Thursday, May 27, 2010

"When it comes to necessary reforms, there always seems to be a fight."

Major audit: TxDOT must change its 'singular, deeply entrenched culture'


Michael Lindenberger
The Dallas Morning News
Copyright 2010

The Texas Department of Transportation should significantly alter its leadership structure, reshuffle its executive ranks and reduce the role engineers play in leading the sprawling agency.

That's according to a new -- and at 628 pages, exhaustive -- audit of its management and structure by the accounting firm Grant Thornton. The audit, available in full here, was released Wednesday by the department after the accounting firm revealed its findings.

I am still working through the details, and there are a lot of them. But key recommendations from the audit focus strongly on the nature of the leadership of the department, which has been under fire in Austin and elsewhere for years, often because of resentment by lawmakers and others that see it as a tool of Gov. Rick Perry's campaign to add toll roads throughout Texas.

The audit notes that one of the most fundamental challenges faced by the department is an unsteady funding stream, and soaring costs associated with its monumental responsibilities. Texas cities are among the fastest-growing in America, and the state maintains more miles of highways than any other -- an expensive combination.

But the report also states that a lack of trust by lawmakers and members of the public has played a critical role in preventing the agency from getting higher appropriations. Some simply don't believe the agency needs what it says it needs. Others, the audit stated, say that until TxDOT wins that trust back, many stakeholders feel it shouldn't be given more money to spend -- even if it clearly needs it.

Other big recommendations urge TxDOT to:

Fundamentally change its culture.

TxDOT has a singular, deeply entrenched culture that reflects 93 years of service dedicated to providing top notch transportation infrastructure to the State of Texas. This culture, and the ways in which the organization is led and managed, are fundamental considerations in the MOR as they affect every aspect of TxDOT performance. The unifying thread through all the MOR observations and recommendations is the way in which leadership and management practices and cultural norms affect TxDOT behavior and efficacy. Changes in this area are the essential underpinning to achieving meaningful improvements in the areas of effectiveness, efficiency, communications and transparency.

Significantly change its leadership structure. It recommends that TxDOT create three executive positions that would answer to the executive director -- chief administration officer, chief operations officer, and chief financial officer. These jobs would be new -- even if, in the case of the CFO, they exist in some form today, and should not be automatically reserved for members of the executive now employed, the audit says.

Lessen its focus on engineering among its top leadership, and indeed throughout the agency. Currently, engineering expertise -- even a license -- seems to be the only coin of the realm that carries any value. That has meant putting engineers in non-engineering roles, just to keep them aboard, and making it harder for non-engineers "to be heard" no matter how strong their relevant, non-engineering expertise might be.

Make the aides to the five TxDOT commissioners who oversee the agency answer to the commissioners, not to the executive director. The report says that has created a conflict of interest. If the commissioners are to oversee the agency, they deserve unbiased and unfettered advice from their administrative assistants.

Divide the government relations staff and the communications staff. A few years ago, communications folks -- spokesman and others -- were merged under a new department led by Colby Chase, who had represented the department's interests in Washington previously. The report says that has helped lead to TxDOT's image as an overly political entity, and the staff of about 50 full-time workers should be divided once again.

Too little metrics, means it's hard to assess TxDOT's work. Is TxDOT doing good work? Efficiently? Who knows, says the audit.

Clearly TxDOT employees are accomplishing a great deal of work. However, in the absence of relevant metrics, performance reporting, management disciplines and controls - deployed across the organization - it isn't possible to determine whether work is being done effectively or efficiently.

There is much more in the audit, and I'm not yet through with it. A lot of the really hard stuff will deal with how centralized the agency's operations should be -- an issue sure to touch soft spots within TxDOT, given its long history of leaving much authority in the hands of its district engineers -- and how to better coordinate its statewide planning efforts.

Meanwhile, the issue is already political, of course. No surprise since even on its own organization chart, TxDOT lists the Governor at the top of its pyramid of power, over the five commissioners he has appointed to lead the agency.

Gubernatorial candidate Bill White attacked Gov. Rick Perry for having failed to develop a long-term transportation policy, and cited the audit as proof.

Sen. Kirk Watson, D-Austin, released a statement Wednesday night saying the report is more reason to remake the agency from the ground up.

"This report reveals very little that those of us who deal with TxDOT regularly didn't already know. When it comes to necessary reforms, there always seems to be a fight, probably because of the culture and leadership issues described in the report," Senator Watson said. "It's time to strip TxDOT back to the engine block and rebuild it as an agency that can effectively serve Texas in this century. My experience working with Chair (Deirdre) Delisi, and our conversations regarding these issues, lead me to believe she intends to begin this significant, essential process."

TxDOT ordered the audit early last year, as it was under the microscope of the Sunset Review Commission of the Legislature. It will be back under that same microscope in 2011, and in that sense the audit is its chance to get out from under the heavy boots of lawmakers before the latter insist on changes of their own.

Of course that will depend on how the agency responds to the challenging assessments contained within its covers. We'll know more about its approach June 8, at 9 a.m. at a specially called meeting of the Texas Transportation Commission.

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