Note 1. Significant Accounting Policies:

A. Basis of Presentation

The Departmental consolidated financial statement has been prepared to report the financial position and results from operations of the Department of Transportation (DOT), as required by the Chief Financial Officers Act of 1990 (CFO Act), as amended by the Federal Financial Management Act of 1994 (FFMA), Title IV of the Government Management Reform Act of 1994 (GMRA). The statement has been prepared from the books and records of DOT in accordance with Office of Management and Budget (OMB) requirements for form and content for entity financial statements and DOT’s accounting policies and procedures. OMB Bulletin

No. 01-09, “Form and Content of Agency Financial Statements,” has been used to prepare the Balance Sheet, Statement of Net Cost, Statement of Changes in Net Position, Statement of Budgetary Resources, and Statement of Financing. They are different from the financial reports prepared pursuant to OMB directives that are used to monitor and control the use of budgetary resources. All financial statements, with the exception of the Statement of Budgetary Resources, are presented on a consolidated basis (material intra-agency transactions and balances have been eliminated). The Statement of Budgetary Resources is presented on a combined basis.

The Balance Sheet presents agency assets and liabilities, and the difference between the two, which is the agency net position. Agency assets include both entity assets (those which are available for use by the agency) and non-entity assets (those which are managed by the agency but not available for use in its operations). Agency liabilities include both those covered by budgetary resources (funded) and those not covered by budgetary resources (unfunded).

The Statement of Net Cost presents the gross costs of programs less earned revenue to arrive at the net cost of operations for both programs and for the agency as a whole.

The Statement of Changes in Net Position reports beginning balances, budgetary and other financing sources, and net cost of operations, to arrive at ending balances.

The Statement of Budgetary Resources provides information about how budgetary resources were made available as well as their status at the end of the period. Recognition and measurement of budgetary information reported on this statement is based on budget terminology, definitions, and guidance in OMB Circular No. A-11, “Preparation, Submission, and Execution of the Budget,” dated June 2002.

The Statement of Financing is intended to be a bridge between an entity’s budgetary and financial (i.e., proprietary) accounting. The Statement of Financing illustrates the relationship between net obligations derived from an entity’s budgetary accounts and net cost of operations derived from an entity’s proprietary accounts by identifying and explaining key differences between the two numbers. Since DOT custodial activity is incidental to Departmental operations and not material, a Statement of Custodial Activity was not prepared. However, sources and dispositions of collections have been disclosed in Note 21 to the financial statements.

The Department is required to be in substantial compliance with all applicable accounting principles and standards established, issued, and implemented by the Federal Accounting Standards Advisory Board (FASAB), which is recognized by the American Institute of Certified Public Accountants (AICPA) as the entity to establish Generally Accepted Accounting Principles (GAAP) for the Federal Government. The Federal Financial Management Improvement Act (FFMIA) of 1996 requires the Department to comply substantially with (1) Federal financial management systems requirements, (2) applicable Federal accounting standards, and (3) the U.S. Government Standard General Ledger at the transaction level.

B. Reporting Entity

DOT serves as the focal point in the Federal Government for the Coordinated National Transportation Policy. It is responsible for ensuring the safety of all forms of transportation; protecting the interests of consumers; international transportation agreements; conducting planning and research for the future; and helping cities and States meet their local transportation needs through financial and technical assistance.

The Department is comprised of the Office of the Secretary and the DOT Operating Administrations, each having its own management and organizational structure and collectively providing the necessary services and oversight to ensure the best transportation system possible. The Departmental consolidated financial statement represents the financial data, including various trust funds, revolving funds, appropriations and special funds of the following organizations:

Office of The Secretary (OST)

Federal Aviation Administration (FAA)

United States Coast Guard (USCG)

Federal Highway Administration (FHWA)

Federal Motor Carrier Safety Administration (FMCSA)

Federal Railroad Administration (FRA)

National Highway Traffic Safety Administration (NHTSA)

Maritime Administration (MARAD)

Federal Transit Administration (FTA)

