By Helen Price Johnson
Hindsight is 20/20, and looking back I see a small transit agency that grew from the grass roots and built up on a shoestring to a vital public service. Run by only one person, habits were entrenched.
Money was saved in hopes of building a facility to meet growing needs. Once grant funds came, the local match took all the savings. Unfortunately, the big construction project took the director’s focus away from monitoring daily finances.
Expenses exceeded revenues, creating a shortfall.
Services had to be cut. If the proper internal financial controls had been in place, less dramatic adjustments could have been made over time. Cuts should’ve been made sooner. We know that now.
Steps were taken to strengthen Island Transit’s checks and balances. The board has increased its oversight of finances. Two board members now meet regularly with staff to review bank statements, expenses and revenues.
A new professional sits in the Transit finance office and is updating the internal controls of the agency. Monthly reports are improved so the board can better monitor the cash position. The State Auditors just finished their review of the Island Transit books for 2013 and confirmed that the previous financial officer did not follow standard practices in a number of areas.
Most significant were the cash shortfall and the control of the federal grant funds for the new building. This year’s reductions in service did “right the ship,” and Transit is operating in the black again, modestly rebuilding a reserve.
The auditors deemed $100 thousand of the $10 million grant as questionable. No one stole any money, but payroll records and equipment inventory were not adequate. That has been fixed. The audit confirmed the board of directors need to improve its oversight of the director. This is an opportunity to start new practices.
Most important to moving ahead is hiring a qualified interim executive director so the transit agency is stabilized for the future and the impacts of the cuts can be addressed. Tentative plans are to hire someone by Thanksgiving.
An interim position makes sense to provide transitional leadership for the organization and provide ample time for the process of selecting a long-term director.
The community needs to say what they want for the system to provide in the future. How can service be expanded? Should it stay fare-free? Routes need to be adjusted to better meet the needs of our citizens.
The audit results show that the agency grew over time, yet the internal financial controls and Board policies did not keep up. Significant progress has been made and I will work hard to continue improving Island Transit for the future.
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