Merrimack Valley Regional Transit Authority Audit Objectives, Scope, and Methodology

An overview of the purpose and process of auditing the Merrimack Valley Regional Transit Authority

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 Merrimack Valley Regional Transit Authority (MVRTA) for the period July 1, 2015 through June 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 MVRTA 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 MVRTA 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 MVRTA properly manage the use of its non-revenue-producing vehicles?	No; see Finding 2

 

To achieve our audit objectives, we gained an understanding of MVRTA’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 MVRTA, which documents all vehicle fleet maintenance and repairs, to determine whether all vehicles used and vehicle maintenance performed during the audit period were properly documented.
• We verified that MVRTA had a vehicle maintenance schedule and tested to determine whether the agency followed the recommended schedule for preventive maintenance and replacement.
• We compared records of the mileage traveled per vehicle to records of oil changes performed during the audit period and tested to determine whether MVRTA followed specific vehicles’ manufacturer guidelines and the required FTA preventive maintenance guidelines.
• We used the RTAI software to obtain 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 15 of the 75 work orders for non-revenue-producing vehicles, which we compared to the data in the RTAI software. We used nonstatistical sampling and therefore did not project our results to the population. Using a 95% confidence level and a 10% tolerable error rate, we also reviewed a statistical sample of 30 out of 2,565 work orders for revenue-producing vehicles, which we compared to the data in the RTAI software. The RTAI database included 60 work orders that did not have specific revenue-producing or non-revenue-producing vehicles assigned to them. We tested 15 of the 60 unassigned vehicle work orders, compared them to the RTAI database, and discussed them 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 MVRTA management about the use of non-revenue-producing vehicles and the process of assigning or lending non-revenue-producing vehicles to MVRTA employees.
• We asked MVRTA management whether the keys to non-revenue-producing vehicles were in the possession of the general manager of First Transit Incorporated or MVRTA personnel or were left in the vehicles.
• We requested the sign-in/sign-out log for non-revenue-producing vehicles.
• We examined the state’s publicly available, searchable website, as well as MVRTA’s website, to ensure that they included data for MVRTA expenditures, including payroll, to ensure transparency with regard to the agency’s spending.

We analyzed the RTAI 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 31, 2018