Montachusett Regional Transit Authority Administration of Limited Unit Rate Service Agreements

The Auditor was already examining DDS’s LUSA spending, especially payments made late in the fiscal year, because that timing looked riskier than normal contract payments.

“Based on this analysis and the results of prior audits that identified issues with LUSA transactions, we concluded that LUSA payments processed late in the year, particularly during the accounts-payable period, might pose disproportionately high risks of improper use or other irregularities.”

The issue matters because public money must be charged to the right contract and accounting category, so the state’s books accurately show what was bought and why.

“By improperly using the LUSA payment mechanism to process the transportation payment adjustments, DDS violated restrictions on the use of LUSA funding and generated erroneous information in the state accounting system regarding the nature of the expenditures.”

If you live in one of MART’s service communities or use state-funded transportation services, this report is about whether taxpayer-funded transportation payments were handled properly.

“MART is one of Massachusetts’s 15 regional transit authorities and provides public transportation to 21 area cities and towns (the cities of Fitchburg, Gardner, and Leominster and the towns of Ashburnham, Ashby, Ayer, Bolton, Boxborough, Hardwick, Harvard, Hubbardston, Lancaster, Littleton, Lunenburg, Royalston, Shirley, Sterling, Stow, Templeton, Westminster, and Winchendon).”

The Auditor said oversight agencies should review the problem, and MART should tighten controls so any future LUSA-related work is properly done, documented, billed, and recorded.

“In accordance with the recommendations of the overall report and the testing results specific to MART, MART should implement appropriate control measures to ensure that all LUSA services are performed, documented, billed, and accounted for in compliance with applicable requirements.”

The mistake had real consequences: because DDS coded the payments incorrectly, both MART and the Auditor’s office had to spend time and resources sorting out what happened.

“As a result, significant MART administrative resources and Office of the State Auditor (OSA) resources were required to examine these transactions and determine why the LUSA payments were issued to MART.”

A LUSA is a flexible master agreement DDS can use for short-term or occasional services for clients who are not already covered by another contract. In plain terms, it is not supposed to be a catch-all fix for billing mistakes under regular contracts.

“LUSAs are a form of a master contract agreement that can be used by DDS to purchase services from a preapproved contractor on an intermittent, limited-time basis for clients who are not already covered through an existing contract.”