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Summary

We publicly issued our audit report determining whether FHWA’s inactive obligations, which had no recorded activity for 18 months, represent valid financial liabilities or can be used on other projects. Despite audits in 1999 and 2001 and FHWA’s implementation of policies to identify unneeded liabilities, we identified $284 million in inactive obligations—22 percent of the $1.3 billion reviewed—associated with projects that had been canceled, reduced in scope, or completed. The accuracy of financial obligations is a measure of the effectiveness of financial management practices. FHWA and state officials are in the process of freeing the unneeded amounts so they can be used on other projects. We estimated that FHWA could free another $251 million by more aggressively reviewing its inactive obligations.