Audit Office finds popular Dial-A-Ride program lacks proper reporting
Pago Pago, AMERICAN SAMOA — More than $500 has been identified as “unreasonable costs” and is among the findings by the Territorial Audit Office’s Limited Scope Review of the Dial-A-Ride Grant Program, administered and overseen by the Public Works Department (DPW) transit division.
According to a Territorial Audit Office (TAO) report, the unreasonable costs designation includes money for a funeral donation, birthday celebration and Christmas lights. The report followed a limited review by TAO of the program on Feb. 8th.
American Samoa receives grant funds from the US Federal Transit Administration (FTA) that provides financial assistance to the transportation systems and services for local residents. One of the grant programs is for the Dial-a-Ride program.
According to TAO, the overall audit purpose was to determine whether grant objectives were met; determine whether costs claims are allowable and reasonable in accordance with the grant terms and conditions; and determine whether DPW practices and procedures comply with federal requirements and grant conditions and the effect of any noncompliance on amounts incurred by DPW Dial-a-Ride program and reimbursement by the federal government.
Since the Dial-a-Ride project is Grant Program Income it has received written authorization from the federal grantor allowing fare collections to be retained as a funding source to support continued transit services, said TAO.
The program has six-running FTA-funded accessible vehicles that service over 600 clients annually. The service is only offered to senior citizens and persons with disabilities providing transportation for work, shopping, medical appointments or for leisure and family visits. There is a $1 fare per-ride, per-stop, per-passenger.
Prior to finalizing the audit report, TAO conducted an exit meeting on Apr. 7th with DPW director Faleosina Voigt and other senior department officials on the proposed audit findings and recommendations.
Voigt provided a response in an Apr. 29th letter to TAO acting director Sualauvi Su’a, along with brief responses to each of the five findings, including the “unreasonable cost” finding.
“We reviewed the Dial-a-Ride expenditure costs and identified non-operating costs that do not support transit operations,” according to results of the audit, which identified a total of $548.55 worth of questioned “unreasonable costs” that are not in accordance with the federal grantor instructions for fare collections to be retained as a funding source to support continued transit service.
The highest questionable cost is $175.85 for three cases of 18x18 vinyl tiles for the Office of Disaster Assistance and Petroleum Management (ODAPM).
In response to this amount, DPW said this cost is in relation to DPW’s move to the Office of Disaster Assistance and Petroleum Management (ODAPM) office-location at the end of 2020. (No details were given as to where this office site is.)
Also questioned by TAO were two separate costs for Christmas lights for department decorations - $69.90 dated Dec. 11, 2020 and $83.80 dated Dec. 14, 2020 — from two local vendors.
The justification response from DPW, is that these costs are for “Christmas decorations for the Holiday season.”
TAO also questioned a total of $155 that was used as a donation for a funeral earlier this year for an employee’s relative and $60 for IOUs for two separate birthdays.
“These funds have been replenished since the [TAO] visit,” was DPW’s response. “Funds are not normally used for these purposes however, because of the time constraint and availability of funds from the staff for our office donation for one of our employee’s son’s funeral, funds was used to cover their costs with the understanding that the Transit funds would be replenished right away.”
“Failure on admin to recover and collect the cost from staff resulted in the delay of recovering these costs. We currently do not encourage this practice,” said DPW.
During its review, TAO said it determined that daily deposits were not done — or discontinued — and the program was permitted to use the local revenues from fare collections for expenses and immediate needs, An ASG Treasury analyst confirmed that these collections must first be deposited daily with the Revenue Office.
DPW responded that since the TAO audit, deposits have been made consistently and provided brief information on the deposits made since the audit. There are seven deposits between Feb. 17, 2021 and Apr. 27, 2021 totaling just over $4,300.
CASH POLICIES & PROCEDURES
Based on it’s review, TAO said there are no written Cash Policies and Procedures established for Dial-a-Ride cash collections, as required by FTA for each state’s role in program administration.
“Based on our interview conducted, we found weaknesses in Internal Control not completing this specific requirement,” said TAO.
DPW responded that, “Cash handling policy used is the ASG policy”. DPW went on to explain the internal cash handling procedures. DPW also explained that $1 is collected for every rider, per trip regardless of the distance; one free caregiver is allowed per rider; and extra caregivers will have to pay $1 each.
After a thorough review reconciliation of the program’s fare collections and expenses, TAO said it noticed a discrepancy in the totals for the running balance in the daily cash sheet from December 2020 to January 2021. TAO found a total of $193.84 in cash that is unaccounted for.
“I believe the accounting of the cash has been improved with our finance team,” was the DPW response to this finding. “The numbers presented in the TAO report are most definitely due to miscalculations and recordings rather than any misuse of funding.”
TAO offered five recommendations to the DPW director. Among them, establish clear and specific cost allocations that are allowable for operating and non-operating cost eligible under grant conditions; and establish a set petty cash amount from fare collections to be utilized for transit operation services, remaining funds to be deposited to Revenue for Program Income expenses.
Furthermore, the accounting personnel should refrain from using their current running balance format report but use a simpler format that would separate fare collections and expense accurately for monthly records.
And establish clear cash collection and expense written policies and procedures that work in conjunction with ASG Treasury and FTA State Management Plan requirements.
Also recommended is, the installation of a Point of Sale (POS) system to streamline the cash collection process immediately as the turn-ins are received and recorded for each Van at their Tafuna site at the end of each day-shift.
TAO explained that the system “will instantly account for revenues received and will default each transaction to the right revenue account in the ASG Accounting System, the One Solution, and summarizes all its transactions on a daily basis”.
According to TAO, this computerized POS system will also ensure efficiencies, generate receipts and receipt numbers automatically and will allow Treasury’s Revenue Division and the SCMO administrators to “view only” access options.
“The costs to have this system set-up, installed and maintained are quite minimal and will certainly improve cash collection procedures,” TAO points out.
In her response letter, Voigt thanked TAO for conducting the audit for this program. “From this report we have been able to strengthen our policies and procedures in our cash handling and recording,” she wrote.
OTHER TAO AUDITS
The Dial-a-Ride program is one of the five audits conducted by TAO in February this year and released publicly on its website (https://www.asgterritorialauditofficetao.com/audit-reports) which Samoa News came across while conducting research into issues and questions relating to the golf course fees.
The other audits are all unannounced cash counts: DPW Finance Office and Building Permits; Public Safety’s Office of Motor Vehicle & Records Division; Sports Complex Management Office (see yesterday’s edition for details); and Port Administration’s Seaport & Water Transportation Division.
Samoa News will report in later editions on other TAO audits.