BALTIMORE — Maryland’s State Highway Administration charged $358.7 million in unauthorized expenditures in the form of federal fund projects, according to an audit released by the Department of Legislative Services on Thursday.

The State Highway Administration, an agency of the Maryland Department of Transportation, was found to have increased unauthorized spending in an audit of the administration from November 2020 to October 2024, including the $358.7 million in unauthorized spending.

According to the Department of Legislative Services, SHA did not provide documentation of accrued funds, $449 million, which includes the $358.7 million.

The administration also had a 3,252% increase in unauthorized spending from June 2024 to August 2024, with a total of $163.5 million spent between the two months.

The funds “may not be recoverable,” and money from the Transportation Trust Fund, with a balance of $400 million, or state general funds may need to be used as an alternative.

SHA did not pay architectural and engineering vendors for their contract and inspection services, according to the audit.

“Our audit also disclosed that SHA did not ensure payments to architectural and engineering (A&E) vendors for contract management and inspection services were properly supported, and vendor personnel maintained certain required certifications,” Brian Tanen, legislative auditor, said in the audit. “SHA uses A&E vendors to assist in the planning and design of state roads, highways and bridges and to provide other required consulting.”

SHA works with architectural and engineering vendors to plan and design roadways in Maryland.

SHA responded in the audit stating that it was “not factually accurate” to say the projects that were part of the $358 million charge were not authorized. The Department of Legislative Services found that not only were these charges documented poorly, but overtime was as well.

“It is accurate that in some cases, expenses charged exceeded the initial authorized amount,” SHA said in its response. “The State Highway Administration followed federally approved accounting practices and no expenses were purposefully miscoded.”

The Department of Legislative Services argued that the problem was not that the projects themselves were authorized, but that the amount spent on each project was unauthorized.

SHA referred to the unauthorized funds as “unbillable expenditures,” but recorded the charges as federal expenditures. The administration agreed to investigate which funds from the $358 million are recoverable and to check its account balances for accuracy.

As for not ensuring that architectural and engineering vendors, SHA said that the Department of Legislative Services’ analysis was accurate and promised to correct “human error” related to invoices, planning to train staff on correct invoicing.

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