Audit: State misspent $7M meant for highway repair

JEFFERSON CITY, Mo. -- More than $7 million in funds meant to fix Missouri's ailing highways instead went to excessive paid leave for employees and other expenses, even as the Department of Transportation has said a funding shortfall will prevent proper maintenance of roads and bridges, according to a state audit released Thursday.

Just weeks ago, director Dave Nichols said the department will take up no new major projects after a steep decline in the state's construction budget for roads and bridges -- from $1.3 billion annually in 2009 to $685 million this year, with an expected drop to $325 million in the fiscal year 2017 budget.

The state constitution limits money from the road fund, which in part comes from Missouri's 17-cent fuel tax and is to be used only to improve highways and bridges.

But the audit noted roughly $7 million in money from the road fund was used improperly in fiscal years 2013 and 2014: About $3.8 million went to safety grants to local entities and almost $1.9 million to settle employee discrimination lawsuits.

"It's improper," deputy auditor Harry Otto said. "And it violates the strict interpretation of the constitution."

Transportation officials in a response in the audit said using those funds for safety education and other programs was within the rights of the department, although they plan to look for other funding sources.

Another $1.5 million in restricted funds was paid to employees on administrative leave who later were laid off as part of a 2011 cost-savings plan.

The department estimates the proposal to cut 1,200 staffing positions could save more than $1 billion over a decade. Those efforts saved roughly $605 million as of last year, but Otto said the department has accrued hundreds of thousands of dollars in unreasonable relocation expenses in the process, including about $622,000 more paid for moving costs than the auditor's office deemed appropriate.

One employee with two homes was reimbursed $30,000 for a loss on the sale of one, for example. The payment goes against transportation department policy, although officials in the audit said extraordinary circumstances made it necessary.

Other issues found in the audit included not disclosing the results of a $625,000 settlement with a former employee that was approved in a closed meeting, which is required by the state's public information laws.

The department policy is to release those records upon request, rather than posting them publicly.