Baltimore, MD—Baltimore City’s Department of Transportation (DOT) does not fully monitor the Federal highway project contract closeout process to make sure they are completed within a reasonable timeframe, according to a Biennial Performance Audit released by the Department of Audits (DOA). The audit covers fiscal years 2021 and 2020.

The biennial audit examined if DOT’s federal contract closeout process is efficient and effective. The closeout process starts at the completion of a highway project and is finalized when the City receives federal reimbursement through Maryland’s State Highway Administration (SHA).

DOA found that inefficiencies in DOT’s contract process resulted in revenue delays for Baltimore City.  Notably, out of 18 contracts received in the audit process, DOT was not able to provide documentation for seven samples (39 percent). Of the remaining 11 samples, delays ranged from 16 months to 19.6 years.

Inefficiencies in the DOT closeout process result in delayed reimbursement revenues to the City and leaves essential funds tied up for too long in federal highway projects. For example, at the time this audit was conducted, $154,202.98 is still outstanding on the contract for Mount St/Amtrak, a project that started in 1998. If projects are not closed out and reimbursed in a timely manner, the City may have to use general funds to cover project costs, restricting the ability to start other needed construction projects. 

DOT does not have established timeframes to complete closeouts, nor does it require an internal division like Contract Administration to track and monitor highway contracts. 

Audits recommends that DOT:

• Establish timeframes to complete contract tasks.
• Give DOT’s Contract Administration Division the authority to track and monitor the process so they are completed in an appropriate timeframe.
• Maintain documentation to track and monitor the closeouts more effectively.

DOT agreed with the audit recommendations, while also emphasizing that closeouts are lengthy and involve multiple partners including SHA and the Federal Highway Administration.

“This is a complex process, one that even the Federal government has struggled to manage,” Comptroller Bill Henry said. “We hope that Audit’s recommendations will help DOT better structure their contract closeout process, so that reimbursements are made in an efficient timeframe and don’t serve as a drag on the City budget.”

DOA also followed up on prior recommendations from the FY '19- '20 Biennial Performance Audit. According to the report DOT has implemented all four recommendations. A full breakdown of those recommendations can be found in the full audit report. 

City Auditor Josh Pasch presented DOT’s Biennial Performance Audit to the Board of Estimates at its August 2nd meeting.

Background

The Department of Audits is the City's independent auditor, providing various audits, attestation engagements, and assurance services with the overall goal of improving government accountability. DOA is part of the Office of the Comptroller.

Resources

DOT Audit Simple Explainer

Audit Report