A certified public accounting firm reported to the Wilkes County commissioners that it had trouble substantiating Wilkes Transportation Authority payroll and billing records.
This was among findings of Whiteville-based Thompson, Price, Scott, Adams & Co. P.A. in a 1½-page, Oct. 24 letter to the commissioners from CPA Alan W. Thompson of the firm.
County Manager John Yates said that with commissioner approval, he hired the Whiteville firm in mid-August to audit WTA due to the agency’s financial problems. Yates said it was in addition to the annual WTA-funded audit by another CPA firm and should cost the county about $7,000.
Thompson said in his letter than his firm didn’t audit WTA.
He wrote, “Per our engagement letter, please find below the results of our consulting agreement…. We have not audited, reviewed or compiled a set of financial statements. We are making no assertions that the findings below are a complete list of the errors within the organization. Consequently, we make no representation regarding the sufficiency of the work performed to discover any or all discrepancies or improprieties.”
Thompson wrote that the payroll and billing record problems were related to findings concerning pay and work schedules of former WTA directors, but the letter never makes clear which directors are referenced.
It said “both previous directors” of WTA were paid more than their approved salaries. It also said, “WTA staff, in emails to me or my staff, have stated that the director never worked more than 25 hours a week.”
The letter stated, “The directors had cash advances (made) to themselves. This is not allowed.”
Other findings concerning WTA listed in Thompson’s letter are:
• it appears a home insurance payment of about $1,200 was paid with “the company credit card;”
• both mileage and gas reimbursements were claimed on a trip to Chapel Hill;
• “paid $250 for a family pass to football games;”
• overstated the mileage back and forth to Walmart and the bank by two miles multiple times.
Thompson wrote that Debbie Collins, director of the N.C. Department of Transportation’s Public Transportation Division, told him in a conversation that WTA should have billing for every hour of payroll but doesn’t.
He wrote, “Ms. Collins stated that if this were done correctly, this would have alleviated the financial stress that WTA is experiencing.”
Thompson said Collins told him “WTA has had 15 years of financial issues and that “the board is responsible for oversight.” He didn’t specify which board he was referencing.
He said a company hired by the DOT also had trouble substantiating WTA payroll and billing records. This apparently was Florida-based Transpro Consulting LLC, hired in 2017 to review WTA’s operations when its financial problems became apparent.
Transpro reported that every year since 2014, WTA staff received Christmas bonuses totaling over $27,000. Thompson wrote that WTA isn’t allowed to pay bonuses.
WTA currently has a deficit of over $100,000 and deficits averaging $20,000 in the last three years.
Transpro’s findings were included in a report Collins shared during a WTA board meeting on May 16, 2017. Thompson said his firm found no evidence of WTA following up on this report.
The DOT report listed what the DOT expected of WTA, including addressing personal loans that Mike Norwood and Robin Kipp received from WTA during their terms as WTA directors. Norwood resigned at the May 16, 2017, WTA board meeting when the DOT report was shared. Kipp resigned at the July 31 WTA board meeting.
The DOT report included recommendations to help WTA save more than $450,000 a year, primarily by scheduling trips more efficiently. Others included hiring more drivers to reduce overtime, reducing administrative staff to levels of comparable agencies and adopting more consistent Medicaid invoicing to improve reimbursements.
Prior to 2017, county government hadn’t appropriated any funds to WTA since $40,500 in fiscal 2009-10 and $50,000 the prior year.
Starting about two years ago, the WTA board requested and received loans of $60,000, $30,000 and $50,000 from the county for payroll and other needs. WTA received $20,000 in the 2018-19 county budget. It received nearly $187,000 this year to be paid back when it receives that amount in an annual state grant. WTA received $35,650 as an amendment to the 2017-18 budget so it could pay payroll taxes.
WTA has a payroll of over $1 million. About 85 percent of its funding is federal, about 5 percent state and about 10 percent from fees for transportation services. WTA mostly provides transportation for government and nonprofit human service agencies, but serves anyone in the county. This includes out of county trips as long as they originate in Wilkes.