A state audit found the Colorado Department of Transportation has issues with the “completeness and transparency” of its budgeting practices.
The audit, released Monday by the Office of the State Auditor, details concerns with how CDOT handles public funds and gives recommendations for corrections.
CDOT, which had a $1.56 billion budget plan in 2017, oversees, operates and maintains the state’s transportation system. Budgets for the department are approved by a transportation commission appointed by the governor.
The audit found that CDOT spent $582.7 million more in 2017 than was outlined in its budget because it did not include revenue that wasn’t spent from the previous year.
“Incomplete information reduces the effectiveness of the budget plan as a management tool and decreases transparency and accountability of the department’s budget,” the audit said. “Both the Commission and members of the General Assembly use the Budget Plan to understand how Department management plans to spend its funds and make decisions regarding the Department’s spending priorities.”
The audit added: “The information that we found missing from the budget, such as the amount of funds the Department expects to carry forward from prior years, its total construction budget, and projects in progress or planned, are fundamental aspects of the Department’s financial planning and would help policymakers make more informed decisions and hold the Department accountable.”
The budget also incorrectly reflected federal funding, with CDOT receiving $43.7 million more (of $718.6 million total) than what was in the approved budget.
The department also did not properly release $29.3 million in unused construction project funds, the audit said.
The audit additionally “found suspicious patterns and anomalies that indicate a lack of detective controls to identify and deter potential fraud by employees,” but did not find specific cases.
“Incomplete fraud detection and prevention controls increase the risk of fraud,” the audit said. “Although all government agencies are at risk of becoming victims of fraud, the Department is particularly susceptible to billing fraud.”
The state auditor offered several recommendations agreed upon by CDOT and the commission.
The audit recommends requiring the budget to reflect all spending and revenue and regularly reviewing “budget-to-actual data.”
It also recommends regular reviews of “vendor and payment data for suspicious patterns or anomalies” and recommends policies that will allow for proper release of unused construction project funds.
“Our internal budget processes should be easier to understand for the public and for stakeholders,” CDOT chief financial officer Jeff Sudmeier told Colorado Public Radio.
CDOT has changed leadership since 2017, with Gov. Jared Polis appointing Shoshana Lew as executive director in December 2018.