By Stephen Groves

ALEXANDRIA, Va.- An audit of the Virginia Department of Transportation (VDOT) revealed $877 million of available funding, Gov. Bob McDonnell announced on Thursday.

At a press conference in Richmond, the governor showed how an outside audit of the state’s transportation department wrung out money that will now be made available for road construction over the next six years. VDOT will be using the money immediately, awarding $800 million to $900 million in contracts before the end of the year.

“There’s been money sitting in accounts while people have been sitting in traffic,” McDonnell said.

He also mentioned a few projects that will be a priority – the HOT lanes on I-95, interchanges on Route 66, and the MLK tunnel in Hampton Roads.

During the 2010 fiscal year, the state didn’t spend $480 million that it was given for road and bridge maintenance. That carryover, on top of unused money from previous years, gives the state $529 million that it is not using. Over half of that, $318 million, is committed to contracts. But $200 million has not even been allocated to a contract.

The audit says this is a result of projects taking too long to be approved and moved through the system. VDOT Commissioner Greg Whirley said that all projects see the same approval process, no matter how large or small they are.

“We manage … a simple turn lane just like we do a major interchange,” he said.

Funding from the federal government under the American Recovery and Reinvestment Act also covered some projects that normally would have been paid for by the state. Also, VDOT’s management would not let any work start on a project before all funding was approved for the entire project, which halted projects.

But McDonnell said now is not the time to slow down. Construction bids are low due to the recession, and the Commonwealth’s roads need improvement.

“Our systems are too slow, they’re too bureaucratic,” the governor said.

He said he will be streamlining VDOT. A large chunk of money, $200 million, comes from changing the amount the agency keeps in its reserves. Instead of a five-and-a-half month reserve, VDOT will keep two months worth of money on hand.

“That’s a risk worth taking when we’re getting the type of construction prices and bids that we are now,” Whirley said.

McDonnell commenced the audit in April, but said he wanted to audit VDOT as far back as 2008 when he was the attorney general.

After a recession in 2006, VDOT became very careful about committing money to projects. In 2009, the general fund dropped so low that then Gov. Tim Kaine ordered that 19 of Virginia’s 42 rest stops close to save $9 million. But the recent audit showed that in 2009, Virginia didn’t spend $348.4 million of their money for roads and bridges. That extra money adds to the $529 million the state is not currently using to total $877 million.

Kaine attributed the extra money to conservative money management. He scaled back the VDOT workforce and did other belt-tightening measures.

“Thanks to tight-fisted project management and sharp reduction in overhead during the toughest economic downturn in a generation — what’s clear is VDOT has cash in the bank to pay for the projects in the Six Year Plan as they are built,” Kaine said on Thursday.

McDonnell used the opportunity to tout his brand of governance, making it clear he was streamlining VDOT to run more like a business. He said he would like to continue the auditing trend by looking at college spending and health care. He also said one person was “terminated” from his/her job as a result of the audit.

The governor said a list of projects that will be funded with the money will be available within 45 days.

VDOT will also manage the money they are granted by the federal government more efficiently. New measures include adding back $524 million that is taken out of the Six Year Improvement Plan budget for federal reserves, getting Federal Highway Administration approval to use $400 million worth of toll credits, which would free up state funds for other projects, using $130 million that is tied up in inactive projects, and deciding where federal funds are going earlier in the year.