Agency presentations to legislative committees are typically routine affairs in which senior managers present unremarkable information to lawmakers whose committees have policy or budgetary oversight of them.
Monday night’s presentation by the Oregon Department of Transportation to the Joint Committee on Transportation, however, was anything but routine, leaving one lawmaker sputtering in frustration.
About one hour and 10 minutes into a hearing on the state highway fund, Travis Brouwer, ODOT’s assistant director and top finance official, told lawmakers how the agency had made a more than $1 billion error in its 2023-25 budget.
To put the “error” in perspective, a January audit of ODOT pegged the actual mistake at $1.1 billion out of a $5.9 billion biennial budget. In other words, the agency expected to have nearly 19% more revenue than it actually did.
In his presentation to lawmakers, Brouwer explained that the model ODOT uses to project revenue makes incorrect assumptions about when ODOT can expect to receive federal funding.
Brouwer termed the error “an overestimation of federal funding in our project delivery and local government budgets by about $1 billion.”
Brouwer went on to explain that the agency discovered the error in late 2023 and notified the Oregon Transportation Commission, which oversees the agency, in early 2024.
ODOT then ordered an audit, which was delivered in January.
In the audit, first reported by the Salem Statesman Journal, auditors found that ODOT had failed to perform a basic accounting function: reconciling actual revenues to the projected revenues in its budget.
“There was no check on the reasonableness of the figure with historical actuals,” the audit found.
In other words, ODOT established a budget based on what it projected it would receive but did not take the step of checking whether the money had actually arrived.
Auditors minced no words in describing the error.
“In developing the agency’s budget, the process did not ensure that a reasonable federal revenue figure was used for the Delivery and Operations Division budget,” the auditors wrote. “An over-reliance on the highway cash flow model and a lack of understanding on how Statewide Transportation Improvement Program programming impacts that model drove the budget error.”
Monday night’s hearing came at a delicate time for the agency.
For the past year, ODOT has traveled the state with key lawmakers, building a case for giving the agency more money in the 2025 session. The department has focused its need for more cash on the failure of gas taxes and other revenue sources to keep pace with the costs of road maintenance and completing major projects.
Although the agency had previously disclosed the billion-dollar error to the OTC, Brouwer’s presentation caught many interested parties and at least one member of the Joint Transportation Committee by surprise.
“I’m totally disappointed and just cannot believe what I’m hearing,” state Sen. Mark Meek (D-Gladstone) said to Brouwer. “Don’t you have any reconciliation process?”
“I’m incredibly disappointed in the fact we have made this error,” Brouwer replied. “It was a significant impact and one we have worked very hard to address.”
But on Wednesday morning, state Rep. Shelly Boshart Davis (R-Albany), vice chair of the Joint Transportation Committee, said ODOT had a lot of work to do before her caucus would support additional funding for the agency.
“A billion-dollar budget mistake coupled with a more than 300% increase on the cost of the Abernethy Bridge [on Interstate 205] are just two examples, although massive, of problems that need to be fixed and accounted for before we ask Oregonians for another dollar,” Boshart Davis said.
This story was produced by the Oregon Journalism Project, a nonprofit newsroom covering rural Oregon.
