Dive summary:

• The federal Department of Transportation (DOT) is the target of stern criticism from the agency's inspector general on how the program brings disadvantaged business enterprises (DBE) into the construction program.
• Among other issues, the inspector general’s report says DOT has failed to implement comprehensive, standardized DBE guidance and hasn't properly trained the people responsible for implementing the program.
• The report says state transportation agencies are focused on getting companies into the program but care less about whether they succeed once admitted.

From the article:

The report found that in fiscal year 2009, DOT distributed over $4 billion in funds to DBEs. This significant amount of funding magnifies the risks for fraud in these programs and heightens the need for effective oversight. From Oct. 1, 2003, through September 30, 2008, OIG investigations of DBE fraud allegations resulted in 49 indictments, 43 convictions, nearly $42 million in recoveries and fines, and 419 months of jail sentences. From 2009 to 2010, the number of open OIG investigations related to DBEs increased by almost 70 percent. DBE investigations currently account for approximately 29 percent of OIG’s open procurement/grant fraud caseload. OIG recommended eight specific steps to improve the program’s management.