Six months after State Auditor Elaine Howle released a scathing report about California's proposed high-speed rail project, the agency is lagging in its response -- and blames the Legislature's budget delay and state hiring freeze.
The California High-Speed Rail Authority has already taken several steps to address some of the problems Howle identified in her report, "High Speed Rail Authority: It Risks Delays or an Incomplete System Because of Inadequate Planning, Weak Oversight, and Lax Contract Management."
The audit found that the rail authority's program managers routinely made mistakes in their invoices and that the authority failed to adequately consider risk management and funding scenarios in its business plan.
The authority released a progress report last week detailing its efforts to respond to Howle's recommendations. Though the authority had revised some of its contracts and policies to improve accuracy and oversight over consultants, officials said their response has been hampered by the Legislature's failure to pass a budget on time.
Legislators passed the budget on Oct. 8, after a 100-day impasse.
"The task of managing, controlling and oversight of this project remain a huge challenge for the Authority due to a lack of additional qualified staff," authority CEO Roelof van Ark said in a cover letter to Howle.
"As the project continues to evolve, the ability to hire additional competent and experienced staff (as was envisioned in the budget and planning) has not been authorized, due to the lack of a State budget, and the subsequent hiring freeze announced by the Governor," van Ark wrote.
The budget situation has kept the authority from hiring a deputy director for risk management, who would assume risk management for the entire project. The authority also wanted to hire two new auditors, but had not been able to do that "due to a lack of a State budget and the current freeze on hiring."
The authority's business plan has come under heavy criticism from both the auditor's office and the nonpartisan Legislative Analyst's Office, which also found the document's risk analysis to be insufficient.
Legislators included a provision in their budget requiring the authority to submit a better business plan, but Gov. Arnold Schwarzenegger vetoed this budget provision.
On the Peninsula, where opposition to the rail system has been most vehement, a group of financial experts released a study earlier this month dismissing the authority's revenue and ridership projections as "implausible."
Despite its financial difficulties, the authority is swiftly proceeding with its analysis of possible design options for the Peninsula segment of the rail project. The authority's board of directors is scheduled to discuss the San Francisco-to-San Jose portion of the line at its Nov. 5 meeting, at which time board members could further narrow down the possible design alternatives.
So far, the authority has identified elevated tracks, at-grade tracks and open trenches as the three possible alternatives for the Peninsula segment.
At its next meeting, the board is also scheduled to approve the hiring of new financial consultants, who will help the authority develop alternative funding scenarios for the project, as Howle had recommended.