Two construction companies abused a system intended to give minority contractors a crack at Ohio Department of Transportation projects, the state government watchdog concluded in a report this week.

Officials from the state transportation agency misunderstood their own diversity program for contractors, which might have encouraged the two Canton companies to submit false documents, according to the report by Inspector General Thomas P. Charles' office.

The possible fraud was limited to a single $218,000 project, the replacement of a drainage pipe in Medina County, the report said.

The project was handled by two minority-owned companies that share an office in Canton, TAB Construction and its subcontractor, Andrell Inc.

According to the inspector general's report, managers of the state's Encouraging Diversity, Growth and Equity program mistakenly thought that the program's 10 percent goal applied only to subcontractors, not prime contractors. The state transportation agency awarded about $44 million in work to companies under the program last year.

The transportation department narrowed the scope of the Medina County project, causing Andrell Inc.'s work to drop below the 10 percent threshold. TAB Construction submitted documents showing that Andrell Inc. employees performed work that they had not, according to the inspector general.

"Regardless of the contractors' intentions, the result remains that the contractors submitted false and misleading documentation to ODOT relative to this construction contract," the inspector general wrote.

TAB President William E. Richardson could not be reached yesterday.

The alleged falsification was based on a misunderstanding: that TAB Construction's own status as a minority-owned firm would not count toward the diversity goals.

The inspector general faulted the transportation agency for that mistake.

"No matter what the circumstances, a company shouldn't be submitting false documents, basically lying to the state," department spokesman Scott Varner said.

The inspector general did not say that either company had inflated its project bid. The drain replacement was completed about two weeks ahead of schedule, the report noted.

jnash@dispatch.com