Cindy Gonzalez
LINCOLN — A new probe of the Nebraska Department of Transportation reveals a “stunning” spate of questionable spending — including more than $6 million in annual overtime pay racked up by 71% of its workers and millions of dollars more in “unexplained” fuel and fleet-related costs, according to the State Auditor’s Office.
A 108-page audit released Tuesday lists myriad flaws in oversight by the public agency in charge of about 2,000 workers, 2,100 vehicles, 599 buildings, 3,500 bridges and nearly 10,000 miles of public roads. The report covers 2023.
Blasting the DOT as a “land of opportunity” for authorities looking to rein in public costs of state government, Auditor Mike Foley took particular aim at that agency’s handling of credit cards.
‘Sure-fire recipe for trouble’
Foley said the department has more than twice as many active credit cards as workers.
About 3,600 active Voyager credit cards and 500 state procurement credit cards are used by the roughly 2,000 employees for the purchase of fuel, service, maintenance and repair of the agency’s fleet of vehicles and equipment, he said.
That number of credit cards circulating in an agency with “sloppy-to-nonexistent record keeping” is a “sure-fire recipe for trouble and abuse,” Foley said in a media statement.
“With over 4,000 government credit cards active and in play at the agency under shockingly weak accounting controls and thousands of purchases transacted at privately-owned commercial gas pumps sprinkled across Nebraska, how can NDOT possibly know whose vehicles are really getting all that fuel? The simple truth is, they don’t.”
Roots of NDOT
Originally created in 1895 as the State Board of Irrigation, the agency became the Department of Roads in 1957. In 2017, it merged with the Department of Aeronautics to form the Nebraska Department of Transportation. The DOT is responsible for highway, bridge, rail, public transit and other surface transportation programs, as well as development of aviation in the state. Duties include design, construction, maintenance and administration of the state’s highway system.
To remedy inefficiencies reported by his auditing team, Foley recommended putting all future overtime claims through a “proper review” that approves only hours determined to be both necessary and cost-effective.
He stressed the “urgent need” for credit card oversight and an overhaul of travel, mileage and fuel accounting controls for employee use of state vehicles.
“Without such drastic and immediate measures, NDOT remains ripe for potential and unrestrained financial fraud and abuse — with the taxpayers left footing the bill,” said Foley.
DOT defends overtime
The DOT, which is led by Director Vicki Kramer, appointed in January 2023 by Gov. Jim Pillen, responded briefly to the audit findings as a department, with no one writer specifically mentioned.
The response said the agency would look for opportunities to better track travel data in state-owned vehicles, and that it has implemented software to better manage fuel purchases via credit cards.
“NDOT will continue to investigate and implement further methods to ensure proper fuel use,” the response said.
On the criticism of overtime, the agency was more defensive. The response noted that the majority of overtime users were construction and maintenance workers, and said the department will continue to review requests to ensure overtime is “reasonable and necessary.”
But the response said that long overtime days or nights for the workers often means that state roadways will open sooner to the traveling public. During the winter, it said, overtime hours for experienced workers often helps ensure the safety of travelers.
Furthermore, DOT representatives noted that the Legislative Audit Office conducted an overtime use audit of the agency in October 2022 that covered three years. They said that review yielded no recommended changes.
Findings
Foley and his auditing team detailed numerous findings. Among them:
- Regarding overtime pay, 37 employees reportedly increased their annual salaries by 40% or more by working beyond 40 hours a week. A standout case involved an employee who boosted his salary by 62%, from about $76,000 to nearly $123,000.
- A quirk in accounting practices led to workers being paid for unused leave that typically gets paid only upon termination of employment. The audit team believes that more than $750,000 may have been overpaid to workers as a result.
- Employees often did not properly complete mandatory vehicle log reports or specify the purpose of travel. Reportedly more than 7,000 times during the year, certain employees revised travel reports without proper documentation or support.
- In one situation, a Valentine-based worker was tasked with traveling to Holdrege for a replacement part to be delivered to North Platte. Managers couldn’t explain, auditors said, why the person would drive more than 600 miles round-trip when someone in another district could have done it in 200 miles.
- Fuel purchases with credit cards were not always reviewed or monitored. Auditors identified almost two dozen fuel purchases, totaling thousands of dollars, for specific vehicles on days when those cars weren’t even in service.
- About 8,500 fuel transactions by agency employees were not tied to any travel log, making “legitimacy” of those expenditures impossible to verify.
- More than 700 times, Foley said, the quantity of fuel purchased appeared to exceed the fuel tank capacity of that vehicle. Likewise, the audit said there were hundreds of instances when fuel type purchased (diesel or gasoline) did not appear to match the fuel requirement of the agency vehicle reported to have been filled.
- On two separate occasions, one fleet vehicle supposedly fueled twice at the same state-owned facility on the same day. In another case, three purchases of fuel on a single credit card occurred at a commercial facility within nine minutes of each other. The department could not produce records to identify the vehicle for which the purchases were made, thwarting the team’s ability to verify the spending.
- Auditors identified more than 10,000 fuel transactions for which employees recorded odometer readings that were inaccurate by 1,000 miles or more. Some inaccuracies were off by tens of thousands of miles, Foley said.
‘Frustration’ of an auditor
Foley said the department “failed consistently” to enforce its own regulations requiring that vehicles be refueled, when possible, at one of 95 state-owned fuel pumps located across Nebraska.
Auditors identified more than 3,500 separate purchases at commercial pumps, totaling about 85,000 gallons of fuel, that they said likely would have cost as much as 85 cents per gallon less at a state-owned pump.
In all, the DOT spent more than $3 million in taxpayer funds at commercial pumps statewide during 2023. Additionally, auditors said, $6 million for other vehicle-related costs was charged on the agency’s credit cards at more than 2,000 merchants.
“The disconcerting trifecta of loose fuel purchasing practices, sloppy-to-nonexistent record keeping, and glaringly inadequate oversight led the auditors to surmise that fuel obtained with NDOT credit cards could have been diverted quite readily — perhaps in appallingly large volumes — to personal vehicles,” Foley said.
The latest audit follows two other recent reports that raised questions about similar issues within the DOT.
Foley said a frustration of his job is not seeing auditor recommendations fully implemented. He said respective departments and the Governor’s Office have ability to direct change.
“I can’t fix anything,” he said. “All I can do is report it.”