Audit 386692

Condition: We noted two instances out of 25 where contractors and vendors were not paid for over 30 days. We also noted that grant reimbursements were not submitted within 90 days on 15 of 25 Transit Cluster disbursements tested. Of those 15 instances, three disbursements did not have a reimbursement requested for over 90 days and were requested after the end of fiscal year 2025. Criteria: All grant activities should include management level oversight to ensure timeliness, accuracy, and compliance with specified grant requirements. Cause: Lack of proactively drawing down Transit grants in latter half of fiscal year 2025 and lag in payment approvals for vendor invoices. Effect: Multiple vendors were not paid for over 30 days after receipt of invoice. Lag in reimbursement requests can cause cash flow issues. Recommendation: A designated management level individual should have oversight to require timely drawdowns of grants and timely payment of invoices. View of Responsible Officials: GRTC acknowledges this finding and will continue to address this issue via updated grant management processes and training additional finance staff on grant writing, pre-award and post-award activities.

Condition: The Company received CSLFRF subrecipient funding from the City of Roanoke (the “City”) in the prior year. The funding is governed by a memorandum of understanding (MOU) between the City and the Company. The City provided these CSLFRF funds to the Company for the Company to provide Micro Transit services with ADA-accessible vehicles and to purchase bus shelters, sidewalk improvements, and other improvements for high-use transit locations. Within Article III of the MOU, the Company was required to submit an annual written report by December 1, 2023 and each following year through December 1, 2025 that included a narrative explaining how and on what expenses the funding was spent and other project specific information. We noted that an annual report was not submitted on December 1, 2023 or December 1, 2024. This results in a material departure from the MOU and a violation of the reporting compliance attribute for CSLFRF. Criteria: Annual reporting requirements as mandated by the MOU should be prepared and submitted to maintain compliance with the agreement. Cause: Lack of proactive grant administration of CSLFRF funds. Effect: The reporting requirements for the CSLFRF program were not met. Recommendation: A designated management level individual should have oversight of funds received under federal programs and ensure that any applicable reporting requirements are properly prepared, reviewed, and submitted to their applicable grantor organization. View of Responsible Officials: GRTC concurs with the finding. Due to staff turnover on both the company and city sides the Director of Finance wasn’t aware of this requirement spelled out in the MOU. It didn’t come to their attention until the audit finding disclosed such information. Given that these funds are now exhausted GRTC doesn’t see a pressing prospective remedy is needed however in the future will be more diligent in reviewing and abiding by strictures in funding agreements. In company’s defense not once did anyone at the City remind or even notify GRTC that this information was needed/requested/desired at any time.

Condition: We noted four instances out of 25 where contractors and vendors were not paid for over 30 days. We also noted that grant reimbursements were not submitted within 90 days on 23 of 25 20.509 program disbursements tested. Of those 23 instances, eight disbursements did not have a reimbursement requested for over 90 days and were requested after the end of fiscal year 2025. Criteria: All grant activities should include management level oversight to ensure timeliness, accuracy, and compliance with specified grant requirements. Cause: Lack of proactively drawing down 20.509 program grants in fiscal year 2025 and lag in payment approvals for vendor invoices. Effect: Multiple vendors were not paid for over 30 days after receipt of invoice. Lag in reimbursement requests can cause cash flow issues. Recommendation: A designated management level individual should have oversight to require timely drawdowns of grants and timely payment of invoices. View of Responsible Officials: GRTC acknowledges this finding and will continue to address this issue via updated grant management processes and training additional finance staff on grant writing, pre-award and post-award activities.