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State Highway Administration faces federal accounting scrutiny as winter costs and capital needs grow
Summary
SHA officials told lawmakers that a post-pandemic shift to more federally funded projects has increased workload and receivables; the OLA audit found $359 million in potentially ineligible federal charges and SHA outlined corrective actions and staffing requests to improve federal reimbursements and project oversight.
Department of Legislative Services analysts told the subcommittee that the State Highway Administration's six-year consolidated transportation program totals roughly $7.8 billion and that federal funding now accounts for a larger share of SHA's capital program than before the pandemic. DLS flagged recent federal rescissions and an Office of Legislative Audits (OLA) finding that SHA charged roughly $359 million in project expenses to federal projects for expenditures not authorized by Federal Highway Administration guidance.
State Highway Administrator Will Pine acknowledged the audit finding and described steps SHA has taken to reduce its federal receivables balance and improve controls. "We have successfully brought our balance of federal receivables down to under $300,000,000 and are continuing to work collaboratively with our federal partners to recover all eligible expenses," Pine said. He also requested eight new positions in FY27 intended to strengthen federal-aid processing and help address increased federal workload.
DLS raised several other budget issues: higher-than-expected winter maintenance spending (SHA reported $101.3 million in winter expenses as of March 2, 2026, $37.1 million over budget), adjustments to highway use revenue distributions to localities, and the resignation of some grant awards after rescission. SHA described mitigation steps including a revised budgeting approach (5-year rolling average for winter costs), designated federal-reimbursement teams, and improved federal-aid staffing.
Committee members pressed SHA on procurement and reimbursement processes, the Greenbelt interchange project tied to a possible FBI headquarters (project remains in the capital program but design advances are paused pending federal and local coordination), and the administration's approach to work-zone safety camera procurement. SHA described an RFP pipeline for automated enforcement, prioritizing work-zone cameras first and fixed cameras next.
DLS recommended narrative and reporting directives on federal reimbursements and contingency language in the budget bill. The subcommittee asked SHA for updates on audit corrective actions and winter expense management; SHA said it will provide additional details and supported the recommended narrative requests.
