WASHINGTON—The federal government has committed more than $50 million to build a sophisticated highway traffic monitoring system that has produced unreliable data and cannot freely share live reports on highway bottlenecks with the public, an audit by the Transportation Department's inspector general has found.

Thousands of tiny traffic-monitoring sensors are being installed along highways in 27 cities nationwide under the program. The monitors collect information on lane occupancy and traffic speed, and the data then is supposed to be transmitted live to electronic message boards and other devices.

But the decade-old agreement that the department signed with Traffic.com, the contractor hired to install the system, included a provision that granted the contractor exclusive control of the data, says the report, a copy of which was provided to The New York Times in advance of its public release.

That means Traffic.com, a subsidiary of Navteq of Chicago, can sell the data to commercial providers like The Weather Channel or post it on its own Internet site. But state and local governments that are partners in the project have been told they are not allowed to share the information with the public unless they pay a fee, the report says.

In San Francisco, for example, the state collects and distributes its own traffic data, offering traffic updates for the metropolitan area. But it cannot do the same with the detailed information gathered by Traffic.com through the federally subsidized system.

The Massachusetts Highway Department, the report says, was formally prohibited from using the data to offer highway message board estimates to Boston-area commuters on traffic delays. Local and state governments were also prohibited from posting the traffic information on government Internet sites or traffic information telephone hotlines, unless they paid Traffic.com a fee for the data.

State and local governments are allowed to use the data to study trends in highway use. But for the most part, Traffic.com is the only entity that stands to profit from the equipment installed in the public right of way and paid for with federal funds, the report concluded.

Executives at Navteq and Traffic.com did not respond to a request for comment on the system, formally known as the Transportation Technology Innovation Demonstration Program.

The problems extend beyond the tight restrictions on the reuse of the data, the report says. It also found widespread reliability problems with the data collection in 2006 and 2007, particularly in cities such as Los Angeles and Chicago. Only after the auditors raised concerns about apparent problems with installed highway sensors were repairs made.

The contractor also did not properly honor a revenue-sharing agreement that requires it to share any money it makes by selling traffic data with its local and state partners, the report says. The auditors calculated that the government partners have been shortchanged by about $1 million over the last six years.

Even when money was set aside to honor the revenue-sharing agreements, the local governments often never saw the earnings, as Traffic.com “;reinvested”; the money to make repairs on its own system, the report says.

The Inspector General's report blames the Transportation Department's drafting and management of the contract for most of the problem, saying it gave extraordinary concessions to the company when it was first hired, and then agreed to more than double the value of the contract without competition.

The department, in its response to the audit, cited nine letters from members of Congress—many of whom had received frequent campaign contributions from executives at Traffic.com—who demanded, among other requests, that it skip a competitive bidding process and give more money to Traffic.com.

Rep. Anthony D. Weiner, D-N.Y., who requested the audit, said the Transportation Department should cancel the Traffic.com agreement, reclaim the equipment and put the project back out to bid under new terms.

“;This is a classic case of a government action that was supposed to be a winner in every direction and turned out just to be a win in just one direction, and that is Traffic.com,”; said Weiner. “;There is no reason any longer that Traffic.com should still be in control of this data.”;