MARTA audits raise questions about expansion projects

Taxpayers have agreed to give MARTA at least $2.5 billion to expand transit over 40 years, but audits obtained by Channel 2 Action News and our partners at the Atlanta Journal-Constitution raise questions about the transit authority??€™s competence to manage such projects. ????

ATLANTA — Taxpayers have agreed to give MARTA at least $2.5 billion to expand transit over 40 years, but audits obtained by Channel 2 Action News and our partners at the Atlanta Journal-Constitution raise questions about the transit authority's competence to manage such projects.

The audits evaluated MARTA's Capital Improvement Program, which enhances and replaces amenities, as well as expanding services. The first audit is a 2014 report by an independent consultant, then a 2017 report by MARTA's own auditors.

Some of the findings from the consultants included work scopes that were poorly written, resulting in delays, most consultants were working without work orders, project information had limited transparency and was not available to the public, and program controls were not subject to ongoing oversight.

Content Continues Below

MARTA’s own auditors found no forecast of project costs, training deficiencies, lack of reporting and monitoring of work done, and a lack of tracking of unauthorized expenditures.

“I would be seriously worried if I was any of the local governments partnering with MARTA,” said Benita Dodd, a transit skeptic at the Georgia Public Policy Foundation. “There are no checks and balances…we should be asking and demanding more from MARTA because we are giving them more.”

After weeks of requests, MARTA declined an interview on the audits. A spokesperson told Channel 2 Investigative Reporter Richard Belcher all the issues have been addressed, if not resolved, but provided no independent documentation to support that claim.

In a lengthy statement, MARTA said they have begun implementing a centralized project management office they will begin staffing in fiscal year 2019 that will help with milestones and deliverables, project forecasting will be assessed monthly, and new work order and system interfaces are now in place to improve project oversight.

“Who’s minding the chicken coop?” Georgia State Clinical Associate Professor Joseph F. Hacker asked. Hacker is an expert on planning and economic development with a decade of transit experience. “I’m not saying there is fraud at all, but the possibility for that, it seems like a lack of oversight.”

Poor oversight could cost federal funding

“You have 26 different units, you have project managers who are not trained cohesively, you don't have standardized procedures for forecasting,” Hacker said. “This is just a recipe for chaos.”

According to Hacker, those proposed MARTA projects will need more than $2.5 billion in local tax dollars to complete. Most transit authorities ask the feds for up to a 50 percent match on capital projects.

There have been recent votes to expand transit in Atlanta, Fulton and Clayton counties. There is a vote on transit tax referendum in Gwinnett County scheduled for next March.

“They have money that is coming through the SPLOST, but that money is not enough to move any of these projects. The projects need matching federal funds,” Hacker said.

Hacker explained federal transit dollars are in short supply and state agencies applying for those dollars need to be as competitive as possible. Issues outlined in the two MARTA audits could hurt the agency’s chances to win federal funds.

The report is not encouraging when it comes to MARTA’s ability to forecast accurately what a project will cost.

“None of us would accept not knowing what something costs,” Hacker said. “They're selling it to us one way, and we don't really know: are these numbers that are right?”

MARTA’s problems may not be unique

“There is a tendency to underestimate the cost and the schedule,” said Jamison Dague, director of infrastructure at the Citizens Budget Commission in New York.

Dague told Belcher some of the problems in those audits are problems for big capital projects everywhere.

“When you’re talking about a large capital project you’re going to end up digging up a lot of dirt, definitely sticking some shovels in the ground, so there can be some field conditions you’re unaware of and that you have to build in contingencies for,” Dague said.

Dague said professional and thorough design process and milestones for a project are key for staying on target.

Questions about transparency

A whistleblower tipped Belcher off to the audits and it took weeks for the transit agency to comply with Belcher’s open records request for copies of them. Channel 2 Action News could not find the audits available online for public inspection.

The external audit of MARTA’s capital program was presented to MARTA more than a year before Atlanta voters passed the $2.5 billion transit sales tax referendum in 2016. The internal audit was published June 2017.

“Without this information being public, it's impossible to identify problems and go about fixing them if you do have issues when implementing your capital program,” Dague said.

Transit supporter Angel Poventude attended numerous MARTA and Atlanta Beltline meetings, pushing for rail expansion, but the capital audits were news to him.

“There was a lot of information in there that I had never seen, for example, there are about 60 people short on staff at MARTA while this audit was being done,” Poventude said.

He was concerned taxpayers did not have access to audits, especially before the MARTA expansion vote.

"Daylight is so important when it comes to oversight. If an audit is done and we the taxpayers are paying for those audits, then that information should be online," Poventude said. "There's clear bullet points in there with what they need to do moving forward. Have those been addressed? 
Is there a way they can show the public that these issues have been taken care of?"

After weeks of requests, MARTA declined to be interviewed by Belcher on the audits. A MARTA spokesperson provided Belcher with a lengthy statement, and stated by email "MARTA Internal Audit has done an audit on the CIP to verify changes are being made. The FTA also recently did a Financial Management Oversight (FMO) on the CIP and had no findings."

When Belcher asked MARTA to supply a copy of that third audit, the spokesperson said she gave incorrect information and said she had no report on improvements made to MARTA’s capital program.

“They say they've taken care of it. Don't worry,” Belcher told Dodd.

“And we're supposed to take their word for it?” Dodd asked. “I would be very hesitant to entrust my county's transit dollars to MARTA unless I see any update on this report.”

