Audit Finds Hundreds of Millions Unspent at VDOT

September 23, 2010

An inattentive Virginia transportation bureaucracy left nearly $500 million unspent last year as interstate rest stops were shuttered and maintenance projects deferred by emergency budget cuts, a private audit to be released Thursday shows.

The four-month review of the Virginia Department of Transportation's finances shows that the recouped cash combined with steps to redirect other state funds will add $614 million to backlogged road maintenance and construction projects through June 2011.

And by 2016, the newfound cash, savings and efficiencies available for the state's six-year road building and maintenance master plan will total nearly $1.5 billion, Transportation Secretary Sean Connaughton told The Associated Press.

Gov. Bob McDonnell, who ordered the audit in April, planned to release the findings and remedial steps the administration will take at a Thursday afternoon news conference. The Republican unsuccessfully called for a private VDOT audit two years ago, while still attorney general, and pledged one while campaigning for governor in 2009.

The findings depict a VDOT central office where "burdensome internal processes and financial controls" allowed millions of dollars in cash to languish, sometimes for years, after projects it was intended to fund became inactive.

Auditors did not find any fraud or criminal misconduct relating to agency operations.

"The process is broken," Connaughton said. "Even though we have modern technology and a lot of modern practices employed in the actual construction operations, the processes that support those are still in the paper and memo stages. They've never gone back and looked at the processes they have employed for a very long time."

The Richmond-based accounting firm of Cherry Bakaert & Holland found that dwindling state revenues during a sharp recession made VDOT extremely conservative in committing money to projects starting in 2006.

The audit shows the trend worsened over four years when the General Assembly twice rejected then-Gov. Tim Kaine's appeals to levy new fees and taxes for a growing backlog of highway construction needs, particularly in Virginia's congested Hampton Roads region and its Washington, D.C., suburbs.

In 2009, with Kaine's administration decrying deep fiscal woes, he ordered 19 of Virginia's 42 rest areas closed at a savings of $9 million annually. Other measures included sharply reduced mowing on highway rights of way, reduced freeway motorists' aid patrols and ending the $21,000 annual state stipend for the historic Hatton Ferry on the James River, the last known hand-poled ferry in the United States.

The tight finances led to layoffs at VDOT, and the Commonwealth Transportation Board last year made cuts to its six-year master road projects program by about $4.6 billion.

But in fiscal year 2010, VDOT left $488 million in maintenance allocations unspent and, by this past June 30, the unspent balance had grown to $529 million, the audit found.

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