Sneak Preview: Michigan Agency To Reassess Audit Documentation

April 15, 2016 | By Jerry Ashworth | Post a Comment

xsass_bookshot(The following was excerpted from a recent article in the Single Audit Information Service.) The Michigan Department of Transportation (MDOT) planned to reevaluate what can serve as sufficient documentation to support allocation adjustments under a state public transportation fund. A recent audit by the Michigan Office of Auditor General (OAG) found that a MDOT office did not corroborate adjustments to audits of transportation provider expenses with appropriate documentation.

MDOT’s Office of Passenger Transportation (OPT), which administers MDOT’s passenger transportation programs, calculates and distributes state operating grants under the state’s Comprehensive Transportation Fund to 80 public transportation providers. As a pass-through entity of grant funding from the U.S. Department of Transportation, Federal Transit Administration, MDOT, through OPT, also determines the eligibility of and provides subawards to qualified transportation providers for operating assistance and capital projects. During state Fiscal Year (FY) 2014, it distributed $167 million in state operating grants, and $62 million in other state and federal grants to transportation providers.

Michigan state law requires that Comprehensive Transportation Fund recipients obtain audits of financial transactions and accounts related the fund and to submit those audits to the OPT. After the OPT receives the audits from all 80 providers, it calculates a revised grant allocation for each provider based on the providers’ total audited expense amounts.

OAG found that the OPT, when reviewing audits submitted by transportation providers, adjusted the audited amounts for items that it determined were not reported. OAG found that the OPT adjusted the audited eligible expenses for five of the 15 transportation provider audits it reviewed. Of the $9.9 million in adjustments made to these five audits, OAG determined that $4.4 million of those adjustments were insufficiently documented.

(The full version of this story has now been made available to all for a limited time on Thompson’s Grants Compliance Expert site.)


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