One of the pivotal points in the chain of events that led the Targhee Regional Public Transportation Authority to dissolve was a federal audit that found serious problems with the bus service’s financial management, some of which led to thousands of dollars in federal overpayments.
The results of this audit, and the Federal Transit Administration’s dissatisfaction with the response, led the Transit Administration to put restrictions on TRPTA’s capital spending and to not give it any new grants. The city of Idaho Falls then decided to withhold a scheduled $35,000 payment to TRPTA earlier this year, pointing to concerns about the agency’s sustainability and whether it could legally operate outside of Bonneville County.
That last audit, which the Transit Administration gave to the Post Register in response to a records request, looked at TRPTA’s financial management from April 2016 to June 2018. It was finished in late 2018.
The audit said TRPTA “lacks internal control policies and procedures for proper accounting and financial management.” This is listed as a “material weakness,” or a deficiency serious enough “that there is a possibility that instances of material noncompliance with the FTA Financial Management system requirements may have occurred and were not prevented or detected and corrected on a timely basis.”
“Errors in accounting and reporting occur and are not detected timely,” the auditors wrote. Furthermore, TRPTA didn’t “have documented policies or procedures for maintaining adequate fixed asset records and for the preparation of the annual budgets. This is a repeat finding from the 2013 and 2016 Triennial Reviews.”
Auditors wrote TRPTA “reported unreliable and inaccurate data” in its 2017 National Transit Database report, and that it lacked controls to review and approve regular bills such as for phones and utilities.
“For example, a complete list of active cellular phone numbers cross referenced to names of current employees to whom each phone number is assigned is not available to verify and validate the charges prior to approval for payment,” the audit says.
The TRPTA board, with hundreds of thousands of dollars in debt and struggling to make payroll, voted to dissolve itself in late April. Bus services ended a week later. The agency is still in the process of selling its assets and paying off its debts, and local officials are weighing whether to create another public transportation service in the region.
The audit identified 11 “significant deficiencies,” which are less serious than material weaknesses. Auditors said:
n TRPTA wasn’t keeping accurate and complete records of its vehicles.
n TRPTA wasn’t performing and recording required twice-yearly inventories of Federal Transit Administration-funded assets. This was a repeat from the 2013 and 2016 reviews, auditors wrote.
n TRPTA assigned a vehicle to the Lemhi County Economic Development Association without adequate or current documentation.
n Different bookkeeping was not being properly reviewed and conflicting bookkeeping functions weren’t being given to different people as they should have been.
n TRPTA claimed $846 in unallowable late fees and charges on a 2016 Federal Transit Administration grant.
n Two procurement files did not include required documents such as a cost/price analysis or procedure to be filed in the event of a vendor protest.
n Calculations of indirect costs did not include an adjustment based on actual spending.
n Errors in grant drawdown calculations led to $1,856 in overpayments by the Federal Transit Administration.
n TRPTA didn’t calculate the net allowable federally funded costs correctly for most of the audited period. This resulted in even more federal overpayments since TRPTA only subtracted revenue from fares from the total allowable costs but didn’t subtract $82,403 in rental and advertising income.
n The number of passenger trips was not reconciled to fare collections, a repeat of a 2016 finding.
n The audit also found “various unresolved discrepancies between information in federal financial reports, milestone progress reports, and Federal Transit Administration’s records.”
The audit included recommendations to address the problems identified and noted TRPTA’s responses, with auditors deeming some responses adequate and pointing out objections to others.
TRPTA General Manager Amanda Ely sent a response in mid-January. Federal Transit Administration Regional Administrator Linda Gehrke replied in February, saying TRPTA needed to come up with “a corrective action plan including reasonable implementation dates.” She wrote the Federal Transit Administration was restricting the authority’s capital purchases and would not allow any new grants “until such time that TRPTA can demonstrate adequate technical capacity and financial management capabilities” in a corrective action plan with dates.
TRPTA responded with a more detailed plan in mid-March, but the Federal Transit Administration was not satisfied and did not lift the sanction before TRPTA voted to dissolve.