VIEWPOINT | With audit done, Island Transit is back on track, in the black

The state Auditors have finished their review of the Island Transit books for 2013 and confirmed there was no malfeasance. No money was stolen, but there was sloppy record-keeping and the previous management was not following standard practices in some important areas. Specifically, management of the cash-flow and documentation of the federal grant funds for the new building project in payroll and tracking inventory were of concern. The good news is the reductions in service earlier this year were sufficient to reduce expenses so Island Transit is operating in the black again and beginning to rebuild the reserve. Also a new financial officer has instituted proper record-keeping and begun a full review of internal controls to be sure best practices are being followed in all areas going forward.

October 31, 2014 6:04 pm

By HELEN PRICE JOHNSON

Island County commissioner

The state Auditors have finished their review of the Island Transit books for 2013 and confirmed there was no malfeasance. No money was stolen, but there was sloppy record-keeping and the previous management was not following standard practices in some important areas. Specifically, management of the cash-flow and documentation of the federal grant funds for the new building project in payroll and tracking inventory were of concern.

The good news is the reductions in service earlier this year were sufficient to reduce expenses so Island Transit is operating in the black again and beginning to rebuild the reserve. Also a new financial officer has instituted proper record-keeping and begun a full review of internal controls to be sure best practices are being followed in all areas going forward.

The board increased its oversight of finances also. Two board members now meet monthly with staff to review bank statements. Monthly reports were improved so the board can better monitor the cash position. State auditors reported that the board is taking “all necessary steps to resolve this issue.” Each of these changes are positive and are improving the agency.

Some have questioned the separation settlement with Martha Rose. I can assure you it was based on contractual obligations as determined by legal counsel, not guesswork. That agreement did pay for “leave,” however the vast majority of it was sick leave, not vacation. Both types of leave were capped and were far less than the balances accrued over 25 years of service.

Moving ahead it is important to hire a qualified interim executive director so the restructuring of routes can be completed and the transit agency is stabilized for the future. The board has decided to do a limited recruitment and tentative plans are to hire someone by Thanksgiving. An interim position is wise at this time to provide transitional leadership for the organization and allow ample time for significant community outreach in the process of selecting a long-term director. That outreach should focus on what we want our transit system to provide in the future. How can we best support expanded service? What are the economics of being fare-free? I hope you will join this important conversation.

The audit results show that internal financial controls and board policies did not keep up as the transit agency grew over time. Significant corrective steps have been taken already and I am committed to continuing to improve Island Transit for our community.