MARTA audit shows wasted money

Auditing experts said the reports don’t cover enough to draw conclusions about MARTA overall, and they cautioned that auditors digging into any large organization will find problems. And MARTA’s auditing department, at least, gets a clean bill of health in peer reviews.

“This tells me the auditor is looking in the right place where the highest risks are and working with management to try to get improvement,” said Ruthe Holden, chairwoman of the American Public Transportation Association’s committee of audit professionals.

But the findings may give ammunition to MARTA critics and tax hawks who question the authority’s efficiency and management of its resources. That’s an issue as MARTA battles to keep its footing in regional transportation negotiations. And they don’t thrill passengers whose routes are being cut as MARTA pleads insolvency.

Sarah Trapp, who takes MARTA to study physical therapy at Georgia State University, noted that it’s her fare and tax money as a Fulton County shopper and passenger that will pay for the oversights.

“It’s a little frustrating,” she said, especially since her pass charge will go up in October.

“They need to do better,” echoed Ong Wang, an 18-year-old art student who takes MARTA every day from the North Springs station.

Even if it’s just a sliver of the overall financial problem, it still matters, Wang said, especially when the agency is cutting because of deficits.

MARTA officials staunchly defended the agency’s handling of its assets and its efforts to root out waste. Considering its 4,600 employees and the size of the operation, they said, MARTA stands up well.

“Be assured that we take our fiduciary responsibility and public trust very seriously,” said MARTA CEO Beverly Scott. While the agency is not perfect, Scott said, in the context of running a $6.4 billion infrastructure system, the agency’s self-policing deserves praise. “We do not tolerate theft, fraud, or disregard for MARTA procedures and will take decisive action when these extremely limited, but unfortunate, circumstances occur.”

One of her bosses on the MARTA board, Harold Buckley, agreed. “I would say that 99.9 percent of our assets, I can absolutely unquestionably say that we can know where they are, we have control over those things,” said Buckley, who chaired the MARTA board’s audit committee from 2003 to 2009. “To cover that one-tenth percent we had put in place mechanisms that would alert us.”

After the laptops came up missing, MARTA fired two people who should have been keeping track of them. The revelation came after MARTA police learned some had been stolen, so the administration checked on all 316 laptops purchased between May 2007 and August 2009. Most of the missing laptops were signed out to inaccurate names or not signed out at all, and in the end MARTA could not find 57 of them. Purchased new, altogether those 57 cost $127,000.

According to MARTA’s assistant general manager of internal audits, Jonnie Keith, other audit findings were minor lapses in procedure, or practices that were not violations but could be improved. Many audits found nothing wrong, and he emphasized that all the problems his auditors found had been addressed. Recently, a national accrediting agency that evaluates police compliance with procedures awarded MARTA’s police department certification as an example to other law enforcement agencies of following best practices.

MARTA has also put procedures in place to prevent a recurrence of the toll violations, said MARTA spokeswoman Cara Hodgson. The toll payment was announced at a tollway authority board meeting, and the violations brought MARTA unwelcome publicity in local television news reports.

In some cases, computers worked against MARTA. Small inputting errors can cause evidence items not to show up on police inventories, according to MARTA police.

A consultant reviewing the maintenance inventory wrote to MARTA management that she watched the parts ordering system block an employee’s access for 45 minutes (MARTA said the problem came from integrating two computer systems and that MARTA has come a long way in fixing it since that note a year ago). In other cases, people took shortcuts they shouldn’t have.

“It’s human nature for people to cut corners,” said Holden, who also heads audits at Los Angeles’ transit agency. She said the findings were not necessarily surprising, given MARTA’s size. “These aren’t signs to me that MARTA the company is about to implode,” she said.

However, she said, staff cutbacks like those MARTA is contemplating only decrease the oversight over controls and increase the risk of misdeeds. “But what’s your alternative,” Holden said. “We’re all hurting for cash.”

Beth Breier, president of the Association of Local Government Auditors, said it is difficult to say how concerned to be about MARTA overall because auditors only have resources to look at slices of an organization. She and Holden had not studied MARTA in detail.

However, Breier said, thinking of the laptops, “Was that important? As a taxpayer it would be pretty important to me.”

Audit sampling

These are some of the findings from 114 internal MARTA audits issued during the 2010 fiscal year:

● Of 316 laptops MARTA purchased between May 2007 and August 2009, 57 are missing, mostly signed out to inaccurate names or no one. The 57 laptops would be worth about $55,000 in their used condition; new, they cost $127,000. Two workers were fired. Computers purchased now are equipped with homing technology, said MARTA staff.

● In the MARTA police property and evidence room, auditors counted 45 drugs headed for destruction but only 42 listed on a police inventory. MARTA police issued new policies and now do inventory spot checks, they said. The auditor expressed concern that the omission could make it easier to destroy the evidence — which included suspected crack cocaine — or take the drugs “for personal gain.”

● In some cases, portions were missing from drugs listed on the inventory in larger quantities. MARTA police said portions had been taken for testing by the GBI, which does not tell MARTA the amount consumed in testing, said MARTA Police Chief Wanda Dunham. Now MARTA records the new quantity when it comes back to the lab, police said.

● An auditor asked MARTA police about a 9 mm pistol unrecorded on the inventory. When the police ran a new inventory later, the pistol appeared on it; “no further explanation was provided,” the auditor wrote. MARTA police said it may have been an inputting error.

● MARTA lost 69 bus radios and issued a report estimating the chances of finding them were “minimal at best.” It then found most of them under repair, some at an outside vendor. One remains at large.

● Databases containing MARTA customers’ credit card information went to a software vendor that was testing MARTA’s fare system, though auditors said it should not have been. Ben Graham, MARTA’s assistant general manager of technology, said the information was encrypted and unreadable. New policies are now in place.