A new federal audit raises questions about whether the Metropolitan Washington Airports Authority is properly managing the nearly $975 million in federal funding it received to build the Silver Line rail project.
The 20-page audit, by the Department of Transportation’s Inspector General and obtained by The Washington Post, identified several instances in which MWAA used federal dollars to pay for services prohibited under federal guidelines and for expenses unrelated to construction of the first phase of the $5.6 billion rail project.
In one example, MWAA used $16,000 in grant money to pay for lobbying services – even though such an expense is not allowed under federal rules. The lobbying services were provided by former MWAA board members.
In another instance highlighted in the report, the airports authority used grant money to pay for $54,000 in expenses related to the second phase of the rail project, even though the dollars were specifically earmarked for Phase 1.
Auditors found that MWAA does not have a reliable system for tracking costs and determining which expenses were eligible for federal dollars. Authority officials also could not provide supporting documentation for millions in expenses, auditors found. And while some of the money may have been spent properly, MWAA officials lacked the records to prove that was the case the report said.
With an estimated $289 million in federal funding still unspent, auditors said it was critical for safeguards to be put into place to protect taxpayers’ investment in the project.
The Federal Transit Administration, which is overseeing MWAA’s management of the project agreed.
“FTA continues to work diligently with MWAA to ensure that internal controls are developed and implemented and we share the OIG’s concerns that MWAA must develop corrective actions for the deficiencies found in this and prior audits,” wrote FTA Adminstrator Peter Rogoff in his response to the IG’s findings. “We recognize that while some progress toward greater accountability has been made, more work remains to be done in the area of internal controls.”
MWAA officials said the agency was working to improve its record-keeping and address the other recommendations.
“We appreciate the FTA’s response letter to the IG, which is included with the report,” MWAA said in a statement. “We will continue to cooperate with the FTA, providing all the documentation it seeks and complying with all its requests and recommendations.”
MWAA already is grappling with criticism following a series of delays that have pushed back the opening of the first phase of the Silver Line rail project. This week, officials announced they have resolved most of the software issues that caused the most recent series of delays and said they expect to complete work on the rail line next month.
This most recent audit was an outgrowth of the inspector general’s previous investigation of operations at the authority, in which auditors identified myriad instances of mismanagement and lax oversight where a top executive hired relatives for jobs at the authority and another accepted Super Bowl tickets and other gifts from contractors doing business with MWAA. In all, 10 people were fired or disciplined following the release of that report.
“Many of the findings included in this report, which covers a time period from 2009 to 2011, relate to issues identified earlier in a 2012 independent audit by KPMG which the Authority had requested, and efforts to address the issues have been underway since then,” MWAA said in its statement. “We have been working closely with the FTA in these efforts, which include moving from largely paper-based systems to a more-modern record-keeping system.”
MWAA officials have touted their efforts to address many of the ethical and operational issues identified in that November 2012 audit. But this new report may raise questions about whether the authority has done enough to fix problems that have dogged it in recent years.