Ben Franklin Transit officials inaccurately reported how much money the agency received in 2011 from sales taxes, operating grant revenue and several other line items in its budget, a state audit report said.
The agency underreported nearly $9.9 million on its financial statements, including $3.86 million in grant receivables, $367,500 in accounts payable and $3 million in operating grant revenues.
It also overreported nearly $20 million in accumulated depreciation, construction work in progress and $2.4 million in sales tax money.
"We didn't find any money to be missing, but it's important to note that adequate, accurate financial information is really critical for those people trying to make decisions," said Mindy Chambers, spokeswoman for the state Auditor's Office.
Chambers explained, for example, that not having the right amount of sales tax revenue accounted for on the books could affect decisions on possible fare increases, route changes or even staffing levels.
Transit officials attribute the reporting errors, in part, to inadequate staffing levels and a turnover in the key positions responsible for review and oversight of the agency's financial report. Ben Franklin Transit's annual operation expenses last year totaled about $31.4 million.
"Everything that was brought up in the audit has already been addressed by staff," Kathy McMullen, the transit's service development manager, told the Herald.
McMullen said new staff members have gone through all the books, implemented a new government accounting system and updated everything so there should be no issues in future audits.
She also emphasized the important thing for taxpayers to know is that there were no lost dollars.
"We have always had an excellent accounting staff," she said. "They really are as honest as the day is long."
The audit, which covered all of 2011, noted the deficiencies in internal controls over accounting and financial reporting could affect the transit's ability to produce reliable financial statements.
In addition to the over- and under-reporting, auditors found that the transit didn't get all the money it was entitled to because it didn't request grant reimbursements in a timely manner, the report said.
But, the administrative services manager hired in May was working on submitting the 2011 grant reimbursements at the time of the audit, the report said.
The transit's 2010 audit also found controls of financial report preparation and review to be inadequate.
Auditors at that time noted that the transit had no independent review process of the financial statements and had not prioritized to ensure management and staff had the resources and knowledge necessary to accurately prepare financial reports.
A new financial services supervisor was hired in June 2011 to address those issues.
This time around, auditors found that the independent reviews of financial statements are now being done, but the reviews were not effective in identifying and preventing errors, the report said.
The new administrative services manager has 15 years of accounting experience that has already helped identify and correct some of the issues flagged in the audit, transit officials said in a written response to the audit.
A fiscal support specialist also was added and the accounting department was reorganized to allow for a review of the general ledger accounts and provide oversight assistance on a transactional and month-end basis, the report said.
Chambers said the Auditor's Office is aware that transit officials have recognized the problem and taken steps to correct it.
"When we go in and audit next year, we'll look to make sure those systems are working," she said.
-- Paula Horton: 582-1556; firstname.lastname@example.org