Bureau of Transportation Statistics (BTS)

Surface Transportation Board (STB)

Office of Inspector General (OIG)

Research and Special Programs Administration (RSPA)

Transportation Security Administration (TSA)

Effective December 29, 2002, the Secretary of Transportation realigned service functions, formerly performed by TASC, by placing these service providers in OST, the organization responsible for service policies. In addition, legislation was signed on November 25, 2002, to create a new Department of Homeland Security (DHS) as of January 24, 2003. The DHS Reorganization Plan dated November 25, 2002, indicates that both the USCG and TSA will be transferred from DOT to DHS on March 1, 2003.

The Saint Lawrence Seaway Development Corporation (SLSDC) is also an entity of DOT. However, since it is subject to separate reporting under the Government Corporation Control Act and the dollar value of its activities is not material to Departmental totals, SLSDC’s financial data have not been consolidated in the DOT financial statements. However, condensed information about SLSDC’s financial position is included in Note 23.

C. Budgets and Budgetary Accounting

DOT follows standard Federal budgetary accounting policies and practices in accordance with OMB Circular No. A-11, “Preparation, Submission, and Execution of the Budget,” dated June 2002. Budgetary accounting facilitates compliance with legal constraints and controls over the use of Federal funds. Each year, Congress provides each Operating Administration within DOT appropriations to incur obligations in support of agency programs. For FY 2002, the Department was accountable for trust fund appropriations, general fund appropriations, revolving funds and borrowing authority. DOT recognizes budgetary resources as assets when cash (funds held by Treasury) is made available through warrants and trust fund transfers.

D. Basis of Accounting

Transactions are generally recorded on an accrual accounting basis and a budgetary basis. Under the accrual method, revenues are recognized when earned, and expenses are recognized when a liability is incurred, without regard to receipt or payment of cash. Budgetary accounting facilitates compliance with legal constraints and controls over the use of Federal funds.

E. Revenues and Other Financing Sources

DOT receives the majority of the funding needed to support all of its programs through appropriations. The Highway Trust Fund, Airport and Airway Trust Fund, Aquatic Resources Trust Fund, and the Treasury General Fund fund some of these appropriations. DOT receives annual, multi-year and no-year appropriations that may be used, within statutory limits, for operating and capital expenditures. Additional amounts are obtained from offsetting collections and user fees (e.g., landing and registry fees) and through reimbursable agreements for services performed for domestic and foreign governmental entities. Additional revenue is earned from gifts from donors, sales of goods and services to other agencies and the public, the collection of fees and fines, interest/dividends on invested funds, loans and cash disbursements to banks. Interest income received is recognized as revenue on the accrual basis. Appropriations are recognized as revenues as the related program or administrative expenses are incurred.

F. Funds with the U.S. Treasury and Cash

DOT does not generally maintain cash in commercial bank accounts. Cash receipts and disbursements are processed by the U.S. Treasury. The funds with the U.S. Treasury are appropriated, revolving, and trust funds that are available to pay current liabilities and finance authorized purchases. DOT has substantially reduced the number of petty cash (imprest) funds outside the U.S. Treasury to reduce the amount of cash paid outside of Treasury. This reduces the amount of interest that must be paid to borrow funds. Lockboxes have been established with financial institutions to collect payments, and these funds are transferred directly to Treasury on a daily (business day) basis. DOT does not maintain any balances of foreign currencies.

G. Receivables

Accounts receivable consist of amounts owed to the Department by other Federal agencies and the public. Federal accounts receivable are generally the result of the provision of goods and services to other Federal agencies and, with the exception of occasional billing disputes, are considered to be fully collectible. Public accounts receivable are generally the result of the provision of goods and services or the levy of fines and penalties from the Department’s regulatory activities. Amounts due from the public are presented net of an allowance for loss on uncollectible accounts, which is based on historical collection experience and/or an analysis of the individual receivables.

