Posted on Wed, Nov. 15, 2006

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Audit says DOT wasted millions

By Seanna Adcox

The Associated Press

COLUMBIA - The S.C. Department of Transportation wastes millions of dollars even though it has limited funds to build and maintain its roads and bridges, according to a state audit released Tuesday.

Legislators asked the state Legislative Audit Council last year to review the DOT's operations and spending.

"I was concerned about things I was hearing. I believed the audit would actually show there might be minor issues but nothing major," said House Speaker Bobby Harrell, R-Charleston, who wrote the request.

"As it turned out, there are huge issues."

The tens of millions of dollars wasted could be used to maintain roads, he said in an interview via cell phone, as his car hit a pothole on U.S. 17 in Charleston.

The 70-page report found the DOT paid twice as much as necessary to hire temporary employees, wasted $32 million on unnecessarily high management fees, prepaid nearly $9 million for projects eliminated from two ongoing contracts and spent $3 million on an extra project the federal government required in 2002 because of environmental violations.

"This report shows something needs to be done," said Sen. Harvey Peeler, R-Gaffney. He is chairman of one of two Senate subcommittees that will meet Thursday to hear the audit council's review and then meet Friday to hear the DOT's response.

"It seems like some of these things have been whispered about over some time," he said. "This actually puts it in writing."

Harrell said he planned to form a special House subcommittee to review the audit and make recommendations.

The DOT said the audit "contains many inaccuracies and misleading conclusions that misinform the legislature and the public."

Peeler said he was especially concerned by allegations the department tried to keep their cash balances low during the legislative session, when lawmakers craft the state budget.

The report said the department may have lost more than $1.5 million in interest over two fiscal years by delaying billing the federal government for reimbursements.

For more than a year, the chairman of the commission that governs the agency has repeatedly asked Director Elizabeth Mabry to resign.

Mabry said earlier this month there is nothing in the report that would make her consider resigning, but she wished she had a better relationship with Transportation Commission Chairman Tee Hooper, who was appointed by Republican Gov. Mark Sanford.

Hooper said the commission will discuss the report at a meeting later this month.

"There definitely needs to be action," he said. "I'm anxious to see what the commission thinks needs to be done now. I've made myself clear over the last year and a half."

Hooper stressed the audit is about management, not the agency's employees.

"The DOT has some really great employees - a dedicated, hardworking group of people," he said. "It has to do with executive management decisions either made or not made."

The DOT's written response to the audit said it found no significant problems in programs that make up 99 percent of the department's expenses.

The agency points to a report by the California-based Reason Foundation that ranks South Carolina second nationwide in cost-effectiveness, and its award for excellence in financial reporting from the Government Finance Officers Association of the United States and Canada.

The agency stresses it has saved taxpayers more than $3 billion by cramming 27 years of building projects - more than 200 - into seven years.

Last month, Mabry wrote an opinion piece accusing Hooper of trying to destroy the agency's reputation so the governor could take it over.

Sanford has wanted to make the director an appointed member of his Cabinet. He said the report clearly shows that "meaningful structural change" is needed.

"Whether it's overpaying by tens of millions for contracts, purposeful manipulation of account balances, or violating state law when it comes to temporary employees, this report is disturbing to me and should be disturbing to anyone who cares about taxpayers and anyone who cares about our state's infrastructure," the governor said.

Sanford, re-elected last week, said reforming the agency will be a top priority next year, and that should happen before the agency gets more money.

Peeler said he does not support ousting Mabry.

"I like Miss Mabry. I don't think she should be the sacrificial lamb," he said. "I don't want to say we fired the director and now everything's OK. I want to make the agency better."

Sanford said the agency's response is particularly disturbing.

Rather than acknowledge problems, "the DOT has chosen to try and shoot the messenger and go on the attack against the Legislative Audit Council," he said.