Thursday, September 23, 2010

VDOT audit finds half a billion in the couch cushions

Governor McDonnell announces results of VDOT audit.

The audit identified a lack of budget accountability from 2006-2009 within the maintenance program as the primary reason funds were not being spent in a timely fashion.

During fiscal year 2009, VDOT had available $1.58 billion for maintenance. However, it spent only $1.23 billion, resulting in it carrying over $348 million. During fiscal year 2010, VDOT had available $1.66 billion for maintenance. However, it spent only $1.13 billion, resulting in it carrying over $529 million. This compares with $8 million carried over at the end of fiscal year 2005.

The report cites several major contributing factors including a lack of focus and a hesitation to use funds during the economic downturn. The result was $877 million unspent.

Lieutenant Governor Bill Bolling added, “Many of us have been calling for an independent, external audit of VDOT for several years. We wanted to make certain that VDOT was spending the taxpayers money as efficiently as possible. While we felt that significant operational inefficiencies existed with the Department, this audit has revealed that the problems were even more serious than we thought.

The audit identified VDOT’s one-size-fits-all approach to project development and execution as a reason many projects are slow to develop. Major interchange projects are managed the same as small turn-lane or repaving projects. It cited burdensome fiscal controls that slowed project development, particularly the practice of developing every maintenance project as though it would be eligible for federal funding. This practice required all projects to undergo the rigorous environmental, funding and design reviews required of federally funded projects, even if they ultimately ended up being paid for by less restricted state funds.

The report suggests VDOT develop a tiered process to manage projects according to their complexity and risk, with corresponding levels of controls.

The report also identified procurement processes that take too long. Recent reviews by VDOT’s own inspector general were referenced, stating that it could take over one year to hire an engineer to design a project. The audit recommends re-evaluating the processes and procedures that slow procurement and focus only on what is legally required.

“This review confirms many of the financial management concerns we have heard from industry experts and elected officials,” said Sean T. Connaughton, Secretary of Transportation. “It is time for us to take action to address the issues raised and reroute our transportation program to the right path for our future.”

Posted By Valerie Garner

Categories: Finance, Politics, State Politics

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