City Council members received a briefing from accountants at Mauldin & Jenkins about the audit of the More MARTA program at the Finance Executive Committee meeting on Wednesday. Leaders from MARTA did not attend, despite telling Council their detailed disagreements with the audit findings would be ready to discuss at the Sept. 25 meeting.
David Roberts, a partner and leader for the governmental advisory services practice at the firm, walked through the findings and recommendations from the audit, including the amount Mauldin & Jenkins believes MARTA owes the program, the need to update the intergovernmental agreement and project sequencing plan for More MARTA, and the documentation the transit agency was unable to provide to the accountants.
Roberts outlined the questions surrounding the cost of enhanced bus service, which have been a main point of concern for city officials since calls for an audit began.
An error in MARTA’s calculations for fiscal year 2022 was identified by the organization during the audit. After correcting it, MARTA owes about $10 million to the More MARTA program, and the agency has agreed to return those funds during its annual budgetary “true-up” process, Roberts said.
The auditors also found that the More MARTA fund was overcharged by about $10 million in FY 2020 and $6 million in FY 2021, he said.
He shared that MARTA has been able to recalculate the cost allocations for those years and produce numbers that closely match what auditors found, but so far MARTA has not provided evidence that it has applied those revised figures for FY 2020 and 2021.
“I believe that we agree on these calculations… but at the time of our fieldwork, these changes were not made, and we believe that these should be allocated back to the More MARTA fund,” he said.
The calculations for FY 2017 through FY 2019 have been the major point of contention. MARTA claims that the methodology auditors used for those years was flawed. Roberts shared that over the 13-month audit process, MARTA was never able to provide documentation for the methodology that the agency used to calculate the costs during that time period.
“We were told that no current MARTA staff had stated experience or knowledge of performing the methodology or methodologies that were used at the time. We were also told that MARTA tried to reverse-engineer it, to try and figure out how it was done, and could not. Internally, Mauldin & Jenkins also tried to reverse-engineer it based on information we received and known data. We also could not,” Roberts said.
He noted that it is unfortunate that knowledge about cost-allocation methodologies seems to be leaving the institution as individual leaders leave MARTA and also pointed out that while it’s obvious that the methodology used in FY 2017 through FY 2019 are different from later years, it’s not clear whether those changes in calculating costs to the More MARTA program were ever presented to the city for input.
Using MARTA’s current cost allocation methodology, Mauldin & Jenkins found that the More MARTA program was overcharged by $14.4 million in FY 2017, $25.7 Million in FY 2018, and $3.8 million in FY 2019 for a total of nearly $44 million.
MARTA disagrees with this finding, and the MARTA board of directors voted earlier this month to have accounting firm KPMG review the Mauldin & Jenkins audit.
“Unless new information is or has been produced by MARTA, I don’t know how any other company or organization could effectively evaluate the cost allocation methodology for [FY 2017] through [FY 2019],” Roberts told councilmembers.
Despite a tense exchange during the City Council Transportation Committee meeting last month, where MARTA CEO Collie Greenwood pledged to bring a detailed list of the agency’s issues with the audit to the Sept. 25 finance executive committee, no one from MARTA was present on Wednesday to discuss.
Greenwood did send a letter to council president Doug Shipman prior to the meeting.
“The current IGA pre-dates both of us, but it is clear that the City Council’s only role in the More MARTA program is to receive a report from MARTA on a quarterly basis,” he wrote.
MARTA claims that private conversations with finance executive committee chair Howard Shook and councilmember Byron Amos in late August and early September led to the meeting being removed from Greenwood’s schedule.
“Mr. Shook shared that he, Mr. Amos, and Mr. [Theo Pace, Mayor Dickens’ Deputy Chief of Staff], discussed the idea of sending a letter to the Mayor’s Office and MARTA stating that the audit and IGA issues won’t get resolved at the Council Committee meetings and should be addressed by MARTA leadership and the Mayor’s office,” MARTA communications manager Payson Schwin shared via email.
Greenwood and Amos agreed that “this was not an issue that could be solved by Council,” Schwin said in the statement.
While the IGA does include only the Mayor’s office and MARTA as decision-makers for the More MARTA program, city councilmembers took issue that MARTA leadership didn’t feel it was important to communicate with the city’s legislative body and the public at the meeting.
“To say that he doesn’t see any need to meet with this council … to me is a major red flag,” Council member Liliana Bakhtiari said. “If MARTA is watching I hope the CEO takes note of how his letter was received.”
MARTA has published the documents it shared with Mauldin & Jenkins auditors — something Greenwood committed to in the letter responding to Shipman.
Councilmember Shook did propose sending a letter from council, which is not able to act as a negotiating agent, to the Mayor’s office and MARTA urging “as strongly as we possibly can” that the two parties come together to solve this issue.
He hopes those conversations have already been happening, “although, frankly, I see no evidence of it,” Shook said.
Sidestep, Rinse, Repeat.
The ATL way.
Why was there no audit of the capital program? This bus expenditure is a small percentage of the entire program.