FAC Explorer

Audit 333605

FY End
2024-06-30
Total Expended
$8.00M
Findings
22
Programs
4
Organization: Detroit Transportation Corporation (MI)
Year: 2024 Accepted: 2024-12-18
Auditor: Alan C Young & Associates PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
515748 2024-002 Material Weakness Yes P
515749 2024-002 Material Weakness Yes P
515750 2024-002 Material Weakness Yes P
515751 2024-002 Material Weakness Yes P
515752 2024-002 Material Weakness Yes P
515753 2024-002 Material Weakness Yes P
515754 2024-002 Material Weakness Yes P
515755 2024-002 Material Weakness Yes P
515756 2024-002 Material Weakness Yes P
515757 2024-003 - - F
515758 2024-003 - - F
1092190 2024-002 Material Weakness Yes P
1092191 2024-002 Material Weakness Yes P
1092192 2024-002 Material Weakness Yes P
1092193 2024-002 Material Weakness Yes P
1092194 2024-002 Material Weakness Yes P
1092195 2024-002 Material Weakness Yes P
1092196 2024-002 Material Weakness Yes P
1092197 2024-002 Material Weakness Yes P
1092198 2024-002 Material Weakness Yes P
1092199 2024-003 - - F
1092200 2024-003 - - F

Programs

ALN Program Spent Major Findings
20.507 Federal Transit Formula Grants $3.08M Yes 1
20.525 State of Good Repair Grants Program $2.53M Yes 1
20.513 Enhanced Mobility of Seniors and Individuals with Disabilities $708,510 Yes 2
20.205 Highway Planning and Construction $76,120 - 1

Contacts

Name Title Type
VJ3NAJ5P1DE3 Karen Foster Auditee
3132211247 Rajeev Shah Auditor
No contacts on file

