A reporter for WPRO-AM took a picture of the flag during a news conference about work zone safety. The photo showed it was hanging against a wall behind two trucks.
By the end of the news conference, the station reported the flag had been removed.
Transportation Director Peter Alviti told WPRO that hanging the flag was stupid and inappropriate.
"Anything like that sends a message and it's an improper message and it's not one that's going to be tolerated around here," he said.
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Department spokesman Charles St Martin said later today that department officials do not know who placed the flag or how long it had been there. He said human resources is looking into it and will "take the appropriate steps."
The 2015 massacre of nine black worshippers by a white man at a South Carolina church sparked discussions nationwide about whether it was appropriate to display the Confederate flag.