BOSTON (AP) A state-mandated audit found that the $14.6-billion Big Dig project in Boston could go over its budget by $40 million because its insurance accounts are underfunded.

In the analysis, the auditors argued that Big Dig officials have improperly applied best-case scenario estimates to how much the project will pay out in insurance claims. Until now, the project has applied only conservative estimates, according to a letter from Massachusetts Turnpike Authority officials to those in the state’s Executive Office of Administration and Finance that The Boston Globe obtained.

The yearly audit by the accounting firm of Deloitte & Touche comes as part of disclosure requirements in a commercial note offering being made by the state.

Officials from the Turnpike Authority, which oversees the massive Central Artery and Third Harbor Tunnel project, as the Big Dig formally is known, disputed the auditor’s conclusions.

“Even if we were to take D&T’s numbers at face value, which we are not, there would be no impact on the taxpayer,” said Turnpike Authority spokesman Sean O’Neill.

Although O’Neill declined to elaborate, a draft memo from the Big Dig obtained by the Boston Herald attributes the estimate to a misinterpretation by Deloitte & Touche of insurance premiums that the project already has paid.

Authority officials also said that the massive construction project has more than enough money in its contingency reserves to absorb a $40-million insurance adjustment.

On a positive note, the auditors agreed with Turnpike Authority officials that overall, the project’s schedule and cost appear to be holding steady.

“Given the history of the project, we take disclosure issues regarding the Big Dig very seriously,” said Eric Ferhnstrom, a spokesman for Gov. Mitt Romney.

Last August, Big Dig officials agreed to return $133 million in federal funds after an audit found the money had been improperly placed in the project’s insurance fund.

The Big Dig project is burying 2 mi. of Interstate-93 beneath downtown Boston, replacing an elevated highway. It is expected to be completed by 2005.

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