Audit Finds Misappropriations by Transit Agencies

A final audit of two beleaguered Coachella Valley transportation agencies released Wednesday affirmed allegations that agency officials misspent public funds, broke federal and state laws and failed to properly document transactions.

Also, new allegations of a potential conflict of interest have been leveled against the agencies’ top executive, who was placed on administrative leave last week.

Directors and staff at the SunLine Transit Agency and the SunLine Services Group declined to comment or did not return phone calls.

The Ernst & Young audit, for fiscal year 2001-02, found that the organizations misspent $751,000 in taxpayer funds for transit projects and used improper documentation to receive federal money for a street sweeper.

The agencies also illegally offered charter service, failed to include a wage clause in a contract and improperly secured a loan to buy taxicabs, the audit alleged.

The first draft of the audit had accused the transit agencies of falsifying documents, an allegation that was revised in the final version. Instead, the report found instances of “improper documentation.”

The financial audit of the two agencies is done annually.

But the findings in the most recent report prompted the Riverside County Transportation Commission, which has financial oversight of the two agencies, to call for an independent audit that could cost as much as $100,000.

“Hopefully it doesn’t go beyond unintentional negligence,” said Riverside County Supervisor Bob Buster, who sits on the commission.

“They need to begin the search for new management to right the ship.”

Chief Executive Richard Cromwell III, who was placed on paid leave last week along with the agencies’ chief financial officer, declined to comment on the audit.

The Desert Sun recently reported that Cromwell failed to report a conflict of interest when he served as an advisor to a private energy company that worked with his transit agency.

Cromwell said he did not report travel or meals paid by Clean Energy Fuels Inc. because they were provided while he was doing work on behalf of SunLine.

He said he planned to send a letter today to the Fair Political Practices Commission asking for a ruling on the appropriateness of accepting the travel and meals.

The SunLine Transit Agency has been providing transportation services for the Coachella Valley since 1978. The SunLine Services Group is responsible for street sweeping, regulating taxi cabs and researching clean fuels.