Loans are accounted for as receivables after funds have been disbursed. For loans obligated prior to October 1, 1991, loan principal, interest, and penalties receivable are reduced by an allowance for estimated uncollectible amounts. The allowance is estimated based on past experience, present market conditions, and an analysis of outstanding balances. Loans obligated after September 30, 1991, are reduced by an allowance equal to the present value of the subsidy costs (due to the interest rate differential between the loans and Treasury borrowing, the estimated delinquencies and defaults net of recoveries, the offset from fees, and other estimated cash flows) associated with these loans.

H. Inventory and Operating Materials and Supplies

Inventory primarily consists of supplies that are for sale or used in the production of goods for sale. Operating materials and supplies primarily consist of unissued supplies that will be consumed in future operations. Valuation methods for supplies on hand at yearend include historical cost, last acquisition price, standard price/specific identification, standard repair cost, weighted average, and moving weighted average. Expenditures or expenses are recorded when the materials and supplies are consumed or sold. Adjustments for the proper valuation of reparable, excess, obsolete, and unserviceable items are made to appropriate allowance accounts. Operating materials and supplies at Coast Guard small cutters and shore units are accounted for in the property system but not inventoried for financial statement purposes, since the amount is not material.

I. Investments in U.S. Government Securities

Investments that consist of U.S. Government Securities are reported at cost or amortized cost net of premiums or discounts. Premiums or discounts are amortized into interest income over the term of the investment using the interest or straight-line method. The Department’s intent is to hold investments to maturity, unless they are needed to cover losses on loan guarantees, finance programs, or otherwise sustain the operation of the organization. Investments, redemptions, and reinvestments are controlled and processed by the Department of the Treasury.

J. Property and Equipment

DOT agencies have varying methods of determining the value of property and equipment and how it is depreciated. DOT currently has a capitalization threshold of $200,000 for structures and facilities and for internal use software, and $25,000 for other property, plant and equipment. Capitalization at lesser amounts is permitted. Construction in progress is valued at direct (actual) costs plus applied overhead and other indirect costs as accumulated by the regional project material system. The system accumulates costs by project number assigned to the equipment or facility being constructed. The straight line method is generally used to depreciate capitalized assets.

FASAB standards require DOT stewardship assets to be omitted from the Balance Sheet. Information on DOT stewardship assets, as well as stewardship investments, is presented in the Required Supplementary Stewardship Reporting section of this statement.

K. Prepaid and Deferred Charges

Payments in advance of the receipt of goods and services are recorded as prepaid charges at the time of prepayment and recognized as expenses when the related goods and services are received.

L. Liabilities

Liabilities represent amounts expected to be paid as the result of a transaction or event that has already occurred. Liabilities covered by budgetary resources are liabilities incurred which are covered by realized budgetary resources as of the balance sheet data. Available budgetary resources include new budget authority, spending authority from offsetting collections, recoveries of unexpired budget authority through downward adjustments of prior year obligations, unobligated balances of budgetary resources at the beginning of the year or net transfers of prior year balances during the year, and permanent indefinite appropriations or borrowing authority. Unfunded liabilities are not considered to be covered by such budgetary resources. Examples of unfunded liabilities are actuarial liabilities for future Federal Employees’ Compensation Act payments and actuarial estimates of the present value of USCG pension and medical expenses. The Government, acting in its sovereign capacity, can abrogate liabilities arising from other than contracts.

M. Borrowings Payable to Treasury

FAA borrowing involves loans from the Treasury to fund expenses in the Aircraft Purchase Loan Guarantee Program. Treasury renews the debt obligation until FAA receives an appropriation to liquidate the principal and interest.

FRA has direct loans from Treasury and guaranteed loans made by the Federal Financing Bank (FFB) to railroads and guaranteed by FRA under provisions of the Railroad Rehabilitation and Improvement Program, the Amtrak Corridor Improvement Program and the Alameda Corridor Improvement Program. FRA records these loans as though they were direct loans.

OST borrows from the Treasury to finance loans to disadvantaged transportation-related businesses using revolving lines of credit. These OST loans are made through the Short Term Lending Program that provides assistance to disadvantaged, minority and women-owned businesses and is administered by the Office of Small and Disadvantaged Business Utilization.

