According to an Auditor's Office report, problems with internal controls at the regional transit provider resulted in thousands of dollars in lost money during the past 4 1/2 years. Auditors also found Sound Transit failed to properly review millions of dollars in payments to the King County Sheriff's Office.
Responding to the allegations, Sound Transit management told the Auditor's Office would implement suggested changes immediately while contending it already has "strong contract management in place to ensure the security services are received consistent with the contract obligations."
Auditors found Sound Transit paid $126,000 in late fees to Securitas -- a private security company contracted to provide station guards and other services -- after failing to pay its bills on time. According to the report, Sound Transit's chief of security told auditors he had been budgeting for the late fees.
The late fees stemmed from overly burdensome bill tracking procedures that slowed payments excessively, Sound Transit managers said in their response to the Auditor's Office report. Sound Transit asserts those problems have since been fixed.
According to the report, Sound Transit also overpaid Securitas during holidays, when it paid staff at time and a half even though the contract did not require that Sound Transit do so. In the agency's response, Sound Transit managers admitted the contract was "incorrectly interpreted" with regard to holiday pay. The agency hopes to recoup some of $190,000 paid in holiday time.
Sound Transit also failed to adequately review invoices submitted for security services, auditors found. The transit agency paid out $17 million to the King County Sherriff's Office during the time period in question, and auditors found Sound Transit didn't require the Sherriff's Office to report what the money was actually spent on.
Auditors noted Sound Transit staff in charge of handling the invoices was not properly trained for the task.
With regard to the unsupported payments to the King County Sheriff's Office and its security contractor, Sound Transit claims to have resolved the shortcomings noted by state auditors.
While thanking the Auditor's Office for its work, Sound Transit continued to assert its contract management system is adequate.
"While invoice review should be strengthened as recommended by the audit, it is important to acknowledge that Sound Transit has strong contract management in place to ensure the security services are received consistent with the contract obligations," Sound Transit staff said in the agency's response. "Sound Transit and the public have received high level security services through these contracts."
The total amount of Sound Transit's contract with the King County Sheriff's Office is $33.3 million. That contract runs from July 2008 through December 2013. The agency's contract with its security provider amounts to $5.6 million annually.