The Toledo Area Regional Transit Authority has "inadequate segregation of duties" within its accounting department, increasing the risk that a financial irregularity or error could go unnoticed, a private accounting firm noted in the now-completed audit of TARTA's 2010 financial records.
Clifton Gunderson, which performed the audit on behalf of the Ohio Auditor of State's office, acknowledged that in "small organizations" such as TARTA, "inadequate segregation of duties is not uncommon" but recommended that certain tasks now performed by the agency's comptroller be delegated to other employees.
The accounting firm also faulted the transit authority for not having a formal manual documenting accounting policies and procedures and noted the presence on TARTA's 2010 books of an improper $66,885 loan to a political action committee -- a loan that was repaid last June after state Auditor Dave Yost made a finding of recovery.
The audit report's public release Thursday marked the conclusion of an audit process that took nearly a year longer than normal. Mr. Yost's office in January declared the transit authority's 2010 books to be "inauditable" because of incomplete information supplied by the agency to Clifton Gunderson.
The transit authority blamed delays on communication problems between it and the accounting firm and on internal sluggishness brought on by its transition to computerized accounting and training of new hires.
In responses published as part of the audit, TARTA said some of the duties associated with the comptroller's office in Clifton Gunderson's "material weakness" citation are normally performed by other staff, but the comptroller is authorized to do them in emergencies as the system administrator for the new computerized accounting system. The accounting system itself has audit functions that are accessible only by the director of information systems, the authority also noted.
"New system implementations and newly created positions in 2012 will enable the authority to further segregate duties as well as institute additional compensating controls," TARTA's formal response said.
James Gee, the transit authority's general manager, said Thursday that the recommendation for separation of duties has been in previous TARTA audit reports "and is typical of places with small staffs.
"We have a very small accounting staff at TARTA," Mr. Gee said. "With computerization, we can control permissions a lot better, with a lot more documents and a lot more support. … Our procedures have changed drastically in the past few years."
That accounting evolution is also why the transit authority has not drafted a formal procedures manual, which is impractical until "processes are deemed best practice and staff assignments are fully determined," according to the agency's formal response to that issue.
The audit report found no discrepancies in TARTA's financial reports.
"The financial statements are fairly presented, which means they are representative of the financial condition of TARTA," said Carrie Bartunek, a spokesman for Mr. Yost.
As to whether TARTA's response to the audit is appropriate, she said, "You'll have to wait a year to find out."
Mr. Gee said Thursday the 2011 TARTA audit is on schedule for completion, with Clifton Gunderson representatives having recently completed their on-site work.
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