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A Review of Financial and Performance Audit Reports for Four Mass Transit Authorities
July 2001
Report Number 01-033
Overall Conclusion
Of the independent financial audit reports for four mass transit authorities (MTAs) that the State Auditor's Office reviewed, only one reported material weaknesses. Specifically, the Capital Metropolitan Transit Authority (Capital Metro) independent financial audit for the year ended September 30, 1999, found that Capital Metro needed to improve its inventory parts purchasing process and perform regular bank reconciliations in a timely manner.
Key Facts and Findings
The Capital Metropolitan Transit Authority (Capital Metro) independent financial audit for the year ended September 30, 1999, found that Capital Metro needed to improve its inventory parts purchasing process and perform regular bank reconciliations in a timely manner. Although its financial audit report indicated that Capital Metro's financial statements presented its financial position fairly, Capital Metro's purchasing and bank reconciliation weaknesses increase the risk of financial loss or fraud.
Capital Metro's independent financial auditor issued its management letter for the audit of the financial statements for the year ended September 30, 2000, shortly before the issuance of our report. In that report, the independent auditor again reported the inventory parts purchasing process as a material weakness. Although Capital Metro's failure to perform timely bank reconciliations was again identified as a finding, the independent auditor no longer considered the issue to be a material weakness.
No other MTA's financial audit identified a weakness capable of similarly increasing the risk of financial loss or fraud. The independent financial audits obtained by the other three MTAs indicate that the financial statements of those MTAs present their respective financial positions fairly.
The most recent performance audit of the Metropolitan Transit Authority of Harris County (Metro Houston) met all legal audit requirements. However, performance audits for the other three MTAs did not contain the required examination of compliance with applicable state law.
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