North County Transit District, which relies heavily on state and federal grants for train and bus services, doesn’t adequately monitor compliance with grant guidelines, according to a highly critical audit of NCTD’s contracts department. This could endanger future funding.
Compliance with rules for government grants was one of 19 specific deficiencies that inewsource addressed in an overview of the audit this week. The audit, conducted by SC&H Group, was published in September but was not presented at a public Board of Director’s meeting until last month.
On Wednesday, we began detailing some of the most newsworthy deficiencies. What follows is information from the audit and examples inewsource identified:
Observation: “Compliance with federal, state, other agencies, and grant guidelines is not centrally monitored. Staff in multiple departments are responsible for monitoring various regulations and guidelines; however, this is not always communicated between departments to ensure all requirements are met. It appears there is no reconciliation of the daily labor reports to the certified payrolls to ensure labor compliance.”
Risk: “Inadequate monitoring of regulatory compliance and grant guidelines could result in the district engaging in activities that violate the applicable regulations or grants. Lack of communication creates an added challenge in efficiently managing existing contracts. Failing to ensure labor compliance may put the district at risk for non compliance with the regulators.”
NCTD has engaged in activities that violate federal regulations and grants.
The Federal Transit Administration performed its triennial review of NCTD in August 2012, and found more problems within the agency than at any point in its history. The Metropolitan Transit System — San Diego’s other transportation agency — was also reviewed that year. No deficiencies were found.
One of the FTA’s findings cited the misuse of $547,000 of federal grant money that was originally intended for preventive maintenance — but was instead used to purchase fuel.
NCTD spent taxpayer money preparing for that federal review.
Eight months earlier, in January 2012, NCTD paid a consultant — Mundle & Associates — $30,108 to perform a compliance assessment of the district’s operations.
The “mock” audit found deficiencies and NCTD then quintupled the contract amount to $157,536.
Another FTA audit, published in February 2013, reviewed NCTD’s civil rights compliance issues. Out of 20 areas reviewed, the audit found 11 deficiencies.
The audit was never presented at a public board meeting.
inewsource has requested comment from NCTD board chairman Bill Horn, but he has ignored requests. inewsource repeated its request Wednesday, this time for an in-person interview to discuss the audit, but Horn declined.
