5/25/2019 7:30:00 AM Northwoods Transit Commission audit issues come to a head
Kayla Houp of The Lakeland Times
Questions and concerns surrounding a required independent audit resurfaced at the Northwoods Transit Commission's May 17 meeting as commissioners discussed a letter issued by the Oneida County Corporation Counsel's office.
"I will read it for you," Oneida-Vilas Transit Commission vice chair Bob Mott said. "Very entertaining."
Mott serves on the Oneida County Administration Committee and had received a copy of the letter, which he said would be forwarded to the other members of the Commission at a future meeting.
The letter reads as a call to action written at the request of the Oneida County Administration Committee advising the Oneida-Vilas Transit Commission of the stipulations of their charter.
"As you know, the Oneida-Vilas Transit Commission was created by a charter adopted by Oneida County and Vilas County," the letter reads.
The letter states that, as per Article VIII, Section 2 of the charter "An annual audit shall be performed by an independent certified public accountant hired by the commission to audit the accounting and budgetary records of the Commission."
Furthermore, the letter states the charter-required audit "shall be started within 180 days after the close of each fiscal year, and completed within 60 days of inception" and "the Commission shall cooperate with all audits performed by the Wisconsin Department of Transportation (WisDOT)." The letter advises the audits performed by WisDOT are not done annually, and are limited in scope.
"And who advised them of that?" commission chair Erv Teichmiller asked. "Because it's very clear to me the email we received from the audit division, that was not limited in scope by any means. It was rather extensive, and they also have a copy of that letter because I provided it to them."
According to the letter from the Corporation Counsel, it was in the administration committee's understanding the OVTC hasn't done an audit since its inception in 2016.
"I believe we were waiting for the state audit that's done," Mott said. "And that's done every two to three years, or something like that, was what we suggested."
"And was supposed to have been done last year," Teichmiller added.
Mott said the letter insists the Commission contract with a CPA within 30 days of the date of the letter, and for an audit to be started within a "reasonable amount of time" and to be completed within 90 days of its inception. Additionally, the audit must include all years since the commission's creation and include a review of "any potential or actual conflicts of interest that currently exist, or have existed since the creation of the commission."
If OVTC does not comply with the letter, the administration committee would recommend appropriate action be taken, which "will likely include withdrawal from the commission by Oneida County."
"Do we have any hard information yet on when this DOT audit would occur?" commission member Chuck Hayes asked.
Mott said it would likely be in late summer or early fall, and "if the state is doing an audit, and another audit is to be done within 90 days of May, you would have two audits within the space of about 60 days."
"I'm going to give some impressions and other thoughts here. I have lots of them," Mott said. "It seemed almost like Dave Hintz was possessed, and I don't know what's pushing the emotional output for this."
Hintz serves as the chairman of the Oneida County Board of Supervisors and is the chairperson of the Oneida County Administration Committee.
Mott said more time had been spent on transit issues by the county than big-ticket items.
"I said, 'It's in the charter, we will follow what the charter says,'" Mott said. "I explained that no money was budgeted for it this year, and we would gladly put it in the budget for next year and do it early in the year, that evidently doesn't suffice."
Mott said the commission wanted to "put their concerns to rest, whether they're well-founded or not well-founded."
Mott said at the start of the meeting he had also addressed a "litany" of issues which had been raised regarding the commission from, from Teichmiller receiving checks at his home for the payment of the building, to inconsistent routes and empty busses.
According to Teichmiller, the issue regarding checks being sent to his home had been resolved, that he had received the last one which would come directly to him, and "from now on, we're (the commission) going to have to work out a system, if there's any future left."
"I think, overall, that transit is benefitting the public," Mott said. "I don't want what's happening, which we see in the newspaper quite a bit, to detract from the job of the transit."
However, Mott said, if it meant dropping support of the transit versus having an audit done, even if it costs the transit local funds, he'd suggest going through with the audit.