MARTA's full response to report

The Capital Improvement Program (CIP) Evaluation & Assessment reports from 2015 and 2017 were performed by independent industry professionals at the request of MARTA leadership to identify opportunities for improvement. These assessments are customary as MARTA is always looking to improve its internal business processes.

We closely review the results of these evaluations and incorporate recommendations that will provide the most value to MARTA in delivering service. We welcome all recommendations and view them not as criticisms, but as opportunities to improve our organization and better serve the public. Metro Atlanta is experiencing tremendous growth and this dynamic environment continually prompts regional stakeholders to assess and fine tune their organizations to achieve optimal performance.

MARTA has been routinely identified as an industry leader by the FTA, APTA and the GAO in asset management, capital programming and state of good repair. Part of MARTA’s success has been its constant drive for continuous improvement, which includes routine independent assessments such as those performed in 2015 and 2017. 

CAPITAL IMPROVEMENT PROGRAM INTERNAL REVIEW RESPONSES

There is a lack of consistency in the management of projects since no centralized Project Management Office exists.

MARTA’s large scale projects are managed using a centralized Project Management Office (PMO) approach. There are smaller projects which are managed by individual business units which is not unusual. The Department of Capital Programs and Development (CPD) has begun implementation of a centralized PMO structure that will encompass all projects large & small and will proceed with staffing in FY19.

There is no documented evidence to show that Project Managers and/or other authorized MARTA employees are monitoring project milestones and/or deliverables. Thus, MARTA could potentially be paying for a project and not receiving the appropriate and/or required deliverable for that project.

Milestones and deliverables are managed in different systems within each PMO throughout MARTA. Deliverables are monitored on individual contracts via the payment application by each contractor. By implementing a centralized PMO structure, the disparate information on milestone and deliverable reporting will become more easily rolled up into a single reporting platform.

Standard Operating Procedures that govern the Office of Capital Programming & Development relative to CIP should be documented to cover the initiation, execution and completion of Capital Improvement Projects.

CPD completed phase one by identifying and creating work flow processes to initiate, develop, approve and implement Capital Projects. 

These processes are embedded in an electronic work flow process that is accessible to both leadership and project delivery personnel. In FY19, CPD will continue to assess and develop processes and procedures as well as the pursuit of software standardization. 

There is no formal policy and procedure that addresses the use/purpose of the CIP reserve and/or how to account for budgetary monies moved in and out of the CIP reserve account.

The Final CIP Reserve Policy and Procedure was completed by the Office of Management and Budget in FY18.

There is no official documented methodology for forecasting of project costs

Projects are assessed monthly starting with initial annual forecast, modified monthly forecasts and monthly actuals. Forecasting, monitoring and reporting on Capital Projects is accessible to leadership, stakeholders and project delivery personnel. MARTA uses a Change Control process and a Committee that reviews and approves all modifications including monetary changes.

There is no validation of project forecasts and project costs by the CIP Monitoring & Reporting Department.

The Monitoring and Reporting branch generates monthly reports and meets one-on-one with Project Managers on a quarterly basis to conduct cost validations and verifications. The validation reports and exceptions are noted in a project controls log. There is also a PMO Oversight Office independent of CPD that is located within the Office of Management & Budget. There is routine and active management of CIP execution, including forecasting.

A lack of system interface between Primavera 6, SharePoint and Oracle allows for a limited transparency into the CIP process, increases dependency on manual interventions, lack of ‘real-time’ reports, and decreased efficiency in monitoring of project milestones/costs/budgets.

The Office of Capital Programs has completed the installation and testing for Primavera P6 and is currently standing up Oracle Gateway. In FY19, the office will integrate Oracle e-Business Suite, Oracle Unifier, and Primavera P6. This is an industry issue, common to many organizations that have well established financial systems that are separate from project delivery software. The work MARTA is doing is groundbreaking. 

Robust training of Project Managers does not exist.

All Project Managers have received CIP Training. MARTA utilizes titles Project Manager I and II and all senior level Project Managers must acquire their Project Management Professional (PMP) Certification Training. Training was conducted by the Project Management Institute (PMI) and PMI approved partners. There are some smaller projects that have limited milestones that are managed by individual business where only a fundamental understanding of project management is required. 

There is a lack of reporting and monitoring with regards to comparing work order costs and deliverables to CIP budgets and vendor invoices to the work orders.

Contracts and Procurement and Legal review all work orders and have issued a new work order procedure that was crafted and reviewed by all MARTA Stakeholders. In addition, MARTA has an A&E Services branch with incredible depth of experience that prepares, monitors and reviews all work orders and interfaces daily with both Contracts and Legal. 

No documentation exists to support the validation of life-to-date project cost against current year project cost.

Life-to-date costs are determined using the Oracle Financial system. Prior to implementation of Oracle, project start dates and original costs were documented using a paper-based filing system. Those older projects initiated during the paper process days are timing themselves out. All new projects start and finish in Oracle. This is not unusual for a large organization as it transitions from legacy paper based processes to all electronic processes. All invoicing is documented in Oracle. PMs routinely validate year-to-date costs and monthly expenditures are internally distributed and posted for easy access. 

There is no process in place to ensure that unauthorized projects are deactivated in Oracle.

The Office of Capital Programming routinely works with Budget, Treasury, Accounting, Grants and Audit to closeout projects. There is a process of validating that all contract requirements have been met and a final audit has been completed. Each office has its own role in the process. Capital Programs is assessing the need for any additional processes relating to Oracle financials along with Budget, Treasury, Accounting, Grants and Audit to determine if they bring value.