N. Interest Payable to Treasury

FAA owes interest to Treasury based on its debt to Treasury as a result of borrowing for the Aircraft Purchase Loan Guarantee Program. Through FRA, the Amtrak Corridor Improvement Program and Railroad Rehabilitation Programs are required to make periodic interest payments to Treasury based on their debt to the U.S. Government.

O. Contingencies

The criteria for recognizing contingencies for claims are: (1) a past event or exchange transaction has occurred as of the date of the statements; (2) a future outflow or other sacrifice of resources is probable; and (3) the future outflow or sacrifice of resources is measurable (reasonably estimated). DOT recognizes material contingent liabilities in the form of claims, legal action, administrative proceedings and environmental suits that have been brought to the attention of legal counsel, some of which will be paid by the Treasury Judgment Fund. It is the opinion of management and legal counsel that the ultimate resolution of these proceedings, actions and claims, will not materially affect the financial position or results of operations.

P. Annual, Sick, and Other Leave

Annual leave is accrued as it is earned, and the accrual is reduced as leave is taken. Accruals for other leave (e.g., credit hours and compensatory leave) are also recorded in the financial statement. Under the Transportation Administrative Service Center, the liability for accrued annual leave is a funded item. To the extent current or prior year appropriations are not available to fund annual leave earned but not taken, funding will be obtained from future financing sources. Sick leave and other types of non-vested leave are expended as taken.

Air Traffic Controllers covered under the Federal Employees Retirement System (FERS) are eligible, upon retirement, for a sick leave buy back option. Under this option, an employee who attains the required number of years of service for retirement shall receive a lump sum payment for forty percent of the value of his or her accumulated sick leave as of the effective date of retirement.

Q. Retirement Plan

For DOT employees who participate in the Civil Service Retirement System (CSRS), DOT contributes a matching contribution equal to 7 percent of pay. On January 1, 1987, FERS went into effect pursuant to Public Law (P.L.) 99-335. Most employees hired after December 31, 1983, are automatically covered by FERS and Social Security. Employees hired prior to January 1, 1984, could elect to either join FERS and Social Security or remain in CSRS. A primary feature of FERS is that it offers a savings plan to which DOT automatically contributes 1 percent of pay and matches any employee contribution up to an additional 4 percent of pay. For most employees hired since December 31, 1983, DOT also contributes the employer’s matching share for Social Security.

Employing agencies are required to recognize pensions and other post retirement benefits during the employees’ active years of service. Reporting the assets and liabilities associated with such benefits is the responsibility of the administering agency, the Office of Personnel Management. Therefore, DOT does not report CSRS or FERS assets, accumulated plan benefits, or unfunded liabilities, if any, applicable to employees.

The USCG Military Retirement System is a defined benefit plan which covers all active duty and reserve members of the USCG. This plan was established under authority of the United States Code, Titles 10 and 14. This system is funded on a “pay-as-you-go” basis.

R. Comparative Data

Comparative data for the prior year has been presented for the Balance Sheet, the Statement of Net Cost, and their related notes.

HERITAGE ASSETS SUMMARY

ANNUAL STEWARDSHIP INFORMATION, SEPTEMBER 30, 2002

NUMBER OF PHYSICAL UNITS

Units as of Units as of

Heritage Assets: 09/30/01 Additions Withdrawals 09/30/02

Personal Property:

Collections

Artifacts 17,715 1,293 132 18,876

Display Models 473 1 1 473

Museum 450 1 0 451

Other Collections 98 0 0 98

Total Collections 18,736 1,295 133 19,898

Other Non-Collection Types

Sunken Vessels 59 0 0 59

Sunken Aircraft 1 0 0 1

Total Non-Collection Types 60 0 0 60

Total Personal Property

Heritage Assets 18,796 1,295 133 19,958

Units as of Units as of

Heritage Assets: 09/30/01 Additions Withdrawals 09/30/02

Real Property:

