Trans Tax operations need to be improved to ensure the accuracy and integrity of the fund’s fiscal, reporting and performance measure functions.
The Office of Internal Audit (OIA) conducted a management audit of the Transportation Infrastructure Tax (Trans Tax) for Fiscal Years 2008 (FY08), 2009 (FY09) and 2010 (FY10). Trans Tax funds are allocated to and expended by the Department of Municipal Development (DMD) and Transit Department (Transit). This audit was included in the FY11 approved audit plan passed by City Council.
A special election was held on March 31, 1999, in which City residents voted to impose a one-quarter (¼) of one percent municipal gross receipts tax for a ten year period, which expired on December 31, 2009. The City Trans Tax Ordinance §4-3-7-5 states that Trans Tax revenue will be used to fund the improvement of transportation systems for the benefit of the City.
Objective: Do Transit and DMD have effective internal controls and processes to ensure compliance with expenditure dedication percentages within §4-3-7-5(A) of the Trans Tax ordinance?
- Transit received additional revenue totaling $111,642 in FY09, which should have been transferred back to the Trans Tax fund.
- Trans Tax Schedule of Expenditures Compared to Appropriations by Purpose within the City’s Comprehensive Annual Financial Report (CAFR) does not accurately reflect Trans Tax budget and expense activity for FY08, FY09 and FY10.
Objective: Are Trans Tax expenditures accurately classified by ordinance dedication outlined within §4-3-7-5(A) and in compliance with City rules and regulations?
- One invoice tested did not meet Trans Tax spending purpose or definition requirements. As a result of this invoice, OIA identified that a total of $54,811 was improperly charged to a Trans Tax activity for road maintenance. The invoices were for a pump station rehabilitation project for the Albuquerque Fire Department. Fifty-nine of 72 (82%) of expense test items were not paid within 30 days by DMD.
Objective: Has DMD complied with §4-3-7-5(C) of the Trans Tax ordinance for road deficiency and rehabilitation aesthetic enhancements on interstate highways?
- In FY09, DMD spent $495,000 on interstate aesthetic enhancements that were not allowed under Trans Tax § 4-3-7-5.
Objective: Has DMD complied with the net new monies spend requirements for road deficiency and rehabilitation dedications within §4-3-7-5(E)?
- DMD did not determine FY96/FY97/FY98 spending averages for road rehabilitation and deficiency dedications, which are needed to validate compliance with the net new monies requirement.
Objective: Have Transit and DMD provided information necessary to comply with Trans Tax reporting requirements within §4-3-7-6(A)?
- DMD has not completed or submitted annual expense reports to the Mayor for FY09 and FY10.
Objective: Have Transit and DMD accomplished and maintained supporting documentation to validate active priority objectives and performance measures related to Trans Tax?
- A total of 14 performance measure variances were identified for Transit and DMD. Transit submitted five priority objective reports late.