Close-out of Agencies and Authorities combined into the Massachusetts Department of Transportation

This is a close-out audit of the agencies and authorities that were merged into the newly created Massachusetts Department of Transportation.

“MassDOT was formed through the merger of four former state agencies: the Massachusetts Highway Department (MHD), the Registry of Motor Vehicles (RMV), the Massachusetts Aeronautics Commission (MAC), and the Executive Office of Transportation and Public Works (EOT) and its divisions.”

State law required the Auditor to check the finances, operations, debt, and policies of the organizations folded into MassDOT.

“In accordance with Chapter 11, Section 12, of the General Laws and as required by Chapter 25, Section 155, of the Acts of 2009, the Office of the State Auditor (OSA) conducted a close-out audit of each agency or authority combined into MassDOT.”

MassDOT controls major public transportation assets and large public budgets, so weak controls could affect taxpayer money and public services.

“During the eight-month period November 1, 2009 (the effective date of the creation of MassDOT) through June 30, 2010, MassDOT had an operating budget of approximately $475 million and a capital budget of $1.15 billion.”

For residents, this matters because roads, bridges, tolls, RMV fees, transit funding, and debt payments all flow through this system.

“The tax and non-tax revenues (e.g., gasoline taxes, RMV fees) previously deposited into the Highway Fund are now deposited into the CTF.”

The Auditor did not find exceptions in the reviewed accounts and first audited financial statements, but did flag weak internal controls.

“Our review of the MTA and legacy agency accounts and MassDOT’s initial audited financial statements disclosed no exceptions.”

MassDOT was told to identify risks, create an internal control plan, and update it regularly after annual risk reviews.

“MassDOT should then prepare an internal control plan in accordance with OSC guidelines.”

The audit’s main significance is that MassDOT’s financial consolidation appeared sound, but its management controls had not caught up with the size and complexity of the new agency.

“Without a comprehensive and documented internal control plan, there is inadequate assurance that agency goals and objectives are met; resources are used efficiently, effectively, and in compliance with applicable laws, rules, and regulations; assets are safeguarded against potential waste, loss, and misuse; and financial data is maintained, reported, and fairly disclosed in reports.”