Buildings and Structures 420 545 61 904

Memorials 2 0 0 2

Recreational Areas 2 0 0 2

Other Historical Areas 24 0 10 14

Total Real Property

Heritage Assets 448 545 71 922

Artifacts are those of the U.S. Coast Guard and Maritime Administration. Maritime Administration artifacts are generally on loan to single purpose memorialization and remembrance groups, such as AMVets and preservation societies. Coast Guard artifacts can be divided into four general areas: ship’s equipment, lighthouse and other aids-to-navigation items, military uniforms, and display models. The addition of artifacts is the result of gifts to the Coast Guard.

Ship’s equipment is generally acquired when the ship is decommissioned and includes small items such as sextants, ship’s clocks, wall plaques, steering wheels, bells, binnacles, engine order telegraphs, and ship’s name boards. Conditions vary, but much is worn out from decades of use.

Aids-to-navigation items include fog and buoy bells, lanterns, lamp changing apparatus, and lighthouse lenses. Buoy equipment tends to be worn out and is usually acquired only when new technology makes it obsolete. Classical lighthouse lenses vary greatly in condition. The condition is normally dependent on how long the item has been out of service and not maintained. Most of the good lenses go to local museums or Coast Guard bases as display items.

Military uniforms are generally donated by retired Coast Guard members, and include clothing as well as insignia and accoutrements. Most clothing is in fair to good condition, particularly full dress items which saw little daily wear.

Display Models are mostly of Coast Guard vessels and aircraft. These are often builders’ models. In addition to being accurate and valuable, they are generally in very good condition. Builders’ models are acquired by the Coast Guard as part of the contracts with the ship or aircraft builders. The withdrawal of display models was due to wear and tear.

Museum and Other Collections are owned by the Maritime Administration. They are merchant marine artifacts, composed of ships’ operating equipment, obtained from obsolete ships. They are inoperative and in need of preservation and restoration. Museum items are on loan to organizations whose purpose is historic preservation, education, and remembrance, open to the public during regularly scheduled hours. Other collections are on loan to public and private entities, the display of which is incidental to maritime affairs, such as county and state buildings, port authorities, pilots associations, public and college libraries, and other organizations.

Non-Collection Type heritage assets are sunken vessels and aircraft owned by the Coast Guard under the property clause of the U.S. Constitution, Articles 95 and 96 of the International Law of the Sea Convention, and the sovereign immunity provisions of Admiralty law. Despite the passage of time or the physical condition of these assets, they remain Government-owned until the Congress of the United States formally declares them abandoned. The USCG desires to retain custody of these assets to safeguard the remains of crew members who were lost at sea, to prevent the unauthorized handling of explosives or ordnance which may be aboard, and to preserve culturally valuable relics of the USCG’s long and rich tradition of service to our nation in harm’s way.

Buildings and Structures include Union Station in Washington, D.C. Union Station is an elegant and unique turn-of-the-century rail station in which one finds a wide variety of elaborate, artistic workmanship characteristic of the period. Union Station is listed on the National Register of Historic Places. The station consists of the renovated original building and a parking garage which was added by the U.S. Park Service. The Federal Railroad Administration received title to Union Station through appropriated funds and assumption of a mortgage. Mortgage payments are made by Union Station Venture Limited which manages the property. Union Station Redevelopment Corporation, a non‑profit group instrumental in the renovation of the station, sublets the operation of the station to Union Station Venture Limited.

As a matter of public law and policy, Coast Guard does not acquire or retain heritage buildings and structures without an operational use. Most real property, even if designated as historical, is acquired for operational use and is transferred to other government agencies or public entities when no longer required for operations. In the majority of cases, therefore, any historical property owned by Coast Guard is multi-use heritage. All multi-use heritage assets are reflected on the balance sheet.

Of the Coast Guard buildings and structures designated as heritage, including memorials, recreational areas and other historical areas, over two-thirds are multi-use heritage. The remaining are historical lighthouses, which are no longer in use and awaiting disposal; their related assets; and a gravesite.

