Maryland State Highway Administration faces accusations involving mismanagement of funds

Dec. 6, 2011

A recent audit shows the Maryland State Highway Administration (SHA) continuing to engage in shady funding practices.

A recent audit shows the Maryland State Highway Administration (SHA) continuing to engage in shady funding practices.

The new report by the Office of Legislative Audits, which was conducted after an audit last summer described a “revolving door” between the SHA and contractors, revealed not much has changed and that the agency continues to hide significant details of its contracting practices from the Board of Public Works. Maryland Transportation Secretary Beverley Swaim-Staley said appropriate actions would be taken, and added that some contracts have been turned over to the attorney general’s office for criminal investigation.

“[These actions are] just the kind of taxpayer abuse that BPW is designed to prevent,” State Comptroller Peter Franchot told the Baltimore Sun. “I would describe SHA’s conduct as a conspiracy with its own contractors to cover up inappropriate spending by avoiding the oversight that is afforded by the BPW under law.”

According to the most recent audit, the SHA shifted money between contracts without BPW approval. Auditors found that in 10 separate contracts worth a combined $45 million, one-third of the money was spent on items unrelated to the projects. The report said that the SHA moved money to “conceal overspending.”

“[The deals] are indicative of a less than arm’s-length relationship between those parties that, in turn, could raise questions about the integrity of the procurement and payment process,” the report said.

The SHA also was found extending dates for contracts without BPW approval and kept $26 million in unspent funds, and that the agency sought new awards even though little of the money for previous contracts had been spent.

SHA’s mismanagement of funds was the most prevalent during a string of events that unfolded in October 2008. The agency asked the board to approve a $16 million contract for inspection services when $15.4 million remained from the previous contract for the same work in the same district. Two months later, with $30 million still available for inspection, SHA went back and asked for another $16 million, and a year later requested $10 million more with $36.5 million in unspent funds still available.

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