NDOT audit shows no new roads since 2008, millions in bank

By Bill Donovan
Special to the Times

WINDOW ROCK, Sept. 26, 2013

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Officials for the Navajo Department of Transportation are continuing to have problems in spending tribal road funds, according to a recent audit.

The Navajo Nation Auditor General's office recently looked into how efficient the department was doing in handling the millions of dollars it receives annually for the tribal road fund. Three funds make up a good portion of monies that are spent annually on building new roads on the reservation and maintaining the ones that already exist here.

The monies that go to the fund come from several sources, including the tribe's fuel tax - which motorists pay at the gas pump - federal grants and some monies from the tribe itself.

Between the time when the road fund was established in 1999 and 2012, a total of $104 million was placed into the road fund, according to Paulson Chaco, director of the department.

During that same time, the department spent about $74 million of those funds. Another $15 million was earmarked for road projects that had not gotten underway In looking at the program, the auditor found a number of problems that has resulted in a failure to build as many roads as the Navajo people needed.

What the auditors found was that since 2008, no new roads have been built and tens of millions of dollars are still just sitting in the bank.

NDOT officials said the committee that provides oversight to the department had declared a moratorium in 2008 on any new expenditures for road construction because so many of the projects that had been funded, had not been completed.

The auditors discovered that this was still a major problem.

"Of the 147 road projects that were approved since (2003), there are 54 outstanding projects," the audit report stated.

In the past when NDOT officials brought this up, they would say that a failure to get the projects completed on time was adding millions of dollars to the cost because of rising costs. A project that was to only cost a few hundred thousand dollars to complete, would wind up costing several times that amount because of increases in the cost of asphalt or salaries.

When Chaco became director of the program in Jan. 2011, he discovered that the moratorium was still in effect and he sent letters to the 110 chapters saying that NDOT "would not be accepting any applications for road projects until further notice."

The auditors were also critical of the way the oversight committee selects which road projects to fund, saying that there is an ineffective procedure.

"Further, there is no assurance that the projects selected will coincide with NDOT's long-range transportation plan or current goals and objectives," the report stated.

NDOT officials have complained privately about this problem for years, saying that the roads that were selected to be built or maintained were influenced more by who was on the committee and how powerful they were.

There have also been allocations that committee members in the past would lobby each other, saying if you will support my request for funding this project I would support your request for your project.

As a result, the determination of which project to fund would likely be influenced by which projects would help the Council delegate on the committee get re-elected rather than which one would save more lives or be more economically feasible.

Another thing of note was the fact that a lot of the projects that were approved for funding weren't even road projects, according to the auditors. They were for parking lots.

"Of the 147 road fund projects, 33 (or 22 percent) were parking lot improvements," the auditors stated, pointing out that parking lot improvements are not paid for out of road construction money.

Instead, it comes out of capital improvement funds.




When auditors asked NDOT officials why this was being done, no one seemed to know the answer. Auditors speculated that members of the tribal Council, under pressure from chapters to find money for parking lot improvements for their chapter houses and other areas, decided it would be easier to tap into the road fund, rather than the tribe's capital improvement fund.

The auditors observed that in fiscal year 2012, NDOT was able to complete 11 road projects.

With 54 road projects still open, that would indicate that it will take another five years to get the projects completed.

To correct the problem, the auditors said NDOT officials need to assess the current status of each open project and establish a plan of action on how to complete it. Once that is done, they need to establish a timeline for completion.

Chaco, in his response to the auditor's report, admitted that although NDOT has expended $89 million for road projects since 1999, "the use of the road fund is questionable in certain areas."

Still, he said, it was unfair for the auditors to compare the operation of the tribal transportation department with state departments.

The tribal program "is nowhere near the capacity of the state's", particularly with their different sections, programs, funding and employee capacities, he said.

He added that NDOT officials are building their department to build a structure that is based on the funding levels that it has rather than the higher funding levels that are available to state DOTs.

He pointed out that NDOT had provided the auditors with a corrective action plan when they did the draft audit and the concerns of NDOT officials remain the same.

"There are also many road projects that still have not been completed and some have been outstanding for as long as 10 years," he said.

"Overall, as the administrator of the road fund, NDOT cannot provide assurance that the funds were used efficiently and effectively while addressing the transportation needs of the Navajo Nation," he said as he concluded his response.



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