Notes to SEFA

Title: EXPENDITURE REPORT Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of Detroit Transportation Corporation (DTC). The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). In addition, expenditures reported on the schedule are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to reimbursement. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. Because the schedule presents only a selected portion of the operations of DTC, it is not intended to and does not present the financial position, change in net position or cash flows of DTC. De Minimis Rate Used: N Rate Explanation: DTC has elected not to use the de minimis 10% indirect cost rate allowed under the Uniform Guidance. Management has reconciled the expenditures reported in the Schedule of Expenditures of Federal Awards to those amounts reported in the annual or final cost reports. Unallowable differences, if any, have been disclosed to the auditor.
Title: ELIGIBLE AND INELIGIBLE EXPENSES PER THE BPT (Bureau of Passenger Transportation) R&E MANUAL AND NOTES TO BPT SCHEDULES Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of Detroit Transportation Corporation (DTC). The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). In addition, expenditures reported on the schedule are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to reimbursement. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. Because the schedule presents only a selected portion of the operations of DTC, it is not intended to and does not present the financial position, change in net position or cash flows of DTC. De Minimis Rate Used: N Rate Explanation: DTC has elected not to use the de minimis 10% indirect cost rate allowed under the Uniform Guidance. The State’s BPT requires DTC to include supplemental schedules to the financial statements. These Supplemental schedules are included on pages 22-34 of this report. These schedules include eligible expenses to be reimbursed with state funds that have been appropriate for mass transit operating assistance under ACT 51. The schedules also detail ineligible expenses that cannot be reimbursed. The supplemental schedules detail any Section 5307 (capital funding) and any other grant funding used to pay operating expenses and either subtracts them out as ineligible or does not include them in the total expense to be reimbursed. • No Office of Passenger Transportation (OPT) approved cost allocation plans are required and therefore none were used in the preparation of the financial statements. • All expenses associated with auxiliary transportation revenue, which contains advertising revenue, are subtracted out as ineligible. • The depreciation expenses of $1,799,731 on assets purchased with state or federal grant funds are shown as ineligible expenses. • The only retirement benefit offered by DTC is a defined benefit plan. Pension costs incurred were calculated pursuant to GASB 68 rules. The total pension recovery recognized as calculated is $(1,159,145) and the entire amount was recorded on the books as a credit to expenses. DTC contributed $1,395,725 during the year and therefore $2,554,870 is added back as negative ineligible pension. DTC did not incur, nor pay, any OPEB. • All expenses associated with Other Federal Transit Contracts and Reimbursements and Other MDOT Contracts and Reimbursements revenue have been subtracted as ineligible. • The portion of ineligible association dues are reported as ineligible lobbying expense. • All expenses associated with miscellaneous revenues are subtracted out as ineligible.
Title: NON FINANCIAL DATA Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of Detroit Transportation Corporation (DTC). The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). In addition, expenditures reported on the schedule are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to reimbursement. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. Because the schedule presents only a selected portion of the operations of DTC, it is not intended to and does not present the financial position, change in net position or cash flows of DTC. De Minimis Rate Used: N Rate Explanation: DTC has elected not to use the de minimis 10% indirect cost rate allowed under the Uniform Guidance. The methodology used for compiling miles and nonfinancial information used to allocate costs has been reviewed and the recording method has been found to be adequate and reliable.
Title: CONTINGENCIES Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of Detroit Transportation Corporation (DTC). The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). In addition, expenditures reported on the schedule are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to reimbursement. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. Because the schedule presents only a selected portion of the operations of DTC, it is not intended to and does not present the financial position, change in net position or cash flows of DTC. De Minimis Rate Used: N Rate Explanation: DTC has elected not to use the de minimis 10% indirect cost rate allowed under the Uniform Guidance. Amounts received or receivable under grant programs are subject to audit and adjustment by grantor agencies, principally the federal and state governments. Any disallowed claims, including amounts already collected, may constitute a liability of DTC. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although DTC expects such amounts, if any to be immaterial.
Title: SUBSEQUENT EVENTS Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of Detroit Transportation Corporation (DTC). The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). In addition, expenditures reported on the schedule are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to reimbursement. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. Because the schedule presents only a selected portion of the operations of DTC, it is not intended to and does not present the financial position, change in net position or cash flows of DTC. De Minimis Rate Used: N Rate Explanation: DTC has elected not to use the de minimis 10% indirect cost rate allowed under the Uniform Guidance. All subsequent events relative to the major programs were evaluated through December 4, 2024, the date the accompanying reports were available to be issued. No significant event was noted that required adjustment or disclosure to the accompanying reports.

Finding Details

Finding 2024-002
Criteria – 2CFR Part 200 requires an auditee to prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA). Condition – During our audit, we noted that DTC did not have a system in place to correctly identify and record the federal expenditures. We noted certain matters that collectively constituted a material weakness in reporting the federal expenditures. The items noted are as follows: Due to lack of coordination between the grants department and the fiscal department, FTA drawdowns were not performed on a timely basis. Timing differences were noted in reporting the expenses in the financial statements and the federal drawdowns. It was further noted that a reconciliation of the grant-related expenses with the general ledger was not performed on a timely basis. Questioned Costs – None Cause/Effect – The SEFA was not accurately stated as a result of not identifying certain federal award expenditures.
Finding 2024-002
Criteria – 2CFR Part 200 requires an auditee to prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA). Condition – During our audit, we noted that DTC did not have a system in place to correctly identify and record the federal expenditures. We noted certain matters that collectively constituted a material weakness in reporting the federal expenditures. The items noted are as follows: Due to lack of coordination between the grants department and the fiscal department, FTA drawdowns were not performed on a timely basis. Timing differences were noted in reporting the expenses in the financial statements and the federal drawdowns. It was further noted that a reconciliation of the grant-related expenses with the general ledger was not performed on a timely basis. Questioned Costs – None Cause/Effect – The SEFA was not accurately stated as a result of not identifying certain federal award expenditures.
Finding 2024-002
Criteria – 2CFR Part 200 requires an auditee to prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA). Condition – During our audit, we noted that DTC did not have a system in place to correctly identify and record the federal expenditures. We noted certain matters that collectively constituted a material weakness in reporting the federal expenditures. The items noted are as follows: Due to lack of coordination between the grants department and the fiscal department, FTA drawdowns were not performed on a timely basis. Timing differences were noted in reporting the expenses in the financial statements and the federal drawdowns. It was further noted that a reconciliation of the grant-related expenses with the general ledger was not performed on a timely basis. Questioned Costs – None Cause/Effect – The SEFA was not accurately stated as a result of not identifying certain federal award expenditures.
Finding 2024-002
Criteria – 2CFR Part 200 requires an auditee to prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA). Condition – During our audit, we noted that DTC did not have a system in place to correctly identify and record the federal expenditures. We noted certain matters that collectively constituted a material weakness in reporting the federal expenditures. The items noted are as follows: Due to lack of coordination between the grants department and the fiscal department, FTA drawdowns were not performed on a timely basis. Timing differences were noted in reporting the expenses in the financial statements and the federal drawdowns. It was further noted that a reconciliation of the grant-related expenses with the general ledger was not performed on a timely basis. Questioned Costs – None Cause/Effect – The SEFA was not accurately stated as a result of not identifying certain federal award expenditures.
Finding 2024-002
Criteria – 2CFR Part 200 requires an auditee to prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA). Condition – During our audit, we noted that DTC did not have a system in place to correctly identify and record the federal expenditures. We noted certain matters that collectively constituted a material weakness in reporting the federal expenditures. The items noted are as follows: Due to lack of coordination between the grants department and the fiscal department, FTA drawdowns were not performed on a timely basis. Timing differences were noted in reporting the expenses in the financial statements and the federal drawdowns. It was further noted that a reconciliation of the grant-related expenses with the general ledger was not performed on a timely basis. Questioned Costs – None Cause/Effect – The SEFA was not accurately stated as a result of not identifying certain federal award expenditures.
Finding 2024-002
Criteria – 2CFR Part 200 requires an auditee to prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA). Condition – During our audit, we noted that DTC did not have a system in place to correctly identify and record the federal expenditures. We noted certain matters that collectively constituted a material weakness in reporting the federal expenditures. The items noted are as follows: Due to lack of coordination between the grants department and the fiscal department, FTA drawdowns were not performed on a timely basis. Timing differences were noted in reporting the expenses in the financial statements and the federal drawdowns. It was further noted that a reconciliation of the grant-related expenses with the general ledger was not performed on a timely basis. Questioned Costs – None Cause/Effect – The SEFA was not accurately stated as a result of not identifying certain federal award expenditures.
Finding 2024-002
Criteria – 2CFR Part 200 requires an auditee to prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA). Condition – During our audit, we noted that DTC did not have a system in place to correctly identify and record the federal expenditures. We noted certain matters that collectively constituted a material weakness in reporting the federal expenditures. The items noted are as follows: Due to lack of coordination between the grants department and the fiscal department, FTA drawdowns were not performed on a timely basis. Timing differences were noted in reporting the expenses in the financial statements and the federal drawdowns. It was further noted that a reconciliation of the grant-related expenses with the general ledger was not performed on a timely basis. Questioned Costs – None Cause/Effect – The SEFA was not accurately stated as a result of not identifying certain federal award expenditures.
