Wow. Governor Perdue and various legislators are coming out firing with both barrels at the Department of Transportation.
They’ve hidden billions of dollars in debt. The state audit says it may have been intentionally hidden.
Gov. Sonny Perdue, in a scathing reaction to the report, said the audit showed nothing less than an attempt to mislead his office, the General Assembly, the State Transportation Board, the agency’s commissioner and the public.
“These numbers are relied upon by legislative appropriators and the executive branch to make accurate predictions and decisions regarding future fiscal policy,” the governor said in a prepared statement. “To think that officials charged with supplying these numbers would intentionally direct those under their command to withhold information is unconscionable at best and illegal at worst.”
As some news articles, including the Atlanta Business Chronicle note, the DOT’s actions may very well be unconstitutional. Committing to construction contracts without funds on hand violates the constitution.
Time to bulldoze the DOT and start over.
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DOT is a big ol’ barrel of suck… and I mean that in oh so many ways.
DOT is unconstitutional? How about the Atlanta Regional commission or the Georgia toll authority?
Perhaps the money was “intentionally hidden” OR perhaps it was due to the incompetence of any state department being run by the typical math-deficient graduate of UGA.
“…the shortfall resulted from a DOT budgeting process that committed funds to projects before the money actually was in hand.
Some State Transportation Board members have argued that such practices are necessary to keep projects flowing smoothly.”
Everybody involved needs to be terminated. Some probably need to be prosecuted.
Maybe the good ole boys shouldn’t have been so quick to rush gina out the door. she kept saying there was a big mess but that board liked having their own little fiefdom.
everyone one of those board members starting with Doss, Beach, and that loser from Columbus should be prosecuted. as in go to jail and do not collect $200.
Now is one of those people you say need to be runoft her now husband?
Should that include Mike Evans since he served on the board?
Funny thing is how the Auditors report to the treasurer, instead of directly to the Board. This is part of the problem – poor internal controls and lack of effective leadership. This is the responsiblity of the Board and the Commissioner who are put into these positions of public trust.
Maybe if those individuals had spent more time doing their jobs, instead of pursuing each other, this could have been avoided.
I bet this will make a good commercial come next primary.
This
is
absolutely
unacceptable.
Billions…so…where is the money going to come from?
Yay fiscal conservatives!
Time to bulldoze the DOT and start over.
With Republicans — the party supposedly about competence — firmly in charge the past 8 years, how will a new-and-improved DOT look any different than the current one? Especially since the state Constitution establishes the funding model and organization.
Maybe the legislators could designate DOT as their first zero-based budgeting initiative next session. For example, DOT has district administrative staff in Atlanta assigned to each of the field districts that inefficiently replicates the activities being done in each field district office. Enron-style off balance sheet liability is one thing; excessive operational budget is another.
Everyone at DOT needs to pair up quickly and “fall in love”.
This should make them immune to responsibility and criticism, based on precedent.
“These numbers are relied upon by legislative appropriators and the executive branch to make accurate predictions and decisions regarding future fiscal policy.”
Really? I think Perdue and the GOP should take a look at their budget and revenue projections before throwing all of the stones at the DOT.
What the DOT did is highly unethical, but they are not the only ones to blame for the fiscal problems our state is facing. Perhaps a Pay-as-you-go plan should be spelled out for the state legislature.
Pay-go is required by the Georgia constitution. Maybe instead of trying to raise taxes in a bad economy, we should focus on learn-to-spend-less-or-don’t go. Maybe if the economy ever starts to pick up we can actually eliminate the state income tax, a reform which would really juice up a recovery. Maybe we’d start to recover some of the wealth that has been lost to Florida, Tennessee, Texas, etc.
Sonny is leaving quite a legacy.
Billions? WHERE in the linked article did it say anything more than $321 million?
IF the DOT treasurer ordered them to stop recording contracts as commitments, that certainly would have crossed the line into fraud.
However, later it says The unexpected deficit first turned up during an audit released last September. According to that report, the shortfall resulted from a DOT budgeting process that committed funds to projects before the money actually was in hand.
What? Generally, commitments are recorded when the contract is issued for the contract price. The total committed amount increases with additive change orders and decreases with deductive change orders. Change orders may arise from the state’s original contract obligations, the scope of work, price adjustments (asphalt exploded in price and there is an adjustment factor for that) and for a lot of legitimate reasons. Commitments are used versus projected costs at completion and those versus appropriations to flag the need for appropriation increases, if the costs are legitimate and cannot be contractually avoided OR for the appropriation scope of work to be reduced to meet the funding realities.
No contract can be legally entered into without appropriated funds, but as we found with Mayor Campbell’s alleged fraud in the 90′s, you can have $40 million change orders to a $10 million original contract.
What generally produces unrecorded commitments is when the owner/DOT doesn’t want appropriators to know about change orders that might suggest that the agency made mistakes. The usual pattern is that the management of the agency declines to record change order costs as committed claiming legitimacy for failure to do so on the grounds that the costs are “disputed” between agency and contractors. Sound project controls would have himn record those costs as new projected costs, so that upper management gets disclosure. Sound internal auditing would test for undisclosed commitments.
Once the original contract is signed there can come into existence even more costs than the original under the relative liabilities of the owner.
These change order costs are every bit as legit as the original and there doesn’t have to be an appropriation or cash deposit to make it that way. Anybody reporting otherwise doesn’t know what the HELL they are writing or reporting.
There was a project manager for San Diego water department who hid $250 million in commitments like this about 12 years ago. The failure is also one of not auditing large contracts for ‘contingent’ or ‘disputed’ costs.
The DOT internal audit department needs to go first, it would seem.
The reporting on this sucks, though.
The reporting on this sucks, though.
You mean Erick’s reporting sucks? Erick the “advocate” for Mark Sanford’s little “Argentinian Trail” hike has a problem with reporting?
Go figure
My question is: what suddenly changed that last year Purdue and Richardson decided that they needed to personally take it over and turn the agency into a “crisis”? What’s the end game that they’re looking for?
I think that would mean Mike Evans is perfectly suited for the US Congress – they have been lying about deficits and engaging in shady accounting practices for decades. He’ll fit right in in Washington as another part-of-the-problem Republican.
Just don’t shut them down before they clean up that awful mess in Oakwood.
s/shut down/shot in the street/g
No match.
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