One of the big four global accounting firms has been hired to conduct a forensic audit of the Memphis Area Transit Authority.
City of Memphis Mayor Paul Young announced the decision to enlist PricewaterhouseCoopers (PwC) to peer into the hard set transit authority’s books during the Tuesday, Aug. 6 Transportation Committee meeting.
“I will tell you this is a priority for this administration. We have had countless meetings over the past couple of weeks,” said Young. “We understand how critical this is. That’s the reason we are taking these extensive steps to ensure that we don’t end up here again.”
A forensic audit is a detailed examination of financial records to find evidence of fraud, misconduct, or other irregularities. The evidence can be used in legal proceedings, or to prevent future fraud.
The development follows a May 21 board meeting, where interim MATA president Bacarra Mauldin told members the transit system was facing a budget deficit of $60 million. In 2022, MATA ran a $43 million deficit.
“I think it’s important to acknowledge the steps that we are taking. We put before you…a draft balanced budget of $67.8 million. We are having our finance committee meeting on August 20 to dig deeper into those numbers. To talk about some of the hard decisions the board will have to make with regards to how we execute our services,” said Mauldin.
While MATA’s problems have been mounting for years, one member blamed starry-eyed expectations for the current deficit.
“We allocated $30 million in the budget as a line item. When we had the budget discussion, I remember very specifically talking to you about how you were going to make up the rest,” Councilwoman Jerri Green reminded Mauldin. “Because the items you had in your plan was $10 million, for example, from the county. And I told you you weren’t going to get more than a million. I knew that’s the where the budget was going. I knew that’s where the votes were. And that’s what you got. So, that’s another $9 million in the hole.”
Green has a unique vantage point. In addition to her work on the council, her day job is as an attorney for the the administration of Shelby County Mayor Lee Harris.
An update on the forensic analysis – along with MATA’s overall operation – is expected during the next committee meeting.
Several members of the committee addressed complaints from citizens. Many include the experience of waiting for a bus that never comes. MATA manages an aging fleet of buses. Many are purchased from other cities fleets, after they procure new vehicles. Many break down during their routes.
Furthermore, much of MATA’s riders are on the lower end of the economic spectrum. Many disabled individuals also rely on public transit to get to and fro. Without a vehicle, a scheduled bus stop can be a necessity.
“It’s a mess. I’m not saying you created it,” said Councilwoman Pearl Eva Walker. “They’re just out there waiting. They don’t know what’s going on. All they know is it’s hot and the busses don’t show up. We even have people who are taking busses on a regular basis to sell blood for money.”
Along with poor real-time communication with customers, MATA also suffers from a poor public image. According to one member, potential riders are turned off the taint of poverty associated with public transportation the transit system faces.
“We have a demographic in this city of poor people that the stigma for many years has caused us to be in this place,” said Councilwoman Yolanda Cooper-Sutton. “I’ve lived at in many different places, transit has just been abroad. Professionals that look like you and I rode the transit.”
To address the issues, MATA recently announced the “Three T’s Tour”, or Transforming Transit Together. The series of public meetings will take place across its service area. A schedule is available on MATA’s website at www.matatransit.com.
“I pledged early this year that we would involve the community in the process of reimagining transit,” said Mauldin. “We actually launched a schedule of community meetings. We are not out there doing it by ourselves. We have a lot of community organizations that are partnered with us for the community meetings.”
Hired on as a chief of staff in 2021, Mauldin has risen quickly climbed the ladder of the transit authority. She is also popular with members of the MATA ranks.
A petition is allegedly circulating among employees to drop her interim tag. However, the list of signatures does carry controversy. During budget season, Mauldin helped employees secure a raise. The timing of the two could be considered a quid pro quo.
“There’s something about that petition and how it’s being handled that I’m just not comfortable with,” Walker said. “I’m not comfortable with being used with respect…you got your raise, so sign the petition. I just don’t think that’s appropriate. If it’s appropriate and legal and all that good stuff, than o.k.,” said Walker.
Mauldin, who just returned from vacation, denied knowledge of the effort.
“I don’t know anything about that,” she said. “I’ve been very focused on monitoring the fiscal activities; giving input on how we can make our operations better. I don’t have any knowledge of that, or have anything to do with that. But we would absolutely happy to look into that and report back on that.”