Finding 2024-002
Criteria – 2CFR Part 200 requires an auditee to prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA). Condition – During our audit, we noted that DTC did not have a system in place to correctly identify and record the federal expenditures. We noted certain matters that collectively constituted a material weakness in reporting the federal expenditures. The items noted are as follows: Due to lack of coordination between the grants department and the fiscal department, FTA drawdowns were not performed on a timely basis. Timing differences were noted in reporting the expenses in the financial statements and the federal drawdowns. It was further noted that a reconciliation of the grant-related expenses with the general ledger was not performed on a timely basis. Questioned Costs – None Cause/Effect – The SEFA was not accurately stated as a result of not identifying certain federal award expenditures.
Finding 2024-002
Criteria – 2CFR Part 200 requires an auditee to prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA). Condition – During our audit, we noted that DTC did not have a system in place to correctly identify and record the federal expenditures. We noted certain matters that collectively constituted a material weakness in reporting the federal expenditures. The items noted are as follows: Due to lack of coordination between the grants department and the fiscal department, FTA drawdowns were not performed on a timely basis. Timing differences were noted in reporting the expenses in the financial statements and the federal drawdowns. It was further noted that a reconciliation of the grant-related expenses with the general ledger was not performed on a timely basis. Questioned Costs – None Cause/Effect – The SEFA was not accurately stated as a result of not identifying certain federal award expenditures.
Finding 2024-003
Criteria – As per uniform guidance compliance requirements for Equipment and Real Property management, a nonfederal entity is required to conduct a physical inventory of assets at least every 2 years. Condition – DTC did not complete the physical inventory of equipment acquired with federal funds within the time specified by the compliance requirements. Questioned Costs – Unknown Cause/Effect – DTC has not complied with the requirements for Equipment and Real Property management.
Finding 2024-003
Criteria – As per uniform guidance compliance requirements for Equipment and Real Property management, a nonfederal entity is required to conduct a physical inventory of assets at least every 2 years. Condition – DTC did not complete the physical inventory of equipment acquired with federal funds within the time specified by the compliance requirements. Questioned Costs – Unknown Cause/Effect – DTC has not complied with the requirements for Equipment and Real Property management.
Finding 2024-002
Criteria – 2CFR Part 200 requires an auditee to prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA). Condition – During our audit, we noted that DTC did not have a system in place to correctly identify and record the federal expenditures. We noted certain matters that collectively constituted a material weakness in reporting the federal expenditures. The items noted are as follows: Due to lack of coordination between the grants department and the fiscal department, FTA drawdowns were not performed on a timely basis. Timing differences were noted in reporting the expenses in the financial statements and the federal drawdowns. It was further noted that a reconciliation of the grant-related expenses with the general ledger was not performed on a timely basis. Questioned Costs – None Cause/Effect – The SEFA was not accurately stated as a result of not identifying certain federal award expenditures.
Finding 2024-002
Criteria – 2CFR Part 200 requires an auditee to prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA). Condition – During our audit, we noted that DTC did not have a system in place to correctly identify and record the federal expenditures. We noted certain matters that collectively constituted a material weakness in reporting the federal expenditures. The items noted are as follows: Due to lack of coordination between the grants department and the fiscal department, FTA drawdowns were not performed on a timely basis. Timing differences were noted in reporting the expenses in the financial statements and the federal drawdowns. It was further noted that a reconciliation of the grant-related expenses with the general ledger was not performed on a timely basis. Questioned Costs – None Cause/Effect – The SEFA was not accurately stated as a result of not identifying certain federal award expenditures.
Finding 2024-002
Criteria – 2CFR Part 200 requires an auditee to prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA). Condition – During our audit, we noted that DTC did not have a system in place to correctly identify and record the federal expenditures. We noted certain matters that collectively constituted a material weakness in reporting the federal expenditures. The items noted are as follows: Due to lack of coordination between the grants department and the fiscal department, FTA drawdowns were not performed on a timely basis. Timing differences were noted in reporting the expenses in the financial statements and the federal drawdowns. It was further noted that a reconciliation of the grant-related expenses with the general ledger was not performed on a timely basis. Questioned Costs – None Cause/Effect – The SEFA was not accurately stated as a result of not identifying certain federal award expenditures.
Finding 2024-002
