House Transportation & Infrastructure Committee searching for $500 million of wasted funds

Brian Stempeck, Environment & Energy Daily reporter

7/21/03

Federal officials, including representatives from the General Accounting Office and the Transportation Department's Office of
Inspector General, will testify before the House Transportation and Infrastructure Committee tomorrow about waste and fraud issues facing the Department of Transportation (DOT).

Committee staff had few details to offer last week about the hearing, which was required under the House's FY '04 budget
resolution. Budget resolutions in the House and Senate mandate that committees identify areas where funding is being wasted.

DOT Inspector General Kenneth Mead recently testified before the House Budget Committee about similar issues. According to Mead's testimony on July 9, the Budget Committee expects T&I Committee members to identify about $491 million of "savings targets," about 1 percent of the administration's FY '04 request for DOT.

The Federal Highway Administration should be "more vigilant in identifying funds that are no longer needed by states," Mead said. DOT IG found "$238 million in funds that states no longer needed on projects that should have been redirected to other projects." For example, DOT has had $54 million tabbed for a Connecticut highway project for 16 years.

Mead recommended that states complete finance plans for all projects that will use more than $100 million in taxpayer money. Currently, officials only have to write the plans for projects larger than $1 billion.

Fraud continues to be a major problem in highway and transit construction. Indictments have tripled and convictions have
doubled, Mead told the committee. "We currently have over 100 ongoing investigations of infrastructure projects or contracts," he said. "Fuel tax fraud drains the Highway Trust Fund of an estimated $1 billion annually," Mead added.

Schedule: The hearing is scheduled for 11 a.m., Tuesday, July 22, in 2167 Rayburn.

Witnesses: Representatives from the Department of Transportation Office of Inspector General, General Accounting Office, Federal Highway Administration, Railroad Retirement Board and Railroad Retirement Board Office of Inspector General were invited to testify.