GAO: Transportation Department can’t withhold electric vehicle infrastructure program funds

The Government Accountability Office ruled against the Transportation Department and its component agency Thursday over a February memorandum that aimed to halt spending on a Biden-era grant program to develop electric vehicle charging infrastructure.

The watchdog determined that the Feb. 6 memo from the Federal Highway Administration, which canceled guidance for the National Electric Vehicle Infrastructure Formula Program and suspended grant plans submitted by the states and Puerto Rico, violated the Impoundment Control Act by withholding funding appropriated in the 2021 Infrastructure Investment and Jobs Act. 

“Under the ICA, a section referred to as the fourth disclaimer prohibits withholding from obligation or expenditure funds appropriated for programs where there is a mandate to spend therefor,” the decision said. “We conclude that the NEVI Formula Program is covered by the fourth disclaimer. Therefore, DOT is not authorized to withhold these funds from expenditure and DOT must continue to carry out the statutory requirements of the program.”

The NEVI Formula Program set aside $5 billion in appropriations between fiscal 2022 and 2026, with 10% to be distributed as grants to states and localities to help them deploy EV charging infrastructure. 

The law required that states submit plans to the Transportation secretary outlining how they intended to use the funds each fiscal year, with the secretary allowed to withhold funding if no plan is submitted by the deadline or if the state has not taken action on its plan. 

However, per the law, the secretary must provide states notice of the decision and provide them 90 days to take action on any concerns raised. 

But as part of a Jan. 20 executive order, the Trump administration directed agencies to immediately pause appropriations tied to the IIJA. That was followed by the Feb. 6 FHWA memo that rescinded NEVI Formula Program guidance and suspended both program funding and approval for state EV infrastructure deployment plans until new guidance was issued. 

But the GAO said that the Transportation Department violated the law in two parts. First, the watchdog said that DOT violated the recording statute because of the department’s requirement to distribute the funds according to the statutory formula laid out in the IIJA, and because DOT did not correctly record the funds as an obligation when they came available. 

Second, GAO said that the department violated the ICA by not having the president transmit a special message to Congress that he intended to either temporarily withhold the funds under a deferral or sought to terminate the program under a recission. Under the ICA’s fourth disclaimer, GAO said that president may not withhold funding required by law to be spent. 

DOT officials argued that there was a “temporary delay” in obligating the NEVI Formula Program because they needed to issue new guidance and receive new deployment plans from the states, but GAO disagreed.

“The delay did not result from DOT’s attempt to comply with the statutory requirements for the program, but rather from DOT imposing requirements on the program that are not contemplated by IIJA," the decision said. “All states submitted their plans for FYs 2022 through 2025 in satisfaction of their statutory requirement. Nonetheless, on February 6, 2025, DOT asserted that it was disapproving all state plans that had previously been submitted, which resulted in much of the NEVI Formula Program funds becoming unavailable for expenditure until FHWA issues new guidance and states develop and submit new plans.”

As a result, GAO officials said the DOT is not authorized to withhold the NEVI Formula Program funds and must either notify Congress of a proposed recission or offer new legislation to change the IIJA.