US to audit grants awarded to California bullet train

FILE - In this Feb. 26, 2015 file photo, a full-scale mock-up of a high-speed train is displayed at the Capitol in Sacramento, Calif. The U.S. Department of Transportation is auditing the California high-speed rail project's federal funding. The inspector general's audit comes at the request of Republican U.S. Rep. Jeff Denham, a critic of the project. The California state auditor is already examining the project after repeated delays and cost overruns. The state is well short of the $77 billion it now estimates it needs to build a bullet train between Los Angeles and San Francisco. California has received more than $3 billion in federal money through grant programs. (AP Photo/Rich Pedroncelli, File)

SACRAMENTO, Calif. - California's high-speed rail project is facing an audit from the U.S. Department of Transportation's as costs continue to climb.

The inspector general's audit, announced Thursday, will examine the Federal Railroad Administration's oversight of nearly $3.5 billion in federal grant money awarded to the project.

It comes as the plan to bring travellers between Los Angeles and San Francisco in less than three hours faces growing scrutiny.

A business plan released in March shows the state does not have the roughly $30 billion needed to complete the first phase of the project between the Central Valley and San Francisco. The entire project, meanwhile, is expected to cost $77 billion. State auditors are also conducting a review.

The authority's new chief executive has pledged more transparency about the project's troubles.

"We will co-operate fully in this and any other audit of our funding or program," Brian Kelly said in a statement. "We look forward to working closely with our federal partners to deliver the nation's first truly high-speed system."

Republican U.S. Rep. Jeff Denham, a project critic, requested the audit in December, saying taxpayers deserve a "full and honest review" of its finances.

The inspector general's office did not provide a timeline for when the federal audit will be completed.

The federal money awarded to California comes with specific conditions that Kelly has promised to meet. They include completing a 119-mile (192-kilometre) segment of track now under construction in the Central Valley and finishing environmental reviews for the full line by 2022.

The audit will specifically evaluate how the Federal Railroad Administration determines whether California has complied with federal guidelines.

Auditors will release the results publicly along with recommendations to Congress and the U.S. Department of Transportation.


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