The recent release of a N.C. Department of Transportation audit – performed by state auditor Beth Wood – has raised its share of eyebrows.
The findings determined that the DOT overspent its budget by $742 million in 2019. The audit pointed the fingers of blame at poor money management – the DOT was allotted to spend $5.94 billion in 2019, but surpassed that by 12 percent – a budget that did not account for actual cost estimates for projects, and an improper “checks and balances” between the state and divisional level on money being spent.
This was enough to bring Division 14 Board of Transportation representative Dirk Cody to the defense of the department. A Robbinsville native, Cody joined the board in August and feels the overspending – while accurate – was not properly explained.
“I certainly appreciate the fine work the auditor’s did; the numbers are what they are,” Cody said. “For me, the context is where the issue is. The numbers are a snapshot of that one day, when they did the audit. But they don’t give you the whole story. Every penny that was spent was spent for the benefit of the citizens of North Carolina.
“There was not any money wasted anywhere.”
Storm brewing
Unforeseen circumstances have led to the overspending. Cody said in the last three years, North Carolina has had two disasters. The department originally budgeted and cashflow-modeled for disasters based of a 10-year span of data, but beginning in the 2016-17 fiscal year, the amount spent on disasters went from a $50 million annual threshold to $171 million (2017-18) and $296 million (2018-19).
Of note, hurricanes Matthew (2016) and Florence (2018) did enough damage that there are still 75 roads in the coastal region that are still awaiting repair, before being reopened. Cody said the disaster-repair money could have came from a different funding source.
“That’s part of our mission,” Cody said of storm-damage repairs. “Instead of those funds being taken from the state’s rainy-day fund – which has a few million in it – the Legislature decided it would come straight out of DOT money.
“There’s work that needs to be done, but there has been no money appropriated to finish the cleanup.”
Stamp on Map
Until it was repealed last year, the Map Act waged a war of its own with the DOT.
Approved in 1987 by the General Assembly, the Act gave the DOT the power to impose absolute, permanent development delays on land within certain transportation corridors, which in turn held down the value of the land. When it came time for the DOT to acquire, for example, land for a new highway, it could do so at a reduced price.Since it was repealed, however, the monies the DOT did not pay to property owners is being divvied out at a costly price.
“The property owners – like they had every right to do, because it might have impacted what they could do with their land – chose to sue,” Cody said. “The courts have been ruling in favor of those property owners, and we’re into the $100-something millions that have been paid.”
COVID-19
Much like other government entities, the DOT has taken a hit from the fallout caused by the worldwide coronavirus pandemic. This quarter alone has seen a $300 million shortfall in revenue.
“Nobody could have seen it coming,” Cody said. “Between this, the Map Act litigation and the disaster funds, we’ve already passed $1 billion in things that we have no control over.”
Planning ahead
Before the audit was completed, the DOT took action.
The delay of 250 projects over the next 12 months has been implemented, as has a hiring freeze and employees will have to sadly join countless others in being furloughed at the beginning of June. The state has around 10,000 workers under its employ.
“Nobody likes to do that,” Cody said. “Hopefully, it’s not a long-term situation. What we need to do is get a path set, because we need to keep fixing roads and we need to deliver roads that our citizens want, need and use.”