Department of Transportation Cancels Stimulus Audits

Federal-aid highway program had been seen as susceptible to fraud


The top watchdog at the Department of Transportation (DOT) announced on Monday that it had terminated an investigation into oversight over improper stimulus payments to DOT contractors.

According to a memorandum from Louis C. King, DOT’s assistant inspector general for financial and information technology audits, the IG’s office would not continue the investigation "due to other higher priority work demands."

The IG opened the investigation on April 30 of this year. It sought to determine "whether [DOT’s Federal Highway Administration (FHWA)] has adequate internal controls to prevent and detect improper payments to [American Recovery and Reinvestment Act] grant recipients."

According to a summary of the investigation posted at the time, "the Department of Transportation has identified FHWA’s Federal-aid Highway Programs as susceptible to significant improper payments."

Recent investigations have found that stimulus recipients have misspent millions in FHWA funds.

One recent audit by the IG’s office faulted poor internal controls for unsupported stimulus expenditures totaling more than $125 million.

"FHWA Division Offices rarely prepared written plans to identify which construction activities would be inspected, did not fully document oversight procedures performed or justify why they excluded some Federal requirements and the related risk areas from their review," the IG’s report noted.

"FHWA does not have assurance that designating a project for full oversight results in a comprehensive review of project-specific risk areas to ensure compliance with Federal requirements," it concluded.

The IG’s office did not respond to a request for additional information on why its recent audit was canceled.

"Given our commitment to oversight of FHWA’s improper payments, we may re-announce this audit at a later date," King wrote in Monday’s memo.

Lachlan Markay   Email | Full Bio | RSS
Lachlan Markay is a staff writer for the Washington Free Beacon. He comes to the Beacon from the Heritage Foundation, where he was the conservative think tank's first investigative reporter. He graduated from Hamilton College in 2009, and currently lives in Washington, D.C. His Twitter handle is @lachlan. His email address is

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