Millions of dollars in Transportation Department stimulus dollars wound up in the hands of unscrupulous contractors because the department took too long to decide whether firms should be suspended or debarred, according to a new Transportation Department Inspector General report.

In some cases, the department took more than 13 months to decide whether a company the IG recommended for suspension or debarment should be barred from receiving government funds. Such decisions are supposed to be made within 45 days of an IG referral, the report said. As a result, states in receipt of federal stimulus dollars made awards to firms the department ultimately decided were not trustworthy, the report said.

For example, Kentucky awarded $24 million of Recovery Act-funded work to companies with officials under review by the Federal Highway Administration. The Federal Highway Administration took 10 months to review those companies and officials before ultimately suspending them, too late to stop Kentucky from making the awards, the report said.

The IG report attributes the delays to weak department policies that don't explain the deadlines for suspension and debarment reviews or that establish a strong management oversight structure.

In addition, some suspension and debarment officials failed to use indictments and convictions to establish evidence to support a suspension or debarment decision. Rather, they took on their own time-consuming investigations that weren't required, the IG report said. In addition, many suspension and debarment tasks were assigned as collateral duties, meaning they were not priorities for the officials responsible for conducting the reviews.