U.S. Department of Transportation Office of Inspector General

Report
U.S. Department of Transportation
Office of Inspector General
AASHTO Internal/External Audit Conference
Phoenix, Arizona
July 16, 2012
OIG Update and Audit Plan
Joseph Comé
Assistant Inspector General
for Highway and Transit Audits
OIG Mission
The OIG supports DOT in meeting its goals of safety, reduced
congestion, global connectivity, environmental stewardship,
security, and organizational excellence.
Inquiry Finds No Evidence of Undue
Influence on Safety Agency
Bus Regulator Must Do More to Stop Rogues, Watchdog Says
FAA Fails to Properly Monitor Contracting, U.S. Auditor Says
Former Owner Convicted in Largest Disadvantaged Business
Enterprise Fraud in Nation's History
OIG Organization
Inspector
General
Calvin Scovel III
Deputy Inspector
General
Ann Calvaresi Barr
Investigations
Audit
Principal Assistant IG
for Investigations
Principal Assistant IG for
Auditing & Evaluation
Tim Barry
Lou Dixon
Investigative
Regional Offices
Aviation &
Special
Programs
Highway &
Transit Audits
Rail, Maritime,
and Economic
Analysis
Acquisition &
Procurement
Financial and
Information
Technology
OIG Investigative Regional Offices
Region 1
Cambridge, MA
(617) 494-2701
Connecticut; Maine; Massachusetts; New Hampshire; Rhode Island; Vermont;
and the following New York counties: Albany, Broome, Cayuga, Chenango, Clinton, Columbia, Cortland, Delaware,
Essex, Franklin, Fulton, Greene, Hamilton, Herkimer, Jefferson, Lewis, Madison, Montgomery, Oneida, Onondaga, Oswego,
Otsego, Rensselaer, Saratoga, Schenectady, Schoharie, St. Lawrence, Tioga, Tompkins, Ulster, Warren, and Washington.
Region 2
New York, NY
(212) 337-1250
New Jersey, Pennsylvania, Delaware, and New York counties not covered by Region 1.
Region 3
Washington, DC
(202) 260-8580
District of Columbia, Maryland, Virginia, West Virginia, and North Carolina.
Region 4
Sunrise, FL
(854) 382-6645
Alabama, Florida, Georgia, Louisiana, Mississippi, Puerto Rico, South Carolina, Tennessee,
and U.S. Virgin Islands.
Region 5
Chicago, IL
(312) 353-0106
Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, Missouri, North Dakota, Ohio, South Dakota,
and Wisconsin.
Region 6
Ft. Worth, TX
(817) 978-3236
Arkansas, Colorado, Kansas, Nebraska, New Mexico, Oklahoma, Texas, and Wyoming.
Region 9
San Francisco, CA
(415) 744-3090
Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Utah, Washington,
and Pacific U.S. Territories.
OIG Recent Accomplishments
For the first half of fiscal year 2012:
 83 audit reports with 234 recommendations;
 3 Congressional testimonies;
 $1.4 billion in financial recommendations;
 86 indictments and 33 convictions; and
 Just over $19 million in fines, restitutions, and recoveries.
Recent FHWA and FTA Audits
Refinements to DOT's Management of the Highway Trust Fund's Solvency
Could Improve the Understanding and Accuracy of Shortfall.
FTA’s Charter Bus Service Regulation on Transit Services.
DOT Can Improve Oversight of Denali Commission's Use of Federal
Transportation Funds.
New York City Fulton Street Transit Center: FTA’s Sustained Focus on Key
Risk Areas Is Needed Until the Project Is Completed.
Oversight of Federal-Aid and Recovery Act Projects Administered by Local
Public Agencies Needs Strengthening.
Opportunities to Foster Contract Competition and Maximize Use of Federalaid Funds.
Financial Analysis of Transportation-Related Public Private Partnerships.
DOT Needs to Improve Tracking and Monitoring of Single Audits Findings.
Challenges to Improving Oversight of Rail Transit Safety and Implementing
Enhanced Federal Role.
Local Public Agency Oversight
LPAs administer approximately $8 billion in Federal-aid highway
program funds yearly; ARRA added an additional $8 billion.
Error rates found in LPA Administered projects reviewed:
Right-of-Way Acquisitions
7%
Construction Close-Out
18%
Value Engineering
23%
Quality Assurance Procedures
39%
Project Reporting and Tracking
44%
Construction Pay Quantities and Progress Payments
49%
Consultant Selection and Billings
63%
Utility Agreements/Reimbursements
67%
Project Bidding—PSE/Contractor Selection/Unbalanced…
73%
Change Orders and Claims
79%
0%
10%
20%
30%
40%
Percent of Projects Reviewed with Errors
Source: OIG Report MH-2011-146
50%
60%
70%
80%
90%
ARRA Contract Competition
Nearly one-fifth of ARRA contracts awarded by State DOTs received just
1 or 2 bids, which could have significant cost implications.
ARRA Contracts by Number of Bids
Number of Bids
Number of Contracts
Percentage
1 bid
472
6%
2 bids
1,100
13%
3 or more bids
6,793
81%
Total competed
contracts
8,365
100%
Overall prices for contracts with 1 or 2 bids were, on average,
11 percent higher than prices for contracts that received 3 bids.
Source: OIG Report ZA-2012-084
OIG ARRA Investigations
Allegation
Total
False Statements, Claims,
Certifications
24
Disadvantage Business
Enterprise Fraud
26
Counter Measures
 Criminal checks and
Suspension and Debarment
checks on prime contractors,
subcontractors, and DBEs.
Prevailing Wage Violations
6
 Reviewing Bidding
Documents.
Anti-Trust Violations, Bid
Rigging, Collusion
5
 Reviewing Certified Payrolls.
Whistleblower
2
 Checking Certification and
Net Worth Status on DBEs.
Embezzlement
1
Corruption
5
 Reviewing change orders,
supplemental agreements,
and claims.
FHWA-Related Audits Underway







Oversight of High Dollar ARRA Projects.
Stewardship and Oversight Agreements.
FHWA’s Full Oversight During ARRA Construction.
The Highway Safety Improvement Program.
TIGER Discretionary Grant Program Oversight.
DOT’s Information Security Program & Practices.
DOT’s Administration of Its Disadvantaged Business Enterprise
(DBE) Program.
 Quality Reviews of Single Audits.
 FHWA’s Oversight of the Indian Reservation Roads Program.
 FHWA’s Oversight of Unexpended ARRA Obligations.
FTA-Related Audits Underway
 FTA’s Oversight of Major Projects in NYC: East Side Access.
 FTA Oversight of the Dulles Corridor Metrorail Project.
 Management of the Metropolitan Washington Airports
Authority (MWAA).
 FTA’s Regional Oversight of Transit Grants.
Future OIG Audit Work
 Accountability - Improper payments;
management of change orders; robust fraud
reporting.
 Performance – Stewardship and oversight of
programs; sound performance indicators tied to
a risk-based approach.
 Operational Efficiency – Consistency; identifying
redundant and unnecessary processes; improving
deliverables; meeting program goals.
www.oig.dot.gov
Contact Information
 National OIG Hotline: (800) 424 - 9071 or
(202) 366 -1461
 OIG Hotline E-mail:
[email protected]
 OIG Web Page:
www.oig.dot.gov
Questions & Comments

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