NCDOT looking to improve oversight after agency overspent $742 million in 2019

North Carolina news

RALEIGH, N.C. (WNCN) – Leaders of the North Carolina Department of Transportation said Wednesday they’re making some changes following an audit that outlined how the agency overspent by about $742 million last year, with lawmakers saying they’re drafting legislation to improve oversight.

“I’m certainly not for sending any taxpayer money to DOT without some accountability and without some new eyes looking at what’s going on,” said Sen. Tom McInnis (R-25th District).

DOT announced last week it will furlough all 9,400 full-time employees, citing a $300 million decrease in revenue amid the COVID-19 pandemic. The furloughs start with senior leaders, with all employees having to take 20 to 30 hours off unpaid by the end of June.

“We cut all the spending we could until the end of our fiscal year. We, as leadership, we took the furloughs first,” said DOT Secretary Eric Boyette.

When CBS 17 asked Boyette if he anticipates additional furloughs in the next fiscal year, which begins July 1, he said, “I have no idea.”

During a Senate committee meeting Wednesday, state lawmakers asked for more explanations from Boyette and Transportation Board Chairman Mike Fox about why the overspending occurred as outlined in the report by State Auditor Beth Wood that was released earlier this month.

Wood noted at the time that the agency’s regional offices were not sticking to the overall spending plan, nor being monitored adequately by DOT. She said the agency also failed to adequately project how much it would need to spend, particularly on storm response.

The report found the agency had planned to spend $5.94 billion in fiscal year 2019 but overspent by $742 million “and was in danger of falling below the statutory cash floor.”

State Sen. Warren Daniel (R-46th) said, “$75 million is a scandal and $750 million, that’s like a federal government number.”

Auditor Wood told CBS 17, “If somebody else outside of the agency had been overseeing this, no matter who that is… they would have been able to keep up with the fact that these 14 divisional offices were spending way over what they had been allocated.”

Secretary Boyette said DOT plans to create a new position, which is a director of financial oversight and improvement. He said funds are now being distributed twice a year instead of annually, and the regional divisions must stay within the spending plan each month. He said the Chief Engineer’s office also has to approve expenditures over $1,000.

Boyette cited the growing cost of responding to storms, but lawmakers questioned why the agency has continued to budget $50 million for that when the average cost in the last three years has exceeded $200 million due to storms like Hurricane Florence. Wood also noted that storm response did not account for the majority of overspending.

Sen. McInnis said the State Treasurer the Office of State Budget and Management will address the committee Thursday. He said lawmakers will then draft legislation aimed at improving oversight.

“It’s going to be monumental. It’s going to be some changes. It’s gonna be different than what we’ve been doing,” he said but added he didn’t have specifics yet. “We want to fix this thing one time, you know. It’s been a piecemeal deal.”

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