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COLUMBIA -- The state's highway commissioners told lawmakers Tuesday that they were "dysfunctional" as a group and had failed to provide proper oversight over the state Department of Transportation.

Legislators wondered aloud if the DOT board should be abolished.

"It's the worst nightmare for the taxpayers of South Carolina," Rep. Annette Young, chairman of the House Transportation Study Committee, said after three hours of questioning board members, all under oath. "The testimony was consistent that the commission had no idea what was going on."

Young's committee is one of three legislative panels peering into DOT as the result of a critical Legislative Audit Council report released last month. The report alleged DOT wasted millions of dollars, mismanaged contracts and violated laws.

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Though DOT Executive Director Elizabeth Mabry criticized the report upon its release as unbalanced, unfair and inaccurate, the commissioners on Tuesday raised no objections to the audit's findings.

"We're all embarrassed by it, and we all have to be responsible for it," Commissioner Hugh Atkins of Spartanburg told the committee.

Atkins said he couldn't defend the board in its failure to prevent problems at the agency. "I strongly feel today we are dysfunctional as a commission," he said.

Legislators wanted to know what specific actions the commissioners took in response to problems cited in the audit, though some weren't on the board at the time.

Young said she was incredulous that the board has yet to take action as a result of the report, which was first presented to commissioners in September. The board had been scheduled to discuss the report Tuesday but didn't.

Concerning some consultants' contracts negotiated in 1999 and criticized by the LAC for allowing higher fees than first offered by one of the consulting groups, Atkins said he doesn't recall ever hearing about that difference. The LAC alleged that it cost taxpayers $32 million.

He said one of his chief concerns on the board is that many discussions about agency matters took place out of the public limelight. He said that could have been one.

Officials said commissioners approve the agency advertising for bids in consultant contracts but don't negotiate the terms or approve the final contracts.

Atkins and other board members said they depended on staffers, particularly Mabry, to tell them which of the myriad of details in contracts they should pay attention to.

"I cannot promise you in the future, under our setup, that we will analyze every contract," Atkins told Rep. Brian White of Anderson.

Replied White: "I can promise that we'll make sure you do."

Commissioner Bob Harrell Sr. said he was warned by staff that if he asked too many questions about contracts, "I could be charged with contract interference."

Harrell said commissioners trusted staff to highlight important details in contracts and other DOT business. "The commission as a whole thought we had these folks in place," he said.

Replied Young, "You didn't."

The committee questioned the commissioners about allegations of favoritism and nepotism, asking each to state if they ever had relatives or friends hired at the agency.

The Greenville News reported last year that Commissioner Marion Carnell asked officials at DOT to interview his nephew and to give him "serious consideration" if they found him qualified. He was hired, as was the daughter of Commissioner Bobby Jones of Camden, in 1999. He said he didn't ask anyone to hire her.

Both men talked about those hirings Tuesday, as well as the hiring of Fred Teeter Jr., a former lobbyist whom Carnell described as a friend. He said he wasn't involved in Teeter's hiring.

The LAC alleged that some of the 18 temporary employees employed by the agency between 2003 and 2005 whose annualized salaries exceeded $50,000 were alleged to be relatives or friends of DOT commissioners or management.

The report also cited a 2003 employee survey that found 66 percent of employees felt favoritism was behind promotions.

Jones told the committee that favoritism has been around since Noah selected the first two animals for the ark and that the agency shouldn't be judged by the survey.

Harrell and Commissioner John Hardee said one solution to the agency's oversight problems would allow the board to elect not just the executive director but also the state highway engineer and the director of finance, in addition to an internal audit director.

But Rep. Jay Lucas, chairman of the House Transportation Subcommittee, asked if a commission still is needed.

"Maybe what we have is just a dinosaur," he said.

DOT Chairman Tee Hooper agreed there are reasons to abolish the commission. He said the board's dysfunction has been the result of Mabry's gaining so much power and not being as engaged as the board should have been.

But Hooper said the board wasn't so dysfunctional three years ago because he hadn't raised concerns then about Mabry's management, which he said eventually polarized the board.

He also said lawmakers themselves couldn't escape blame. Two years ago, he said, the Legislature was provided copies of his letter of concerns to Mabry, yet still signed a resolution to support her.

"This is not new news," he said of the management issues. "I think you need to be reminded this has been before you."