"The Texas Department of Transportation... misplaced a billion dollars."
Debra Medina on Thursday, January 14th, 2010 in a debate.
Medina says TxDOT lost $1 billion
The Texas Department of Transportation has become an easy target this campaign season, and Debra Medina, the Wharton businesswoman vying to knock Gov. Rick Perry from his seat, took a swing at the agency during the Jan. 14 GOP gubernatorial debate.
"We've got to look at transparency, efficiency and accountability in all areas of state government," she said. "We have seen sloth, if you will, sloppy management in the Texas Youth Commission, in criminal justice, in the Texas Department of Transportation, where they misplaced a billion dollars."
A billion dollars, MIA?
Chris Lippincott, TxDOT director of media relations, said: "That's not correct."
In October 2007, TxDOT officials accidentally counted $1.1 billion in bonds revenue twice, he said — a mistake that led the agency to commit an extra billion to road projects.
Chief Financial Officer James Bass realized the agency had erred by a billion dollars when it approved $4.2 billion for construction in fiscal 2008. Because of the mistake, the department announced huge cuts in spending that froze some road projects that were ready to go.
"There was an accounting error," Lippincott said. "A miscalculation."
Actually, there were two accounting errors, according to an August 2008 state audit of the agency. In adding up what was available for projects, department forecasters added $581 million of bond money that was already in a $3.1 billion total. Then, they lumped in another $488 million from the Texas Mobility Fund, money that was actually already tabbed to pay for past projects. Taken together, that was $1.069 billion that at least some people in the agency counted twice.
TxDOT didn't announce its gaffe until a February 2008 legislative hearing, where lawmakers were skeptical that it was just a number-crunching error and not a tactical move to create a financial crisis and thus pressure legislators to ease the limits on private toll road contracts.
The audit concluded that "ineffective communication, a complex reporting structure, and misunderstanding of reported data led the Department of Transportation to overschedule $1.1 billion in planned contract awards for fiscal year 2008."
No one has shown that any money was misplaced, as Medina claimed. The money never existed in the first place.
But she didn't miss the point. The transportation behemoth did make a billion-dollar mistake, a misstep that hobbled crucial road projects.
We rate Medina's claim Mostly True.
Published: Friday, January 22nd, 2010 at 6:38 a.m.
State Auditor Office, An audit report on the Department of Transportation's Financial Forecasting and Fund Allocation, August 2008
Texas Debates, Jan. 14
Interview with Chris Lippincott, Texas Department of Transportation director of media relations, Jan. 22
Austin American-Statesman, State road officials say they were erred by $1 billion, by Ben Wear, Feb. 6, 2008
Austin American-Statesman, Audit explains TxDOT error, by Ben Wear, Aug. 29, 2008
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