Audit calls for better control over construction changes

Thursday, March 14, 2002 | 9:40 a.m.

CARSON CITY -- The state Transportation Department could save $1 million a year by tightening controls over change orders on its highway construction projects, an executive audit says.

During an 18-month period that ended June 30, 2001, the department completed 98 road projects for $487 million. Of that total, $40 million was above the bid price and paid for additional work or changes in the contract terms.

The state Division of Internal Audits said the transportation department processed 731 change orders. In some cases it took more than 100 hours in staff time to process an order, said the report, which was presented to the Executive Branch Audit Committee on Wednesday.

State Transportation Director Tom Stephens agreed that improvements must be made, as change orders now represent 8.6 percent of the projects' cost. Stephens said he intends to reduce that to 8 percent this year, 7 percent in 2003 and 6 percent in 2004.

The change orders, he said, are not wasted money. They may be needed to improve a project or take care of something that may have been overlooked.

For instance, Stephens said, after the Sahara Avenue project in Las Vegas began, Palace Station asked that the utility lines be placed underground. The casino paid for that work, but it was added to the total cost.

The city of Las Vegas wanted noise walls for that project, and paid 50 percent of the cost. But that was added to the change order costs, Stephens said.

Another audit released Wednesday found the state Department of Human Resources can do a better job in managing federal funds that are passed through to pay for services for children with disabilities.

The department could provide clinics with an additional $400,000 annually by increasing the percentage of grant funds from the federal government, the audit said. It could also distribute up to an additional $300,000 by spending the funds earlier in the grant period.

Nevada served 1,838 children in fiscal 2001 and had a waiting list of 400.

"We need to do a better job of pushing the money down to the serve the children," Mike Willden, director of the state Department of Human Resources, said. His agency has already started to implement some of the suggested changes in sending more money to the clinics, he said.

The internal audits division also examined the state Division of Investigation and found it needs to discover a new source of revenue.

The investigations division uses money it receives from forfeitures of drug profits to match federal funds.

The audit found that forfeiture cash is decreasing and there may not be enough to provide the match in the future.