Department of Transportation
Highway Trust Fund
Notes to Financial Statements
September 30, 2006
(Dollars in Thousands)
NOTE 8 - CONTINGENCIES
FHWA pre-authorizes states to establish construction budgets without having received appropriations from Congress for such projects. FHWA does not guarantee the ultimate funding to the states for these "Advance Construction" projects and, accordingly, does not obligate any funds for these projects. When funding becomes available to FHWA, the states can then apply for reimbursement of costs that they have incurred on such project, at which time FHWA can accept or reject such request. For the year ended September 30, 2006, FHWA has pre-authorized $44.8 billon under these arrangements; however, no liability is reflected in the HTF financial statements at September 30, 2006.
There are legal actions pending against the HTF Agencies in Federal courts in which claims have been asserted that may be based on action taken by the Agencies. Management intends to vigorously contest such claims. Management believes, based on information provided by legal counsel, that losses, if any, for these cases would not have a material impact on the financial statements and no loss accrual has been made for these cases outstanding as of September 30, 2006 due to this fact.
