State auditors urge clearer tracking and earlier notice for major paving projects

The State Auditor's Office told the Senate Transportation Committee on Wednesday that Vermont’s Agency of Transportation (AOT) needs clearer, consistent tracking of why paving projects fall behind schedule or exceed cost estimates and earlier notice to the legislature when projects are delayed or funding is shifted.

The recommendation came during a presentation by the auditor’s office, which reported follow-up work on a 2023 audit of AOT’s paving program. The auditors examined 14 paving projects with estimated construction costs of $2 million or more and said many projects took longer or cost more than originally forecast. "We first made a recommendation that VTrans develop and implement a process to consistently record why the reasons for cost and schedule deviations," said Timash, Deputy State Auditor. "And there's a statutory requirement that if a project is delayed because they need the funding, they shift the funding to another project. They're required by statute to inform you."

Why it matters: Without consistent documentation and timely notification, legislators and local officials may not see years-long schedule slippage or multi‑year cost increases until after money has been reallocated or estimates have grown significantly. The auditors showed one long-running example — referred to in testimony as the Killington–Stockbridge (Stockbridge Park) project — that the office traced back to before fiscal year 2013. Auditors said roughly $9.6 million in construction appropriations has been included in transportation programs for that project to date, while construction has not occurred and the project’s original FY2015 estimate of about $12 million had grown to roughly $15 million by FY2022 and climbed further thereafter.

The auditors described three central recommendations to address the problem. First, require AOT (also referred to as VTrans in testimony) to systematically record the reasons for cost and schedule variances and notify the legislature when funding or schedules change. Second, develop and publish performance measures for both schedule and cost — including for the preliminary engineering/design (pre‑construction) phase — and report those measures to the legislature and the public. Third, improve the content of the annual transportation program and 10‑G-style reporting so that changes that accrue over multiple years are visible, not just year‑to‑year spikes.

"There may be valid reasons" for delays or cost increases, Timash said, including added mileage, federal funding timing, or external cost pressures. But the auditors argued that routine, standardized explanations and metrics would let legislators ask focused questions earlier. Jonathan Kingston, product manager for the auditor’s office, showed examples of other states’ dashboards, including a Virginia Department of Transportation format and a project dashboard maintained by the Agency of Digital Services (ADS), which use development vs. delivery phases and green/yellow/red metrics to show both successes and problems in a single view.

Committee members asked whether the problem is AOT’s estimates or the market for bidders. The auditors said the projects they reviewed were competitively bid and they did not find clear evidence of bid rigging in those selected projects. "When they develop their estimate, the estimate continually gets refined; the one that they go to bid with, that's the one they compare," Kingston said. The auditors noted one local example in which construction costs rose about 40 percent between 2021 and 2023 for a single project, and said that kind of cumulative increase can be missed by current reporting thresholds.

What changed so far: The auditors said the legislature partially responded by lowering the 10‑G notification threshold (the testimony reported a change to a 75 percent cost change threshold from a prior level), but auditors recommended a lower threshold and inclusion of multi‑year increases so projects that “inch up” each year are still visible. They also recommended that the transportation program include original and current cost and schedule information and more explicit comment fields when a project is delayed.

Committee members and auditors discussed tradeoffs including the burden of IT development and agency buy‑in. "It could be the bids came in so much higher than they had estimated. So the project gets moved out in that period of time," Timash said; he and Kingston emphasized that a practical, once‑a‑year dashboard in the transportation program or periodic emails to committee members could achieve much of the intended transparency without a heavy real‑time IT build.

No formal votes were recorded during the presentation. The auditors said they will share links to dashboards used by other agencies and remain available for follow‑up. The office said this presentation was part of its normal audit follow‑up process: an audit issued in spring 2023 with a one‑year follow‑up done in January, and a three‑year follow‑up planned.

Ending: The committee’s new leadership and turnover among chairs prompted several members to say this is an opportune time to refine the information legislators receive about large transportation projects. The auditors urged modest, implementable changes — clearer reasons for variances, basic performance metrics for pre‑construction and construction, and more visible comparisons of original vs. current cost and schedule — so the legislature can identify and discuss projects that are repeatedly delayed or that accumulate multi‑year cost increases.