Traverse City Record-Eagle

Grand Traverse County

January 28, 2009

BATA receives clean audit

Bus service is on track for small surplus in 2009

By BRIAN McGILLIVARY and MELISSA DOMSIC

TRAVERSE CITY -- Heidi Wendel suspected she was the intended victim of an "office setup" when she was assigned to oversee the Bay Area Transportation Authority's annual audit.

It must have been a joke, she figured, since the books looked so bad.

That was three years ago, when the tax-supported local bus service was losing money, was plagued by significant weaknesses in financial management and oversight, and had glaring deficiencies in accounting practices.

Wendel's first two audits reported similar problems.

That pattern changed Wednesday.

"There are a couple of items that are pretty small ... but this is a much cleaner report than last year," said Wendel, a partner at the Traverse City accounting firm Dennis, Gartland & Niergarth.

Her audit of 2008 finances found no major accounting or financial management problems. She noted the audit was completed in December, taking three months less than the 2007 audit.

Past audit problems were magnified by the fact BATA operated without a financial officer in 2007.

Wendel compared the lone 2008 comment from auditors about BATA's need to improve its cash flow to last year's list of more than 15 comments about financial problems.

Absent in 2008 were recurring issues such as the need for a deficit elimination plan, problems with employee expense reports and cash handling, a lack of a conflict of interest policy and delayed bank deposits.

"It seems like such a long time ago now," Wendel said.

BATA's board in 2008 more actively scrutinized finances and operations while the organization went through changes, including the hiring of controller Eric Gray and the retirement of executive director Joe DeKoning.

Gray and BATA board members spent much of 2008 implementing internal controls and working to cut costs and increase revenues for the cash-strapped organization. The audit showed it still lost $368,000 for the fiscal year that ended Sept. 30, 2008, but is currently tracking to show a small surplus for 2009.

Wendel said things began to change at BATA the day Gray came aboard.

Board members agreed and thanked Gray for helping them navigate their financial mess.

"I think bringing (Gray) on was the best decision we've made in the last year," said board member Kevin Endres. "Sitting through this audit report was a lot more enjoyable than last year."

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