Overview
GATRA did not ensure that its contracted transit provider reconciled the collected farebox cash revenue to the transit fare collection system. During our audit, we observed the cash-counting process performed by GATRA’s contracted transit provider and noted a process discrepancy that resulted in a monetary discrepancy. Specifically, GATRA’s contracted transit provider did not reconcile the cash revenue to the transit fare collection system, and there was a variance of $710.41 for two days over what the transit fare collection system reported. Given that the full fare price is $1.50, this discrepancy implies that approximately 473 riders were unaccounted for in the transit fare collection system for two days.
If GATRA does not ensure that its contracted transit provider reconciles farebox revenue, then there is a higher-than-acceptable risk that the provider may underreport the farebox revenue and misappropriate the cash revenue that was not captured in the transit fare collection system.
Authoritative Guidance
The Federal Transit Administration’s Transit Asset Management Systems Handbook, dated September 2020, states,
Transit agencies must ensure that vendors are accountable for performance and provide low-risk software support. . . . [The Federal Transit Administration recommends] data reconciliation with banking and regional fare collection systems.
Reasons for Issue
GATRA did not have adequate policies and processes in place, including a monitoring component, to ensure that the total farebox revenue reported by the contracted transit provider was accurate.
Recommendations
- GATRA should ensure that its contracted transit provider reconciles the cash payments collected to the cash revenue recorded in the transit fare collection system.
- GATRA should develop policies and procedures, including a monitoring component, to verify the accuracy of the total farebox revenue reported by its contracted transit provider.
Auditee’s Response
This audit was on the purchase and maintenance of our battery electric bus fleet. I believe finding three was outside of the scope of the audit, however, since the auditors brought it into this report, I will address it.
This audit, which started in October 2023, observed the cash room, where fare sales are counted and stored, in May 2024. At that point, cash wasn’t being counted daily. The Operator’s new Comptroller, who had been on the job for three months at the time, was still learning the full scope of the position. The Operator had not had a Comptroller position in several years and the GATRA Administrator had required that this position be created and filled shortly after starting as Administrator.
At the point where this was brought to the Comptroller’s attention, she dropped everything to immediately change the cash counting process to daily and started a Cash Audit Review. These new policies were implemented at the time to demonstrate improvement to the auditors while they were still on site. Because of this immediate demonstrated improvement, GATRA was under the impression that this finding would not be listed. GATRA have already addressed the recommendations that were made.
Auditor’s Reply
We understand that GATRA took action to address the concern after we notified them; however, this does not erase the finding that occurred during the audit period of July 1, 2021 through June 30, 2023. It is our duty and responsibility under generally accepted government auditing standards to report these breakdowns in the cash reconciliation process, which were indeed part of the scope of our audit. Specifically, this finding was identified as part of our data reliability assessment. This assessment is a requirement of generally accepted government auditing standards; we are required to comply with these standards as outlined in Section 12 of Chapter 11 of the Massachusetts General Laws. We appreciate that GATRA has taken measures to address our concerns regarding this matter and we will be following up on this in approximately six months as part of our post-audit review process.
| Date published: | December 24, 2024 |
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