Jan. 11 (Bloomberg) -- Miami-Dade County is using consultants to improve transit-system accounting that led to the suspension of $180 million in federal money, said County Manager George Burgess.
“I’ve sent a team of four outside professionals into the agency to really scour what appear to be accounting issues,” Burgess said in an interview today. “We’ve already changed personnel in the agency that, frankly, were probably a little lax.”
The Federal Transit Administration, which oversees $10 billion for local transportation, suspended the grants to Florida’s largest transit system in November. It submitted a preliminary audit Jan. 7 that detailed 14 deficiencies. The county, which released the audit late yesterday, has 30 days to respond.
A prolonged freeze of federal money for repairs, construction and bus purchases may harm Miami-Dade’s credit standing, Assistant County Manager Ysela Llort told commissioners of Florida’s largest municipal borrower last month. Standard & Poor’s, Moody’s Investors Service and Fitch Ratings have a negative outlook on Miami-Dade, which has about 2.4 million residents, the most of any Florida county, according to U.S. Census Bureau estimates.
Burgess said he didn’t expect the audit to affect the bond rating, because the accounting deficiencies are resolvable.
The draft U.S. audit found the transit system didn’t properly account for fare collections or follow rules for using federal money. It said the system improperly charged expenses against U.S. funds, drew more against grants than was available, allowed high staff turnover to compromise reporting and didn’t adequately account for maintenance and other expenses.
The suspension of U.S. funds “will remain in place until these findings are resolved,” Yvette Taylor, regional administrator for the Federal Transit Administration, said in a letter to the county accompanying the preliminary audit.
Burgess said in the interview that he met with staff yesterday to address the findings.
“We’re well on our way to correcting things; it’s a work in progress,” he said at a meeting of the Greater Miami Chamber of Commerce. “I’m not trying to downplay it. It needs to be fixed. But we haven’t seen anything fraudulent.”
S&P rates Miami-Dade’s general-obligation bonds AA-, its fourth-highest grade. Moody’s and Fitch rate them third-highest, at Aa2 and AA. Miami-Dade has $17.8 billion of debt outstanding, the most of any Florida municipality, according to data compiled by Bloomberg.
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