Audit: DOT spends millions on unused equipment

September 21, 2010 10:32:39 AM PDT
A report released Tuesday by the North Carolina Office of the State Auditor is highly critical of the state Department of Transportation - saying it has millions of dollars worth of heavy road-building equipment that sits unused most of the time.

"Department of Transportation’s policies and procedures do not provide reasonable assurance that underutilized or idle heavy equipment will be detected and corrective action taken," reads the audit.

Click here to read the audit (.pdf)

Auditors looked at DOT reports for approximately 2,300 pieces of heavy equipment - one costing around $153 million - that show that more than half of the items were used less than 30 percent of the available time between October 1, 2006, and September 30, 2009.

The equipment included excavators, crawler tractors, backhoes, motor graders, loaders and dump trucks.

Approximately one third of the items, costing $56 million, were used less than 15 percent of the time during each year of the three-year period.

"DOT reports indicate that some pieces of heavy equipment were not used at all. During the 12 months ending September 30, 2007, there were 274 pieces of heavy equipment (12% of items analyzed), with a cost of $20.7 million, which were never used," says the audit.

But the DOT defended the need for some of the equipment Tuesday, saying it's used for certain emergencies like hurricane recovery, snow storms, or rock slides.

"It's sort of like having a flashlight in your house. You don't use a flashlight every day. But when you need it, you need it," offered DOT Highway Administrator Terry Gibson

The report says the DOT could generate $3.5 million and reduce costs by "selling half of the equipment (about 390 pieces) that was used less than 15% of the time during the year ending September 30, 2009."

"DOT management should establish performance measures or expectations for heavy equipment usage rates that would justify the cost associated with continued ownership. The Department should periodically review and adjust performance measures to increase efficiency and achieve departmental goals," recommends the report.

In its written response to the audit, the DOT says it agrees with the need to establish measures or expectations for heavy equipment. It says it has commissioned a study from East Carolina University to look at the issue and make recommendations.

The study is to be complete by October 1.

The DOT also said it has begun a review to look for any equipment it should get rid of.

"I have directed an immediate review by the State Highway Administrator of any piece of equipment not utilized in the last year to determine if the equipment needs to be sold or reassigned," wrote Secretary of Transportation Eugene Conti.

But the DOT also compares their trucks to your lawn mower, and asks: should you buy a new lawn mower if you plan to use it only a couple hours a week, 10-months a year?

"You wind up with about 4 percent utilization, but that's really not the question. The question is. Is it cheaper to own the lawnmower, or is it cheaper to have someone else do it for you?" said Gibson.

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