Consistent with a number of recommendations contained herein, it is important that the state have the ability to audit local road agency work and spending. This is especially true when one considers that a large percentage, often over 50 percent of the funds for county and city road agencies, come from the state. There often is limited local funding of local road agencies. As such it is important that the state have an effective means of auditing local expenditures of MTF distributions. This is not because local agencies are mistrusted. It is simply standard operating procedure that entities providing large sums of monies to other organizations be allowed to audit that spending.
Act 51 should be amended to provide explicit authority for the Auditor General and/or MDOT to conduct financial and performance audits of all aspects of local road and/or transit agency use of MTF monies. Audits should also be allowed of all reports required to be submitted to the department, and of all rules and regulations that local road and/or transit agencies are to follow in performing their road and/or transit duties. Act 51 does not currently contain such a requirement and in 1976 the Michigan courts issued an injunction prohibiting MDOT from conducting any such audits because Act 51 did not provide any explicit authority for such audits. This injunction was the subject of a case in the early 2000s when Wayne County refused to allow the Auditor General to audit its road agency, before eventually agreeing to the audit.