Criteria – 2CFR Part 200 requires an auditee to prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA). Condition – During our audit, we noted that DTC did not have a system in place to correctly identify and record the federal expenditures. We noted certain matters that collectively constituted a material weakness in reporting the federal expenditures. The items noted are as follows: Due to lack of coordination between the grants department and the fiscal department, FTA drawdowns were not performed on a timely basis. Timing differences were noted in reporting the expenses in the financial statements and the federal drawdowns. It was further noted that a reconciliation of the grant-related expenses with the general ledger was not performed on a timely basis. Questioned Costs – None Cause/Effect – The SEFA was not accurately stated as a result of not identifying certain federal award expenditures.
Finding 2024-002
Criteria – 2CFR Part 200 requires an auditee to prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA). Condition – During our audit, we noted that DTC did not have a system in place to correctly identify and record the federal expenditures. We noted certain matters that collectively constituted a material weakness in reporting the federal expenditures. The items noted are as follows: Due to lack of coordination between the grants department and the fiscal department, FTA drawdowns were not performed on a timely basis. Timing differences were noted in reporting the expenses in the financial statements and the federal drawdowns. It was further noted that a reconciliation of the grant-related expenses with the general ledger was not performed on a timely basis. Questioned Costs – None Cause/Effect – The SEFA was not accurately stated as a result of not identifying certain federal award expenditures.
Finding 2024-002
Criteria – 2CFR Part 200 requires an auditee to prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA). Condition – During our audit, we noted that DTC did not have a system in place to correctly identify and record the federal expenditures. We noted certain matters that collectively constituted a material weakness in reporting the federal expenditures. The items noted are as follows: Due to lack of coordination between the grants department and the fiscal department, FTA drawdowns were not performed on a timely basis. Timing differences were noted in reporting the expenses in the financial statements and the federal drawdowns. It was further noted that a reconciliation of the grant-related expenses with the general ledger was not performed on a timely basis. Questioned Costs – None Cause/Effect – The SEFA was not accurately stated as a result of not identifying certain federal award expenditures.
Finding 2024-002
Criteria – 2CFR Part 200 requires an auditee to prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA). Condition – During our audit, we noted that DTC did not have a system in place to correctly identify and record the federal expenditures. We noted certain matters that collectively constituted a material weakness in reporting the federal expenditures. The items noted are as follows: Due to lack of coordination between the grants department and the fiscal department, FTA drawdowns were not performed on a timely basis. Timing differences were noted in reporting the expenses in the financial statements and the federal drawdowns. It was further noted that a reconciliation of the grant-related expenses with the general ledger was not performed on a timely basis. Questioned Costs – None Cause/Effect – The SEFA was not accurately stated as a result of not identifying certain federal award expenditures.
Finding 2024-002
Criteria – 2CFR Part 200 requires an auditee to prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA). Condition – During our audit, we noted that DTC did not have a system in place to correctly identify and record the federal expenditures. We noted certain matters that collectively constituted a material weakness in reporting the federal expenditures. The items noted are as follows: Due to lack of coordination between the grants department and the fiscal department, FTA drawdowns were not performed on a timely basis. Timing differences were noted in reporting the expenses in the financial statements and the federal drawdowns. It was further noted that a reconciliation of the grant-related expenses with the general ledger was not performed on a timely basis. Questioned Costs – None Cause/Effect – The SEFA was not accurately stated as a result of not identifying certain federal award expenditures.
Finding 2024-002
Criteria – 2CFR Part 200 requires an auditee to prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA). Condition – During our audit, we noted that DTC did not have a system in place to correctly identify and record the federal expenditures. We noted certain matters that collectively constituted a material weakness in reporting the federal expenditures. The items noted are as follows: Due to lack of coordination between the grants department and the fiscal department, FTA drawdowns were not performed on a timely basis. Timing differences were noted in reporting the expenses in the financial statements and the federal drawdowns. It was further noted that a reconciliation of the grant-related expenses with the general ledger was not performed on a timely basis. Questioned Costs – None Cause/Effect – The SEFA was not accurately stated as a result of not identifying certain federal award expenditures.
Finding 2024-003
Criteria – As per uniform guidance compliance requirements for Equipment and Real Property management, a nonfederal entity is required to conduct a physical inventory of assets at least every 2 years. Condition – DTC did not complete the physical inventory of equipment acquired with federal funds within the time specified by the compliance requirements. Questioned Costs – Unknown Cause/Effect – DTC has not complied with the requirements for Equipment and Real Property management.
Finding 2024-003
Criteria – As per uniform guidance compliance requirements for Equipment and Real Property management, a nonfederal entity is required to conduct a physical inventory of assets at least every 2 years. Condition – DTC did not complete the physical inventory of equipment acquired with federal funds within the time specified by the compliance requirements. Questioned Costs – Unknown Cause/Effect – DTC has not complied with the requirements for Equipment and Real Property management.