About $1.1 billion in overbudgeting by the Texas Department of Transportation resulted from bad internal communication, misunderstandings and a complex reporting schedule, according to a new state audit.

The Texas Transportation Commission, which oversees the department, was also left out of the loop about the error and its causes, a state auditor’s report found.

"Although the department asserts it briefed all commission members individually, no briefing documents, specific dates or calendars were provided to auditors to verify those briefings," states the report, which was released Thursday.

Deirdre Delisi, chairwoman of the commission, said she welcomed the report.

"Since the error was discovered, internal changes in controls have been made in the agency to prevent this from happening in the future," said Delisi, who was not on the commission when the shortfall was discovered.

Chief among the changes, she said, was consolidating all of the finance functions under the chief financial officer.

Ultimately, no projects in Fort Worth area were delayed as a result of the error.

Counting it twice

In fiscal 2008, the department overscheduled $1.069 billion for contract awards. It did so by making mistakes in how it identifies the money it has available.

The department was initially unaware, auditors found, that it boosted bond revenues by $581 million. The problem: The bond proceeds had already been earmarked. In effect, the department counted the money twice.

Similarly, the department increased planned awards from Texas Mobility Fund bond revenue by $488 million. But the money was already pledged to pay for existing projects.

Improving the system

To better keep track of its cash and keep the commission informed, the audit report makes a number of recommendations, some of which are already in the process of being implemented by the department, officials said.

They include:

Brief the transportation commission on developments that have a significant statewide impact

Summarize important information in its cash forecast report and a clear description of "what-if" scenarios

Create a formal process for the finance division to follow in reviewing and approving amounts used to develop all contract award schedules.

Amadeo Saenz Jr., the Transportation Department’s executive director, said in a statement that the audit report discovered many of the same problems identified internally.

"Implementation is already well under way for several of the recommendations," he said. "I am committed to increasing the department’s transparency, and the recommendations identified in this audit put us another step closer to realizing that goal."