The state auditor has issued a report on the California Department of Transportation's overhead costs, revealing that the department frequently spends more than budgeted.
The auditor reviewed the performance, management, efficiency and budget of Caltrans' support program, and found:
The capital outlay support costs for 62 percent of the projects that completed construction in fiscal years 2007-08 through 2009-10 exceeded their respective budgets – the cost overruns totaled more than $305 million of the $1.4 billion in total support costs for these projects.
The average support cost overrun for State Transportation Improvement Program projects was about $1.5 million per project, and about $329,000 for State Highway Operation and Protection Program projects – more than 25 percent of their respective budgets.
An increase in the hourly rate for support costs was the primary cause for the cost overruns in the projects we reviewed – one project was about 14,600 hours under budget, yet exceeded its budgeted cost by nearly $6.8 million, or 83 percent.
The auditor also found that Caltrans' time-reporting system does not prevent its employees from charging time to projects to which they are not assigned, and lacks strong internal controls to ensure that employees charge their time appropriately. (Source: California State Auditor Report 2010-122, "California Department of Transportation: Its Capital Outlay Support Program Should Strengthen Budgeting Practices, Refine its Performance Measures, and Improve Internal Controls," April 28.)