Money & Politics | Daily Report | High-speed rail

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Fresh off reports earlier this week that California is set to receive another $900 million in federal funding to finance its vaunted high-speed rail venture, a report released yesterday by Inspector General Laura Chick suggests that the authority overseeing the project may have mismanaged some of the money it has already received.

While noting that the California High-Speed Rail Authority has improved its accounting and money management in a number of areas, the report [PDF] also points out several areas where it falls short. Among them: spending more than $90,000 on potentially redundant PR services and failing to document more than $3.4 million in reimbursed expenses.

The authority's public relations contracts have made headlines before. Earlier this year, the authority hired international PR giant Ogilvy Public Relations to manage its outreach efforts after controversy stalled the hiring of its first choice, Mercury Public Affairs, which has close ties to Gov. Arnold Schwarzenegger.

Prior to that, according to the report, the authority contracted with several other PR firms, which apparently continued to bill for services several months after the switch was made to Ogilvy.

The report also notes that the authority does not have adequate systems in place to track how its stimulus money is spent, a federal requirement. Earlier this year, the state received more than $2.3 billion in stimulus money to support its high-speed rail efforts.

Another audit earlier this year accused the authority of questionable spending and contract management, but yesterday's review noted that the organization had made progress in those areas.

In a response included with the report, authority CEO Roelof van Ark said that most of the problems raised by Chick's office have been resolved since July, including obtaining all documentation for paid expenses and resolving the PR contract.