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HomeMy WebLinkAboutAudit Reports - Public - Transit Services Program Performance Audit Report - 9/15/2022 FINAL REPORT City of Glendale TRANSIT SERVICES PROGRAM PERFORMANCE AUDIT REPORT September 15, 2022 Moss Adams LLP 999 Third Avenue, Suite 2800 Seattle, WA 98104 (206) 302-6500 Transit Services Program Performance Audit Report for the City of Glendale Table of Contents Executive Summary 1 A. Objectives 1 B. Conclusions 1 Detailed Report 3 A. Introduction 3 B. Background 3 C. Scope and Methodology 4 Findings and Recommendations 5 Process Improvement Opportunities 14 Appendix: Definitions of Audit Findings Rankings 15 Transit Services Program Performance Audit Report for the City of Glendale | 1 EXECUTIVE SUMMARY Moss Adams LLP (Moss Adams) was contracted by the City of Glendale (the City) to conduct a performance audit of the City’s Transit Services (Transit) program. This review included evaluating current processes and internal controls related to program performance monitoring, contract monitoring, compliance with the Americans with Disabilities Act (ADA), and cash handling. We performed a variety of procedures to test internal controls and assess alignment with best practices, including conducting analysis of current performance metrics, testing samples of financial records, and evaluating existing policies and procedures. This engagement was performed in accordance with Standards for Consulting Services established by the American Institute of Certified Public Accountants. Accordingly, we provide no opinion, attestation, or other form of assurance with respect to our work or the information upon which our work is based. This engagement was also performed consistent with the guidance issued by the Institute of Internal Auditor’s (IIA’s) International Professional Practices Framework (IPPF). This report was developed based on information gained from our interviews and analysis of sample documentation. The procedures we performed do not constitute an examination in accordance with generally accepted auditing standards or attestation standards. Our objectives for this engagement were to: • Evaluate current processes and controls in place around program performance monitoring • Assess current policies and procedures related to contract monitoring for alignment with best practices • Test internal controls and policies for compliance with select requirements of the ADA • Assess whether adequate internal controls appeared to be in place over fare collection and cash handling The procedures and testing performed identified four areas for improvement. These are highlighted below. Finding 1. Organizational Performance – Moderate Risk Finding Transit collects data on various performance metrics but does not have an effective performance measurement process. As a result, Transit may be missing opportunities to improve service efficiency and effectiveness. Recommendation Transit should implement a performance measurement process that includes clearly defining metrics, establishing a regular process for reviewing metrics, and making improvements based on results. This process should include the development of a survey for the ongoing collection of input from residents. Transit Services Program Performance Audit Report for the City of Glendale | 2 Finding 2. Contract Monitoring – Moderate Risk Finding While contracts reviewed included appropriate clauses for monitoring performance, Transit does not have an effective contract monitoring process to ensure contractors meet contract requirements. Recommendation Transit should develop a contract monitoring policy that requires contract administrators to monitor contractor performance and to create and implement plans for monitoring their contracts. Contract administrators should proactively work with vendors to ensure there is a mutual understanding of expectations and to regularly identify any areas for vendor performance improvement. Finding 3. ADA Compliance – Moderate Risk Finding Transit’s website does not clearly direct residents to resources for requesting reasonable modifications to access public transportation. Additionally, Transit has not implemented a formal training program or monitoring process to ensure staff comply with ADA requirements. Recommendation Transit should update its website to direct riders to where reasonable modifications can be requested, finalize and implement the ADA compliance curriculum for Transit staff, and implement regular monitoring to ensure staff are following ADA-related requirements. Finding 4. Cash Handling – Low Risk Finding Formalized training for Transit staff involved in the cash handling process does not exist, and there are not controls in place to ensure that the combination to the safe is changed regularly to ensure it is restricted to only authorized individuals. Recommendation While cash handling training is likely a need Citywide, Transit should consider developing and providing regular cash handling training for Transit staff who are responsible for any aspect of the cash handling process. Additionally, Transit should update its existing cash handling procedures to specifically address safe security requirements. Throughout the performance audit, we also identified two additional process improvement opportunities (see Section IV). These process improvement opportunities should be considered for implementation. Although the focus of this audit was to identify opportunities for improvement, it is important to note the areas that are operating well. Transit should be commended for the following accomplishments: • Commitment to Continuous Improvement: We saw evidence of Transit’s commitment to implement recommendations for improvement, including the recommendations presented in this report. • Compliance with the ADA: Transit clearly strives to comply with federal laws and provide safe and quality service to riders with disabilities. We identified few issues with potential non- compliance and improvement efforts were already underway. • Contract Consistency: In our review of Transit’s current contracts, we found that best practices for protecting the City’s financial interests during contract development were consistently applied, such as inclusion of early termination clauses and processes for attorney review. We would like to thank City staff and management for their time and efforts in assisting with this audit. Transit Services Program Performance Audit Report for the City of Glendale | 3 DETAILED REPORT Moss Adams was contracted by the City to perform a performance audit related to its Transit program. This audit assessed the risk areas of overall program performance, contract monitoring, compliance with the ADA, and cash handling practices. This audit was performed as part of the Fiscal Year (FY) 2022 Annual Audit Plan developed by the City’s Independent Internal Audit Program (IIAP). Our audit was performed between March 2022 and July 2022. Transit’s mission is to provide safe, reliable, convenient, economical, and efficient public transportation services to residents of the City. To achieve its mission, Transit aims to provide increased mobility and transportation options and provide an effective and efficient service to internal and external customers. Like many public transportation entities in recent years, Transit has experienced decreases in ridership and increases in overall costs.1 Additionally, staffing vacancies have affected Transit’s operations. Transit provides a variety of public transportation options to City residents. These include: • Fixed-route bus service, offered in partnership with Valley Metro, which provides transportation on routes throughout the city and is connected to the Phoenix metro area • Glendale Urban Shuttle (GUS) Bus, which provides free transportation on three circulator routes throughout the City • Dial-A-Ride, which is a daily curb-to-curb service that any resident or visitor to Glendale may reserve ahead of time and ride for a fare • ADA Reservation Service, which is combined with Dial-A-Ride and provides curb-to-curb transportation at a reduced fare for individuals with a documented disability and their companions or attendants (this service is offered in accordance with the ADA) • A Taxi Voucher Program, which provides subsidized taxi rides for repetitive medical treatments through a contract with L&S Transportation, LLC This performance audit focused on the following objectives: • Evaluate current processes and controls in place around program performance monitoring • Assess current policies and procedures related to contract monitoring for alignment with best practices • Test internal controls and policies for compliance with the ADA • Assess whether adequate internal controls appeared to be in place over fare collection and cash handling 1 The Federal Transit Authority, 2020 National Transit Summaries and Trends 2020 Transit Services Program Performance Audit Report for the City of Glendale | 4 To obtain an understanding of policies, procedures, and overall service provisions of Transit’s services, we conducted interviews with City personnel who have designated responsibilities related to Transit program management, operations, and driver dispatch. Additionally, we performed the following detailed testing procedures: • Organizational Performance: To assess Transit’s organizational performance and cost effectiveness and efficiency, we obtained ridership and cost data for services provided exclusively by Transit, including Dial-A-Ride and GUS, and analyzed the following: ○ Dial-A-Ride and GUS ridership for FY12 through FY22 ○ Dial-A-Ride performance trends, including total trips, missed trips, and on-time percentage, for FY18 through FY21 ○ Changes in operating costs for FY18 through FY21 • Contract Monitoring: We obtained an understanding of the City’s current policies and procedures related to contract monitoring to assess whether they provided comprehensive guidance for monitoring contractor performance. We then obtained all 14 contracts maintained by Transit in fiscal year 2022 and assessed whether each contract contained clauses related to contractor performance, including performance standards and reporting requirements. • ADA Compliance: To evaluate and test Transit’s compliance with the ADA, specifically regarding transportation services, we performed the following: ○ Obtained dispatcher and operator manuals, internal policies related to ADA services, and public-facing brochures ○ Obtained a copy of Title 49, Part 37 of the Code of Federal Regulations, which codified parts of the ADA related to public transportation ○ Analyzed provided policies, procedures, public-facing documents, and the City’s public transportation webpages to assess for compliance with selected relevant sections of federal law • Cash Handling Processes: We selected a judgmental sample of financial records including Driver Reconciliation Sheets, deposit records, and the general ledger for six days between June 2021 and June 2022, and performed the following: ○ Determined whether each required Driver Reconciliation Sheet was maintained and complete, and was signed by a first and second verifier ○ Totaled and compared amounts collected and deposited ○ Verified the Driver Reconciliation Sheets matched the deposited amounts and totals on the general ledger ○ Assessed the timeliness of each deposit • Other Cash Handling Best Practices: To evaluate whether Transit had adopted recommended cash handling best practices, we performed the following: ○ Obtained Transit Cash Handling Procedures, Transit Deposit Procedures, and City of Glendale’s Cash Handling Policy ○ Reviewed the policy and procedure documents and tested relevant sections for adherence to cash handling best practices in the areas of access, environment, documentation, reconciliation, monitoring, segregation of duties, dual custody, and timeliness Transit Services Program Performance Audit Report for the City of Glendale | 5 FINDINGS AND RECOMMENDATIONS 1. Finding Transit collects data on various performance metrics but does not have an effective performance measurement process. As a result, Transit may be missing opportunities to improve service efficiency and effectiveness. Recommendation Transit should implement a performance measurement process that includes clearly defining metrics, establishing a regular process for reviewing metrics, and making improvements based on results. This process should include the development of a survey for the ongoing collection of input from residents. Condition: Transit collects data on various performance metrics, including overall ridership, on-time performance, cost efficiency, and cost effectiveness. However, Transit does not have a performance measurement process for regularly reviewing and reporting on metrics and making necessary improvements based on the results. Additionally, Transit does not collect regular and ongoing feedback from customers on its services, such as through a customer survey. Instead, Transit is reactive to complaints related to service. Criteria: An established performance measurement process is important for aligning staff around common goals, making informed decisions about process improvements, and promoting accountability and transparency to residents. Performance measurement processes are cyclical, and typically involve setting key performance indicators based on organizational goals and regularly reporting on progress, usually on an annual basis. Establishing a performance measurement process can help Transit in three major areas: • Informed Decision-Making: Establishing a performance measurement process would help Transit leadership objectively understand how effectively services are being delivered. Without this information, decisions can often be based on more subjective measures like anecdotal evidence and political pressure. In addition, it would enable stakeholders such as residents, City Council, and City Management to understand a coherent, comprehensive, and consistent picture of Transit's performance and track large-scale progress toward mission-critical goals. • Accountability and Organizational Learning: A clear performance reporting process can help Transit cultivate accountability, ensure compliance with relevant laws, and help identify areas for improvement. For example, routine evaluation of metrics for overly long trips on ADA paratransit service can help ensure timely awareness of any emerging patterns of inequitable service for disabled passengers. Transit Services Program Performance Audit Report for the City of Glendale | 6 • External Communication: Data can help Transit better tell its story and show its value to residents. Proactively reporting program outcomes and data to the public based on City priorities is a best practice that can bolster trust and confidence in Transit services overall. Including a customer feedback mechanism in a performance measurement process is helpful to understand customer pain points and evaluate overall satisfaction. Regular customer feedback is an important contributor to ongoing service improvement and customer satisfaction. By soliciting customer feedback on a regular basis and incorporating a review of results into a performance measurement process, Transit will be able to identify potential issues and proactively address customer needs. Cause: Transit has not prioritized establishing a performance measurement process and does not appear to have a long-term strategy or direction for the Transit program. Interviews with staff revealed a lack of awareness of Transit’s goals, performance metrics, and improvement opportunities. A Transit Planner position has been vacant for most of the last year but could serve a vital role in setting a long-term strategy and establishing a performance measurement process. Effect: Transit lacks an effective performance evaluation process and may be missing opportunities to improve service efficiency and effectiveness. Additionally, Transit may not be alerted to potential ADA compliance issues related to paratransit service. In our review of Transit performance, we identified several opportunities for Transit to improve. Overall Ridership: Transit ridership decreased between FY12 to FY21 for both GUS and Dial-A-Ride, which are the two services Transit provides directly rather than through a contract. GUS ridership decreased about 49% and Dial-A-Ride decreased about 52%. The COVID-19 pandemic was a contributing factor to decreasing ridership in the last couple of years, but it does not account for decreasing ridership prior to FY20. Transit Ridership FY12-21 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21Number of RidersGUS Bus Dial-A-Ride Transit Services Program Performance Audit Report for the City of Glendale | 7 Cost Efficiency and Effectiveness: Based on a review of data submitted to the Federal Transit Administration, Transit has become less cost-efficient and less cost-effective over time. Service has become more inefficient over the years largely due to decreases in ridership, both before and during the COVID-19 pandemic, and increases in both direct and indirect costs. According to staff, the rise in operating costs has resulted in more money being spent on wages, health insurance, fuel costs, and liability and workers' compensation insurances. Staff also reported that there have been increased internal service charges for services like Human Resources, Information Technology, and Finance. Dial-A-Ride Service: We reviewed Transit’s on-time performance for Dial-A-Ride, which considers the percent of time the operator arrives on-time to the pick-up location. We also reviewed missed trips to understand how often Transit was not able to fulfill scheduled trips. While on-time performance was generally good (over 98%), it fell to about 90% in FY20. Additionally, while there were 11 missed trips in FY18, there were over 60 missed trips in FY19 and FY20, and there were 38 missed trips in FY21. Transit management reported issues with on-time performance and missed trips were likely due to challenges with staffing operators, who may have had greater incentives to work for other transportation entities, such as higher pay or increased training opportunities. Dial-A-Ride Missed Trips FY18-FY21 Without a process to regularly review and report on metrics such as those described above, Transit risks being unaware of declining service levels and missing opportunities to take corrective action. Transit also risks being out of compliance with ADA requirements which require transit agencies to ensure they are providing adequate service to residents with disabilities, including avoiding a substantial number of missed trips. Additionally, not having a mechanism to collect ongoing customer feedback may limit Transit’s understanding of and ability to improve the customer experience. Collecting ongoing feedback through a customer survey would provide Transit with additional metrics related to the customer experience, which would strengthen any performance measurement processes that are implemented in the future. Recommendation: Transit should implement a performance measurement process that includes clearly defining metrics, establishing a regular process for reviewing metrics, and making improvements based on results. This process should include the development of a survey for the ongoing collection of input from residents to understand and prioritize needs. Implementing these processes should be prioritized and Transit staff at all levels should be involved. 11 38 0 10 20 30 40 50 60 70 FY18 FY19 FY20 FY21 Transit Services Program Performance Audit Report for the City of Glendale | 8 As part of this effort, Transit should establish a performance reporting framework that can be used to organize, visualize, and share information related to the work Transit is doing to achieve its goals. The framework should include metrics that provide meaningful, balanced information about operations to guide management decisions, improve alignment around goals, promote transparency and accountability, complement anecdotal evidence with data, and steer the future direction of Transit’s services. By developing a strong reporting structure that is focused on key strategic priorities, Transit can improve internal alignment around goals, as well as accountability for making improvements toward those goals. Additionally, Transit staff should work to identify a realistic and meaningful way to request, collect, and analyze feedback from residents on their experiences using public transportation in the City. This could be a short survey sent at the end of certain types of trips, such as ADA Reservation Service or Dial-A-Ride, to understand what worked well and what, if anything, riders would like to see improved. Alternatively, Transit could conduct a regular survey of all known riders or residents on a larger scale to solicit feedback and track progress on customer satisfaction. MANAGEMENT RESPONSE Management Agreement Concur Owner Transit Administrator/Operations Superintendent Target Completion Date Implementing a Performance Measurement Process as part of the Balanced Scorecard Program – June 30, 2023. Development and roll-out of Customer Survey/Questionnaire – March 31, 2023. Action Plan Using the data performance metrics that we currently track and report, staff will develop a performance measurement process by which we can gauge performance. This will include developing a baseline and setting performance goals for each service metric (on-time performance, productivity, passenger boardings per mile, phone hold times, missed trips, etc.). Staff will also develop and implement a time-based (quarterly, semi-annual) survey/questionnaire to collect feedback from residents and customers on the quality of service received and suggested improvement areas. This process will be incorporated into Transit’s Balanced Scorecard as part of the City’s Strategic Planning process. 2. Finding While contracts reviewed included appropriate clauses for monitoring performance, Transit does not have an effective contract monitoring process to ensure contractors meet contract requirements. Recommendation Transit should develop a contract monitoring policy that requires contract administrators to monitor contractor performance and to create and implement plans for monitoring their contracts. Contract administrators should proactively work with vendors to ensure there is a mutual understanding of expectations and to regularly identify any areas for vendor performance improvement. Transit Services Program Performance Audit Report for the City of Glendale | 9 Condition: Transit has three contracts for transportation-related services with the Regional Public Transportation Authority (RPTA), City of Phoenix, and L&S Transportation LLC. RPTA and City of Phoenix contracts provide regional and fixed-route public transportation services and L&S Transportation LLC is contracted to provide the Taxi Voucher program. Transit has 11 other contracts for services including bus stop maintenance, security