Audit: DOT not following spending guidelines, lucky to be within budget

Posted September 14, 2021 1:02 p.m. EDT
Updated September 14, 2021 1:15 p.m. EDT

— The state Department of Transportation stayed within budget for the first half of the 2020-21 fiscal year "largely due to chance" because agency officials aren't following spending guidelines put in place last year, according to a state audit released Tuesday.

The audit again presses DOT to establish annual spending plans based on specific road construction and maintenance projects and to have managers monitor spending and enforce the set limits.

State Auditor Beth Wood put DOT on notice last year that better budgeting was needed after a cash crunch at the agency in 2019 forced some projects to be put on hold and hundreds of temporary workers and contractors to be laid off. Lawmakers had to step in with a bailout to keep operations running.

But DOT apparently has continued basing its forecasts on spending levels from previous years, according to the new audit. Although the agency was still within budget after last December, auditors said there's still a risk for overruns because of a lack of a focused spending plan.

The agency was 18 percent under budget for engineering work on new projects and 24 percent under on road maintenance for the June-to-December period.

"The significant variance highlights how the department’s planned spending was not based on actual planned projects for the year," the audit states. "Since the department’s planned spending was not based on actual planned maintenance projects, it will be difficult for management to ensure funds are available to complete all appropriate maintenance projects during the year."

Budgeting issues also make it difficult to determine whether deviations in spending are a result of economic conditions, changes in material costs, fraud or some other reason, auditors added.

Secretary of Transportation Eric Boyette agreed with many of the audit's findings and said DOT is working to adopt statistical modeling tools to better forecast spending. He noted modeling is easier for new projects than for maintenance, however.

"We are ... committed to making continued improvements to our process and how we do business. NCDOT’s finances have stabilized, and we continue to track below our spend plan," spokeswoman Carly Olexik said in a statement.

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