresponding numbers remained in existence from fiscal year 2011  through 2017, even though the asset categories were updated in fiscal  year 2016. Tracking by Capital Improvement Project number provided a  means to report consistently through that time period. Therefore, we used  the asset categories from fiscal years 2011 through 2015 as our base  reporting categories. These categories consisted of: (1) Vehicles/Vehicle  Parts, (2) Rail System Infrastructure Rehabilitation, (3) Maintenance  Facilities, (4) Systems and Technology, (5) Track and Structures, (6)  Passenger Facilities, (7) Maintenance Equipment, (8) Other Facilities,  and (9) Project Management and Support. We consolidated WMATA’s  nine asset categories into five asset categories in order to represent  broader categories of investment: Rail and Bus Vehicle Fleet  (Vehicle/Vehicle Parts), Fixed Rail Infrastructure (Rail System  Infrastructure and Track and Structures), Maintenance Facilities and  Equipment (Maintenance Facilities and Maintenance Equipment),  Passenger and Other Facilities (Passenger Facilities and Other  Facilities), and Business Systems and Project Management Support  (Systems and Technology and Project Management and Support). We  then reviewed WMATA’s fiscal year 2016 Fourth Quarter Report, fiscal  year 2017 Fourth Quarter Report, and fiscal year 2017 Budget  Reconciliation Report to match each project number from those two years  to their corresponding category from fiscal year 2011 through 2015.

To assess WMATA’s new capital planning process and how it addresses  weaknesses WMATA identified in the previous process, we interviewed  WMATA officials about their capital planning process and reviewed  WMATA documentation related to the capital planning process. This  included Capital Needs Inventories, WMATA’s policy for preparation of  the 2010 and 2016 Capital Needs Inventories, annual capital budgets—to include capital improvement programs, and guidance documents issued  by WMATA related to submitting projects for inclusion in the annual  capital budget. We also reviewed the fiscal year 2018 business plan for  WMATA’s Capital Planning and Program Management Department. We  also interviewed officials from the Metropolitan Washington Council of  Governments, the American Public Transportation Association, and FTA  to discuss WMATA’s capital planning and budgeting processes.  Furthermore, we compared WMATA’s capital planning practices to  leading practices identified in GAO’s Executive Guide. The Executive  Guide was used since it identifies leading practices for capital decision- making that are applicable to a wide variety of organizations, both public  and private. For example, the Executive Guide developed leading capital  planning practices by (1) identifying government and private sector  organizations recognized for outstanding capital decision-making  practices and (2) identifying and describing the leading capital decision- making practices implemented by these organizations. To identify leading  practices for capital planning, we also reviewed Transit Cooperative  Research Program Report 157. This report developed a framework for  transit agencies to use when prioritizing the rehabilitation and  replacement of capital assets and discusses leading practices in how to  do this. We also identified project management principles from the Project  Management Institute, Inc. Finally, we discussed capital planning with  the peer transit agencies and prepared a summary of various aspects of  capital planning in these agencies.

To examine progress toward goals in WMATA’s track preventive  maintenance program and how the program compares with leading  program management practices, we reviewed WMATA documentation  about the program, interviewed WMATA officials, and analyzed track- defect data and electrical-wayside-fire data provided by WMATA for fiscal  years 2016 through 2018—which were the only years detailed track  defect and electrical fire incident data were available. In order to  determine whether the data provided were sufficiently reliable, we  checked the data for errors, conducted interviews with knowledgeable  officials to learn their procedures for collecting and analyzing the data,  and performed independent tests that included verifying WMATA’s final  tally of track defect and fire incidents and verifying there were no  extended periods of time where data was missing. We also provided a set  of data reliability questions to determine whether procedures were  sufficient. After performing these steps we determined that the data were  sufficiently reliable for the purposes of our report.

In our interviews with WMATA, officials also described what goals they  had created for the track preventive maintenance program, their progress  in meeting those goals, and provided documentation to demonstrate their  progress, which we reviewed. We also interviewed officials from the  American Public Transportation Association and the American Railway  Engineering and Maintenance-of-Way Association about best  maintenance practices in the transit industry. We then compared  WMATA’s track preventive maintenance program to leading program  management practices identified by the Project Management Institute,  Inc.’s The Standard for Program Management and internal control  standards published by the Committee of Sponsoring Organizations of  the Treadway Commission (COSO). The Project Management Institute’s,  standards are utilized worldwide and provide guidance on how to manage  various aspects of projects, programs, and portfolios. In particular, The  Standard for Program Management provides guidance that is generally  recognized to support good program-management practices for most  programs, most of the time.

We conducted our work from November 2017 to January 2019 in  accordance with generally accepted government auditing standards.  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. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

Appendix II: Comments from the Washington Metropolitan Area Transit Authority

In addition to the contact named above, Matt Barranca (Assistant  Director), Richard Jorgenson (Analyst in Charge), Melissa Bodeau, Lacey  Coppage, Cory Gerlach, Erin Guinn-Villareal, Kirsten Lauber, Joshua  Ormond, and Patrick Tierney made significant contributions to this report.

To address safety problems in the Washington, D.C., Metro rail system, Metro started a preventive track maintenance program in June 2017. The program aims to reduce service disruptions caused by track defects or electrical fires—which Metro says are the most significant safety risks.

While Metro reports making progress, it can't be sure that the program is designed effectively. For example, the program doesn't address non-electrical fires, which comprise 30% of all track fires.

We recommended a formal risk assessment, which would use data to assess safety and strategic risks to the program, such as ensuring adequate time for maintenance work.