On April 29, 2010, the State Auditor released a report confirming the Planning and Conservation League’s concerns that the California High-Speed Rail Authority does not possess the transportation planning expertise to properly implement the state’s largest public works project, and should be subject to significantly greater oversight. 

Entitled High Speed Rail Authority: It Risks Delay Or An Incomplete System Because Of Inadequate Planning, Weak Oversight, And Lax Contract Management, the Auditor’s report chastises the Authority’s 2009 business plan as lacking detail regarding how it proposes to finance the project.  For example, the Authority estimates that it needs between $17 and $19 billion in federal funds to implement the project, but the Auditor notes that it only expects to receive $2.25 billion from the federal government.  Similarly, the Authority’s spending plan through 2013 includes an amount in excess of 2.5 times of what is presently available.  Perhaps even more troubling is the Authority’s handling of funds it has already been allocated.  The Auditor found the Authority does not ensure that work is actually performed by contractors before paying invoices, and has paid $4 million to regional contractors without documentation from the Program Manager indicating that the work had been completed.  The Auditor also determined the Authority has no system for tracking administration and preconstruction costs as required by state law, and consequently risks prematurely exhausting funds limited for those purposes.

The Auditor’s report makes several recommendations consistent with PCL’s requests of the Legislature to increase oversight and accountability of the Authority.  The Authority should be required to develop and make available a revised spending plan with funding scenarios that address the potential for reduced or delayed funding from planned sources, and develop a method for effectively tracking administrative and preconstruction costs.  The Authority should also institute a process for critically reviewing progress reports and demand that they detail the status of promised products and services, and adhere to controls for processing invoices so that payment is given only for work performed.

Despite its issues with the Authority, PCL continues to believe that high-speed rail can afford significant benefits to California’s residents and natural environment.  Currently, PCL is working with legislators such as Senators Ducheny, Lowenthal, and Simitian to craft statutory language that will hold the Authority accountable to clear programmatic benchmarks and afford either the Legislature or another state agency with transportation planning expertise greater oversight over the Authority’s activities.