State Controller Calls for Audit of Transit Agency

Keeping a promise to increase oversight of California’s transportation spending, state Controller Kathleen Connell on Tuesday chose the Orange County Transportation Authority for the second in a series of sweeping audits.

As with a similar review of the Los Angeles Metropolitan Transportation Authority announced last month, Connell emphasized that the audits are the next phase of her plan to make sure tax dollars are being properly spent.

“Taxpayer funding of transportation systems is now skyrocketing in California,” Connell said in a written statement. “No conclusions should be drawn that because we are auditing we are suspicious of financial trouble or regularity.”

Connell noted that OCTA has generated profits each of the past three years and has reduced its debt.

Jim Kenan, OCTA’s director of finance and administration, said the agency’s finances are extensively reviewed every three years by both state and federal auditors, and each year by accounting giant Ernst & Young. “We anticipate a very clean report,” he said.

The transportation agencies in Los Angeles and Orange counties are the first of four to be scrutinized by the controller’s office, which has the authority to audit programs that spend state tax money.

Ventura and San Diego counties will follow, but not until one or both of the first two audits are complete. That may not be until spring, said Tom Marshall, a spokesman for Connell.

The controller chose these particular regions because in addition to bus and rail systems, their governing authorities have broad planning power, unlike agencies elsewhere in California, Marshall said.

The decision to focus on transit agencies parallels a big increase in transportation financing. Over the next five years, about $6.8 billion of California’s budget surplus has been allocated for transportation. Orange County will receive $240 million in additional funds, primarily to expand the Garden Grove Freeway and to lower the railroad along the Orangethorpe corridor.

In Orange County, where buses carry an estimated 57 million passengers annually and the agency also partially finances two Metrolink rail lines, the audit will focus on two main areas: verification that funding has been used in compliance with state and federal requirements, and the effect of the increased state funding.