California’s missing train

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If you were looking to take some easy shots at government waste and abuse, you’d have a hard time topping California State Auditor Elaine M. Howle’s recent assessment of the Golden State’s 14-year-old high-speed rail project. The California High Speed Rail Authority, she writes in a 47-page report issued at the end of April, “paid at least $4 million of invoices for which it had no evidence…that the contractors had performed the work invoiced” and “does not generally ensure that invoices reflect work performed by contractors.”

The Authority’s free-spending ways become even more clear in a spot-check by the auditor: “Of 22 regional contractor invoices we reviewed, the Authority paid 20, totaling $6.9 million, without documenting that the Program Manager had performed a required review.…It spent $46,000 on furniture for its Program Manager’s use based on an oral agreement.” The Authority’s plans also “lacked detail” about ridership projections for the train, about where its funds will come from, about whether state, local, or federal agencies or private partners will be paying for the project, and about how the Authority would manage risk.

As if to drive the point home, Howle singles out the leg of the bullet train line that is generally considered the simplest, cheapest, and shortest. “Creating a viable funding plan may be a challenge as matched funding for the least expensive corridor eligible for Recovery Act funds—Los Angeles to Anaheim—amounts to $4.5 billion, while projected costs total $5.5 billion,” Howle writes. She adds that “the regional contractor working on the Los Angeles-to-Anaheim corridor completed 81 percent of planned hours but spent 230 percent of planned dollars.”

Full story: Mystery Train – Reason