Audit: Delays in Highway Projects Costly

Posted February 7, 2008

— Delays in highway and bridge construction cost North Carolina taxpayers at least $152 million in recent years, according to a state audit released Thursday.

The State Auditor's Office examined 390 highway and bridge projects completed across the state between April 2004 and last March and found that work on almost three-fourths of them didn't start the year they were supposed to start. Forty percent of the projects started more than a year late.

If the state Department of Transportation had kept those projects on schedule, the state could have saved $152.4 million in inflation-related cost increases, according to the audit.

Aside from increased materials costs associated with the delays, the audit found that highway contractors were being paid 7 percent more than the amounts specified in their contracts.

"We don't think that number is accurately reflected," DOT spokesman Ernie Seneca said of the savings estimate. "There's a lot more to the story."

The DOT saved more than $80 million on road projects that were completed ahead of schedule, Seneca said.

Auditors said the DOT lacks comprehensive project management, handling pre-construction issues like permitting and environmental studies separately from construction. As a result, the department can't properly analyze the performance of contractors and engineers and find ways to improve, the audit said.

“DOT is a multibillion-dollar state agency that appears to operate on hunches and intuition rather than hard data analysis,” State Auditor Les Merritt said in a statement.

Audit supervisor Bill Styres called the report one of the most complex he's ever worked on because the DOT doesn't organize data on its construction projects.

"Extracting the data from all the different places was difficult. They don't have a system in place already doing that for themselves," Styres said.

When the DOT does analyze the results of a highway project, those results are compared with the revised schedule or budget and not the original. The auditors contended that this method distorts any delays and cost overruns.

“It’s reasonable to expect that with any large construction project, there will be bumps in the road," Merritt said. "But taxpayers expect DOT to learn from their past projects, not simply blur the numbers to make every project appear more on-target."

The audit marked the second time in recent months that DOT management has come under fire.

The department hired international consulting firm McKinsey & Co. to study its operations, and a report issued last fall found a lack of accountability and low employee morale.

Transportation Secretary Lyndo Tippett said in a 10-page response to the state audit that the DOT has been working to improve its processes. But he said some factors in highway construction are outside of the department's control.

"These projects, we put our best estimates (on them), and that's what they were – estimates – because it's so early in the process. So much can happen along the line," Seneca said.

Many of the delays were linked to permitting and environmental reviews. The DOT and federal highway officials began streamlining those processes in 2001, after most of the projects examined in the audit had already completed those steps. So, auditors said it was unclear whether the streamlining effort had any impact on keeping projects on schedule.

Auditors said they plan to check with the DOT in six months on whether any changes have been made.


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  • wayne1961 Feb 8, 2008

    If NCDOT should be held accountable for getting projects out on time, the environmental agencies should be held to the same standards. They should be getting beat up in the press as much as NCDOT, but it seems they are getting a pass through all this.

    Why doesn't someone investigate their cooperation and their delay throughout the permitting process? Based on what I am reading and what I have heard there is some blame to go around.

  • j49 Feb 8, 2008

    The regular everyday employees are not coming to work drunk, but Lyndo is probably working thru a vodka induced haze everyday...
    as long as Tony Rand and the Fayetteville mafia are in charge this is what you are gonna get..they care about nothing but their own selfish interest. it's ugly , but it didn't just get this way.Thanks Mike..great legacy..8 years with your head in the sand....

  • john60 Feb 7, 2008

    ghimmy, of course the permits are handled prior to construction. State law requires the permit to be part of the construction plans, so the projects can't be let until the permits are in hand.

    NCDOT has changed the way they get approval from the agencies now; before, the plans were nearly finished before the agencies got involved. Now they are required to give their approval to the project at several stages during the preliminary design process. What is happening though is the agencies drag out the process by asking for more studies, more options, more redesigns, so instead of the projects being held up at the end of the process, they get held up at the start.

  • pete Feb 7, 2008

    after working for the d.o.t. for years , i will agree with most here that dot reform needs to take place from top to bottom and although a vast majority of the total dallars spent on a highway project is federal funs , waist is still waise .

  • ghimmy47 Feb 7, 2008

    You want to know the biggest problem with DOT? There's nothing but phone calls, an occasional fax and online monthly accounting between Raleigh and any DOT office in the state. It's not an organization run like a business. It's a collection of little kingdoms and the rule is to mind your own business.

  • ghimmy47 Feb 7, 2008

    I know as a fact permits are handled outside construction. As a matter of fact I was handed a set of plans and was well along with a project when told to stop. Yup ... I was draining WETLANDS without a permit. I thought I might go to jail. Remind you of a channel dredged in Currituck County?

  • veyor Feb 7, 2008

    A tornado needs to go through government - top to bottom. But what we're about to get is gasoline to pour on the burning ship.

  • APPMAN Feb 7, 2008

    Angel, trust me, I used to work in the Highway Building and know someone who came in drunk, and when she was sober, snored the day away sleeping. It happens. And guess what? She gets promoted for this type behavior.

  • freddie cadetti 72 Feb 7, 2008

    Hey Auditors...don't go blaming the DOT for costly delays. Take the matter of the US 70 Clayton By-Pass. It was put 10 years behind schedule because of a dag blame microscopic fish, who the environmental whaco's decided they couldn't live without! All the while, costs of future construction soared, cars and trucks sat idle in traffic all day further polluting the air, and wasting fuel while the tree huggers blocked the way to construction of this vital link. Now that the construction has begun, the Contractor is well AHEAD of schedule! Shame on you for allowing tree hugging activists to drive up the costs of construction.

  • colliedave Feb 7, 2008

    Heads need to roll, but no change will come with a dem at the head of the ship.