cameras, park-and-ride space, power-washing, and software. We reviewed all of Transit’s 14 contracts and found they all included performance monitoring clauses, such as providing reports upon request and maintaining records. The contracts also consistently included no-cause termination clauses, which are important for ensuring Transit can terminate agreements with contractors who are not meeting expectations. However, Transit staff do not consistently ensure contractors are meeting expectations included in contracts. While some contract administrators reported occasionally checking contractor performance by informally inspecting whether work was done as expected, these processes are not formalized or consistent. Criteria: Effective contract monitoring ensures that any goods and services are provided in accordance with the terms of the contract, which then ensures the financial interests of the City are protected. An effective contract monitoring process typically includes at a minimum: • An assigned contract administrator responsible for regularly reviewing contractor performance and ensuring contractors are satisfactorily meeting expectations • An initial meeting with the vendor to set performance monitoring expectations • A plan for regularly conducting performance monitoring activities such as desk reviews and site visits depending on the nature of the contract • Regular reporting by the vendor to the contract administrator and the contract administrator to department leadership • Maintaining a contract administration file for storing all contract-related documentation, including monitoring documentation Cause: The City Attorney’s Office provides templates for contract development, the City does not have a comprehensive guide or set of expectations for contract monitoring. The contract monitoring procedures that exist are focused on how to use the City’s contract management software as opposed to creating effective contract monitoring plans. Additionally, Transit does not have clear expectations for contract administrators around contract monitoring. Effect: Transit and other City departments may not be aware of current vendor performance issues, which could lead to inefficient use of City resources and inadequate protection of the City’s financial interests. Staff reported Transit has experienced some issues with underperforming contractors in the past. Early termination clauses can protect the City from paying an underperforming contractor, but contract administrators first need to be alerted to potential issues. A contract monitoring process could help ensure timely identification of issues so Transit can make sure all parties involved in a contract are accountable and services are properly delivered. Recommendation: Transit management should develop a contract monitoring policy that requires contract administrators to monitor contractor performance. The policy should require contract administrators to create and implement plans for monitoring their contracts. Contract monitoring plans should include methods for regularly conducting performance monitoring activities such as desk reviews and site visits depending on the nature of the contract. Once monitoring plans are created, Transit contract administrators should proactively work with vendors to ensure there is a mutual Transit Services Program Performance Audit Report for the City of Glendale | 10 understanding of expectations and to identify areas for vendor performance improvement on an ongoing basis. MANAGEMENT RESPONSE Management Agreement Concur Owner Transit Administrator, initially. Once the Budget and Finance Department gets a Contract Manager on board, this may change, depending on what this position’s responsibilities will be to the other Departments. Target Completion Date June 30, 2023 Action Plan Transit staff will develop and implement a contract monitoring process to ensure contractors’ performance is monitored and all terms of the contract are adhered to, according to the Scope of Work. This process may include conducting regularly scheduled meetings with vendors/contractors to review contract and job performance as well as discuss any issues contractors may be having in the carrying out of duties as described in the Scope of Work. Staff will also work with the City Manager’s office as well as the Procurement Department to incorporate new guidance and policies as they are developed for City-wide implementation. 3. Finding Transit’s website does not clearly direct residents to resources for requesting reasonable modifications to access public transportation. Additionally, Transit has not implemented a formal training program or monitoring process to ensure staff comply with ADA requirements. Recommendation Transit should update its website to direct riders to where reasonable modifications can be requested, finalize and implement the ADA compliance curriculum for Transit staff, and implement regular monitoring to ensure staff are following ADA-related requirements. Condition: Based on a review of Transit’s internal policies and procedures and public-facing information, Transit resources appear to be generally aligned with ADA requirements, including providing comparable service to individuals with disabilities as passengers on the fixed-route system, designating a responsible individual to ensure Transit is meeting ADA requirements, establishing publicly accessible policies for filing ADA complaints, requiring proper staff training on ADA compliance, and properly setting fares for people using ADA paratransit service. However, we identified two areas where Transit could improve compliance: • Requesting Reasonable Modifications: Residents who need to request reasonable modifications to access public transportation would