An obscure Illinois tollway audit in 2008 warned about conflict of interest involving engineering contracts, sloppy record-keeping and insufficient checks and balances in the midst of the agency's $6.3 billion road widening and rebuilding program.
The internal audit of purchasing and contract policies for 2006, obtained by the Daily Herald, was completed in December 2008 but never discussed at subsequent tollway board meetings after its release.
The report stated that conflict of interest existed in some instances when engineering firms hired to independently inspect construction and scrutinize expenses ended up policing their own contracts.
"This process is jeopardized when the same vendor performs multiple aspects of the project construction and oversight. The tollway risks the integrity of the process by allowing vendors to review, inspect and approve projects they have a vested interest in," auditors said.
Since the audit occurred, the agency has worked to ensure similar conflicts don't occur and has an independent general consulting engineer, AECOM, that will intervene in such cases, officials said. Audits from 2009 indicated no recurrence of the problems.
"I have looked at the audit, and I am glad we have put policies and procedures in place to make sure we don't have a finding like this again," tollway Chairman Paula Wolff said.
The Daily Herald obtained a copy of the 2008 report after it was referenced during a Jan. 21 meeting called by Wolff about the 2009 audits. Previously, internal audits were circulated to board members but not discussed in public.
"The goal is to be very open with all the audits," Wolff said. "It's good for the agency. We all benefit from seeing where there are potential weaknesses and addressing them."
Wolff was appointed as chairman in August by Gov. Pat Quinn, who said it was time for a new era of openness at the agency, hurt by former Gov. Rod Blagojevich's corruption indictment. Blagojevich denies charges he tried to extort campaign funds from tollway contractors, but the allegations cast a shadow on the authority, which also has been criticized for political hiring practices.
Auditors cited McDonough Associates Inc., HNTB Corp., and Knight Engineers & Architects as examples of contractors with dual roles.
McDonough generated news in late 2008 when former tollway Executive Director Brian McPartlin left the agency to work for the firm. He ended up not taking the job.
Tollway Chief of Engineering Paul Kovacs said tollway staff reviewed all the contracts cited by the auditors and found no misconduct had occurred. Kovacs also added tollway engineers provide another layer of oversight.
Al Swanson, a senior vice president for McDonough, said it was the tollway's decision to award the contracts and no problems involving conflict of interest occurred. Other companies cited in the 2008 audit did not return calls or deferred comment to the tollway.
Some other concerns in the 2008 audit include contracts without proper signatures and approvals, uncertainty over whether vendors were checked to see if they owed the state money, and duplications and errors in a master list of vendors.
The vendor list has been updated and streamlined since, officials said.
Auditors also critiqued a committee that evaluates change orders for increases or decreases in a project's cost. The committee, which includes the tollway chairman and engineers, lacked conflict of interest rules, and breezed through change orders, auditors said.
"The decisions made may not be in the best interest of the tollway since the engineering department has a vested interest in ensuring the construction projects are completed on time," auditors said.
Tollway spokeswoman Joelle McGinnis said the committee had completed conflict-of-interest rules and procedures in 2009.
State Sen. Susan Garrett, who has been holding hearings into problems related to tollway oases, called the audit troubling and wondered why it took so long to surface.
"The tollway has to take responsibility for past actions," the Lake Forest Democrat said.
This Thursday, the tollway board is expected to discuss 2009 audits that found inaccuracies in the master list of vendors again, $44,000 in duplicate payments and lax hiring procedures such as improperly maintained job descriptions and outdated tests. The findings of the latest audits are being remedied and the overpayments were corrected, officials said.