...transportation investment Nation's history. Along with this major investment transportation comes an even greater responsibility to use those taxpayer funds wisely and uphold the public trust.

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Today, the highway transportation community faces significant pressures to handle more challenges with fewer resources due to stretched budgets, reduced staff, the cumulative demands of maintaining an ever-growing infrastructure, and a host of other factors. To accomplish their missions, most transportation agencies rely on contract services and products for which they have oversight accountability.

"Public employees who work to ensure we get what we pay for are the eyes and ears of the taxpayer," said Mary J. Richards, president of the Massachusetts Organization of State Engineers and Scientists, at the 2004 National Fraud Awareness Conference cosponsored by the U.S. Department of Transportation's (USDOT) Office of Inspector General (OIG), the American Association of State Highway and Transportation Officials (AASHTO), and others. "Their duties involve the verification that work performed by private contractors meets the required specifications, both in materials used and in construction practices rendered. The number of these professionals has been drastically reduced, and the ranks of private contractors [have] been increased so dramatically that the lack of oversight on public construction projects has spawned an even greater potential for the waste, fraud, and abuse of tax dollars."

Transportation agencies need to be concerned because the consequence of fraud, waste, and abuse is that less money is available to meet program objectives, not to mention that public confidence in transportation programs is compromised. This is especially critical at a time when infrastructure needs are increasing and the Nation's fiscal resources are struggling to meet these growing demands.

Fraud in highway construction projects is more common than one might think, is increasingly sophisticated, and crosses geographical boundaries. USDOT's OIG currently is investigating 228 contract and grant fraud cases across the country, compared with 158 investigations that were underway 5 years ago. The surge in investigations suggests that transportation managers need to be increasingly vigilant.

One challenge OIG recently cited in Congressional testimony is an example of the funding that might be made more available if the transportation community could be more vigilant and collectively reduce fraud, waste, and abuse by only 1 percent. This would net an additional $8 billion for critically needed transportation projects (based on $800 billion invested by the Federal Government and States in highway projects over the last 6 years). That is enough money to fund 16 new major highway projects or, put another way, might represent an additional $160 million per State.

Proactive and effective fraud prevention, detection, and prosecution are achievable only through a well-coordinated, multidisciplinary, intergovernmental approach. The Federal Highway Administration (FHWA), OIG, State departments of transportation (DOTs), and industry partners must work together to protect highway projects from fraud and maintain public confidence in the integrity of the Nation's transportation system.

To help transportation agencies recognize and prevent fraud, some of the most prevalent fraud types were discussed with USDOT Inspector General Calvin L. Scovel III. Inspector General Scovel provided tips for detecting fraud schemes and described some of OIG's efforts to educate contracting officers, project managers, and others. (For examples of specific fraud schemes and ways to detect them, see a companion article in this issue of Public Roads, "Is Your Construction Project a Victim of Crime?")

What exactly...

NOTE: All illustrations and photos have been removed from this article.



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