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COLUMBIA -- A yearlong audit of the state Department of Transportation alleges the giant agency has wasted millions of dollars and violated state law and federal transportation regulations.

The Legislative Audit Council found problems with the way DOT hired and paid private consultants, including one program in which it reported that consultants were paid nearly $9 million for projects that were eliminated from the contracts.

The audit will be the focus of the several legislative committees, but its impact was unclear Tuesday. The agency's board is scheduled to meet again the week after Thanksgiving and likely will talk about the report, but commissioners said they are unsure what action, if any, will be taken. Lawmakers have said they want any spending and management problems fixed before responding next year to any DOT pleas for more money.

The report released Tuesday cited one unidentified firm that was paid $2.6 million through four contracts in what the audit described as a noncompetitive selection with "vague terms and scope of services."

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The agency, which has a roughly $1 billion annual budget, paid nearly twice as much as necessary, the audit report said, to hire temporary employees, mostly former highway agency workers, through the consultant firm.

One of them, the agency's former director of human resources, was paid $43 an hour and listed as a "senior engineer" for the firm, according to the audit. With overhead and profit, DOT paid the firm $120 an hour for her services, the audit reported.

In a 12-page response, agency officials denied many of the audit's findings. They wrote that the audit had found no significant problems with the agency's operations that encompass 99 percent of its expenditures.

"LAC's statements on the remainder are overstated and misleading and based upon incomplete information resulting in an overall unbalanced review," they wrote.

The 98-page audit report identified what it said was a host of problems in areas ranging from preconstruction contracts to the agency's audit program and its cash balances at a time when the agency couldn't afford to pave the state's secondary roads.

Auditors reported finding evidence to "support allegations that SCDOT attempted to lower its cash balances during the legislative session" and deferred billings to the federal government, costing the agency more than $1.5 million in lost interest.

Gov. Mark Sanford, who has pushed for the agency to come under the governor's control, called the audit report "disturbing."

"It's never been clearer that meaningful structural change is needed at DOT because the current lack of accountability has failed the hundreds of great employees there and it's failed taxpayers across the state," he said.

House Speaker Bobby Harrell said Tuesday he would appoint a committee to study the audit and make recommendations.

"Those are serious problems that have to be dealt with. I'm not ready to call for anyone's resignation," Harrell said. "But I think that we need to look at the report, figure out the issues that led to those problems and then require changes. If that means a replacement of leadership, that may be where we end up going."

One of those who said she will ask to be on that committee is Rep. Annette Young, a Dorchester County Republican who accused DOT officials last month of backing out of a commitment to fund $50 million in projects in her district. She said Tuesday she was "shocked" at what she read in the audit.

Two Senate committees that will review the report announced Tuesday they will begin meeting on the findings Thursday.

"It's not flattering by any means," said Senate Majority Leader Harvey Peeler, who will chair one of the Senate panels. "Andie McDowell driving a Mary Kay pink Cadillac and the entire cast of Nip Tuck couldn't make this report look pretty."

Peeler, however, said he likes DOT executive director Elizabeth Mabry and wasn't proposing she resign.

"I think she has done as good a job as she could do with what she had," he said. "I don't want her to become the sacrificial lamb. It's bigger than one person and one personality. I understand it's under her watch, but making her a scapegoat won't work."

Peeler said the report could result in reforms of the way highway commissioners are chosen. Six of the seven are selected by lawmakers, with the chairman appointed by the governor.

Peeler said he doesn't believe Sanford's proposal to make DOT a Cabinet agency will pass, but he would favor allowing the governor to appoint all board members with the advice and consent of the Senate.

Lawmakers requested the report last year following allegations of mismanagement by DOT Chairman Tee Hooper of Greenville.

Hooper also has called for Mabry to resign.

Mabry has said that won't happen and accused Hooper of attempting to destroy DOT for political purposes. She has vigorously defended the agency.

She wrote an opinion article for newspapers calling attention to what she says are the agency's accomplishments. She also held a press conference to praise her staff and critique news coverage.

Hooper said Tuesday the audit vindicated his efforts to change management at the agency.

"I've been criticized for calling attention to executive management decision making," he said. "It seems as if the audit points out some pretty significant issues."

One of the problem areas cited by the report was the payment of $253 million to private consultants to help with the agency's seven-year-long accelerated construction program.

The Greenville News reported last year that the agency chose to use consultants rather than have its 1,476-member engineering staff do the work.

The agency said then it would take 500 more workers to handle the projects in-house but did not publicly compare costs. The newspaper estimated the cost of the additional workers, based on average staff salary, would have totaled $85 million less than what DOT spent on the consultants.

Tuesday's audit concluded that the "contracts did not adequately protect the state's interest and resulted in wasted funds."

DOT officials have countered in recent weeks that the agency has the lowest number of employees per mile compared to other states. They also said that after comparing various scenarios, including hiring additional staff, using the consulting firms best served the public, saving $21 million to $130 million.

One glaring omission, the audit reported, was information on how DOT negotiated the fees it paid to the consultants.

"The terms of the contracts were not favorable to the state and resulted in the unnecessary expenditure of funds," the audit reported.

The contracts included fixed fees, the audit reported, and paid $8.7 million to the consultants for projects that were eliminated from the contracts.

The audit also found the consultants' program and financial management fees were set too high. One contractor, the audit said, had proposed a fee of 2 percent but DOT agreed to pay 4.5 percent. The difference, according to the audit, was $32 million "that could have been used for other projects."

The audit also alleged the private consultants performance was no better than the DOT supervisors. Projects managed by the consultants were 7 percent more over budget than those managed by DOT, the audit reported.