Failing to Track Highway Spending

October 15, 2014
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The problems with federal highway spending are well documented. The program distorts project incentives and distributes money inefficiently. A new report from the Government Accountability Office (GAO) adds to the list of problems, detailing improper fund management within the Federal Highway Administration (FHWA).

In 2014 the highway trust fund collected $39 billion in fuel tax revenues, but spent $53 billion, creating a $14 billion deficit. This was not an isolated event. Since 2008 Congress has provided  $50 billion of general federal revenues to prop up the highway trust fund. The Congressional Budget Office estimates that the highway trust fund will require another $157 billion of general revenues by 2024.

Funds from the highway trust fund are spent by several agencies, with the bulk allocated by FHWA. In fiscal year 2013, FHWA spent $41 billion, or 80 percent, of all highway funds. Of that, $39 billion was sent to states; the majority going to road and bridge construction and improvement.

But GAO found that FHWA is poorly tracking how this money is being spent. According to GAO,  “FHWA tracks and reports aggregate obligations for its “major projects” (projects with a total cost of $500 million or more), it does not collect and report aggregate obligations for other projects, which represented nearly 88 percent of all fiscal year 2013 spending.” GAO’s analysis states that $36 billion in federal highway funding is not being properly tracked by FHWA.

Tracking this information would allow FHWA to provide greater oversight on projects, and to provide Congress and the public greater detail about spending projects and priorities. The agency could track cost growth on projects and perhaps stop cost overruns, which are common on transportation projects.

FWHA already has the technology to make these improvements. GAO notes that FHWA’s computer system already has the capability to track this data, but the agency does not feel inclined to use this capability.

Congress’ current short-term patch to the highway trust fund expires in May. FHWA’s adoption of GAO’s recommendations would allow both Congress and the agency to better control spending and lower the imbalance between spending and revenues.

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