VDOT Audit Finds $1 Billion in Revenue

SPRINGFIELD, VA— The Virginia Department of Transportation audit, called for by Governor McDonnell, has resulted in over $1 billion in revenue this year and the possibility of $400 million in the future.  The findings were announced Thursday morning after the independent firm, Cherry, Bekaert & Holland, finished their performance audit.

House Republicans have called for an audit of VDOT, introducing bills years after year. Delegate Albo has been a co-patron on many of these bills (HB 185 in 2004, HB 185 in 2005, and HB 6005 in 2008, to name a few) only to have them defeated time and time again by the Senate.  Delegate Albo stated, “The previous two governors could have done the audit on their own, but did not.  So we tried to force the issue through legislation that was unfortunately defeated year after year.  But after November 2009’s election, there is a new governor, and he initiated the audit himself.  The results showed, as we expected, that there was a better way to run VDOT and a more efficient way to use taxpayers’ funds.”

The funds discovered are predominately one-time funds.  The total is broken down as follows; $500 million in unused transportation funds, over $400 million in possible future matching funds by using toll collections to match federal funds, in the future over $130 million a year in applying for federal funds on time, and an indeterminate amount by doing things more efficiently.  These changes should allow VDOT to put more money into transportation construction and maintenance.  “Transportation is one of my constituents’ most important concerns.  The purpose of the audit was to assure the tax payers of Virginia that the money we presently send to VDOT is being spent wisely,” said Delegate Albo.

The unused revenue comes from the following areas: funding, maintenance, project development, operations and VDOT’s recent downsizing.

Some of the interesting points made in the audit include the following:

1.      There has been an inability to move projects in a timely manner due to mismanagement.  The same process for project development was being used, no matter the size of the project, creating an inefficient use of resources.

2.      VDOT began a reorganization and restructuring of its agency, reducing it by more than 1,000 employees.   It is at its lowest employee level since the 1960s, making project completion more difficult.

3.      The declining economic environment also played a role. Due to the lack of funding that VDOT has experienced in the previous years, they were becoming more cautious and conservative when it came to advancing projects.

4.      VDOT was not correctly managing their projects, thus missing the deadlines for federal matching funds.  Virginia lost $163 million in 2008 and $112 million in 2009 in matching federal funds.  That averages out to $130 million per year.

5.      Many projects are funded both by the federal government and by the state government with the state having to meet the more expensive federal requirements in order to get the money.  VDOT was designing all projects to meet federal standards.  The audit suggests that VDOT determine before design which projects have to meet the higher federal standards, and then only spend the extra money on those federal projects as opposed to all projects.

6.      Using toll credits would bring in an ongoing $400 million for construction projects. (Recently the federal government changed its rules and allowed states to use funds from toll roads to be used as federal matching money.  VDOT had failed to adjust for this new policy and was not using toll funds for federal matches.)

7.      Fraud or abuse of funds was not found and only one employee had been fired as a result of the audit.

“The results of this audit are monumental.  We found over $500 million in unused transportation funds which are now available, a $400 million a year source of additional matching funds for future construction, and a $130 million a year source of funding by applying for federal matching funds on time.  On top of that, we have devised some ways to work more efficiently in the future,” said Delegate Albo.  “Have we solved transportation in Virginia with this audit?  Absolutely not.  We are currently short $510 million per year on just maintenance and construction is even worse.  You can’t fund road, rail, tunnel and bridge repair on a funding source (the gas tax), which was set in 1987 and does not increase with inflation.  However, we are now closer to solving the problem and now the tax payers know that the money they send to VDOT will be efficiently used.”

Governor McDonnell has instructed VDOT to begin funding current projects that had been put on hold or new projects not yet started as soon as possible. The construction revenue will be put back into the Six Year Improvement Plan and the maintenance will be, of course, used for maintenance.  In the future, the new practices will be put into place to more effectively build and maintain our roads and rail.

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Full VDOT Audit

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