More MARTA audit raises more questions, tension over accounting practices

An independent audit of the More MARTA program released on Monday found that the transit agency could owe nearly $70 million to taxpayers.

The audit did not indicate any instance of malfeasance or illegal use of funds, but it did find that tens of millions of dollars intended for transit expansion projects through More MARTA have been spent elsewhere. The findings have heightened tensions between MARTA and City of Atlanta officials. 

MARTA immediately questioned the methodology used by auditors at Mauldin & Jenkins. Leadership at the transit agency and the chair of its oversight body in the Georgia General Assembly, MARTOC, have called for a review of the audit by accounting firm KPMG.

“We’ve received a copy of that letter. We’re reviewing it, and we’ll have more on that later,” Courtney English, chief policy officer and senior policy advisor for Mayor Andre Dickens, said. 

At the MARTA board committee meetings on Thursday, Aug. 22, multiple board members expressed their disappointment that there wasn’t more open communication with MARTA staff about the calculations used in the audit and that the concerns raised by the agency weren’t included in the report. 

DeKalb County board member William Floyd voiced support for engaging KPMG, which is already conducting a financial review of the agency for MARTOC, to see what it might cost for an additional independent audit and bring that discussion to the next MARTA board meeting on Sept. 12. 

“If there’s something that needs to be corrected, I want it corrected — I think we all do,” Freda Hardage, a Fulton County representative on the board, said.

For city officials, the findings seem “consistent with the concerns” raised back in March 2023, City Council President Doug Shipman said, including “lack of clarity on how they were making decisions on More MARTA spending, concern about whether or not they were actually delivering the services they were spending on, the overall oversight and process of communication and of data.”

A pattern of financial dysfunction

The auditor’s report indicates that MARTA basically admits to mistakes in fiscal years 2021 to 2023 that amount to about $26 million, Shipman said. 

For FY 2017-19, MARTA is contesting the methodology used, “but literally MARTA can’t produce any documentation nor can anyone at MARTA can recall the way they did the calculations at the time,” Shipman said. “They may be disputing it, but it’s problematic when you’re disputing it [and] you don’t know how you did it yourself.”

MARTA fired CFO Gordon Hutchinson back in 2019 due both to claims of harassment and “rampant dysfunction” in the finance department. Raj Srinath, who served as CFO beginning in 2021, left the agency in October 2023 while this audit was underway. 

The missing documentation centers around the sales tax money that’s being used for enhanced bus service. Former ATL DOT deputy commissioner for transportation strategy Doug Nagy raised questions about this spending back in 2022 and said he personally met with eight MARTA board members to explain the concerns. 

By comparing bus schedules, city officials began to realize that MARTA was spending millions of dollars on “enhanced” bus service but not providing any expansion of routes or increased frequency of buses, he said. 

Board members peppered Srinath and MARTA’s Chief Capital Officer overseeing the Division of Capital Programs, Expansion & Innovation (CPEI), Carrie Rocha, with questions about the discrepancies at a board meeting on June 9, 2022. 

At that point, MARTA was reporting an expected budget surplus of $150 million but was still using about $21 million from the More MARTA funding for operations expenses. At the same time, the agency was assessing a plan to consolidate 110 bus routes down to 40 routes. 

The audit notes that MARTA isn’t prohibited from using the sales tax money for operations. From the beginning of More MARTA Atlanta collections in April 2017 through the end of FY 2022, MARTA divided the revenues evenly between capital programs and operational programs. In FY 2023, the agency began allocating 55 percent of monthly revenues to capital, or transit expansion, programs and 45 percent to operations. 

According to the report, nearly $69 million has been spent on more MARTA projects over the last five years. Meanwhile, the operating costs have totaled about $161.5 million since fiscal year 2017.

Not what voters were promised 

In that same June 2022 board meeting, Rocha shared a presentation outlining the history of the More MARTA Atlanta program and highlighted that the top transit priorities for residents were light rail — and specifically light rail on the Beltline — followed by rail on Campbellton Corridor and increased bus service. 

The list of More MARTA projects in some phase of planning, design, or construction today, provided by MARTA, totals an estimated $1.6 billion in projected costs. It does not include any Beltline transit projects and has revised Campbellton Road to a bus rapid transit (BRT) line. 

MARTA’s sales tax revenue projections show that the program is likely to collect $1.23 billion over the next ten years — not enough to cover the first tier of prioritized projects, let alone the four infill stations the mayor’s office has proposed, which could add roughly $1 billion to the total capital expenses.

“To Beltline Rail Now, it matters only in this way — that as we go forward with the More MARTA program and looking at its financial model, that we look at how to change it so that we can actually build transit expansion in More MARTA, which is what the whole thing is about anyway,” Matthew Rao, board chair of Beltline Rail Now, said. 

It’s not about assigning blame, he said, but moving projects forward. 

“We are interested in the future revenue of the program, which isn’t a part of the audit, and we’re interested in how leaders like Mayor Dickens can elevate the projects buried in Tier Two to Tier One,” Rao said. 

What’s next

The audit recommends updating the intergovernmental agreement and aligning MARTA leadership and city officials on the list of highest-priority More MARTA projects. 

“We look forward to engaging with MARTA directly on how to execute the recommendations contained in the audit, and we have been in communication with their leadership. So we look forward to sitting down with them soon,” English said of the Dickens administration.

Beyond those recommendations, “I also believe there should be some tangible dollars returned to the More MARTA fund,” Shipman said. 

The infill stations and the budget for the Five Points renovation remain open questions, he said. Moving forward, he hopes to see the City Council play more of a role in ensuring transparency and accuracy. 

“But I don’t think it’s just about that. It is also about the overall process and how you oversee and get approvals for a complex series of projects like we have,” Shipman said.

In addition to the audit, MARTA is also facing ridership levels lower than in the 1970s, before the heavy rail system was built.

“While transit agencies in Sunbelt cities like San Diego, Houston, and Miami have successfully returned to pre-COVID ridership levels, MARTA executives have struggled to win back customers with ridership only half of what it was before the pandemic,” Nagy said. 

The Atlanta metro area is projected to grow by 1.8 million people in the next 26 years. A failure to improve transit now means constraints on mobility in an increasingly congested city. 

“MARTA board members have a choice: associate their personal reputations with rampant financial dysfunction through a deny and delay strategy or take action to reimburse Atlanta and set MARTA on a more inspiring path, a path that restores taxpayer trust and ridership,” Nagy said.