MacIver News Service

By M.D. Kittle

MADISON, Wis. — The Wisconsin Department of Transportation has failed to comply with several provisions in a state law written in the aftermath of a bombshell audit of a troubled government agency that wasted billions of taxpayer money. 

In a memo obtained by MacIver News Service, the nonpartisan Legislative Audit Bureau lays out the DOT’s failure to follow accountability provisions in Act 247, which went into effect in April 2018. 

The DOT’s failure to comply has the co-chair of the Joint Legislative Audit Committee talking about whether to pursue another “deep dive” audit into the agency. 

“I’m just going to keep pushing. It’s the only tool I’ve got to get compliance here,” Sen. Rob Cowles (R-Green Bay) said of his cajoling of the DOT to meet the requirements of state law. “Maybe we’re not going far enough. Maybe there needs to be another deep dive into what’s going on there.” 

“This is the second time they’ve not complied. I’m not sure what to make of it.” 

Act 247 requires semi-annual reports to the Transportation Projects Commission, the Joint Finance Committee, and the Joint Legislative Audit Committee. The reports are to lay out full project cost estimates, including costs before a transportation project is enumerated. The DOT must also include project design engineering and construction engineering costs, the price tag for environmental studies, and a listing of other program funds paying for the project. Cost estimates must include the expected date of completion and a projection on inflationary effects of construction costs. 

The 2017 audit found cases where DOT officials didn’t account for inflation, adding to the billions of dollars in project cost overruns over a 10-year period between 2006 and 2016. 

In its memo last week to Cowles and Audit Committee co-chair, state Rep. Samantha Kerkman (Salem Lakes) the audit bureau noted that the DOT’s required report failed to comply with four of Act 247’s provisions. In an October follow-up letter on the “Report to the Transportation Projects Commission on the State of Major Highway Projects and Southeast Wisconsin Megaprojects,” then-DOT Secretary Dave Ross detailed actions his agency would take to ensure future compliance. 

In the DOT’s latest six-month report sent this month, the Audit Bureau found the agency had complied with “most provisions” in the law, “including the four provisions with which the August 2018 report had not complied…” But it had failed to comply with three other provisions.

The agency did not provide full cost estimates of approved or enumerated projects. Ross, according to the memo, had previously noted there was no known full cost estimate for the 30-year-old U.S. Highway 10 — Marshfield to Appleton — project when it was approved. 

“However, we found at the Legislative Reference Bureau a document written by the Legislative Fiscal Bureau indicating, at the time of enumeration in 1989, that the project was estimated to cost $125 million,” the audit bureau’s memo states.   

Some of the compliance issues seem to speak to agency accounting failures long before Ross arrived. The new law requires the DOT to include full cost estimates for projects before enumeration. But Ross told the audit bureau that the estimates cannot be accurately reported for projects enumerated before 2011, “and that such information does not exist for some projects.” 

To comply, the audit bureau said, the DOT should include pre-enumeration costs for all projects, “even if these estimates represent the best available cost estimates.”

“We note that some projects enumerated before 2011 were not recommended by either DOT or the TPC and, as a result, may have no pre-enumeration costs,” the memo to the co-chairs states.  

Act 247 also requires DOT’s biannual report include agency opinions on whether a project will be completed as originally scheduled without additional funds. Ross told the audit bureau in October that the information could be obtained by taking together the initial and current cost estimates and the initial and current expected dates of completion. Compliance, however, means the agency must officially state its opinion on the questions. 

While some of the details may seem like minutia, Cowles said it’s critical the agency fully comply. 

“Are these earth-shaking things? Perhaps not, but if they won’t do the qualification things right what else won’t they do six months, a year, five years from now? We’ll lose control of the whole legislation. We want them to be diligent and doing this the right way every time.” 

The 2017 audit found all manner of waste and accountability issues. In failing to account for inflation alone, the DOT underestimated transportation costs by more than $3 billion over the 10-year period. 

Ross took the reins of the troubled department in 2017 with a pledge to change the culture of the agency. In many ways he did. As MacIver News Service reported last year, the agency saved the state highway program at least $69 million through reforms. 

But it’s a long road to longer-term savings through efficiencies and waste prevention and monitoring. That’s why, Cowles said, the recommendations by the audit committee and the new accountability statutes are so important. 

DOT Secretary-designee Craig Thompson recently told lawmakers that the agency will bring the agency into compliance. Cowles said time will tell. Thompson, who spent years advocating for Wisconsin transportation interests, has made it clear Wisconsin’s road program needs, at bare minimum, $360 million in new revenue over the next biennium, as he pushes higher fuel taxes and other revenue “enhancements.” 

For now, Cowles said he simply wants to see compliance. 

“How do you get compliance? If they just don’t want to comply it’s quite a struggle. Someone could take them to court perhaps. Can you do another audit? That’s a big ordeal,” the senator said. 

“It’s government at its finest,” he sarcastically added. “It’s frustrating.” 

M. D. Kittle M. D. Kittle is an investigative reporter with the MacIver Institute. Reposted here with permission.