The Department of Transportation’s Office of Inspector General (OIG) released a report criticizing PHMSA’s implementation of Congressional mandates and recommendations from the NTSB, GAO and the OIG itself. The OIG’s findings paint a troubling picture of an unsophisticated agency. OIG highlights in particular the lack of sufficient procedures to track rulemakings and coordinate within various departments within the agency and with other intermodal agencies, resulting in delayed rulemakings and implementation of recommendations. While PHMSA has already been implementing organizational changes, the OIG notes that it is too soon to determine whether they will adequately address the Agency’s ability to meet mandates and recommendations in full and in time.
While criticism of PHMSA’s timeliness in implementing statutory requirements is not new, Representative DeFazio requested this OIG audit due to concern about PHMSA’s delay in establishing rail car regulations and implementing mandates from the 2011 Pipeline Safety Act reauthorization. The OIG review confirmed that since 2005, PHMSA has only implemented approximately two-thirds of Congressional mandates and NTSB, GAO and OIG recommendations. Twenty-five percent of PHMSA’s statutory mandates remain unimplemented, including 8 pipeline safety rulemaking mandates from the 2011 reauthorization. Further, the Agency has missed nearly 70% of its mandated deadlines.
As to the underlying cause of the delays, the OIG found that PHMSA has not developed sufficient agency-wide processes or provided guidance to its program offices on implementing mandates and recommendations. Although PHMSA was created in 2004, its predecessor agencies date back to the 1970s and only recently did PHMSA’s Office of Hazardous Materials Safety and the Office of Pipeline Safety prepare internal rulemaking procedures (in 2012 for hazardous materials and 2015 for pipeline safety). Despite those new procedures, the OIG disparagingly notes that the procedures do not require participation of Chief Counsel staff in the development of regulations, although approval is required before rules are endorsed by the PHMSA Administrator. By way of example, PHMSA staff spent 13 months drafting the nearly 400 page natural gas proposed rulemaking before requesting input from the Chief Counsel’s office, and it then took another 9 months to exchange comments and conduct meetings before that office concurred with the draft.
In addition, the OIG found that PHMSA does not have requirements or procedures in place for the Chief Safety Officer’s staff to provide quality assurance reviews of regulatory analyses (although mandated by a 2010 DOT Order) and even when input is provided, it is not always incorporated. Upon review of specific mandates and recommendations, OIG explained that PHMSA’s recent procedures on rulemaking were rarely implemented, including basic requirements such as developing a plan, identifying roles and responsibilities, and creating timetables. Despite its procedures, OIG observed that PHMSA has no established process for oversight of implementation of mandates and recommendations and no internal reporting or tracking processes, and that the Administrator is provided with only verbal briefings, none of which are documented.
To address these shortcomings, OIG recommends that PHMSA develop and implement the following five (5) measures:
- Agency-wide policy for implementing mandates and recommendations (including minimum requirements such as roles and responsibilities, plan for addressing every mandate/recommendation, assigning team member responsibilities, and retaining documentation per DOT records management policy);
- Rulemaking prioritization process that includes assessment of risk;
- Written agreements with other DOT operating administrations, including FAA, FMCSA, and FRA for coordination on rulemaking, among other things;
- Guidance to Office of Hazardous Materials Safety on implementing written agreements with other operating administrations; and
- Internal policy on dispute resolution process that includes criteria and timeframes.
In response, PHMSA agreed with the majority of the OIG findings, noting that they are consistent with the Agency’s own internal review conducted earlier this year. PHMSA has set a timetable for implementation, with several recommendations to be completed by the end of this year and all of them by the end of March 2017. Further, the Agency detailed efforts that are currently underway to improve its response to mandates and recommendations, including new administrative positions, a new Office of Planning and Analytics, revised or new procedures, and a Regulatory Steering Committee.
The reality nevertheless remains that PHMSA continues to be understaffed and underfunded with an expanding regulated oil and gas pipeline network and a growing task list, including these recent OIG recommendations as well as mandates from the 2016 Pipeline Safety Act reauthorization. As the Agency rushes to meet these demands without adequate procedures and oversight in place, the findings in this report suggest that the quality of PHMSA’s rulemakings and studies, including its recent reliance on the issuance of interim final rules instead of proposed rules, should be questioned. Similarly, PHMSA’s procedures, oversight, and coordination in other areas such as accident investigations and enforcement may also be subject to additional scrutiny.