Ben Franklin Transit lacked sufficient monitoring to prevent a former employee from stealing more than $17,600 over a nearly two-year period, according to a State Auditor's Office report released Monday.
But Tim Frederickson, the transit agency's general manager, disputed the findings and said it was Ben Franklin Transit employees who discovered and reported the theft.
"We would like to refute their sense that we failed to monitor," Fredrickson said. "We have learned our lesson over the years. We were able to put the person under surveillance and discovered what he was doing. ... For the state auditor to characterize this as a failure to monitor is silly to me when in fact we were the ones who discovered what was going on."
Fredrickson declined to talk about what procedures the transit agency uses to monitor the movement of cash, citing security concerns. But he said transit officials have grown wiser since the theft was discovered.
"If you don't learn from something like that, you're making an even bigger mistake," he said.
The report followed a fraud investigation by the Auditor's Office after former Ben Franklin Transit maintenance worker Scot Sterling Smith was prosecuted for first-degree theft.
Smith was arrested in October and charged with stealing about $8,000 from the transit system over about a six-month period.
Court records show he pleaded guilty to the first-degree theft charge in February, but has yet to be sentenced.
The theft was reported in October 2010 after a maintenance manager found a suspicious tool in the maintenance shop and later saw Smith using the tool to access cash boxes inside the buses, the auditor's report said.
The manager and Richland police found two bags of cash and bus tickets in the employee's tool box.
The subsequent investigation by the State Auditor's Office suggested Smith had stolen at least $17,612 from the transit agency between January 2009 and Oct. 8, 2010.
Auditors came to that conclusion after reviewing the transit agency's financial records for 2009, 2009 and 2010, and compared weekly ridership to weekly deposits to determine if expected revenue was deposited. Auditors found the theft had amounted to more than double what prosecutors initially had suspected.
Auditors also found the agency lacked internal monitoring procedures to catch the theft, and recommended procedures be established to safeguard public money.
Smith had been responsible for removing the bus cash boxes and taking them by himself to a secure location for armored car pickup.
"This lack of monitoring allowed the loss to occur," the auditor's report said.
Fredrickson said Ben Franklin Transit is taking steps to try to recover the money from Smith, but said even the auditor's estimate is only a guess.
He said the theft amounted to less than 2 percent of the cash that's estimated comes in from the boxes in a year. The small amount made the thefts difficult to detect from looking at the books, he said.
"When we see those kinds of (small) changes, it's difficult to try to discover a pattern," he said.
Another possible consequence of the theft is that ridership may have been underestimated because of less cash coming in from the buses.
"We can probably adjust that for the two years we believe there are losses," Fredrickson said. "It wouldn't have been by much anyway."
-- Michelle Dupler: 582-1543; email@example.com