not find information about this process on Transit’s website. Requests for reasonable modifications must be made through Valley Metro, but we could not find this information or a link to this process in the City’s publicly available information. • Training: Staff are not provided with specific initial training or regular refresher training on ADA requirements or serving individuals with disabilities. Although management is currently working Transit Services Program Performance Audit Report for the City of Glendale | 11 toward implementing a new ADA compliance curriculum for Transit staff, there currently is not a formal training program in place. Additionally, Transit does not have effective monitoring processes to ensure staff comply with ADA- related training policies. Transit relies on complaints from the public to uncover potential issues with non-compliance. Criteria: The ADA has several requirements for Transit agencies, including but not limited to: • Providing paratransit or other special service to individuals with disabilities that is comparable to the level of service provided to individuals without disabilities who use the fixed route system • Designating a responsible individual or individuals to ensure the transit entity is meeting ADA requirements • Establishing publicly accessible policies for requesting reasonable modifications and steps for filing ADA complaints • Requiring training for personnel to ensure they operate vehicles safely and properly assist and treat people with disabilities who use the service in a respectful and appropriate manner • Setting fares for ADA paratransit so eligible individuals are not charged more than twice the amount that would be charged to an individual paying full fare on the entity’s fixed route system Cause: While Transit staff appear to be committed to complying with federal law and providing safe and quality service to riders with disabilities, Transit does not have a process for regularly reviewing ADA compliance and ensuring operations are aligned. Effect: Transit may not be in compliance with certain components of ADA requirements. Without establishing a process to regularly review compliance, Transit may miss future potential compliance issues even after Transit addresses the issues identified in this report. Additionally, without formal ADA training and a staff monitoring process, Transit does not know whether employees are operating in compliance with the ADA, introducing risks that the City could lose federal funding and that passengers with disabilities may experience inequitable service. Recommendation: Management should establish a process for regularly reviewing Transit’s compliance with ADA requirements on at least an annual basis. Transit should also address current compliance issues including developing comprehensive, appropriate, and routine training for staff and including a section on its website for how riders may request reasonable modifications through Valley Metro. Additionally, Transit should implement regular monitoring to ensure staff are following ADA- related requirements, such as requirements for occasional supervisor observations of transit operators. MANAGEMENT RESPONSE Management Agreement Concur Owner Transit Administrator, in partnership with Public Affairs Target Completion Date December 31, 2022 Action Plan Staff will either insert a link to direct ADA eligible passengers to where they can find information relating to “Reasonable Modifications” or will provide that information directly on the web page. As part of Transit’s initial training of Transit Services Program Performance Audit Report for the City of Glendale | 12 operators and dispatchers, new employees view an introductory training video on providing service to individuals with disabilities. However, since that training alone does not satisfy ADA training requirements, Transit staff has already begun researching and accumulating additional training curriculum to augment this training. A process has already been put in place to document and track both initial and annual refresher ADA training for the appropriate staff. 4. Finding Formalized training for Transit staff involved in the cash handling process does not exist, and there are not controls in place to ensure that the combination to the safe is changed regularly to ensure it is restricted to only authorized individuals. Recommendation While cash handling training is likely a need Citywide, Transit should consider developing and providing regular cash handling training for Transit staff who are responsible for any aspect of the cash handling process. Additionally, Transit should update its existing cash handling procedures to specifically address safe security requirements. Condition: To evaluate whether Transit had adopted recommended cash handling best practices, we reviewed their policies and procedures and tested relevant sections for adherence to cash handling best practices. These included defining who has access to cash and when, proper training, maintaining written responsibilities, recording cash amounts received, reconciling actual amounts received, monitoring for overages or shortages, segregating duties, counting cash with more than one person present, and timely deposits. We identified two areas where Transit’s cash handling operations do not align with best practices: • Training: Written cash handling policies do not address required training. According to the new hire checklist, drivers receive training on reconciliation sheets, but cash handling or collection is not otherwise listed. Staff reported formalized training does not occur. However, a lack of training on proper cash handling appeared to be an issue City-wide. • Safe Security: The combination to the safe was last changed in 