RICHMOND, Va. — A confidential audit found that the Virginia Department of Transportation wasted millions of tax dollars by failing to fine a nonperforming contractor.

The Office of the State Inspector General concluded “at least $3 million” was “wasted” by VDOT management for not holding Serco Inc. accountable for allegedly incomplete or undone work.

Serco holds a $335 million contract to provide roadside assistance and other logistical service to VDOT. The six-year contract, which took effect July 1, 2013, was designed to provide more services at current costs, VDOT spokeswoman Marshall Herman said.

Last year, anonymous complaints to the State Employee Fraud, Waste and Abuse Hotline alleged Serco wasn’t fulfilling the contract.

The state’s audit substantiated one charge: VDOT failed to fine Serco for incidents of nonperformance. The auditors didn’t confirm claims that Serco’s contract was being renegotiated for additional funding or that Serco employees were taking “excessive breaks” from work.

The OIG audit, obtained through a Freedom of Information Act request, recommended VDOT “resolve potential conflicts regarding responsibility for contract administration.”

The confidential report — which cost $14,089 to conduct and was issued five months after its expected release date — also recommended “determining the need for corrective action against select employee(s).” No names were made public.

A Dec. 30 VDOT memo stated that identified deficiencies were corrected or are in the process of being fixed.

In an email statement, Serco spokesman Alan Hill said, “We are enormously honored to serve Virginia motorists and support VDOT’s innovative transportation operations.

“The IG report did not find that the contract was renegotiated to provide additional funding, nor did it find that Safety Service Patrols were taking excessive breaks.

“At all times, systems and processes were in place to ensure the safety of the motoring public was never compromised.  The report did not identify any ‘outstanding fines’ nor did it recommend fines,” Hill noted.