FHWA has funded approximately 13,000 State and local highway infrastructure projects and has disbursed almost $26 billion in ARRA funds.A report on another IG audit relating to the Federal Highway Administration and the ARRA was just issued on May 7, 2013 and found areas for improvement in DOT's oversight of the administration of program funds:
The Improper Payments Information Act of 2002 makes Federal agencies accountable for preventing and detecting improper payments within their programs. The Improper Payment Elimination and Recovery Act of 2010 requires identification and estimation of improper payments. The Department of Transportation (DOT) has identified FHWA’s Federal-aid Highway Programs as susceptible to significant improper payments. In fiscal year 2012, DOT reported an estimate of $103.2 million in improper payments in FHWA’s Federal-aid Highway Program.
On May 7, 2013, we reported that FHWA inspections did not routinely verify whether States detected instances of noncompliance with some Federal requirements. For example, we projected that $125.6 million, or 12 percent, of ARRA progress payments made to contractors in three States were unsupported.The IG said that "all four recommendations" stemming from that audit were "resolved but open pending completion of planned actions" by DOT.
The more recent audit, which began in April and was terminated this week, was intended to test DOT's internal controls to see if they were adequate to "prevent and detect improper payments" to ARRA grant recipients. The IG's termination letter stated that the audit may still take place at a later date.
Note: A version of this article first appeared at The Weekly Standard.