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Audit findings: MARTA responds

MARTA says it’s made substantial progress in improving oversight of its capital improvement program. Below is a list of one audit’s findings and MARTA’s explanation of what it has done to address the problems. 

CAPITAL IMPROVEMENT PROGRAM INTERNAL REVIEW RESPONSES FROM MARTA

The Capital Improvement Program (CIP) Evaluation & Assessment reports from 2015 and 2017 were performed by independent industry professionals at the request of MARTA leadership to identify opportunities for improvement. These assessments are customary as MARTA is always looking to improve its internal business processes. 

 We closely review the results of these evaluations and incorporate recommendations that will provide the most value to MARTA in delivering service. We welcome all recommendations and view them not as criticisms, but as opportunities to improve our organization and better serve the public. Metro Atlanta is experiencing tremendous growth and this dynamic environment continually prompts regional stakeholders to assess and fine tune their organizations to achieve optimal performance.

 MARTA has been routinely identified as an industry leader by the FTA, APTA and the GAO in asset management, capital programming and state of good repair. Part of MARTA’s success has been its constant drive for continuous improvement, which includes routine independent assessments such as those performed in 2015 and 2017. 

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AUDIT FINDING: There is a lack of consistency in the management of projects since no centralized Project Management Office exists. 

MARTA’s large scale projects are managed using a centralized Project Management Office (PMO) approach. There are smaller projects which are managed by individual business units which is not unusual. The Department of Capital Programs and Development (CPD) has begun implementation of a centralized PMO structure that will encompass all projects large & small and will proceed with staffing in FY19.

AUDIT FINDING: There is no documented evidence to show that Project Managers and/or other authorized MARTA employees are monitoring project milestones and/or deliverables. Thus, MARTA could potentially be paying for a project and not receiving the appropriate and/or required deliverable for that project. 

Milestones and deliverables are managed in different systems within each PMO throughout MARTA. Deliverables are monitored on individual contracts via the payment application by each contractor. By implementing a centralized PMO structure, the disparate information on milestone and deliverable reporting will become more easily rolled up into a single reporting platform. 

AUDIT FINDING: Standard Operating Procedures that govern the Office of Capital Programming & Development relative to CIP should be documented to cover the initiation, execution and completion of Capital Improvement Projects. 

CPD completed phase one by identifying and creating work flow processes to initiate, develop, approve and implement Capital Projects. These processes are embedded in an electronic work flow process that is accessible to both leadership and project delivery personnel. In FY19, CPD will continue to assess and develop processes and procedures as well as the pursuit of software standardization.   

AUDIT FINDING: There is no formal policy and procedure that addresses the use/purpose of the CIP reserve and/or how to account for budgetary monies moved in and out of the CIP reserve account. 

The Final CIP Reserve Policy and Procedure was completed by the Office of Management and Budget in FY18.

AUDIT FINDING: There is no official documented methodology for forecasting of project costs.

Projects are assessed monthly starting with initial annual forecast, modified monthly forecasts and monthly actuals. Forecasting, monitoring and reporting on Capital Projects is accessible to leadership, stakeholders and project delivery personnel. MARTA uses a Change Control process and a Committee that reviews and approves all modifications including monetary changes. 

AUDIT FINDING: There is no validation of project forecasts and project costs by the CIP Monitoring & Reporting Department. 

The Monitoring and Reporting branch generates monthly reports and meets one-on-one with Project Managers on a quarterly basis to conduct cost validations and verifications. The validation reports and exceptions are noted in a project controls log. There is also a PMO Oversight Office independent of CPD that is located within the Office of Management & Budget. There is routine and active management of CIP execution, including forecasting. 

AUDIT FINDING: A lack of system interface between Primavera 6, SharePoint and Oracle allows for a limited transparency into the CIP process, increases dependency on manual interventions, lack of ‘real-time’ reports, and decreased efficiency in monitoring of project milestones/costs/budgets. 

The Office of Capital Programs has completed the installation and testing for Primavera P6 and is currently standing up Oracle Gateway. In FY19, the office will integrate Oracle e-Business Suite, Oracle Unifier, and Primavera P6. This is an industry issue, common to many organizations that have well established financial systems that are separate from project delivery software. The work MARTA is doing is groundbreaking. 

AUDIT FINDING: Robust training of Project Managers does not exist. 

All Project Managers have received CIP Training. MARTA utilizes titles Project Manager I and II and all senior level Project Managers must acquire their Project Management Professional (PMP) Certification Training. Training was conducted by the Project Management Institute (PMI) and PMI approved partners. There are some smaller projects that have limited milestones that are managed by individual business where only a fundamental understanding of project management is required.  

AUDIT FINDING: There is a lack of reporting and monitoring with regards to comparing work order costs and deliverables to CIP budgets and vendor invoices to the work orders

Contracts and Procurement and Legal review all work orders and have issued a new work order procedure that was crafted and reviewed by all MARTA Stakeholders. In addition, MARTA has an A&E Services branch with incredible depth of experience that prepares, monitors and reviews all work orders and interfaces daily with both Contracts and Legal.  

AUDIT FINDING: No documentation exists to support the validation of life-to-date project cost against current year project cost. 

Life-to-date costs are determined using the Oracle Financial system. Prior to implementation of Oracle, project start dates and original costs were documented using a paper-based filing system. Those older projects initiated during the paper process days are timing themselves out. All new projects start and finish in Oracle. This is not unusual for a large organization as it transitions from legacy paper based processes to all electronic processes. All invoicing is documented in Oracle. PMs routinely validate year-to-date costs and monthly expenditures are internally distributed and posted for easy access.  

AUDIT FINDING: There is no process in place to ensure that unauthorized projects are deactivated in Oracle. 

The Office of Capital Programming routinely works with Budget, Treasury, Accounting, Grants and Audit to closeout projects. There is a process of validating that all contract requirements have been met and a final audit has been completed. Each office has its own role in the process. Capital Programs is assessing the need for any additional processes relating to Oracle financials along with Budget, Treasury, Accounting, Grants and Audit to determine if they bring value.

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