2nd UPDATE

Perdue: A Bad Smell At DOT, Problem In The Hundreds Of Millions Of Dollars

2nd Update at 5:06 p.m. with additional context, more comments from Perdue and comments from DOT commissioner. New material highlighted.
Updated at 2:10 p.m.

By Dick Pettys
InsiderAdvantage Georgia

(4/9/08) Gov. Sonny Perdue said Wednesday he’s asked for a forensic audit of the Department of Transportation in the wake of the latest report of financial mismanagement in the agency. Hundreds of millions of dollars are at issue, he told reporters.

“Every time I meet with Commissioner Abraham and I hear more about the DOT and what’s being found over there, I’m not sure we’re at the bottom of the barrel but every time she comes over there’s a smell that’s not very pleasant about what’s happening there,” Perdue said.

He commented in a news conference where he was flanked by House Speaker Glenn Richardson and Lt. Gov. Casey Cagle, the two men who presided over a session in which the business community launched a powerful effort to raise taxes for transportation over Perdue's opposition, and saw it fail in the last seconds of the session.

Angry mutterings continue to reverberate through the business community.

Perdue said he’s convinced that throwing money at DOT in the past has been part of the problem and he said it’s probably a good thing that the effort failed in the Legislature this year to allow a local option sales tax for road building.

“Folks, it was putting the cart before the horse,” he said. “When you double the money within four years and we get the value we’ve gotten, it’s not right for me to ask the people of Georgia to give more money again right today.”

Nonetheless, Perdue said more money will be needed for transportation in the future.

He said he wants to see an inclusive, collaborative process over the next few months involving lawmakers, DOT officials, the Get Georgia Moving Coalition and numerous other groups to nail down a plan “that will literally move our state forward” and said he wants to see that done by the end of September so lawmakers can see the work product, question it and consider it in 2009.

Perdue said he’s not sure a tax increase is the correct approach, but that more options are needed. "I think we still need more resources in transportation. And we're going to look for the right way to do that. Does that necessarily mean taxes? Is that the best user-fee way for funding transportation? I'm not convinced it is. We're going to look for a variety of options to do that. But the more information I hear from Commissioner Abraham, the more convinced I am right now that money may have exacerbated the problem right now."

Several hours after Perdue's news conference, DOT Commissioner Gena Abraham and DOT Board Chairman Mike Evans met with reporters to provide a briefing on their preliminary findings.

Abraham, who took office last November and has been warning the DOT has over-committed to road projects it can't possibly fund, said the latest figures put that number close to $1 billion.

"We over-obligated. We committed more money than we had coming in, and basically it means we've got to create a debt-management plan in order to ensure that as we move forward, those obligations can all be met," she said.

The department this summer will begin re-prioritizing the roughly 9,000 projects on its books based on "true engineering principles," she said.

Evans said: "The bottom line on it is, the preliminary findings of the audit show some significant financial obligations that, frankly, neither the board nor the governor knew about it and the time, and they were the result of '06 and '07 over-programming versus the available funds that we had."

He said the board has been briefed, as have key legislative leaders. "I suspect, based on what I've heard today from board members, there will be pretty serious questions asked of staff and hopefully we'll get serious answers back ..."

Earlier today, we posted this story:

Sen. Eric Johnson provided the first word on this, but now other sources confirm that new financial problems have been found in the Georgia Department of Transportation.

“There are going to be more financial disclosures - significant disclosures,” a source who spoke on condition of anonymity told InsiderAdvantage. “The state auditors have been in there and thrown up their hands. They say we need some outside auditors.”

According to the source, the problem - or at least one of the problems - involves federal funding, but he said he wasn’t at liberty to go further.

The department is said to be briefing key legislators and other officials over the next several days.

The first public word came from Johnson earlier Tuesday morning in a teleconference with Atlanta reporters.

Johnson said it may be a good thing the Legislature couldn’t agree on a local option sales tax for transportation, which failed by three votes in the Senate on the session’s final night last Friday.

“I think there’s more bad news to come out of DOT. People will be on their hands and knees thanking God Almighty it (the proposed T-SPLOST) wasn’t on the ballot,” he said. He did not elaborate.

Late last year after taking office, new DOT Commissioner Gena Abraham revealed to the governor, top legislative officials and the public that the agency is in such a disarray it doesn’t know how many projects it has, its computers don’t all talk to one another and that road-building projects have been vastly over-promised to local governments.

Problems within the agency were the reason Gov. Sonny Perdue cited for opposing efforts to give the DOT more money. He said that should be put on hold until the agency was able to manage what it already had.