Audit takes aim at ITD management, finances 

Idaho’s infrastructure is crumbling. With 34 percent of its roads and bridges in “poor” or “mediocre” condition, the state transportation department suffers from declining revenue and rising costs. What’s worse, what little can be done is hampered by the agency’s scattershot management practices.

This was the message an independent audit of the Idaho Transportation Department’s highway programs delivered to the Joint Legislative Oversight Committee in Boise Jan. 19 and examined by the House and Senate transportation committees Jan. 20.
The audit, prepared by Pennsylvania consulting firm Avant IMC, covered ITD’s operations on 5,000 miles of highway, 1,761 bridges and 29 rest areas, as well as budget and personnel constraints. The report took aim at ITD’s “reactive,” “district-centered” and “decentralized” statewide strategy as a major stumbling block to its cost-effectiveness.
Specifically, the audit stated ITD’s performance measures are inconsistent, the department doesn’t take advantage of current technology or follow consistent best management practices.
“Many of the measures are well-intended… but they don’t really push the department in a positive direction,” said Roberta Manshel, a consultant with the audit team.
Auditors recommended establishing an internal Project Management Office that could save the agency $5.3 million in the first five years, followed by an estimated annual savings of $3.1 million. Making up for turnover and staffing shortfalls by hiring consultants would save another $6.1 million in the first five years, followed by an annual $3.5 million savings.
But improving management still wouldn’t be enough. Even if funding from a higher gas tax and registration fees reaches the requested $240 million, ITD would still be $55 million short of what it will need by 2013.
A major reason for that, according to auditors, is ITD’s $1 billion “Connecting Idaho” strategy. They said the “worst-roads-first” strategy of targeting the most deteriorated roads and bridges for immediate work is a drain on already stressed budgets, and sets up the state for ballooning future costs.
“It is much more costly to replace a roadbed that has been destroyed… than it is to maintain that road in the first place,” said Michael Huddleston, one of the auditors.
James Brock, the lead author of the report, added that every $1 spent to preserve a road in “good” or “fair” condition would save between $6 and $10 in the future.
“You’ll be able to potentially save hundreds of millions of dollars in avoided costs in the future,” Brock said.
While the transportation department said in a 14-page written response that it mostly agreed with the audit’s findings, it differed on a key point: Auditors said ITD should change the way Grant Anticipation Revenue Vehicle (GARVEE) bonds are financed, but transportation officials said the way they finance GARVEE bonds works just fine.
If it continues as it has, the audit team said ITD could lose more than $20 million to negative carry by 2010, when the fifth and final GARVEE issuance takes place.

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