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DOT audit raises red flags on agency spending practices

Report should prompt hard look at restructuring department

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The recently released audit of the state Department of Transportation clearly shows changes need to be made.

Most importantly, the agency's executive director, Elizabeth Mabry, needs to get off the defensive, look at what the audit found and tell us what she and her staff are going to do to be better stewards of our money. State lawmakers need to look hard at revamping the agency and should look at Gov. Mark Sanford's call for making it part of his cabinet, with the executive director reporting directly to him.

The year-long audit by the Legislative Audit Council found that over the three years the council examined the department wasted at least $50 million, did not properly document all contracts and had questionable relationships with some contractors.

According to the report:

• Contracts to outsource construction management resulted in millions in higher costs. Contractors were paid for $8.7 million for projects that were not completed, and DOT paid an unnecessarily high management fee, costing the state an extra $32 million.

• The agency did not complete federally required independent estimates for half the projects surveyed. The state saved about 3 percent on projects where an estimate was prepared compared with those with no estimate.

• DOT's history with one engineering firm "raised questions of favoritism and ineffective management of resources." The agency also asked contractors to help pay for a conference to improve biker and pedestrian safety, creating a conflict of interest.

Very troubling was the charge that the department delayed getting federal highway aid reimbursements during the state's budget-writing process to make it seem less flush with cash, thus losing about $1.5 million in interest that could have been earned.

For those concerned about department projects here, particularly the S.C. 170 widening project, it is disappointing to find that the audit doesn't link specific problems to specific projects nor does it name names when it comes to problem contractors.

Still, all sides in this debate need to tone down the rhetoric. The audit found problems that must be fixed, but it's not the end of road-building as we know it nor does it mean the department should not get the funding it needs to do the work it is charged with doing. This audit shouldn't be an excuse for lawmakers to shirk their responsibilities. They need to address problems raised in the audit. They should not use it as an excuse to leave the state's gasoline tax at a paltry 16 cents a gallon.

Mabry, for her part, needs to acknowledge where the agency has gone wrong and tell us what she plans to do to fix it. What she has done so far is put together a public relations campaign leading up to the report's release, holding press conferences touting the agency's accomplishments and releasing to newspapers a statement highly critical of Transportation Commission Chairman Tee Hooper, who in turn has been a sharp critic of Mabry. The department also released a statement the day the audit became public defending its actions and pointing out the audit did not criticize how it handled 99 percent of the agency's $3.5 billion in spending over the three years.

Sanford said Wednesday, a day after the audit was released, that lawmakers should do what 47 other states have done and allow the governor to appoint the executive director of the agency or its board, with the advice and consent of the Senate. Now the governor appoints the board's chairman, and lawmakers in each of the state's six congressional districts appoint the remaining commissioners.

This system is all too typical in South Carolina, with authority split between the legislature and the governor's office. Six commissioners owe allegiance to the lawmakers who put them on the commission. Only the chairman is appointed by someone with a statewide mandate.

The result is fractured responsibility and little direct accountability. It also results in the politicking we see from Mabry and from Hooper.

Lawmakers and the governor can use this audit as a springboard for improving a very important state agency. They should not use it to score political points.