August 19
SCDOT Weekly Update - 1

The South Carolina Department of Transportation (SCDOT) has begun publishing a weekly update for the media and the public concerning the agency’s financial situation. This is an effort to clarify information that has been circulating in public venues that may have been distorted or confusing.


               A report was presented to the SCDOT Commission at its monthly meeting on August 18, 2011 by Secretary of Transportation Robert St. Onge concerning the agency’s cash management situation. St. Onge made the following points:


  • The headline on the Secretary’s report was: SCDOT has processed payment for all validated invoices 30 business days or older.
  • SCDOT has awarded a significant number of projects to repair and improve highways and bridges in the state. Many of those projects involve resurfacing work that must be done in warmer weather, which is typically the peak construction season.
  • Financial indicators began to show in May and June of 2011 that the high volume of invoices from these projects being presented for payment, all in short period of time, were going to put pressure on SCDOT’s cash balance.
  • SCDOT notified its contractors of the cash shortfall and opened lines of communication as some payments to contractors were temporarily delayed beyond the normal 30 business day turnaround schedule. SCDOT asked that any and all contractors that faced a serious disruption in their ability to meet payrolls or pay suppliers contact SCDOT so that those individual situations could be worked out.
  • One solution that was best for SCDOT, its contractors and the taxpayers was developed with the Federal Highway Administration (FHWA)
  • FHWA agreed that SCDOT could request 12 months of reimbursements (money already coming to SCDOT) in one, upfront payment.
  • The plan was successfully executed and SCDOT received $52.8 million dollars in reimbursements on August 18. Earlier that week on August 15, SCDOT had received Federal funds in the normal cycle of FHWA reimbursements totaling $28.3 million. Funds from both of these reimbursements were added to SCDOT’s existing cash balance of $28 million.
  • To minimize cash flow challenges, SCDOT is reducing the number of state-funded projects that will be awarded during the months of August and September of 2011. The total value of these projects is $24 million.
  • Most of these projects are resurfacing projects on secondary roads. These projects will be awarded at a later date. No work currently underway has been halted by SCDOT. No projects have been eliminated from the State Program. The contracts will be put out for bid and awarded at a later date.
  • Secretary St. Onge concluded his report by reiterating the following facts:

1) SCDOT’s immediate cash flow challenge has been resolved with the cooperation of the FHWA and the accelerated reimbursements.

2) SCDOT will more closely review the financial impact each project will have on the agency’s cash flow before the contractors are given the green light to begin work. The evidence of these efforts is the reduction of projects already mentioned.

3) Despite the cash flow issues, SCDOT is following its mandate to maintain and improve the safety of the state highway system and a great deal of work has been accomplished. 

4) SCDOT is a major contributor to the economy. Providing work for the highway construction industry keeps thousands of people in South Carolina working, earning paychecks and paying taxes instead of creating a drain on the state through making unemployment payouts.

            5) The work done by our contractors and consultants improves the safety and efficiency of the highways and provides infrastructure for economic development.






SCDOT Funding Information



  • SCDOT’s sources of revenue come from state and federal gas taxes that motorists and truckers pay at the pump.
  • SCDOT receives federal funding for all highway projects that qualify for federal money. The agency must pay contractors upfront for approved invoices. Then SCDOT applies for reimbursements from FHWA. Federal funds typically require a 10% or 20% match which comes from state gas tax revenues.
  • When the agency receives reimbursements, typically twice each month from FHWA, those funds are applied to the next round of projects to keep the construction cycle moving.