DLS: Office of Legislative Audits flagged $1.4 billion in federal revenue at MDOT lacking supporting documentation

Senator Hester asked DLS about an Office of Legislative Audits finding that, at the close of FY25, Maryland Department of Transportation entities had about $1,400,000,000 in federal revenue entries for which supporting documentation was not available. Zimmerman said auditors looked at both the State Highway Administration and the Transit Administration and found combined entries lacking supporting documentation; agencies are reviewing whether funds have since been recovered or can be supported for reimbursement.

Zimmerman said some of the items may reflect timing or reconciliation differences and that agencies identified by the audit were working to determine recoverability. "I think all of the agencies that were identified are working through to determine, how much of those funds have been recovered," she said. She warned there is a risk that state funds could be needed to backfill a portion of the amount if federal reimbursements are not obtained.

Committee members asked what institutional changes would prevent similar issues in the future; Zimmerman said agencies are continuing reconciliations and that DLS expects follow‑up from those departments and the Office of Legislative Audits.

No formal action was taken during the briefing.