Report 2023-124
April 4, 2024

Local Streets and Roads Program
State Agencies and Cities Are Generally Following Requirements as They Attempt to Improve Conditions

April 4, 2024

The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California 95814

Dear Governor and Legislative Leaders:

As directed by the Joint Legislative Audit Committee, my office conducted an audit of the Local Streets and Roads Program (program). Our assessment focused on the California Transportation Commission’s (Commission) and the State Controller’s Office’s (State Controller) administration of the program and the manner in which six selected cities have used program funds. In general, we determined that state agencies are appropriately allocating program funds to cities and counties, and the selected cities are properly using funds to improve local streets. Nevertheless, street conditions are continuing to decline, and the State Controller has not held cities to some key aspects of accountability for their required local streets and roads spending.

We found that the Commission has properly determined funding eligibility for all cities and counties in the State and that the State Controller distributed funds according to state law. The Commission also ensured that all cities and counties reported their expenditures of program funds, and it provided that information to the public on its website. The six cities we reviewed appropriately used program funds to maintain and repair streets and on other allowed activities, including street safety projects. Nevertheless, and despite the significant additional funding that the program provides, pavement conditions in the cities we reviewed are generally declining.

We found that the State Controller is not ensuring that cities and counties follow a state law that requires a certain level of local spending on streets and roads. State law allows, but does not require, the State Controller to audit cities and counties to ensure that they maintain specified levels of local spending each year. However, the State Controller has only conducted reviews of local streets and roads spending, and it maintains that such reviews do not allow it to enforce the requirement. As a result, there are no consequences if cities and counties repeatedly fail to meet their required local spending levels.

Respectfully submitted,

California State Auditor