During the past year, Coast Guard performed a comprehensive review of buildings and structures to validate historical classification. In addition to reviewing assets currently classified as heritage and multi-use heritage, civil engineering facilities were also tasked with evaluating other assets, which due to year of construction and/or co-location with a historical lighthouse, could also be reclassified as heritage. This validation resulted in an increase of heritage assets but had no effect on the balance sheet.

Financial information for multi-use heritage assets is presented in the principal statements and notes.

NATIONAL DEFENSE PROPERTY, PLANT, AND EQUIPMENT SUMMARY

NUMBER OF PHYSICAL UNITS AND ACQUISITION COSTS

SEPTEMBER 30, 2002

(Dollars in Thousands)

National Defense Reserve Original Capital Acquisition MARAD Acquisition

Fleet Vessels Units Cost __ Improvements Total Cost

Ready Reserve Fleet Vessels 76 $ 859,163 $ 591,078 $ 1,450,241 $ 1,101,458

Retention Vessels 65 244,757 43,022 287,779 232,554

Scrap Ships 133 2,833,730 280,313 3,114,043 571,427

Total 274 $ 3,937,650 $ 914,413 $ 4,852,063 $ 1,905,439

All DOT National Defense Property, Plant, and Equipment (PP&E) is in the Maritime Administration (MARAD). The data continue to be refined. Capital improvements reflect all costs on record, some dating to the late 1970’s.

Original cost is the original cost of the assets to MARAD or the cost to the Federal entity that originally purchased the assets and subsequently transferred the assets to MARAD. The MARAD acquisition cost is the value of the assets transferred and/or acquired by MARAD as if they were recorded under FASAB No. 6, Accounting for Property, Plant and Equipment (PP&E). FASAB No. 6 requires the cost of general PP&E transferred from other Federal entities to be the cost recorded by the transferring entity for the PP&E, net of accumulated depreciation or amortization. If the receiving entity cannot ascertain those amounts, the cost of the PP&E shall be its fair value at the time transferred. In this case, fair value is equal to the net book value of the assets as if depreciation took place since the date of the original acquisition.

NONFEDERAL PHYSICAL PROPERTY

ANNUAL STEWARDSHIP INFORMATION, SEPTEMBER 30, 2002

TRANSPORTATION INVESTMENTS

(Dollars in Thousands)

Surface Transportation: FY 1998 FY 1999 FY 2000 FY 2001 FY 2002

Federal Highway Administration

Federal Aid Highways (HTF) $19,967,116 $ 22,741,808 $ 24,920,221 $ 25,876,082 $ 29,377,231

Other Highway Trust Fund Programs 119,276 124,705 42,269 85,807 211,883

General Fund Programs 173,230 90,587 151,011 44,159 31,616

Appalachian Development System 187,173 137,265 157,219 23,801 146,306

Federal Motor Carrier 0 0 91,822 125,261 149,091

Federal Transit Administration

Discretionary Grants $ 1,872,945 $ 1,523,668 $ 1,199,725 $ 721,774 $ 495,322

Formula Grants 1,729,350 2,174,323 2,791,855 3,978,247 4,283,634

Capital Investment Grants 0 248,844 1,071,361 1,902,425 2,371,521

Washington Metro 183,626 161,834 108,518 115,856 89,227

Interstate Transfer Grants 2,693 10,602 836 2,716 8,155

Surface Transportation Nonfederal

Physical Property Investments $24,235,409 $ 27,213,636 $ 30,534,837 $ 32,876,128 $ 37,163,986

Air Transportation: FY 1998 FY 1999 FY 2000 FY 2001 FY 2002

Federal Aviation Administration

Airport Improvement Program $ 1,436,541 $ 1,612,867 $ 1,375,293 $ 2,178,576 $ 2,933,542

Air Transportation Nonfederal

Physical Property Investments $ 1,436,541 $ 1,612,867 $ 1,375,293 $ 2,178,576 $ 2,933,542

Total Nonfederal Physical Property

Investments $25,671,950 $ 28,826,503 $ 31,910,130 $ 35,054,704 $ 40,097,528

The Federal Highway Administration reimburses States for construction costs on projects related to the Federal Highway System of roads. The main programs in which the States participate are the National Highway System, Interstate Systems, Surface Transportation Program, and Congestion Mitigation/Air Quality Improvement. The States’ contribution is ten percent for the Interstate System and twenty percent for most other programs.

