2026-04353NoticeWallet

Arizona Passes Final FHWA Audit for Highway Project Responsibilities

Published Date: 3/5/2026

Notice

Summary

Arizona’s Department of Transportation (ADOT) has completed its fourth and final federal audit for taking charge of environmental reviews on highway projects, a job usually done by the Federal Highway Administration (FHWA). This means ADOT is fully responsible for making sure projects follow environmental rules, speeding up approvals and saving time and money. The audit confirms ADOT is doing a great job, so the state keeps leading these important reviews without federal delays.

Analyzed Economic Effects

5 provisions identified: 1 benefits, 3 costs, 1 mixed.

Arizona Now Runs Federal NEPA Reviews

Effective April 16, 2019, the Arizona Department of Transportation (ADOT) assumed FHWA's environmental review responsibilities for Federal-aid highway projects in Arizona. The Federal Highway Administration (FHWA) says this state assumption gives ADOT sole responsibility and liability for NEPA reviews and can speed approvals and save time and money for projects.

Dashboard Reporting Must Be Corrected

FHWA identified a non-compliance observation that ADOT did not include all Federal permits, authorizations, active projects, and published milestone dates in the Federal Infrastructure Permitting Dashboard as required by MOU Part 8.5.1 and DOT Dashboard reporting standards. ADOT is required to take corrective action to identify anticipated Federal permits and input target and actual milestone dates for those permits and authorizations.

Environmental Commitments Not Fully Tracked

FHWA found that ADOT lacks a consolidated process manual or report documenting tracking and implementation of all environmental commitments required under 23 CFR 771.109(b)(2). ADOT must take corrective actions to address gaps in documentation, implementation, and tracking of mitigation commitments across ADOT divisions, Local Public Agencies, and contractors.

FHWA Audit Finds ADOT Mostly Compliant

FHWA conducted Audit #4 of ADOT from March 27 to March 31, 2023 and published the final audit report March 5, 2026. FHWA found ADOT carried out assumed responsibilities consistent with the MOU but identified non-compliance observations that ADOT must correct, and FHWA will continue to monitor ADOT under 23 U.S.C. 327(h).

QA/QC, Training, and Performance Gaps Identified

FHWA observed that ADOT's quality assurance/quality control (QA/QC) procedures focus on file completeness rather than assessing decision accuracy, many ADOT staff have not taken required training, and performance measures do not evaluate program quality as required by the MOU. FHWA recommends ADOT update QA/QC, training, and performance metrics and document improvements during the MOU renewal process.

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Key Dates

Published Date
3/5/2026

Department and Agencies

Department
Independent Agency
Agency
Transportation Department
Federal Highway Administration
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