MARTA officials are investigating how its chief auditor was hired despite a history of financial red flags, but they vowed the setback wouldn’t derail plans to transform the troubled transit authority.
Assistant General Manager for Audit Robin Howard resigned Wednesday after a story in The Atlanta Journal-Constitution revealed he was under indictment in Virginia on charges of embezzlement and had a history of five-figure liens. The authority now plans to look at its own books to make sure that funds are in their proper place.
“We will definitely look into any and all areas that our previous auditor was involved in,” General Manger Keith Parker said.
Howard, whose salary with MARTA was $150,000 a year, was a key player in a plan to transform the financially struggling transit authority by eliminating inefficiencies, outsourcing functions and attracting more riders. An arrest warrant was issued for him Tuesday on charges of embezzling about $50,000 from the Washington, D.C., chapter of the Institute of Internal Auditors, where he served as treasurer and president before coming to MARTA at the beginning of 2012.
State Rep. Mike Jacobs, R-Brookhaven, called Howard’s resignation a setback for the authority’s aggressive plan to restructure itself after a KPMG management audit showed it spent $50 million annually over the national average in employee benefits and could save between $60 million and $142 million over five years by privatizing some functions.
The authority, which a University of Georgia study called critical to the regional economy, runs an annual operating deficit of $30 million. If not reversed, MARTA might have to consider fare hikes and service cuts — further endangering its viability.
“I think MARTA has a period of months to show some real progress on the privatization front,” said Jacobs, the chairman of MARTA’s legislative oversight committee. “MARTA’s response to this setback will be very instructive. It is going to speak volumes.”
MARTA will name an acting internal auditor and conduct a search for a good fit to transform its finances, business model and culture, Parker said. “We are going to continue to move forward aggressively with the transformation road map,” he said.
The Atlanta Journal-Constitution learned through a records search that in October 2011, the Internal Revenue Service placed a tax lien on Howard of $10,909. He repaid that lien four months after arriving at MARTA. The records list one other federal tax lien of $10,889, also filed in October 2011. It was unclear whether this lien has been repaid.
Howard also had a 2001 judgment against him in a Virginia circuit court for $10,755. Also, in 2000, he had two child support liens filed against him for $18,023 and $5,570. It was unclear in the records whether these liens have been paid.
Parker believes a search firm was responsible in 2011 for vetting Howard’s background. He is trying to determine whether the MARTA search committee knew about the liens and court judgments against Howard and, if so, why he rose to the top among the finalists.
“We’re looking into all the elements of this hire to make sure that if there are things we don’t want to replicate that those things don’t happen again,” Parker said. “The next person we bring in here for our internal auditor will be a person who knows that MARTA is going through a transformational change.”
Said Parker, “We want a person who has experience in helping an agency become more efficient.”
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