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VDOT audit reveals 2 huge pots of gold

The audit recommends converting $400 million in credits that it receives from the federal government for maintaining toll roads into money it can use as state matches for federal projects. That will free up state money for other projects.

The state also will stop keeping 10 percent of the federal transportation money it receives each year in reserve and will keep only a 60-day state reserve for construction money.

McDonnell called the state's reserve policy "unrealistic" and "unacceptable" and noted that it has far higher reserve limits than other states require.

But Democratic legislators said Thursday that the new proposed reserve amounts are way too low. "We are really cutting it close to only go back to 60 days of reserves,'' said Del. Vivian E. Watts (D-Fairfax), a former transportation secretary.

Transportation Secretary Sean T. Connaughton said state officials will decide what the money will be spent on within the next 45 days, but the money could be put toward any one of a large number of planned maintenance projects in Northern Virginia. Those include improvements on I-66 and I-95 and bike trails.

Senate Majority Leader Richard L. Saslaw (D-Fairfax) said the transportation agency is coping with the loss of more than 1,000 employees through the years and the challenges of allocating federal stimulus dollars.

"While no one wants to see funds lying unused," Saslaw said, "I appreciate that the VDOT management employed a cautious approach during a period of great financial uncertainty and did not over-obligate funds."

An additional $100 million is in accounts used by localities, primarily in Hampton Roads, to pay for transportation projects. State officials are pushing local officials to spend that money, but Democrats argue that the money could not be used because a 2005 state law prevents officials from spending the funds until they are pooled from all revenue sources.

Bob Chase, executive director of the Northern Virginia Transportation Alliance, a business-supported group that lobbies for transportation funding, said he welcomed news that more money will be going toward new construction and maintenance projects but that the General Assembly still needs to approve new long-term investments in transportation. Virginia's transportation needs equal $18.7 billion over 10 years, according to the transportation secretary's office.

The four-month audit, conducted by Cherry, Bekaert and Holland of Richmond, cost $424,000.

Soon after his inauguration in January, McDonnell called for four audits of VDOT, an agency that in the past three decades has undergone more than 50 audits.

In May, the first audit, of public-private partnerships, recommended that the state create a government office solely dealing with those types of deals. Last month, the second audit of the Virginia Transportation Research Council - which works with the University of Virginia and the Virginia Tech Transportation Institute to research, test and implement transportation improvements - found that more needs to be done to determine whether its findings are being implemented. A fourth audit will be released later this year.

House Speaker William J. Howell (R-Stafford) said the audit showed "gross inefficiencies."

"Allowing for the immediate obligation of over $1.4 billion for transportation projects across Virginia will mean more bang for taxpayer bucks, more relief for congestion-weary drivers and more jobs and economic opportunities,'' he said. Staff writer Rosalind S. Helderman contributed to this report.

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