SCDOT audit shows problems with funds, projects, procedures

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By Stan Welch

Faced with a badly crumbling state infrastructure, Governor Nikki Haley proposed an increase in the state gasoline tax earlier this year. The proposal included a reduction in the state income tax from the current seven per cent to five per cent, to offset the increase at the pumps. The elevation of the head of the SC Department of Transportation to a cabinet level post was also a part of the proposal.

While the House approved the tax increase it bogged down in the Senate, as demands for significant reforms to the South Carolina Department of Transportation (SCDOT) became loud and strident. Much of the data used to support those demands is contained in an audit of the SCDOT performed by the Legislative Audit Council, an instrument of the legislature which was tasked with performing such an audit, with specific goals in mind.

District Four County Councilman Tom Allen made a brief presentation of the audit’s findings at the last Council meeting. The entire audit report comprised more than three hundred pages, but he based his presentation on a summary of the study. The information presented here also comes from that summary.

The audit focused on efficiency, the DOT’s failure to prioritize projects appropriately, and mis-allocation of funds, in terms of serving the state’s overall infrastructure needs. One aspect of those mis-allocations is the prioritization of funds. The audit states clearly that even as the state’s roads suffered severe deterioration from 2008 to 2014, more emphasis was put on adding new miles to the state inventory, rather than repairing and maintaining existing roads.

According to the report, South Carolina has approximately forty one thousand miles of road to maintain. During the period from 2008-2014, the percentage of primary roads rated in poor condition rose from 31% to 54%, while the secondary roads not eligible for federal funds increased from 33% to 54%.

The audit also takes DOT to task for failing to have one single list of projects encompassing all sorts of projects, large and small. DOT also advances lower ranked projects over higher ranked projects without any written justification, and is unable to provide the methodology by which such choices were made. In addition, priorities, once set, are seldom reviewed to determine if needs or conditions have changed enough to warrant a review of the priorities.

Several factors contribute to the lack of oversight at the DOT. It seems to be a classic case of too many chiefs and not enough Indians. For example, the coexistence of a Highway Commission appointed by the General Assembly with a department head appointed by the Governor creates confusion as to who has what authority, thereby undermining both. The report states bluntly that the DOT’s internal, in house auditor is ineffective because of the chief internal auditor’s lack of independence.

The report recommends restructuring, with the intent of promoting greater efficiency in decision making, establishing clearer lines of authority, strengthening oversight and increasing accountability.

Other instances of misguided funds are revealed by the fact that in 2015, the DOT provided approximately $182 million to various Metropolitan Planning Organizations and Councils of Government, although only about a fifth of that amount was required by federal law to be distributed to those organizations.

Other data from the report shows how enormous and expensive the task of the SCDOT is. For example, In addition to the forty one thousand centerline miles in the state system, there are also 8,436 bridges to be maintained. Of that total, as of January 1 of this year, 804 are structurally deficient and 789 are functionally obsolete, a total of 18.9% of the state’s bridges.

As the state of any given road continues to deteriorate, the cost of reclaiming each mile rises astronomically. For example, to preserve one lane mile of road in good condition, it costs approximately $22,000. That same mile of road in fair condition costs approximately $124,000. In poor condition, the cost rises to $188,000 per mile. Clearly, maintenance is preferable to replacement or rehabilitation.

Additional aspects of the audit report and the issues facing SCDOT will be reported in future issues of The Journal.