The state Auditor’s Office issued two findings against Island Transit in a recent audit report, although the agency’s new executive director was the one to point the issues out to the state after ordering an internal review.
In an accountability audit covering the period from Jan. 1 to Dec. 31, 2024, auditors reported that the agency “lacked the proper oversight and internal controls to ensure inventory assets were properly safeguarded.”
Specifically, transit management wasn’t aware until 2025 that one of the its parts coordinators tracked purchases and inventory on a computer outside of the formal inventory system, resulting in discrepancies between actual inventory and what was on the computer system, the audit report states.
The report states that five items that auditors selected for testing did not match inventory records, “including items that could easily be recycled for cash.”
In addition, the agency didn’t have controls to avoid conflicts of interest. An employee in the parts department who was in charge of purchasing parts is “immediately related to an employee who processed the accounts payable, without independent oversight,” the report states.
According to a separate audit report on federal awards, the auditors found that Island Transit did not have adequate internal controls and did not comply with federal procurement, suspension and debarment requirements.
The transit board of directors hired Melinda Adams as the new executive director in October 2024. The board members fired the former director earlier in 2024 after they said they lost confidence in him.
Adams asked for an internal review shortly after joining the agency in order to have “a clear and honest look at existing processes” and to identify areas that needed improvement, according to a statement from Island Transit
“I requested a comprehensive financial and technology review so I could understand exactly where our strengths were and where we needed to improve,” Adams said.
The review identified several “process inadequacies and areas requiring improved oversight,” according to the statement. Though findings and the corrective actions were proactively shared with the state Auditor’s Office to support full transparency.
“When issues were identified, we didn’t wait,” Adams noted. “We immediately put procedures and corrective actions in place, including some restructuring to ensure stronger internal controls.”
One of the audit reports describes in detail how Island Transit took action to correct the problems. It states that Adams hired the firm Clark Nuber for an assessment of the finance department and maintenance parts department. Clark Nuber provided a robust report, which Adams provided to state auditors along with discussions about corrective actions that were already taking place.
The report states that Adams “met with maintenance management staff and parts personnel to begin a restructure of the department and to implement a parts management plan to facilitate corrective action needed.”
According to the statement from Island Transit, the agency views the audit as an opportunity to strengthen operations and reinforce financial integrity.
“We want to ensure integrity in all of our processes,” Adams said. “We acknowledge the imperfections and move forward with streamlining process and procedures. “
Island Transit is committed to transparency, accountability and continuous improvement.
“These reviews underscore our commitment to the community,” Adams said. “We’re building a stronger, more reliable agency for the community we serve.”
