Maryland's top transportation official says managers at the State Highway Administration routinely cut corners in following state procurement rules and often asked contractors to perform work outside the scope of their contracts.
State Transportation Secretary Beverley K. Swaim-Staley said a Department of Transportation investigation found no instances in which SHA officials profited personally from violations of the procurement rules.
But she said the practice of shuffling work from one contract to another — which has the effect of concealing changes from the state spending board — must end.
"The rules were not followed, and they need to be," Swaim-Staley said.
In an interview with The Baltimore Sun, Swaim-Staley offered her most extensive public comments on problems at the SHA since they were revealed in a scathing audit released in July.
The Office of Legislative Audits, the investigative arm of the General Assembly, raised concerns about allegedly cozy relations between senior SHA staff and former employees who left the agency and went on to work for private highway contractors.
Auditors said the agency failed to report changes in contracts to the state Board of Public Works, where they could have faced public scrutiny.
Auditors also raised the case of a high-level state construction official who, they said, solicited state contractors to become sponsors of a charity golf tournament with which he was associated.
They reported that the official expedited contract awards to two of those contractors and failed to make all the required ethics disclosures.
The official left the agency earlier this year. Swaim-Staley said the SHA was conducting a search for a replacement.
Auditors reported that another senior SHA official retired and soon took a job with a construction management company that later received a $16 million contract in a procurement process in which he had participated.
Former administrator Neil J. Pedersen retired from the agency the day before the audit was released. State officials and Pedersen have denied any connection between his departure and the audit.
He said at the time of his resignation that some senior officials at the agency had let him down.
Swaim-Staley said the agency has since examined many contracts to see whether they raised concerns.
"We have not found additional conflicts of interest," she said.
After the legislative audit was released, Swaim-Staley asked Deputy Transportation Secretary Darrell B. Mobley to take over the SHA as acting administrator and to uncover any management issues that needed to be addressed.
The agency operates with an annual budget of nearly $1 billion.
Swaim-Staley and Mobley said top-level personnel changes were occurring at the agency, but they declined to go into details, citing confidentiality provisions in state law.
"It's actually fair to say that people may have decided to opt to take their retirement," she said. "People would rather just leave if they can rather than go through a process of change."