DOT Under Microscope for Stimulus Grants

Patches in the Tarmac are seen at Cape Girardeau Regional Airport, March 25, 2009, in Cape Girardeau, Mo. Officials hope to repair these and other areas of the airport with federal stimulus money.
AP Photo/Jeff Roberson
While the White House promised strict oversight of stimulus money, new findings from a government watchdog show that the administration paid for 50 airport projects that didn't meet the grant criteria and approved projects at four airports with a history of mismanaging federal grants.

CBS News has reported on $100 million in stimulus money being spent on tiny airports that cater to recreational flyers, corporate jets and remote communities as part of the Department of Transportation's "Airport Improvement Program." Now CBS News investigative correspondent Sharyl Attkisson reports on new problems with oversight of that program along with billions more of taxpayer dollars.

From airport improvements to highway construction, some of the federal programs getting the most stimulus money also represent the greatest possibility of waste and fraud.

In touting its stimulus package earlier this year, the Obama administration promised to watch spending like a hawk.

"If a federal agency proposes a project that will waste that money, I will put a stop to it," President Obama pledged back in February.

Transportation Department Inspector General Calvin Scovel plans to examine the FAA's process for selecting programs receiving the $1.1 billion in federal grant money. Two Alaska towns that did not meet the minimum score were Akiachak, a town of 659 residents, which received $14 million to replace its airfield, and Ouzinkie, with a population of 167 and received nearly $15 million to replace its gravel runway.

Scovel also noted four projects to recepients with a history of misusing government money. The grantees are Guam International Airport Authority, Owensboro-Daviess County, Ky., Pitkin County, Colo., and Puerto Rico Port Authority.

Department of Transportation Deputy Secretary John Porcari countered that the grants in question were part of an effort to help smaller airports meet required safety standards and said Scovel's description was "an overstatement" and that the scoring system was a way to help focus stimulus spending.

Also, federal agencies are largely left to monitor their own spending. And new findings show there's good reason to question how hard they're really trying to expose waste and abuse in their own agencies.

It started when the U.S. inspector general began digging to see how well the Department of Transportation was watching over four programs identified as its most likely trouble spots - the Federal-Aid Highway Program, Federal Transit Administration Formula Grants Program, FTA Capital Investment Grants Program, and the FAA Airport Improvement Program.

Together, those programs are receiving $37 billion in stimulus fund.

But the inspector general found something shocking and issued an urgent advisory saying basically that the Transportation Department's effort to quantify improper payments was basically worthless.

The inspector general said when the department's contractor checked invoices for discrepancies, it chose sample sizes that were too small and not random, meaning the results were "not credible," "misleading" and "do not … represent the seriousness and extent of the problem."

For example, under the Airport Improvement Program, five million purchases were made worth $4.4 billion in taxpayer money. But the Transportation Department only examined 63 line items - just 0.3 percent of the total.

It's even worse for highway grants. The Transportation Department looked at just $20 million out of $32 billion that was actually spent on the Federal Aid Highway Program - just 0.06 percent.

The percent of transactions scrutinized by the Department of Transportation is dwarfed by other agencies. Auditors at the Agency for International Development, for example, examined a full 31 percent of cash spending.

"There's gonna be tens of billions of dollars flowing through some of these programs that are already vulnerable to waste and fraud. … They need to do a better job of tracking it and they aren't doing that," said Leslie Paige of Citizens Against Government Waste.

The Department of Transportation declined CBS News' requests for an interview, but defended the work as statistically, saying "we are confident that the controls we have in place defend against improper payments."

The department also said it will expand its next audit to examine more payments.

Congress promised unprecedented oversight of stimulus tax dollars. But the effectiveness of that oversight depends on how hard you really look.

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    Sharyl Attkisson is a CBS News investigative correspondent based in Washington.