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.