"For the agency to receive federal money and then basically lose track of it is unacceptable, especially regarding mass transit," said state Rep. Dave Agema, R-Grandville, chair of the House Appropriations Subcommittee on Transportation. "Michigan is trying to make a finite amount of money go as far as possible, and the federal government is willing to help out with matching funds. But it's our transportation department's responsibility to prove the money is not wasted and they are using it for what it needs to be used for."

Transit agencies are responsible for maintaining Michigan's bus system and MDOT is responsible for auditing the use of the revenue by these agencies; the report showed only half of the required audits had been performed.

Agema has taken issue with the state's practice of spending money on state transit projects while roads across Michigan continue to require extensive repairs. The inability of MDOT and the transit agencies to track where project money is going is irresponsible, he says.

"Subrecipients of this money are really the black hole called out in the AG's audit report," Agema said. "For the last few years I have been most concerned about the efficiency of mass transit and the fact that they are so heavily subsidized. To have little accountability within the department is unacceptable."

Agema hopes the Auditor General's report can serve as material to assist the department in developing reforms that will guarantee federal dollars are spent responsibly and in compliance with federal regulations.