Everett, Wash.
Published: Wednesday, March 28, 2007

Ferries can't account for cash

Inability to track ticket sales an ongoing problem, state audit finds

By Jerry Cornfield / Herald Writer

 OLYMPIA - A new state audit has found a very old problem for Washington State Ferries - it doesn't know whether any of the millions of dollars paid by riders is missing.

"It might be zero. It could be some huge amount," said state Auditor Brian Sonntag, who released the report Friday.

"We're not saying we know how much money is missing. We're saying the ferries department cannot identify if any is missing," he said.

This is the 21st straight year a state audit has noted the ferry system's inability to reconcile for certain the number of tickets sold and the amount of money received.

This audit looks at the entire state Department of Transportation and covers the fiscal year of July 1, 2005, through June 30, 2006. During that time, Washington State Ferries reported $136.5 million in fare revenue at its 14 terminals, plus another $3.2 million from sales by independent contractors, according the audit.

Click here to see a PDF of the latest report.

"No system is in place to ensure that all sales are recorded," the audit found. "Neither our office nor the Ferries Division can estimate how much is lost due to unrecorded sales."

Transportation officials said they expected to see this finding again. They also hope to solve the problem with the switch to an electronic ticketing system, now in use at nearly all ferry terminals.

"When the electronic fare system is finished, maybe we'll see the auditor move on to another finding, but I'm not sure of that because it may be stuck in his word processor," Transportation Secretary Doug MacDonald said.

Sonntag said the changeover might be the long-sought solution.

"They're getting there," he said.

Fare revenues are not the only concern raised in the audit. The report also found:

* Gasoline credit cards reported stolen from the Transportation Department were used to buy $9,000 worth of fuel before being canceled.

* Discrepancies in mileage records for dozens of department vehicles.

The department employs about 7,250 people on a roughly $1.9 billion annual budget. It has a fleet of 2,421 vehicles, and last year it spent about $3 million on gasoline.

The audit found that 16 gasoline credit cards were reported lost or stolen during the last fiscal year.

Ten of those were used to charge unauthorized fuel purchases, and those thefts have been referred to police for investigation, the audit said.

No employee is suspected of involvement, said Steve McKerney, the department's director of internal audit.

"This does point out that we need to do a better job of monitoring our fuel usage," department spokesman Lloyd Brown said.

In the course of examining gasoline purchases, the audit found "the department did not always maintain vehicle logs or other documentation detailing use of the vehicles."

The audit studied records for 295 vehicles for the fiscal year. Of those, 111 had nearly complete logs of mileage driven, while 102 had no log available.

For 20 percent of the vehicles checked, there was a discrepancy of 500 miles or more between odometer readings and the written logs. One vehicle differed by 22,872 miles.

Brown said the differences arise because written logs are not updated enough. There is no evidence of employees using company cars on personal business, he said.

A frequent critic of government spending said that because the audit examined only a portion of the department's fleet, there could be a grave problem.

"By not having adequate controls of how gas is purchased and accounted for, it runs the risk of misappropriation," said Jason Mercier, director of the Economic Policy Center at the Evergreen Freedom Foundation.

MacDonald said he was "basically pleased" with the audit findings and viewed them as proof the department is doing a pretty good job taking care of its resources.

"For an agency of our size and scope, this shows there is good, strong management controls," MacDonald said.

"I believe our inventory control as shown by the auditor is as good as the inventory control at QFC," he said. "I am very pleased."

Reporter Jerry Cornfield: 360-352-8623 or jcornfield@heraldnet.com.
© 2009The Daily Herald Co., Everett, WA