"Can I speak to that specifically, the comment you just made?" commission treasurer Steven Schreier asked. "The support by the county to transit, what is that specifically? What do we lose, potentially, if the tie between the county and transit is severed?"
"We exist because the county passed a resolution to create us," Teichmiller said. "It's not like we can function without them. We'd have to start from scratch, and I'm not sure how that gets created, if it gets created."
Teichmiller said the amount of money the county puts into them, aside from the $50,000 loan to create the commission, is only the money coming through the aging departments as match for the federal dollars which come through WisDOT for transportation.
Mott said the only money Oneida County "had in the game" was the amount the county gave to start the commission.
Email from WisDOT
Mott then shifted the commission's attention to an email transit manager Roger Youngren and Teichmiller received from Chad Reuter, transit section lead worker for the Bureau of Transit, Local Roads, Rails, and Harbors Wisconsin Department of Transportation.
The email includes details regarding the CPA audit requested of the commission as well as the state audit done through the DOT.
"WisDOT/FTA does not require single audits for governmental entities that receive less than $750,000 in federal funds, but there is no prohibition against those audits if the threshold is not met," the email read.
Moreover, the email said WisDOT's financial audit of the expenses and revenues of the Transit Commission from 2015 to 2018 would be conducted in the fall of 2019, and that the "CPA audit, however, will not cover some items that Mr. Hintz believes a CPA would investigate, including conflict of interest issues."
Mott highlighted the part of the email that said WisDot had been involved with many discussions over the past few years regarding financial issues with the commission.
Reuter's email said these issues appeared to WisDOT to be caused by "funds not available early in the year due to delays at the federal level" and "not from fraudulent behavior or a lack of interest in paying Commission bills."
"At the end of the conversation, Chad and Mr. Hintz agreed that the commission provides valuable transit service to Oneida and Vilas counties," the email reads. "WisDOT supports the counties and the commission working together to ensure the continued operation of these services."
"We're going to do the audit, the only issue is who pays for it and what we need to do to alter our budget," Teichmiller said.
Schreier said he had "plenty to say" about the audits.
"We're being told we need to commit to having this audit contracted out by a certain date, or suffer the consequences," Schreier said. "And I'm not faulting the admin department for doing that. To some degree, they're justified in doing that."
At the same time, Schreier said having to commit $35,000 for a CPA audit for the last three years, only to find out most of that information may have been covered by the WisDOT audit, would potentially result in a duplication of information.
"Why would you duplicate information that you're going to get for free in the audit that they're (WisDOT) going to be doing?" Schreier asked. "Why not contend that, yes, we're committed to following the charter. We'll withdraw that whole thing about the audit."
Schreier said it "should be agreed" there's no true benefit to committing to having a CPA audit done until the WisDOT audit is finalized so as to prevent duplication of information, and then commit to having it done annually so the Commission can budget for it.
"My understanding is that the admin committee would like the CPA audit to include a dimension on conflict of interest to address, and they would like us to pay for that," Hayes said. "So, in effect, this group would contract with a CPA auditor, and we would then pay the CPA auditor to investigate ourselves. That doesn't make sense."
"They're not going to deal with anything with the charter until this audit thing is taken care of," Teichmiller said.
Mott agreed and said he wold put potentially changing the audit on the Commission's next meeting agenda.
Kayla Houp may be reached via email at firstname.lastname@example.org.
The Northwoods River News | Walker Communications, LLC 232 S. Courtney Street, Rhinelander, WI 54501 | Office (715) 365-6397 | Fax (715) 365-6361
Corporate billing office: The Lakeland Times / Lakeland Printing Inc. | P.O. Box 790, Minocqua, WI 54548 | (715) 356-5236 | Fax (715) 358-2121 Members of the Wisconsin Newspaper Association, Wisconsin Community Papers, Rhinelander Area Chamber of Commerce, Minocqua Area Chamber of Commerce