On Friday, February 5th, the State Transportation Board voted to rescind their earlier decision dn return to cash accounting for the near future. The move came after a Senate Transportation Committee hearing where several Senators took issue with the decision. The Legislature has floated proposals to change state law to allow GDOT to use accrual accounting.
On Thursday, January 28th, the State Transportation Board voted to ignore the State auditor’s recommendation that DOT operate using a cash accounting system. The Board authorized the department to operate under accrual accounting. Cash accounting requires the entire amount of funding for a project to be available up-front, where accrual allows the department to begin projects, while anticipating the receipt of federal funds at a later date. The Board believes the accrual method is a more effective way to provide jobs for DOT workers and contractors, but the auditor cautioned that federal funds are not guarantted and should not be treated as such.
In response, Governor Perdue cancelled a bond refinancing that could have saved the State $22 million in interest costs. He cancelled the refinancing because of concerns that the underwriters might have with this newly adopted method of accounting.