Turnpike audit: Byrd finds no ‘egregious wrongdoing,’ but legislators vow regulatory ‘action’

Support Journalism

An investigative audit of the Oklahoma Turnpike Authority did not find any violations of the law, but State Auditor and Inspector Cindy Byrd called on legislators to begin regulating the OTA’s “extensive” authority and “revisiting” laws that define the OTA’s powers.

The majority of the audit report (embedded below) focused on procedures occurring under the ACCESS Oklahoma project. The project has drawn pushback from both residents in the affected area east of Norman and some public officials because of the planned route’s potential to disrupt residents. She said the audit highlights how “broad, unrestrained and unchecked OTA’s legal authority is.” Because of such concerns, Byrd issued a call to action.

“Given the extensive number of concerns voiced by the public and echoed by (Attorney General Gentner Drummond), the Legislature may want to consider revisiting relevant statutes and creating additional guardrails,” Byrd said.

In a statement, OTA spokesperson Lisa Shearer-Salim said the authority was pleased to have “independent confirmation” that they were in compliance with state law.

“OTA will review the audit in more detail, but it is committed to considering how and where we can strengthen our policies and improve the documentation of our procedures and controls,” Shearer-Salim said.

In the report, auditors wrote that the scope of the request for the audit was “broad,” and led to a “voluminous audit” that examined:

• OTA’s relationship with other state entities;
• contracting and purchasing practices;
• financial controls;
• the authority’s bond approval and land acquisition processes;
• the sale of surplus land; and
• the history of the Gilcrease Turnpike, among other topics.

“We did not find instances of egregious wrongdoing or significant statutory non-compliance,” auditors wrote. “OTA appears to be operating within its extensive authority to expand and maintain the turnpike system.”

Auditors found and recommended improvement to three areas of weakness:

• Ensuring proper contracting controls;
• performing and documenting cost analysis and negotiations to ensure OTA is minimizing costs for engineering services; and
• ensuring proper funding for Highway Patrol troopers and cadets.

Byrd said they also found two possible conflicts of interest regarding engineering contracts for the ACCESS Oklahoma project. She said OTA identified 12 prime engineering consultants for on-demand services, including Olsson Engineering and Poe Engineering. She said prime status means the firms were “pre-selected to be on standby to support the ACCESS project.”

Byrd said OTA is not required to follow a competitive bidding process, but there is a requirement that “OTA keeps cost to a minimum.”

“Without competitive bidding, contractors have no incentive to lower their prices,” Byrd said. “OTA could not produce documentation showing that it had made any attempt to negotiate contractor pricing downwards.”

She also called into question the designation of the 12 contractors, and said they were selected without a documented explanation. She said “Contractor One,” identified as Poe Engineering in working papers from the audit, is also the ACCESS Oklahoma program manager and has been paid “more than $16 million for program management.”

“Contractor One’s dual role as a program manager and as a prime contractor is a conflict of interest,” Byrd said.

The firm Byrd referred to as “Contractor Two” during the press conference is identified in working papers as Olsson Engineering. The firm drew Byrd’s attention because of its status as a prime contractor and consulting engineer.

“That means Contractor Two is responsible for recommending new projects, and then can also, on the other side, try to obtain the contracts as a contractor,” Byrd said.

In OTA’s statement, Shearer-Salim said the authority is deliberate about keeping staffing levels flat and defers to professional service contracts to “procure engineering and construction management services,” through on-demand and project-specific solicitations.

“This lawful and intentional administrative choice helps OTA keep construction costs at a minimum, manage changing project details, staffing capacity and timing while still relying on a competitive, qualifications-based selection process,” Shearer-Salim said.

‘This is a bipartisan effort’

Senators Mary Boren (D-Norman) and Shane Jett (R-Shawnee) were in attendance at Byrd’s press conference and responded positively to Byrd’s call to action.

“We are looking for some action points to be able to implement the recommendations that have come forward,” Jett said.

Despite Thursday marking the first looming deadline for bills in the Legislature, Jett said legislation on OTA could still move.

“If leadership wants something done, they have a knack for breaking their own rules to get things done,” Jett said. “The public needs to get on the phone, call their House and Senate members, and ask them to clean up the Turnpike (Authority).”

Jett said he has introduced a slew of legislation that would regulate the OTA. He said he also introduced SB 1786 to expand the state auditor and inspector’s authority. But, he said OTA related bills are not being heard in committee.

“A lot of them are just sent to the committees and they simply die there,” Jett said.

Boren said the issue is bipartisan, noting Jett’s presence at the press conference.

“On a lot of issues, we are very, very, very far apart. But as far as holding government accountable? (…) This is a bipartisan effort by the people and at the Legislature, and I am confident that we have the votes,” Boren said.

Also in attendance was Dr. Amy Cerato, president of Pike OFF OTA, a grassroots organization that has pushed against the ACCESS Oklahoma plan for years. Cerato said legislators have “no excuse not to bring this up this session.”

She said the group is planning to file two lawsuits in the near future. One will be filed on March 23 if there are not pans to mitigate “several violations” the group wants addressed, Cerato said. The other pending lawsuit is a federal class action suit, she said.

Drummond: Audit not a ‘clean bill of health’

Oklahoma Attorney General Gentner Drummond requested the audit in March 2023. In the letter to Byrd penned on March 15, 2023, Drummond wrote that his concerns include improper transfers between the turnpike authority and the Oklahoma Department of Transportation, improper contracting and purchasing, and inadequate internal financial controls.

“I have had many conversations over the past few months with legislators, community leaders, private citizens and state employees who have expressed a wide array of concerns with the financial conduct of the Oklahoma Turnpike Authority,” Drummond wrote in his letter to Byrd.

Byrd has said an audit of this size and scope has never been done on the Oklahoma Turnpike Authority. When her office got the request, she announced it would be a year before she could get started because the office was already auditing billions in COVID-19 pandemic spending. The agency’s work was further delayed when it was called upon to look at financial problems at the Oklahoma Department of Mental Health and Substance Abuse Services, Byrd said.

Joe Echelle, OTA’s executive director, has said the state auditor and inspector has never audited the turnpike authority before. Echelle has said the agency is paying $150,000 for the audit, which is unnecessary and redundant.

He said the OTA is audited by a third party every year and undergoes financial scrutiny from various entities since it sells bonds.

In a statement sent after the press conference, Drummond said the audit’s findings should not be taken as a “clean bill of health.”

“The audit made clear the need for increased oversight, accountability and transparency at the OTA,” Drummond said. “My office will continue to monitor the OTA’s operations and will not hesitate to act should further conduct warrant further review.”

Read the full OTA audit

Support Journalism