Transit provider Jaunt, a crucial service to people with disabilities, owes nearly $1 million to the state and will receive less money for operations this year after it over-reported ridership and underreported costs with contracted services, according to a review by the Virginia Department of Rail and Public Transportation.
And yet, the ride provider says services will not be affected.
The DRPT review occurred after former Jaunt CEO Brad Sheffield was asked to resign late last year when the board said he “purchased numerous expenses for goods, services and travel which violated internal control policies of the corporation.” Later, a Freedom of Information Act lawsuit revealed that Sheffield spent more than $7,000 on multiple conference trips.
In a letter to the Jaunt board and acting CEO Karen Davis from earlier this month, DRPT’s Chief of Public Transportation Jennifer Mitchell said the review’s findings “are troubling and indicate a pattern of misinformation and inaccurate reporting by Jaunt leadership that resulted in the over-allocation of state and federal resources to Jaunt.”
Jaunt owes the DRPT $968,640, and the agency will have a reduction of $429,163 in operating assistance for fiscal year 2022. The state is also canceling a grant for 23 light duty transit vehicles that was awarded $1.8 million in federal money and $361,000 in state money.
Davis said the refund and reduction in operating assistance will not affect the service provided by the transit agency because the agency has the money due to federal pandemic funding and surplus funds.
“The overreporting as they describe caused a larger drawdown of money, and so reducing that back down to our actual numbers that we produce makes perfect sense,” she said. “They won’t affect our riders at all; it essentially is the amount of money we need to provide services. In the over-allocation that occurred, we have that money to return to them. We have only been spending money that we needed in order to run services.”
A representative from DRPT said the five-page letter “serves as the department’s statement on the matter at this time.”
Jaunt operates the area’s paratransit service for Charlottesville Area Transit under a contract with the city, runs commuter routes and has contracts with human service agencies. The service is owned jointly by and provides service to Albemarle, Fluvanna, Louisa, Nelson and Buckingham counties and the city of Charlottesville. Last year, Jaunt took over Greene County Transit.
People utilize Jaunt to commute to and from work, for shopping trips, to get to appointments and as an accessible transport service for passengers unable to use traditional fixed-route service. Prior to the pandemic, Jaunt had more than 300,000 passenger trips annually, according to data reported to the Federal Transit Authority.
According to the letter, in fiscal year 2019, overall ridership for Jaunt was overstated by 18% and rural ridership was overstated by 28%. Revenue miles were overstated by 29% and revenue hours were overstated by 15%.
The letter also said DRPT determined that the costs and revenues associated with contracted services have been “consistently and significantly underreported in allocating costs across these programs.” For FY19, Jaunt allocated 8.58% of their costs to agency trips, when the actual share of agency trips was 17.79%. For FY20, JAUNT allocated 6.9% of their costs to agency trips, when the actual share was 15.79%
Mitchell said this resulted in the over-allocation of state operating assistance in FY21 and FY22, as well as federal operating assistance funding for its rural services in FY19, FY20, FY21, and FY22
Mitchell’s letter said the numbers came from performance data submitted in comparison to information directly from Jaunt’s scheduling system. Davis said Sheffield did the reporting to the state on his own.
“He did not leave a roadmap for us about how he came up with those numbers,” she said. “That’s why we constructed our own way of pulling the data out of our systems and giving it to them.”
The letter said that all of Jaunt’s vehicles were purchased with rural transit funding, which cannot be utilized to provide trips solely within the urbanized area including the ADA trips provided under agreement with Charlottesville.
“DRPT’s assessment has determined that 32% of the vehicle miles are associated with ADA trips, making nearly a third of JAUNT’s fleet ineligible for replacement with [rural transit] capital funding,” the letter said.
Mitchell said in the letter that DRPT will work with Jaunt to reapply for capital funding in the FY23 grant cycle.
In response to a freedom of information act request by The Daily Progress for the documents that were examined as part of this in-depth review, DRPT said the documents are exempt from disclosure, “as they have been furnished in confidence and otherwise provided to or produced by or for the Office of the State Inspector General with respect to an on-going investigation.”
According to DRPT budget data, in a typical year, most of Jaunt’s funding for operations comes from local governments. Davis said she anticipates Jaunt will be giving money back to localities.
“I don’t know what that amount looks like,” she said. “We are meeting with different counties to discuss their individual budgets and making sure that they have asked and we have answered all their questions, and that everyone feels confident about it.”
After information came out about Sheffield’s spending, Jaunt rewrote the organization’s financial and grants management policy, Davis said.
“That [policy] really is the meat of a lot of the oversight that is now in place that prevents this from happening again at the senior level,” Davis said. “The CFO now has a line directly to the president of the finance committee on the board, and they’re in constant conversation. All travel and major expenses by senior staff are pre-approved by the board president.”
Ahead of DRPT’s review, Jaunt hired a consultant to reconstruct the agency’s budgeting and financials, Davis said.
“We’re actually finalizing that, but now with the DRPT review, we want to revisit it again with our consultants and make sure that anything additional that DRPT wants us to address is addressed,” she said.
Jaunt is also required to develop a new Transit Development Plan, “using properly qualified consultant services.” TDPs are required by DRPT for any public transit operator receiving state funding and serves as a guide for transit agencies around ongoing and future operations of the agency. The plans need to be submitted every six years, and an annual letter must be submitted describing implementation progress and any significant changes.
“We’re working off a plan right now, and I think DRPT wants to start fresh with the new team and new consultants make sure that the recommendations are sound,” Davis said.
The Jaunt Board of Directors has also hired Ted Rieck as its new CEO, who will start on Dec. 6. Rieck’s last day with the Metropolitan Tulsa Transit Authority as its general manager is Friday.
“The TDP will be a guiding document that will help foresee our future, and when our new CEO Ted Rieck starts, he will have a huge role to play in all that as well,” Davis said.
In the letter, DRPT said its consultant identified administrative costs relative to the cost of service should be evaluated by Jaunt.
“The proportion of Jaunt’s budget focused on administration greatly exceeds industry standards,” the letter said. “While not specific to the compliance, it was identified by DRPT’s consultant as an area of concern.”
The department said the consultants were transit industry consulting firm KFH Group and SC&H Group, a management consulting, audit and tax firm.
Davis said some of the positions and costs were incorrectly put into admin and should have been operational.
Mitchell said in the letter that DRPT’s review is closed, but “due to the significance of the issues identified,” all of the information identified and evaluated during the course of the review was shared by DRPT with the Office of the Attorney General, Office of the State Inspector General, Federal Transit Administration Region 3 and the U.S. Department of Transportation Office of the Inspector General.
Representatives from the Office of the Attorney General, Office of the State Inspector General and the U.S. Department of Transportation Office of the Inspector General said they do not release information related to ongoing investigations and cannot confirm the existence of any investigation. A representative from the Federal Transit Administration did not get back to The Daily Progress with information before press time.