FAC Explorer

Audit 330148

FY End
2024-06-30
Total Expended
$46.71M
Findings
4
Programs
5
Organization: Metropolitan Transit Authority (TN)
Year: 2024 Accepted: 2024-11-27
Auditor: Crosslin PLLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
512422 2024-001 - - B
512423 2024-002 - - I
1088864 2024-001 - - B
1088865 2024-002 - - I

Programs

ALN Program Spent Major Findings
20.526 Buses and Bus Facilities Formula, Competitive, and Low Or No Emissions Programs $910,834 Yes 0
20.507 Federal Transit Formula Grants $593,470 Yes 0
20.513 Enhanced Mobility of Seniors and Individuals with Disabilities $570,459 - 0
20.530 Public Transportation Innovation $77,659 - 0
20.505 Metropolitan Transportation Planning and State and Non-Metropolitan Planning and Research $41,459 - 0

Contacts

Name Title Type
JCKQY7NM1EX1 Shelly B. McElhaney Auditee
6158626144 Erica Saeger Auditor
No contacts on file

Notes to SEFA

Title: PROGRAM CLUSTERS Accounting Policies: The schedule of expenditures of federal awards and state financial assistance are prepared on the accrual basis of accounting. The information in the schedule of expenditures of federal awards is presented in accordance with the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule of expenditures of federal awards and state financial assistance present only a selected portion of MTA’s operations, they are not intended to and do not present the financial position, changes in net position, or cash flows of MTA. The schedules of expenditures of federal awards and state financial assistance include the grant activity of the Metropolitan Transit Authority (“MTA”) and its blended component unit, Davidson Transit Organization (“DTO”). DTO is a legally separate 501(c)(3) notfor- profit organization which was formed to provide the necessary labor to operate MTA’s transit system. Accordingly, certain federal, state and local awards received by MTA are used to reimburse labor costs incurred by DTO. Such funds received by MTA and used to reimburse DTO are reported in the accompanying schedules of federal, state and local awards by the receiving agency to avoid duplication of the aggregate level of federal awards expected by MTA, the reporting entity. Accordingly, such funds are included only once. Such funds are subject to the compliance requirements that could have a direct and material effect on a major program and are subject to audit under Uniform Guidance. The detail of federal awards passed from MTA to DTO, included in the accompanying schedule of expenditures of federal awards, is as follows: Program Title CFDA Number Expenditures Federal Transit Formula Grants 20.507 $14,665,430 As the funds above are passed within the same financial reporting entity, they are not included as pass-through funds reported separately in the schedule of expenditures of federal awards. De Minimis Rate Used: N Rate Explanation: MTA has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Uniform Guidance defines a cluster of programs as a grouping of closely related programs that share common compliance requirements. According to this definition, similar programs deemed to be a cluster of programs are reported and tested accordingly.
Title: CONTINGENCY Accounting Policies: The schedule of expenditures of federal awards and state financial assistance are prepared on the accrual basis of accounting. The information in the schedule of expenditures of federal awards is presented in accordance with the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule of expenditures of federal awards and state financial assistance present only a selected portion of MTA’s operations, they are not intended to and do not present the financial position, changes in net position, or cash flows of MTA. The schedules of expenditures of federal awards and state financial assistance include the grant activity of the Metropolitan Transit Authority (“MTA”) and its blended component unit, Davidson Transit Organization (“DTO”). DTO is a legally separate 501(c)(3) notfor- profit organization which was formed to provide the necessary labor to operate MTA’s transit system. Accordingly, certain federal, state and local awards received by MTA are used to reimburse labor costs incurred by DTO. Such funds received by MTA and used to reimburse DTO are reported in the accompanying schedules of federal, state and local awards by the receiving agency to avoid duplication of the aggregate level of federal awards expected by MTA, the reporting entity. Accordingly, such funds are included only once. Such funds are subject to the compliance requirements that could have a direct and material effect on a major program and are subject to audit under Uniform Guidance. The detail of federal awards passed from MTA to DTO, included in the accompanying schedule of expenditures of federal awards, is as follows: Program Title CFDA Number Expenditures Federal Transit Formula Grants 20.507 $14,665,430 As the funds above are passed within the same financial reporting entity, they are not included as pass-through funds reported separately in the schedule of expenditures of federal awards. De Minimis Rate Used: N Rate Explanation: MTA has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The grant revenue amounts received are subject to audit and adjustment. If any expenditures are disallowed by the grantor agencies as a result of such an audit, any claim for reimbursement to the grantor agencies would become a liability of MTA. In the opinion of management, all grant expenditures are in compliance with the terms of the grant agreements and applicable federal and state laws and regulations.

