Good news for highway contractors in Georgia:
The State Transportation Board agreed Thursday to loosen up funding of highway projects that has slowed significantly since the state changed its budgetary practices nearly two years ago following a critical audit.
Board members voted overwhelmingly to return to a system of “accrual accounting,” which allows the Department of Transportation to commit funds to multi-year projects before all of the money is in hand.
A state audit in 2008 concluded that accrual accounting was a violation of the Georgia Constitution, and then-DOT Commissioner Gena Evans halted the practice.
Combined with the economic downturn, the change in policy slowed the flow of DOT funds for new construction – which had hit a record $2.7 billion in fiscal 2007 – to a trickle, prompting highway contractors across the state to lay off large numbers of workers.
“This state is hurting tremendously for jobs,” said board member David Doss of Rome, who made the motion to return to accrual accounting. “By us having our hands tied by this accounting, it has cost jobs.”
In passing Doss’ motion with just two “no” votes, the board turned aside warnings from the agency’s legal staff that if Georgia Attorney General Thurbert Baker rules accrual accounting illegal, the DOT would have to pay back any advance funds used to award construction contracts.
After the 2008 audit, the board was forced to scramble to plug a $450 million deficit in that year’s budget caused by advancing funds to highway projects.
“I think we’re being too hasty to move ahead with this right now,” said board Chairman Bill Kuhlke of Augusta, who voted against the proposal.
Under Doss’ motion, the DOT will send a letter to Baker informing him of its action and requesting a formal opinion on the legality of accrual accounting.
“If we’re wrong, we’re in no worse a position than we were on June 30, 2008,” Doss said. “We took steps to fix it.”
