Thursday, February 21, 2008

"The controversy over public-private partnerships has thrown a spotlight on the Texas Department of Transportation."

Texas lawmakers seek audit of transport budget after flap

Feb 20, 2008

By Joan Gralla
Copyright 2008

NEW YORK- Top Texas legislative leaders asked the state auditor on Wednesday to probe the state Department of Transportation's budgeting, saying last week's hearing found "significant weakness and questionable accounting."

The transportation agency projected a $3.6 billion shortfall by 2015. But Lt Gov. David Dewhurst and Speaker Tom Craddick said it failed to include a total of $8 billion of transportation bonds and faulted its forecasts for higher maintenance costs.

The two Republicans asked State Auditor John Keel to conduct a "comprehensive review" of the agency's financial planning, according to their letter to him, which they released.

Texas has the nation's biggest privatization program -- a $50 billion multiyear plan -- that Republican Gov. Rick Perry says is needed to keep traffic from stalling growth.

But legislators enacted curbs last year that they say were needed to help prevent developers from enriching themselves at taxpayers' expenses.

The chair of the Texas transportation commission, Hope Andrade, in a statement said she would welcome a review, adding: "The mobility challenges we face are significant, and effectively addressing these issues will require an open dialogue as we continue to work alongside our transportation partners."

The governor's spokeswoman, Allison Castle, noted that Perry appoints the transportation commissioners who oversee the department, explaining he does not run its daily operations.

The controversy over public-private partnerships has thrown a spotlight on the transportation agency's budgeting because it has less reason to do such deals if it has more funds than it might appear, critics say.

The state auditor, asked if he would examine privatization issues in his review, replied: "We will look at what the letter asks us to and any other things that come to our attention."

Keel, who is appointed by the Legislature, said his staff will aim to finish the audit by the end of the state's fiscal year on Aug. 31.

The list of subjects that the House and the Senate, which Dewhurst controls, asked the auditor to probe included forecasts for higher maintenance costs that do not "seem to show a complete and accurate financial picture," they wrote.

"The agency claims to have experienced 60 percent inflation of highways costs between 2002 and 2007," they said, asking if the department's data matched "general trends" in highway construction.

Other practices they questioned included the agency's practice of shifting funds among districts. (Reporting by Joan Gralla; Editing by Jan Paschal)

© 2008 Reuters:

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