An Audit Report on the Department of Transportation's Administration of Construction Contracts
October 2004
Report Number 05-007
Overall Conclusion
The Department of Transportation (Department) has policies and procedures to ensure that it correctly pays contractors for allowable expenditures on construction projects, but it needs to improve controls to prevent illegal and unauthorized activity from occurring. Although we identified improvements the Department needs to make, payments to contractors that we tested at three of the Department's district offices were properly supported, approved, and calculated.
Certain weaknesses in access controls for SiteManager (the Department's construction administration system) could allow users to inappropriately create or modify construction data. As a result, there is an increased risk that a contractor could receive an improper payment without management's knowledge or appropriate approval.
The Department also needs to improve controls over inventories of materials on hand held by contractors to reduce the risk that contractors could retain advance payments for materials that they are not entitled to retain. In addition, the Department needs to improve controls to ensure that all materials used to construct Texas roadways are properly tested and approved to avoid accepting substandard construction. The Department also has an opportunity to improve its efforts to promptly collect and pay funds when it shares the costs of highway construction projects with other parties.
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