The Federal Transit Administration provides grants to State and local transit authorities and agencies.

Discretionary grants provide capital assistance to finance acquisition, construction, reconstruction, and improvement of facilities and equipment. Discretionary grants fund the categories of new starts, fixed guideway modernization, and bus and bus‑related activities.

Formula grants provide capital assistance to urban and nonurban areas and may be used for a wide variety of mass transit purposes, including planning, construction of facilities, and purchases of buses and railcars. Funding also includes providing transportation to meet the special needs of elderly individuals and individuals with disabilities.

Capital investment grants were created in the Transportation Equity Act for the 21^st Century (TEA-21) to replace Discretionary grants. They continue to provide capital grants for new fixed guideway systems and extensions to existing fixed guideway systems (new starts), fixed guideway modernization, and bus and bus‑related facilities.

Washington Metro provides funding to support the construction of the Washington Metrorail System.

Interstate Transfer Grants provided Federal funding from FY 1976 through FY 1995 to allow States and localities to fund transit capital projects substituted for previously withdrawn segments of the Interstate Highway System.

The Federal Aviation Administration (FAA) makes project grants for airport planning and development under the Airport Improvement Program (AIP) to maintain a safe and efficient nationwide system of public-use airports that meet both present and future needs of civil aeronautics. FAA works to improve the infrastructure of the nation’s airports, in cooperation with airport authorities, local and State governments, and metropolitan planning authorities.

HUMAN CAPITAL INVESTMENT EXPENSES

ANNUAL STEWARDSHIP INFORMATION, SEPTEMBER 30, 2002

(Dollars in Thousands)

Surface Transportation: FY 1998 FY 1999 FY 2000 FY 2001 FY 2002

Federal Highway Administration

National Highway Institute Training $ 2,716 $ 2,540 $ 7,304 $ 3,202 $ 9,146

Federal Transit Administration

National Transit Institute Training 3,116 3,600[1] 3,790 3,550[2] 3,9462

Research and Special Programs Administration

Hazardous Materials (MAZMAT) Training 3,849 5,014 7,778 7,771 7,763

Surface Transportation Human

Capital Investments $ 9,681 $ 11,154 $ 18,872 $ 14,523 $ 20,855

Maritime Transportation: FY 1998 FY 1999 FY 2000 FY 2001 FY 2002

Maritime Administration

State Maritime Academies Training[3] $ 7,900 $ 7,550 $ 7,773 $ 8,257 $ 8,257

Additional Maritime Training 453 463 463 463 463

Maritime Transportation Human

Capital Investments $ 8,353 $ 8,013 $ 8,236 $ 8,720 $ 8,720

Total Human Capital Investments $ 18,034 $ 19,167 $ 27,108 $ 23,243 $ 29,575

The National Highway Institute develops and conducts various training courses for all aspects of Federal Highway Administration. Students are typically from the State and local police, State highway departments, public safety and motor vehicle employees, and U.S. citizens and foreign nationals engaged in highway work of interest to the U.S. Types of courses given and developed are modern developments, technique, management, planning, environmental factors, engineering, safety, construction, and maintenance.

The National Transit Institute of the Federal Transit Administration develops and offers training courses to improve transit planning and operations. Technology courses cover such topics as alternative fuels, turnkey project delivery systems, communications-based train controls, and integration of advanced technologies.

The Research and Special Programs Administration administers Hazardous Material Training (Hazmat). The purpose of Hazmat Training is to train State and local emergency personnel on the handling of hazardous materials in the event of a hazardous material spill or storage problem.