Financial Management Oversight (FMO)

Under the Financial Management Oversight Program FTA conducts several types of reviews: 

• The Full Scope Financial Management System Review requires FMO contractors to conduct a series of interviews, full transaction review, and appropriate substantive tests. The contractors determine that the grantee's financial management system meets the requirements of the Common Rule (49 CFR Part 18.20). The contractors then express an objective, external, independent professional opinion to FTA, in accordance with established public accounting standards, on the effectiveness of the grantees internal control environment. The seven standards for financial management systems are: Financial Reporting, Accounting Records, Internal Control, Budget Control, Allowable Costs, Source Documentation and Cash Management. An average FMO review takes three to four weeks, conducted at the grantee's site; 
• Follow-up Reviews are primarily performed to ensure those recommendations resulting from full scope reviews are implemented and working properly. If this type of review is performed, it will occur between 12-18 month after the full scope review; 
• Financial Capacity Assessment (FCA) of selected grantees involved in major capital investment projects. This type of review assesses the financial capability of grantees to meet Full Funding Grant Agreement (FFGA) obligations and maintain their existing transit operation. In cases where projects have progressed into construction, the contractors evaluate the financial capacity of grantees to complete the undertaking according to the terms, conditions, budgets, schedules, and commitments in the FFGA or as proposed in a Recovery Plan. Financial Capacity Assessments analyze plans to mitigate the risks associated with: 
  • the provision of the required local share, 
  • the ability to complete the Project on schedule in the face of delayed or reduced Congressional appropriations, unanticipated conditions or budget overruns, and 
  • the ability to operate and maintain the existing system, as well as the project; and, 
• On a case-by-case basis, we conduct Special Analyses or Special Reviews related to grantee's financial management issues.  
  

Contact: Office of Program Management 202-366-4020