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COLUMBIA -- The State Budget and Control Board on Friday unanimously approved a $40,074 settlement to enable the immediate retirement of state Department of Transportation Director Elizabeth Mabry.

The move paves the way for the DOT board to find a successor and to move forward with needed reforms at the giant agency, DOT Chairman Tee Hooper of Greenville told the board.

As executive director, Mabry was responsible for overseeing a $1 billion annual budget, 5,000 workers and the care of more than 40,000 miles of roads, the fourth-largest state-maintained road system in the nation.

Mabry has been on sick leave for the month of December for an undisclosed illness and didn't attend Friday's meeting.

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Hooper told board members via a telephone conference call that he believed approving such a settlement might not feel "comfortable" in light of a recently released critical audit and he couldn't defend it. But he said it is the right thing to do because it begins to get the agency out from a cloud of controversy.

"I believe it is in the best interest of the state and the best interest of DOT to accept the settlement and move forward," he said.

Gov. Mark Sanford, who chairs the five-member board, told members there is still a problem with a lack of accountability at DOT that cries out for restructuring.

"The systemic flaw goes well beyond Betty Mabry," Sanford said.

The governor, who has been critical of the agency's spending and management under Mabry, also took issue with a summary of the agreement that said various members of the DOT commission had expressed a desire for new leadership. Sanford said he was unaware of anyone other than Hooper expressing such sentiments.

Two other board members, Sen. Hugh Leatherman of Florence and Comptroller General Richard Eckstrom, defended Mabry, saying nothing in the board's actions should be interpreted as criticism of Mabry's performance.

"I don't want us to say DOT has not done a good job or Mrs. Mabry has not done a good job," Leatherman said.

Eckstrom said Mabry's service to the state "has been significant. I think we should not leave any suspicion that she has been necessarily deficient in the way she's run that agency."

Mabry, the agency's leader for a decade, sent word to the DOT board on Dec. 18 she was willing to retire at the end of the month provided the state purchased retirement credits worth about $40,000. Mabry has worked for DOT for 27 years and three months, nine months short of the state retirement mark.

The DOT board approved her retirement the next day after talking behind closed doors for 90 minutes about Mabry's terms and the agency's future.

Three legislative committees recently have peered into DOT's management in the wake of a critical audit released last month that alleged that DOT wasted millions of dollars, mismanaged contracts and violated laws.

The agreement approved Friday releases Mabry and DOT from any potential claims against each other, though it still allows the state Attorney General's Office to file a civil lawsuit against her if it determines that one is warranted.

According to Vance Bettis, a private attorney who represented the DOT board in the settlement, Mabry might have remained on sick leave for several months early next year if her retirement offer had not been approved. He said if the DOT board had tried to fire her, she probably would have sued the state.

"I sincerely believe that this is a small price to pay to put SCDOT on the road to a fresh start and that the agreement, viewed in proper context, is clearly in the best interest of the state, the commission and the SCDOT and its employees," he wrote in a letter to state personnel officials. "It avoids almost certain litigation and at a relatively small price."

The board remained "polarized" over Mabry up until her retirement offer, Hooper told Sanford and other Budget and Control Board members. He said the cost of paying her while on sick leave next year would exceed the cost of the settlement.

The board, at Sanford's request, earlier this month denied Mabry a recommended raise, citing the critical report of the Legislative Audit Council.

A legislative committee has asked state Attorney General Henry McMaster to determine if any laws were violated.