Friday, April 30, 2010

Government waste by the billions

I'm not in favor of this scheme but nevertheless it tells you a lot about what's happened to our country. Any serious project has become a financial boon for the lawyers, planners, environmental study types and mostly the politicians. We are no longer a nation of builders but rather peripheral service providers. It's like our education system where teaching the basics has been usurped by self esteem and psycho babble, public construction has lost its focus. Building things is subservient to everything other then actual construction.


Auditor faults state's high-speed rail agency

California's plan to build a high-speed rail system could be in jeopardy because the state agency overseeing the $42 billion project hasn't figured out how to secure enough money, according to an audit released Thursday.
The High-Speed Rail Authority also suffers from lax oversight, poor management and insufficient planning, according to the report by state auditor Elaine Howle.
Howle determined the agency needs to figure out alternative business plans because the planned funding - including billions in anticipated state and federal dollars and private financing - may not all work out.
The authority is charged with building the 220-mph train system between the Bay Area and Southern California by 2020.
The audit was requested by the Joint Legislative Audit Committee, made up of members of the state Senate and Assembly. Many of its findings are similar to a report issued by the nonpartisan Legislative Analyst's Office in January.
"This report concludes that the High Speed Rail Authority has not adequately planned for the future development of the program," Howle wrote in a letter to the governor and Legislature accompanying the audit. "The program risks significant delays without more well-developed plans for obtaining funds."
Plan 'lacks detail'
As of February, Howle wrote, the authority had secured about $11.6 billion in funding. But the agency's December business plan "lacks detail regarding how it proposes to finance the (program) and mitigate associated risks."
For example, the authority anticipates up to $19 billion in federal funds, but has received only $2.25 billion and does not have commitments for future federal dollars, according to Howle. And without federal or other funds, the authority cannot legally leverage the $9 billion in state bond funds approved by voters. Its plans for up to $12 billion in private funding are also vague, she said.
Howle said the agency's assumptions of state and federal funding appears to be 2 1/2 times more than what is now available.
Addressing problems
The auditor recommends that the authority develop alternative funding plans. The authority's interim executive director, Carrie Pourvahidi, said in a written statement that the agency has "already moved aggressively to address many of the issues and suggestions ... including refining our business plan to respond to questions about funding, risk management and ways to attract private investment."
Howle also found that the authority needs to improve oversight and administrative controls. For example, the agency has not created a system to track some areas of spending - including bond funds and federal stimulus dollars - that it is legally required to account for. She recommended tracking the expenditures and creating a long-term spending plan.
Additionally, the audit found that the authority has been lax in monitoring architectural and engineering contracts, including when it paid for tasks not included in contractors' work plans and made up to $2.9 million in payments without making sure the work was done. And a "primary tool" for monitoring the program's status - monthly progress reports - have contained "inaccurate and inconsistent information," according to Howle.
Issue with title
The board that oversees the authority is looking for a new executive director. In a written response contained in the report, board chairman Curt Pringle agreed with many of the findings but took issue with the report's title, "High Speed Rail Authority: It risks delays or an incomplete system because of inadequate planning, weak oversight, and lax contract management." Pringle called the title "inflammatory" and "overly aggressive" - something Howle disagreed with.
Senate President Pro Tem Darrell Steinberg, D-Sacramento, said legislators will use the audit's findings to "implement necessary reforms" as they review the authority's budget in the coming weeks.
"The Senate asked for the audit because of concerns about the management of the high speed rail authority, which have now been validated," he said in a written statement. "These problems need to be fixed and they need to be fixed now."

No comments: