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Regional Rail Commission Triennial Performance Audit FY 15/16 - 17/18

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Regional Rail Commission Triennial Performance Audit FY 15/16 - 17/18 FINAL REPORT MARCH 2019 San Joaquin Regional Rail Commission Triennial Performance Audit FY 15/16 - 17/18 moore & associates San Joaquin Regional Rail Commission Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report Table of Contents Chapter 1: Executive Summary ........................................................ 01 Chapter 2: Review Scope and Methodology ..................................... 03 Chapter 3: Program Compliance ...................................................... 07 Chapter 4: Prior Recommendations ................................................. 13 Chapter 5: Data Reporting Analysis ................................................. 15 Chapter 6: Performance Analysis ..................................................... 17 Chapter 7: Functional Review .......................................................... 25 Chapter 8: Findings and Recommendations ..................................... 39 Moore & Associates, Inc. | 2019 San Joaquin Regional Rail Commission Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report This page intentionally blank. Moore & Associates, Inc. | 2019 San Joaquin Regional Rail Commission Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report Chapter 1 Executive Summary In 2018, the San Joaquin Council of Governments selected Moore & Associates, Inc., to prepare Triennial Performance Audits of itself as the RTPA and the seven transit operators to which it allocates TDA funding. Moore & Associates is a consulting firm specializing in public transportation. Selection of the consultant followed a competitive procurement process. The California Public Utilities Code requires all recipients of Transit Development Act (TDA) Article 4 funding to complete an independent audit on a three-year cycle in order to maintain funding eligibility. Audits of Article 8 recipients are encouraged. The Triennial Performance Audit is designed to be an independent and objective evaluation of the San Joaquin Regional Rail Commission (SJRRC) as a public transit operator, providing operator management with information on the economy, efficiency, and effectiveness of its programs across the prior three fiscal years. In addition to assuring legislative and governing bodies (as well as the public) that resources are being economically and efficiently utilized, the Triennial Performance Audit fulfills the requirement of PUC Section 99246(a) that the RTPA designate an entity other than itself to conduct a performance audit of the activities of each operator to whom it allocates funds. This chapter summarizes key findings and recommendations developed during the Triennial Performance Audit (TPA) of SJRRC’s transit program for the period Fiscal Year 2015/16 through Fiscal Year 2017/18. The Regional Rail Commission operates the Altamont Corridor Express rail line (ACE Rail), which travels along a single fixed alignment between Stockton and San Jose. SJRRC operates four westbound and four eastbound trains each day, originating in Stockton for the morning westbound service and in San Jose for the afternoon/evening eastbound service. ACE rail service is provided at ten stations: Stockton, Lathrop/Manteca, Tracy, Vasco Road, Livermore, Pleasanton, Fremont, Great America, Santa Clara, and San Jose. Notable events taking place during the audit period are noted below. In March 2016, ACE experienced a derailment between Fremont and Pleasanton. Nine passengers were injured and service was canceled for a full service day. In May 2016, SJRRC adopted a 5.25 percent increase in ACE fares. The fare increase was implemented in October 2016. In May 2016, SJRRC began expanding wifi from a designated wifi car to additional rail cars on a trial basis. In June 2018, SJRRC’s Valley Rail Project was selected for funding under SB-1. The Project will extend rail service north to Natomas/Sacramento Airport and south to Merced by 2027. 1 This performance audit was conducted in accordance with generally accepted government auditing standards. Those standards require the audit team plans and performs the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for its findings and conclusions based on the audit Moore & Associates, Inc. | 2019 San Joaquin Regional Rail Commission Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report objectives. Moore & Associates believes the evidence obtained provides a reasonable basis for our findings and conclusions. This audit was also conducted in accordance with the processes established by the California Department of Transportation (Caltrans), as outlined in the Performance Audit Guidebook for Transit Operators and Regional Transportation Planning Entities. The Triennial Performance Audit includes five elements: Compliance requirements, Follow-up of prior report recommendations, Analysis of program data reporting, Performance Audit, and Functional review. Test of Compliance With one exception, Moore & Associates concludes the Regional Rail Commission complies with the Transportation Development Act (TDA) regulations in an efficient and effective manner. 1. The FY 2015/16 State Controller Report was submitted late. Status of Prior Recommendations The prior triennial performance audit contained no recommendations. Findings and Recommendations Based on discussions with SJRRC staff, analysis of program performance, and a review of program compliance and function, Moore & Associates submits one compliance finding for San Joaquin Regional Rail Commission. 1. The FY 2015/16 State Controller Report was submitted late. Moore & Associates has identified no functional findings. Exhibit 1.1 Summary of Audit Recommendations TDA Compliance Recommendation Importance Timeline Be mindful of filing deadlines for the State 1 Low Ongoing Controller’s Report. 2 Moore & Associates, Inc. | 2019 San Joaquin Regional Rail Commission Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report Chapter 2 Review Scope and Methodology The Triennial Performance Audit (TPA) of the San Joaquin Regional Rail Commission’s public transit program covers the three-year period ending June 30, 2018. The California Public Utilities Code requires all recipients of Transit Development Act (TDA) funding to complete an independent review on a three- year cycle in order to maintain funding eligibility. In 2018, SJCOG selected Moore & Associates, Inc., to prepare Triennial Performance Audits of itself as the RTPA and the seven transit operators to which it allocates TDA funding. Moore & Associates is a consulting firm specializing in public transportation. Selection of the consultant followed a competitive procurement process. The Triennial Performance Audit is designed to be an independent and objective evaluation of the Regional Rail Commission as a public transit operator. Direct benefits of a Triennial Performance Audit include providing operator management with information on the economy, efficiency, and effectiveness of its programs across the prior three years; helpful insight for use in future planning; and assuring legislative and governing bodies (as well as the public) that resources are being economically and efficiently utilized. Finally, the Triennial Performance Audit fulfills the requirement of PUC Section 99246(a) that the RTPA designate an entity other than itself to conduct a performance audit of the activities of each transit operator to which it allocates TDA funds. This performance audit was conducted in accordance with generally accepted government auditing standards. Those standards require the audit team plans and performs the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for its findings and conclusions based on the audit objectives. Moore & Associates believes the evidence obtained provides a reasonable basis for our findings and conclusions. The audit was also conducted in accordance with the processes established by the California Department of Transportation (Caltrans), as outlined in the Performance Audit Guidebook for Transit Operators and Regional Transportation Planning Entities, as well as Government Audit Standards published by the U.S. Comptroller General. Objectives A Triennial Performance Audit has five primary objectives: 1. Assess compliance with TDA regulations; 2. Review improvements subsequently implemented as well as progress toward adopted goals; 3. Review the accuracy of data reporting; 4. Evaluate the efficiency and effectiveness of the transit operator; and 5. Provide sound, constructive recommendations for improving the efficiency and functionality of the transit operator. 3 Moore & Associates, Inc. | 2019 San Joaquin Regional Rail Commission Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report Scope The TPA is a systematic review of performance evaluating the efficiency, economy, and effectiveness of the transit operator. The audit of SJRRC included five tasks: 1. A review of compliance with TDA requirements and regulations. 2. An assessment of the implementation of recommendations contained in prior performance audits. 3. A verification of the methodology for calculating performance indicators including the following activities: Assessment of internal controls, Test of data collection methods, Calculation of performance indicators, and Evaluation of performance. 4. Examination of the following functions: General management and organization; Service planning; Scheduling, dispatching, and operations; Personnel management and training; Administration; Marketing
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