2009. Written cash handling policies do not include rules for who has access to the safe combination, how often the safe combination is changed and by whom, and circumstances for when the safe combination must be changed. We also reviewed a judgmental sample of fare collection and financial records and found cash handling processes were followed and deposited amounts were accurate. Criteria: Established cash handling procedures are important to protect Transit from revenue loss and ensure employees have consistent rules to follow. Best practices related to effective cash handling include many elements, including but not limited to: • Training employees in how to properly handle cash • Ensuring cash is counted with two people present to reduce the risk of theft • Limiting access to cash, including keeping cash in a secure and locked location before it is deposited Transit Services Program Performance Audit Report for the City of Glendale | 13 • Ensuring prompt deposits to protect against cash being misplaced or stolen • Segregating duties of recording totals, completing reconciliations, and depositing funds to help prevent errors from being made without discovery by another person Cause: While Transit has detailed procedures that dispatchers and drivers must follow for proper cash handling, neither Citywide nor departmental cash handling policies include rules related to who may have access to the safe or when and how often training on cash handling procedures should occur. Effect: Transit may not know of all individuals who currently have access to the safe or whether their access is authorized. This increases the risk of theft. Without necessary training, staff may not follow procedures to adequately control the risk of theft or loss. Recommendation: While cash handling training is likely a need Citywide, Transit should consider developing and providing regular cash handling training for Transit staff who are responsible for any aspect of the cash handling process. Additionally, Transit should include in their written cash handling procedures a new section on properly securing the safe, including designation of an individual responsible for changing the safe combination and rules for who has access to the combination, how often the combination is changed, and other circumstances for when the combination must be changed, such as termination of employees who had access to the safe. MANAGEMENT RESPONSE Management Agreement Concur Owner Cash Handling Training and Process: Administrative Support Supervisor Security Controls for the Safe: Dispatch Operations Supervisor Target Completion Date December 31, 2022 Action Plan Transit staff will work with the Budget and Finance Department to adopt any cash handling training that is already available. If there currently is no such training in place, Transit will partner with Budget and Finance to work to develop and incorporate this training as it is made available for City-wide use. Transit is in the process of developing a policy addressing security controls for the safe and corresponding access requirements. Since the start of this performance review, the combination has been changed twice due to staff departures. Transit Services Program Performance Audit Report for the City of Glendale | 14 PROCESS IMPROVEMENT OPPORTUNITIES Moss Adams identified two process improvement opportunities as a result of this performance audit. The table below summarizes these recommendations. CATEGORY PROCESS IMPROVEMENT RECOMMENDATIONS 1 ADA Compliance – Public Communication A review of the City’s Public Transportation website revealed potential issues with accessibility for people with disabilities, particularly those with low vision. Consider conducting an accessibility evaluation of Public Transportation webpages to ensure the content and formatting is accessible for people with disabilities. 2 Succession Planning Based on interviews with Transit staff, many roles appear to be siloed in their responsibilities, with an overall lack of cross-training and long-term succession planning for positions that have been occupied by the same individuals for many years. Organizational effectiveness could suffer without proper planning for these employees’ eventual departure or retirement. Management should create succession plans to ensure smooth transitions should key staff members leave their positions. This plan should be updated periodically. Transit Services Program Performance Audit Report for the City of Glendale | 15 APPENDIX: DEFINITIONS OF AUDIT FINDINGS RANKINGS We utilized the City IIAP’s risk rankings, presented below, and assigned rankings based on our professional judgment. A qualitative assessment of high, medium, or low helps to prioritize implementation of corrective action as shown in the following table. HIGH Critical control deficiencies that expose the City to a high degree of combined risks. Recommendations from high-risk findings should be implemented immediately (preferably within three months) to address areas with the most significant impact related to the Transit program. MODERATE Represents less than critical deficiencies that expose the City to a moderate degree of combined risks. Recommendations arising from moderate-risk findings should be implemented in a timely manner (preferably within six months) to address moderate risks and strengthen or enhance efficiency in internal controls on areas with moderate impact and likelihood of exposure. LOW Represents low risk or control deficiencies and the exposure is not likely to expose the City and its assets to significant losses. However, low-risk findings should be addressed in order to improve efficiency and effectiveness of operations. Recommendations arising from low-risk findings should be implemented within 12 months.