A stinging state audit of the California bullet train project released Thursday found that bad decision-making, organizational flaws and poor contract management led to multibillion-dollar cost overruns and delays in construction.
The construction program in the Central Valley, in which the rail authority is building 119 miles of bridges, rail bed, viaducts and trenches, is $600 million over budget and at risk of missing federal deadlines set under past grant agreements, the audit said.
“Missing the deadline could expose the State to the risk of having to pay back as much as $3.5 billion in federal funds,” state auditor Elaine Howle said in a letter to Gov. Jerry Brown.
The audit, ordered by the Legislature earlier this year, found extensive mismanagement of the program, including serious problems tracking contracts, reviewing invoices for payment and monitoring progress on construction.
The findings of deep-rooted problems comes as Brown, who has devoted his considerable political power to advancing the project, prepares to hand off leadership to incoming Gov. Gavin Newsom.
In her letter to Brown, Howle suggested that much of the spending may have been an outright waste.
“Despite its challenging financial situation, we determined that the Authority has failed to implement sound contract management practices. As a result, it cannot demonstrate that the large amounts it has spent on its contracts have been necessary or appropriate,” she wrote.
The push for the audit originated with Republicans in the state Senate and Assembly, but was resisted for years by the Democratic majority until earlier this year when the delays and cost increases continued to mount. The project is now 13 years behind the schedule set in the bond act approved by voters in 2008 and has grown in cost by $44 billion over its original $33-billion price target.
Mike Rossi, the former Bank of America executive who is the leading finance director on the rail authority board, pledged to adopt the audit’s many recommendations, but said that does not “signal agreement with all of its conclusions about the impact of past decisions by the authority.”
http://www.latimes.com/local/california/la-me-bullet-train-audit-20181115-story.html