Finding Details

Finding 2024-001
2024 - 001 - INTERNAL CONTROLS OVER CASH DISBURSEMENTS FOR ALLOWABLE COSTS Federal Transit Administration Formula Grants Assistance Listing No. 20.507 CARES ACT U.S. Department of Transportation Criteria In testing the internal controls for MTA’s major program, it was noted that there was one expenditure out of 40 expenditures tested made payable to a vendor that was allowable under the CARES ACT grant; however, per review of the check copy, the check only contained one signature. MTA’s internal control policies surrounding cash disbursements require two authorized signatures on any cash disbursements greater than $10,000. Condition and Context MTA paid a vendor an amount greater than $10,000 that did not include two authorized signatures on the check. Questioned Cost The amount paid to the vendor was $199,321. Cause MTA paid a vendor with a check that was only signed by one authorized signor instead of two authorized signers as required by their internal control policies related to cash disbursements. Effect MTA was not in compliance with their internal control policies relating to cash disbursements for amounts expended greater than $10,000. Recommendation We recommend that MTA consistently adhere to their internal control policies related to cash disbursements. We recommend that MTA ensure that there are two authorized signatures for all cash disbursements greater than $10,000. Views of Responsible Officials and Planned Corrective Actions See management’s corrective action plan.
Finding 2024-002
2024 - 002 - PROCUREMENT AND SUSPENSION AND DEBARMENT Federal Transit Administration Formula Grants Assistance Listing No. 20.507 U.S. Department of Transportation Criteria Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred or whose principals are suspended or debarred. Covered transactions include procurement contracts for goods or services that are expected to equal or exceed $25,000 and all non-procurement transactions (e.g., subawards to subrecipients).Condition and Context We performed testwork on 40 vendors and noted that for two out of 40 vendors tested, the two vendors were not listed in SAM, there was not a signed statement/contract/certification that the had not been suspended or disbarred, and there was no evidence in the files that a review had been performed to verify that the vendors or the vendors’ principals had not been suspended or debarred. Upon discussion with MTA, they noted that they do include standard Suspension and Debarment language at the end of all purchase orders. However, there was no evidence that the vendor signed any statement/contract/certification that the vendors has not been suspended or debarred. Questioned Costs The costs associated with the two items selected for testing were $30,372 under grant TN-2022- 025-00 and $30,798 under grant TN-2023-028-00. Both were related to vehicle purchases. Therefore, the total questioned cost for fiscal year 2024 totaled $61,170. Cause The amounts paid to the vendors in question were related to vehicle purchases without verifying that the vendors or the vendors’ principals had not been suspended or debarred. Effect MTA may have entered into an agreement with a vendor that has been suspended or debarred. Recommendation We recommend that MTA ensure compliance with this regulation as it relates to federal programs for all vendors and should ensure that all vendors are listed in SAM, include a requirement that signed suspension and debarment certifications be obtained and placed in all contract files, or add a clause or condition to signed contracts or subcontracts between each vendor and MTA stating that the vendor or the vendors’ principals have not been suspended or debarred for all vendors regardless of the type of goods or services provided. Views of Responsible Officials and Planned Corrective Actions See management’s corrective action plan.
Finding 2024-001
2024 - 001 - INTERNAL CONTROLS OVER CASH DISBURSEMENTS FOR ALLOWABLE COSTS Federal Transit Administration Formula Grants Assistance Listing No. 20.507 CARES ACT U.S. Department of Transportation Criteria In testing the internal controls for MTA’s major program, it was noted that there was one expenditure out of 40 expenditures tested made payable to a vendor that was allowable under the CARES ACT grant; however, per review of the check copy, the check only contained one signature. MTA’s internal control policies surrounding cash disbursements require two authorized signatures on any cash disbursements greater than $10,000. Condition and Context MTA paid a vendor an amount greater than $10,000 that did not include two authorized signatures on the check. Questioned Cost The amount paid to the vendor was $199,321. Cause MTA paid a vendor with a check that was only signed by one authorized signor instead of two authorized signers as required by their internal control policies related to cash disbursements. Effect MTA was not in compliance with their internal control policies relating to cash disbursements for amounts expended greater than $10,000. Recommendation We recommend that MTA consistently adhere to their internal control policies related to cash disbursements. We recommend that MTA ensure that there are two authorized signatures for all cash disbursements greater than $10,000. Views of Responsible Officials and Planned Corrective Actions See management’s corrective action plan.
Finding 2024-002
2024 - 002 - PROCUREMENT AND SUSPENSION AND DEBARMENT Federal Transit Administration Formula Grants Assistance Listing No. 20.507 U.S. Department of Transportation Criteria Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred or whose principals are suspended or debarred. Covered transactions include procurement contracts for goods or services that are expected to equal or exceed $25,000 and all non-procurement transactions (e.g., subawards to subrecipients).Condition and Context We performed testwork on 40 vendors and noted that for two out of 40 vendors tested, the two vendors were not listed in SAM, there was not a signed statement/contract/certification that the had not been suspended or disbarred, and there was no evidence in the files that a review had been performed to verify that the vendors or the vendors’ principals had not been suspended or debarred. Upon discussion with MTA, they noted that they do include standard Suspension and Debarment language at the end of all purchase orders. However, there was no evidence that the vendor signed any statement/contract/certification that the vendors has not been suspended or debarred. Questioned Costs The costs associated with the two items selected for testing were $30,372 under grant TN-2022- 025-00 and $30,798 under grant TN-2023-028-00. Both were related to vehicle purchases. Therefore, the total questioned cost for fiscal year 2024 totaled $61,170. Cause The amounts paid to the vendors in question were related to vehicle purchases without verifying that the vendors or the vendors’ principals had not been suspended or debarred. Effect MTA may have entered into an agreement with a vendor that has been suspended or debarred. Recommendation We recommend that MTA ensure compliance with this regulation as it relates to federal programs for all vendors and should ensure that all vendors are listed in SAM, include a requirement that signed suspension and debarment certifications be obtained and placed in all contract files, or add a clause or condition to signed contracts or subcontracts between each vendor and MTA stating that the vendor or the vendors’ principals have not been suspended or debarred for all vendors regardless of the type of goods or services provided. Views of Responsible Officials and Planned Corrective Actions See management’s corrective action plan.