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Past River Valley Transit audits clean, but with suggestions

Auditors looking at the finances of the city Bureau of Transportation — River Valley Transit — from 2007 through 2019 found areas of significant deficiencies and recommended corrective action be taken but nothing out of the ordinary, illegal or noncompliant.

Management at the time agreed to correct the problems, the Sun-Gazette learned.

Using the state Right to Know law, the newspaper obtained three auditing firm recommendations.

Mayor Derek Slaughter required the newspaper pursue that route for the auditor recommendations.

The earliest of the audits was done by Parente Randolph, followed by Larson, Kellett & Associates and finally Baker Tilly, which no longer does the audit for the city as of this year.

Nothing of significance appears until a 2011 audit, when auditors uncovered irregularities with capital assets regarding “a construction project that was in progress.”

The audit doesn’t identify the projects.

However, in that audit, it was determined the bureau assets were “incorrectly reported in accordance with accounting principals.”

That year, too, the bureau’s capital assets and net assets were “overstated,” as of June 30, the bureau’s fiscal year marker. Auditors recommended the bureau management work with the city to ensure accounts were being “recorded properly.”

As manager of the bureau, William E. Nichols Jr. stated that he agreed to take corrective measures when there were problem areas to fix.

During these years, and because of the amount of grant dollars requested, Nichols asked for auditors to assist in proper recording of the amount of “state and federal receivables” that were coming in.

However, the auditors said the bureau management was responsible for the “internal control over financial reporting” and could not do that task.

One of the more consistent themes in these yearly audit recommendations were that any deficiencies in accounting practices could be “mitigated by the active participation of City Council and the city controller in bureau activities.

Told what auditors discovered, a city councilwoman and former mayor who worked side by side with Nichols each said they were not surprised.

City Councilwoman Bonnie Katz said she understood why Nichols would ask for external assistance as the city took in the millions of dollars in federal and state “receivables” or grants.

Nichols was able to find the financing needed to make a multitude of projects happen, Katz said.

Nichols was removed from his job once Slaughter took office. Baker Tilly also is no longer auditing for the city. Slaughter said he continues to get the city fiscal house in order. He offered no comment on any ongoing investigation by state attorney general agents.

Attorney General Josh Shapiro’s office had no comment.

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