Audit 4131

FY End

2023-06-30

Total Expended

$43.16M

Findings

4

Programs

6

Organization: Metropolitan Transit Authority (TN)

Year: 2023 Accepted: 2023-11-27

Auditor: Crosslin PLLC

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
2404	2023-001	-	-	C
2405	2023-001	-	-	C
578846	2023-001	-	-	C
578847	2023-001	-	-	C

ALN	Program	Spent	Major
20.507	Federal Transit_formula Grants	$24.43M	Yes
20.526	Buses and Bus Facilities Formula, Competitive, and Low Or No Emissions Programs	$700,488	Yes
20.513	Enhanced Mobility of Seniors and Individuals with Disabilities	$569,495	-
20.530	Public Transportation Innovation	$98,162	-
20.505	Metropolitan Transportation Planning and State and Non-Metropolitan Planning and Research	$25,356	-
20.205	Highway Planning and Construction	$3,256	-

Contacts

Name	Title	Type
JCKQY7NM1EX1	Ed Oliphant	Auditee
6158624167	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) not-for-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: (See chart in the notes to the SEFA). 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: The auditee did not use the de minimis cost rate. 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) not-for-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: (See chart in the notes to the SEFA). 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: The auditee did not use the de minimis cost rate. 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 2023-001

2023 - 001 - CASH MANAGEMENT Federal Transit Administration Formula Grants Assistance Listing No. 20.507 U.S. Department of Transportation Criteria In testing the cash management compliance requirement for MTA’s major program, it was noted that MTA’s Grants and Special Projects Administrator requested federal drawdowns for allowable reimbursable subrecipient grant expenditures 4 business days in advance of MTA accounting making payments to the vendors; therefore, MTA did not commit itself for initiating cash drawdowns for immediate disbursement no later than 3 business days as required. Condition and Context MTA did not disburse the payments to the vendors within the 3-business day threshold. Questioned Cost The amounts of the federal drawdowns were $17,345 and $4,125 under grants TN-2020-001-00 and TN-2019-024-02, respectively. Cause MTA made drawdowns of funding and did not immediately disburse the funds to the vendors within the required timeframe. Effect MTA was not in compliance with the cash management requirement under the grants. Recommendation We recommend that MTA consistently adhere to the disbursement timing requirements of the grants. We recommend that MTA drawdown federal funding when vendors or subrecipients have allowable expenditures that have occurred or are going to occur within the 3-business day threshold. Views of Responsible Officials and Planned Corrective Actions See management’s corrective action plan.

Finding 2023-001

2023 - 001 - CASH MANAGEMENT Federal Transit Administration Formula Grants Assistance Listing No. 20.507 U.S. Department of Transportation Criteria In testing the cash management compliance requirement for MTA’s major program, it was noted that MTA’s Grants and Special Projects Administrator requested federal drawdowns for allowable reimbursable subrecipient grant expenditures 4 business days in advance of MTA accounting making payments to the vendors; therefore, MTA did not commit itself for initiating cash drawdowns for immediate disbursement no later than 3 business days as required. Condition and Context MTA did not disburse the payments to the vendors within the 3-business day threshold. Questioned Cost The amounts of the federal drawdowns were $17,345 and $4,125 under grants TN-2020-001-00 and TN-2019-024-02, respectively. Cause MTA made drawdowns of funding and did not immediately disburse the funds to the vendors within the required timeframe. Effect MTA was not in compliance with the cash management requirement under the grants. Recommendation We recommend that MTA consistently adhere to the disbursement timing requirements of the grants. We recommend that MTA drawdown federal funding when vendors or subrecipients have allowable expenditures that have occurred or are going to occur within the 3-business day threshold. Views of Responsible Officials and Planned Corrective Actions See management’s corrective action plan.

Finding 2023-001

2023 - 001 - CASH MANAGEMENT Federal Transit Administration Formula Grants Assistance Listing No. 20.507 U.S. Department of Transportation Criteria In testing the cash management compliance requirement for MTA’s major program, it was noted that MTA’s Grants and Special Projects Administrator requested federal drawdowns for allowable reimbursable subrecipient grant expenditures 4 business days in advance of MTA accounting making payments to the vendors; therefore, MTA did not commit itself for initiating cash drawdowns for immediate disbursement no later than 3 business days as required. Condition and Context MTA did not disburse the payments to the vendors within the 3-business day threshold. Questioned Cost The amounts of the federal drawdowns were $17,345 and $4,125 under grants TN-2020-001-00 and TN-2019-024-02, respectively. Cause MTA made drawdowns of funding and did not immediately disburse the funds to the vendors within the required timeframe. Effect MTA was not in compliance with the cash management requirement under the grants. Recommendation We recommend that MTA consistently adhere to the disbursement timing requirements of the grants. We recommend that MTA drawdown federal funding when vendors or subrecipients have allowable expenditures that have occurred or are going to occur within the 3-business day threshold. Views of Responsible Officials and Planned Corrective Actions See management’s corrective action plan.

Finding 2023-001

2023 - 001 - CASH MANAGEMENT Federal Transit Administration Formula Grants Assistance Listing No. 20.507 U.S. Department of Transportation Criteria In testing the cash management compliance requirement for MTA’s major program, it was noted that MTA’s Grants and Special Projects Administrator requested federal drawdowns for allowable reimbursable subrecipient grant expenditures 4 business days in advance of MTA accounting making payments to the vendors; therefore, MTA did not commit itself for initiating cash drawdowns for immediate disbursement no later than 3 business days as required. Condition and Context MTA did not disburse the payments to the vendors within the 3-business day threshold. Questioned Cost The amounts of the federal drawdowns were $17,345 and $4,125 under grants TN-2020-001-00 and TN-2019-024-02, respectively. Cause MTA made drawdowns of funding and did not immediately disburse the funds to the vendors within the required timeframe. Effect MTA was not in compliance with the cash management requirement under the grants. Recommendation We recommend that MTA consistently adhere to the disbursement timing requirements of the grants. We recommend that MTA drawdown federal funding when vendors or subrecipients have allowable expenditures that have occurred or are going to occur within the 3-business day threshold. Views of Responsible Officials and Planned Corrective Actions See management’s corrective action plan.