Department of Transportation
Construction Contract Payments The Department of Transportation spends more than $1.5 billion a year to build, repair and maintain the Stateís highways, bridges and other transportation infrastructures. The work is performed by private construction firms under contract with the Department. We examined the Departmentís controls over its payments on these contracts.
We found that the controls for regular construction contracts (in which the contractors were paid certain agreed upon amounts for performing certain agreed upon work) provided reasonable assurance the payments were accurate and appropriate. However, we identified a number of weaknesses in the controls over contracts in which the contractors were paid on the basis of their actual costs. For example, the Departmentís daily inspection reports generally lacked the details needed to verify the contractorsí claimed costs, particularly for labor and equipment. As a result of these control weaknesses, there was an increased risk these contractors could be overpaid. We recommended certain improvements be made in the Departmentís controls over these types of contracts.
For a complete copy of Report 2006-S-8 click here.
For a copy of the 90-day response click here.