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Audit Spurs Inquiry Into 2 Agencies

The Coachella Valley transit units allegedly broke federal rules, misspent money and doctored data -- charges they partly concede.

June 26, 2003|Seema Mehta | Times Staff Writer

Federal, state and local officials are investigating allegations that twin Coachella Valley transportation agencies, nationally renowned for use of alternative fuels, have misspent public funds, falsified documents and violated federal regulations.

The executive director of SunLine Transit Agency and SunLine Services Group, two agencies that operate under the umbrella of a joint-powers authority for Riverside County and nine of its cities, contested some of the allegations Wednesday, acknowledged others and laid out a preliminary plan to solve underlying problems.

"We receive the bulk of our funding from government sources to whom we are responsible and accountable. We do not take this lightly," the executive director, Richard Cromwell III, told SunLine's board of directors on Wednesday. "Our plan to repair things is comprehensive and ... will take time to implement correctly and completely."

Cromwell proposed several solutions to put in place over the next couple of months, including developing plans for an independent audit, strengthening fiscal controls and looking for a way to separate the two transit agencies.

The two agencies have been accused in a draft audit of misspending $751,000 in county transit funds, submitting backdated documents to get $184,000 in federal funding for a street sweeper, illegally offering charter service and other improprieties.

The concerns were raised in a draft audit of the 2001-02 fiscal year by Ernst & Young that was presented to the board May 28. But now, the Federal Highway Administration, Caltrans, the Riverside County Transportation Commission and others are looking into the two agencies, which have separate missions but shared leadership, staff and headquarters.

SunLine officials say that although there are flaws in how the two agencies balanced their books, the concerns are overstated.

"Too much is being made of it," said Roy Wilson, a SunLine board member and Riverside County supervisor. "Obviously, the audit indicated we need to tighten up the accounting ledgers between the two. That's something the board is taking seriously, as is the staff, and will correct."

But "there's no malfeasance or criminal activity involved. It's a matter of them having one agency with two separate accounts and not a clear separation of the books," he said.

But others are calling for a closer look.

"My concern is, I do work hard to bring home federal funding for fuel cell research and other transportation issues, and I want to make sure taxpayer dollars are going exactly where they are intended to go," said Rep. Mary Bono (R-Palm Springs).

"Until [the situation is fixed], I am a little more hesitant to send federal dollars that way."

Officials with the Federal Highway Administration and Caltrans confirmed that they are investigating the allegations but otherwise declined to comment.

SunLine Transit Agency has provided transit for residents of the Coachella Valley since 1978. SunLine Services Group is a decade-old public agency with responsibilities that include sweeping streets, regulating taxis in the area and researching use of clean fuels. Both are led by Cromwell as executive director and the same board of directors, made up of elected officials.

The audit found that $751,000 of Measure A funds -- a taxpayer-approved half-cent sales tax for county transit spending only -- had been loaned from the Transit Agency to the Services Group for administrative costs.

The draft audit also stated that the Services Group sought reimbursement for buying a street sweeper before the actual purchase, backdating documents in the process. Once it received the $184,000 in federal funds, the sweeper was purchased, a fact not in dispute.

Cromwell denied that any documents were backdated.

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