The Federal Highway Administration Identifies a $3.5 Billion Funding Discrepancy

Feb. 7, 2023
This could affect infrastructure projects in the coming months if this problem is not fixed

A funding discrepancy that dates back over 18 years has been found by the Federal Highway Administration (FHWA) to the tune of $3.5 billion. The discrepancy is between the accounting systems used by the U.S. Department of Transportation (USDOT) and FHWA which could affect federal highway contract authority provided by formula to the states.

The issue is this: FHWA uses an accounting system that tracks data to pay invoices and reimbursements known as the Financial Management Information System (FMIS). It shows an estimated $4.7 billion balance in contract authority authorized prior to the bipartisan Infrastructure Investment and Jobs Act (IIJA). USDOT, however, uses a system called Delphi which shows a $1.2 billion balance. 

According to FHWA, this discrepancy occurred between fiscal years 2003 and 2005, during USDOT switching over to Delphi.

FHWA and USDOT have been unable to identify the discrepancy. They are going back to examine fiscal years 2004 through 2005 transactions in order to identify the problem, and this may take several months to figure out.

Temporarily, FHWA announced to state DOT's that it is limiting access to pre-IIJA contract authority to make sure they use no more than the $1.2 billion recorded in Delphi for project funding.

FHWA noted that this is a one-time error.

State DOT's are concerned about how this will be fixed, especially since this will directly affect infrastructure projects.

“State DOTs are greatly concerned about the $3.5 billion accounting discrepancy,” emphasized Jim Tymon, executive director of the American Association of State Highway and Transportation Officials (AASHTO).

“AASHTO and its members are committed to working with USDOT officials to ensure that any potential solution to this accounting error does not have an adverse impact on the critical work being done by state DOTs across the country,” Tymon said.

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Source: AASHTO