Audit of the Lowell Regional Transit Authority Objectives, Scope, and Methodology

An explanation of what the audit of the transportation authority examined and how it was conducted.

Overview

In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor has conducted a performance audit of certain activities of the Lowell Regional Transit Authority (LRTA) for the period of July 1, 2015 through July 30, 2017.

We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Below is a list of our audit objectives, indicating each question we intended our audit to answer; the conclusion we reached regarding each objective; and, if applicable, where each objective is discussed in the audit findings.  

Objective	Conclusion
Did LRTA maintain a cost maintenance log for each vehicle to ensure that preventive maintenance for vehicles and equipment for transporting passengers with disabilities under the requirements of the Americans with Disabilities Act of 1990 was up to date per Federal Transit Administration (FTA) guidelines?	Yes
Did LRTA submit all required financial records to the Commonwealth for inclusion on the Commonwealth’s searchable website as required by Section 14C of Chapter 7 of the General Laws?	No; see Finding 1
Did LRTA properly manage the use of its non-revenue-producing vehicles?	No; see Finding 2

To achieve our audit objectives, we gained an understanding of LRTA's internal controls that we deemed significant to our audit objectives through inquiries and observations, and we evaluated the design of controls over cost maintenance logs, financial reporting to the Commonwealth, and non-revenue-producing vehicles.  

In addition, we performed the following procedures to obtain sufficient, appropriate audit evidence to address the audit objectives.

• We analyzed the data in the Ron Turley Associates, Inc. (RTAI) Fleet Management Software maintained by LRTA, which documents all vehicle fleet maintenance and repairs, to determine whether all vehicles used and vehicle maintenance performed during the audit period were recorded in the database.
• We verified that both of the LRTA maintenance facilities had a vehicle maintenance schedule and tested a nonstatistical sample for each of the facilities to determine whether the agency followed the recommended schedule for preventive maintenance and replacement. For the first facility, we tested the records for 15 of the 67 vehicles that received maintenance at the facility during our audit period, choosing the 10 vehicles with the highest number of work orders and the 5 vehicles with the lowest number of work orders. For the second facility, we tested the records of 16 of the 54 vehicles that received maintenance at the facility during our audit period, choosing the 10 vehicles with the highest number of work orders and the 6 vehicles with the lowest number of work orders. We compared records of the mileage traveled per vehicle to records of oil changes performed during the audit period and tested to determine whether LRTA followed specific vehicles’ manufacturer guidelines and the required FTA preventive maintenance guidelines.
• We extracted from the RTAI software a fleet inventory list and maintenance records. We used original maintenance work orders as well as copies as evidence to verify the information in the RTAI software–generated report. We reviewed a nonstatistical random sample of 7 of the 23 work orders for non-revenue-producing vehicles, which we compared to the data in the RTAI software. We also reviewed a nonstatistical random sample of 34 of the 557 work orders for LRTA vehicles used to provide transportation for several member communities’ councils on aging, which we compared to the data in the RTAI software. Finally, we reviewed a statistical sample of 30 out of 1,721 work orders for revenue-producing vehicles, using a 95% confidence level and a 10% tolerable error rate, which we compared to the data in the RTAI software. The RTAI database included six work orders that did not have specific revenue-producing or non-revenue-producing vehicles assigned to them. We tested all of the unassigned vehicle work orders, which we compared to the data in the RTAI software and discussed with management to gain an understanding of them. We verified attributes of the work orders pertaining to the maintenance work performed and maintenance costs.
• We asked LRTA management about the use of non-revenue-producing vehicles and the process of lending a non-revenue-producing vehicle from the motor pool.
• We asked LRTA management whether the keys to non-revenue-producing vehicles were in the possession of the general manager of McDonald Transit Associates, Inc.; MV Transportation, Inc.; or LRTA personnel or were left in the vehicles.
• We requested and reviewed the sign-in/sign-out log for non-revenue-producing vehicles.
• We examined the state’s publicly available, searchable website, as well as LRTA’s website, to determine whether they included data for LRTA expenditures, including payroll, to ensure transparency with regard to the agency’s spending.

We analyzed the RTAI Fleet Management Software by performing validity and integrity tests, including testing for missing data and scanning for duplicate records. We performed a source documentation review of the original hardcopy work orders to ensure that they matched the information in the RTAI software. We determined that the data from this system were sufficiently reliable for the purposes of our audit.

Date published:	July 23, 2018