Auditing

Texas Roadkill: $1.1 Billion Accounting Error

Double counting bond proceeds caused the state to nix highway projects -- and is likely to trigger an agency audit.
Stephen TaubFebruary 7, 2008

The Texas Department of Transportation (TxDOT) has admitted to making a $1.1 billion accounting error. During a Texas Senate hearing, the agency disclosed that it erroneously counted some proceeds from bond sales twice, according to the San Antonio Business Journal,.

The upshot is that the TxDOT committed to road projects it can no longer afford to take on, according to the report. TxDOT’s admission will likely lead to an audit.

In November, the department had announced a funding shortage and said it would cut parts of its budget and freeze some new road projects. Reportedly, after the announcement, some skeptical lawmakers and transportation industry experts suspected TxDOT was exaggerating its financial crisis. But the admission about the accounting errors earlier this week helped explain a majority of the cuts.

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Nevertheless, some skeptics believe this is a crisis manufactured by a group supporting the privatization of roads, according to the The Austin American-Statesman. Indeed, State Senator Kirk Watson reportedly stated at a Senate committee hearing that Texas Transportation Commission members “have an agenda. And that’s to privatize the second-largest (highway) system in the world.” He chided agency officials: “And you are hell-bent-for-leather to do that.”

However, State Senator Tommy Williams pushed for a third party to look at TxDOT’s books, said the American-Statesman. “It’s important to me that we get the state auditor’s office in there as quickly as possible,” Williams reportedly stated.