WASHINGTON — Virginia is reviewing its public-private partnership program to ensure the state can most efficiently leverage private funds as its transportation revenues have dwindled amid the economic recession.

Gov. Robert F. McDonnell on Wednesday released an audit report he had called for to analyze the state’s Public-Private Transportation Act of 1995. The audit conducted by KPMG Infrastructure Advisory Group —  the first of three assessments to overhaul the state’s P3 program — recommends the state open an independent office for P3 projects to make sure that projects are prioritized appropriately.

McDonnell requested the review because “lengthy processes, unclear deadlines, and red tape still stand in the way of achieving the full benefits” of the state’s P3 process, he said in a statement Wednesday. He said his administration will begin to implement P3 program changes this summer.

As proposed in the audit, a new P3 office would be led by one individual who would report directly to the Virginia Department of Transportation commissioner and the secretary of transportation. The office would need a dedicated funding source to conduct traffic and revenue studies.

The state has completed three P3 projects. It has another two under construction and six under development. But the heart of Virginia’s transportation problem is sufficient state funding for projects, sources said — something not addressed in the audit.

The economic recession has squeezed sales and fuels taxes, which the state relies on for projects. The state’s transportation trust fund revenue decreased by about 7.0% in fiscal 2009 and is expected to drop by 4.5% in fiscal 2010, Moody’s Investors Service reported last month. The state has cut more than 1,400 transportation employees.

Last week, the Virginia DOT released its working draft for fiscal years 2011-2016 transportation projects, including the P3 projects. Proposed spending for transportation is 10% lower than the level approved in in 2009. The report says the state will match VDOT’s eligible capital expenses at 56% and operating expenses at 36%, the lowest level in Virginia’s history.

The key to P3 projects in Virginia “is often that they can’t be done without some state investment,” Jeffrey C. Southard, executive vice president at the Virginia Transportation Construction Alliance and a former VDOT assistant commissioner. He said the state successfully leveraged funds in a P3 deal for the Interstates 95 and 395 High Occupancy Lanes project -- a $2 billion project that will cost taxpayers $500 million.

“We’re back to the issue of 'Where does the money come from?’” Southard said. “The problem is we don’t have sufficient taxpayer dollars to leverage all these projects.”

The state is looking for alternative funding sources. ­Earlier this month, McDonnell filed an application with the U.S. Department of Transportation to toll I-95 near the North Carolina border. McDonnell estimated that a $1-to-$2 toll could generate $30 million to $60 million annually.

VDOT earlier this month competitively sold $492.7 million of bonds, including $407.2 million of Build America Bonds, to Goldman, Sachs & Co. The bonds are the first of a $3 billion debt program approved in 2007 for transportation projects. The bonds were rated Aa1 by Moody’s and AA-plus by Standard & Poor’s and Fitch Ratings.

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