- Associated Press - Tuesday, February 25, 2014

BATON ROUGE, La. (AP) - The Capital Area Transit System may have violated state law in failing to adopt safeguards that could have avoided the loss of more than $150,000 in bus fares and bus pass revenue.

The Louisiana Legislative Auditor’s office, in an audit released Monday, said CATS failed to account for those funds during an 18-month period beginning in 2012.

The Advocate reports (https://bit.ly/1c2kx0i) the report shows that CATS management was aware of the cash shortages but failed to “take substantive action to prevent repeated shortages.”

An investigation began after CATS management notified the office of suspicious payments showing then-board member Montrell McCaleb used $1,484 of CATS funds to pay his personal bills. McCaleb was investigated by the Louisiana Inspector General’s Office, which led to his September arrest. He has yet to be formally charged. .

District Attorney Hillar Moore III said he’s been waiting to meet with the other investigating agencies before making decisions about an indictment.

The Legislative Auditor’s report focused primarily on three areas: $79,496 of uncollected bus fare revenue, $78,648 of uncollected bus pass revenue, and $35,459 paid to former administrators for hours not worked and leave not earned that were improperly awarded as part of severance packages.

The report attributes the missing bus fare revenue to a lack of written policies and procedures for fare box processing, broken equipment and untrained employees.

Much of the leadership in place during the reporting period has since been replaced.

CEO Brian Marshall resigned in April and CATS Board President Isaiah Marshall, no relation to Brian Marshall, resigned in July. Both quit amid public outcry and criticism of their performances. CATS Chief Financial Officer Gary Owens resigned in August. And four other board members have also since been replaced.

The audit found from Jan. 1, 2012, to July 30, 2013, cash transactions totaling $1,944,154 were conducted on fare boxes, but only $1,864,658 was deposited into the bank, leaving a deficit of $79,496.

On average, the monthly bus fare collections were short 4 percent, or $4,416.

Brian Marshall told the Legislative Auditor’s office that he hired security personnel to investigate the shortages, and ultimately concluded the shortages were related to bus operator error, according to the report.

In a written response to the report, Brian Marshall said he learned about the fare box shortages in 2011 and determined it was the result of faulty equipment that the agency could not afford to replace. He said the fare boxes could not read the new $5 bills.

Owens wrote in his written response that he conducted an audit in July and August of last year that confirmed theft was the principal cause of the reported shortages. In his subsequent resignation letter, he said he was not involved with the theft, but took responsibility as CFO.


Information from: The Advocate, https://theadvocate.com

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