NEW: Overseer Identifies Problems with RIPTA’s Financial Controls
Thursday, October 04, 2012
The special overseer for RIPTA today announced findings that indicate multiple problems with financial controls at the state's public transportation agency.
Requisitions for goods and services were approved without their first being checked against available funding, a situation Studley said is akin to “writing a check without knowing how much money is in your account.”
A resource team appointed by Studley also noted the absence of monthly cash flow analyses and consistent inventory controls so that staff could not provide a clear accounting of its stock items.
As interventions, the Resource Team has created new procurement procedures so that all purchasing requests must first be evaluated for both available funds and critical need before they can be approved. It has also developed a monthly cash flow analysis based on past expenditures that can help staff predict potential cash shortages over the remainder of the fiscal year. And, the team is evaluating best practices of other transit authorities as part of the process toward improving inventory control.
The interim CEO also stressed the importance of identifying and adopting additional cost cutting measures immediately. RIPTA is anticipated to show a significant deficit in its FY 2013 budget, and, in the absence of a financial intervention, is currently projected to run out of funding in late winter or early spring.