A new approach to spending tracking seeks to reduce wasted tax dollars
The federal government spends billions of dollars every year on infrastructure through funding issued to state and local governments by the Federal Highway Administration.
When a state, city, or county gets federal money from the FHWA, there are oversight and compliance requirements that come with that money. As of late, the most important requirement to abide by comes down to proper project closeout. Every construction project will have an end date when there is no more work being done, period. At that point, the party managing the federal funds is responsible for providing complete documentation.
Due to the archaic pen and paper reporting systems many Departments of Transportation (DoTs) and municipalities currently utilize, the record-keeping and reporting processes for closing out projects is cumbersome and time intensive. This inefficiency in reporting has led to U.S. infrastructure projects often remaining open longer than necessary, exposing them to multiple financial risks, such as work items and materials being charged against the project that would be considered a fraudulent payment.
For example, it’s not uncommon for a project to order $75,000 of concrete and only use $50,000 worth. However, without proper project closeout documentation, the excess $25,000 of materials won’t be refunded, ultimately becoming wasted taxpayer dollars.
Crackdown on DoTs and other government agencies
Legislation to combat this poor stewardship of taxpayer dollars was passed in 2014, but the FHWA had no way of feasibly tracking project end dates. Thanks to a long overdue update to the FHWA financial management system in February 2018, infrastructure construction projects will now be held accountable. Federal funds are distributed in accordance with federal financial guidance. The update to the 2014 legislation now requires state and local transportation agencies to perform a complete project closeout through detailed documentation that proves the project meets all engineering, financial, and all other federal funding requirements no later than 12 months after project completion. Federally funded projects that fail to close out within one year will be subject to massive fines or, worse, will not receive funding at all. This puts a major burden on states that have to front project costs and take losses when not reimbursed by federal funding.
How to better comply
An initiative to achieve this first step and move away from the historic process of documenting project information through pen and paper is already under way. Through the FHWA Every Day Counts initiative, federal aid recipients are encouraged to consider innovative new approaches to their projects, including exploring the many transformative technologies now available to help make infrastructure construction less expensive and more efficient.
Construction teams will be able to more efficiently and effectively complete this process with the implementation of the right technology. This is where the concept of projects intelligence is revolutionizing the industry. Pavia System’s HeadLight technology, for instance, provides field personnel with a central platform accessible via an iPad that is streamlined to quickly collect, store, and report the information needed for proper project documentation.
This level of detail informs teams — visually and in real-time — what work was done, where it was done, and when it was done. That information is stored in a central place that can be accessed two, 10 or 20 years after the project is finalized. Access to this level of intelligence makes it easy to find and correlate all the information needed in relation to a particular project.
With a central hub of information, project managers and industry officials can use essentially the equivalent of a quick Google search to correlate all of the information that they need to justify every quantity that was collected with a particular bid item.
The bottom line
This small software upgrade to the FHWA’s financial management system is not only ensuring the proper stewardship of taxpayer dollars, but is setting in motion the demand for construction agencies and government entities to innovate their outdated processes. By implementing a few new technologies that have been thoughtfully developed with the needs of construction teams in mind, worker’s jobs will be easier. Transparency and accountability will increase, saving millions of taxpayer dollars that will help us invest in more of the infrastructure that we need.
Si Katara is the President & Co-founder of Pavia Systems. To learn more please visit paviasystems.com