GAO Study Says RTD Overbought : Transit: Agency purchased too many new buses, according to report on misuse of federal funds.

Mass transit agencies in California, Hawaii and the U.S. Pacific territories wasted, misspent, or mismanaged more than $84 million in federal transit funds during the last four years, according to a General Accounting Office report released Friday.

Among those cited was the Southern California Rapid Transit District, faulted for using federal money to buy too many new buses.

The GAO, the investigative arm of Congress, blamed the waste it found at the transit agencies on lax oversight by the Pacific regional office of the Urban Mass Transit Administration, the federal agency that administers more than $34 billion in grants for bus and rail systems throughout the nation.

More than half the 77 local transit agencies that receive grants from UMTA’s regional office “did not have adequate management controls to ensure compliance with federal grant requirements and to safeguard funds,” the report concluded.

RTD officials dismissed the GAO report as a rehash of old complaints, most of which have either been settled or proven unfounded.

“It’s an old fight. We’ve already gone through all of this with UMTA,” said RTD spokesman Anthony Greno.

“Unfortunately, they (GAO investigators) took a rather literal interpretation of things, including some things it doesn’t understand,” said RTD Controller-Treasurer Thomas Rubin.

The GAO complained that local agencies failed to carefully monitor the way their federal money was spent, did not properly protect property paid for by the federal government, and failed to adopt procurement procedures required by federal regulations.

Exacerbating the problem, the GAO said, was the failure of regional UMTA officials to properly police local transit agencies. For example, the study said, the San Francisco office has awarded more than $540 million in grants since October, 1987, to transit agencies that failed to meet the requirements of previous grants.

The regional office oversees nearly $4 billion in grants, all but $84 million of which are in the hands of 71 California transit agencies. The office has recovered about $10 million of the wasted or misspent money, the report said.

Among the most egregious examples of waste or mismanagement cited in the report were:

* Four California agencies--RTD, Orange County Transit District, San Francisco Municipal Railway and Central Contra Costa Transit District--inappropriately used $39.9 million in federal funds to buy more new buses than they should have. The overexpenditures occurred because the agencies “did not have adequate property management systems to ensure that the size of their bus fleets complied with UMTA’s guidelines,” the report said.

* The Santa Clara County Transportation Agency spent $6.1 million in federal funds on improvements for a transit mall and other projects that were not authorized by the federal government. The agency also double-billed UMTA for some construction costs.

* The Bay Area Rapid Transit District billed the federal government for $4.3 million in ineligible labor, contract, and property costs. In addition, the district failed to close out grants quickly enough, resulting in $550,000 in unauthorized charges for equipment and construction that UMTA had prohibited.

* The Alameda-Contra Costa Transit District and the RTD charged the federal government nearly $170,000 for extended warranties and service agreements that are not legally eligible for federal reimbursement.

Rubin of the RTD conceded that his agency improperly asked to be reimbursed for warranties, but he said the district has already reimbursed UMTA for the relatively small amount.

The RTD controller attacked the charge that his agency has more buses than needed, citing statistics showing that Los Angeles operates the most crowded buses in the nation--36% more crowded than second-place Houston.

He said GAO investigators knew but ignored the fact that they happened to audit RTD when it briefly had an unusually large number of spare buses. At the time, he said, RTD had postponed the auction of 200 old buses because it had been told that a shipment of new buses might have defective bolts.

“We wanted to make sure the new buses worked before we took the old buses off the road,” he said.

Rubin also said that RTD, which is also among the world’s pioneer agencies in the development of alternative-fueled buses, had a larger than average surplus of methanol- and natural gas-powered buses because those experimental vehicles were breaking down more often than expected.

Since the GAO visited, RTD’s spare bus ratio has fallen to 23%, Rubin said, and should be below the recommended 20% in 12 to 18 months.

Times staff writer Mark A. Stein contributed to this story