Investigation Confirms That SamTrans Mishandled Public Funds

A yearlong investigation into the accounting practices at the San Mateo County transit district confirmed that roughly $2.5 million of public money was badly mismanaged, but did not find evidence of criminal conduct.

The San Mateo County District Attorney launched their probe after whistleblowers pointed to a series of fake and inflated expenses.

• [BAY LEGAL]SamTrans Faces 'Forensic Audit' as Part of Fraud Investigation

The DA’s yearlong audit confirmed these claims. It found that from 2009 to 2013, the transit district racked up $2.5 million in expenses that had no invoices or backup. Insiders told NBC Bay Area that managers were setting aside public money to be used at later time with less oversight.

• [Legal]Insiders Allege Fraudulent Accounting at SamTrans

Assistant District Attorney Al Serrato said, "There's always a cause for concern when it's not clear to an auditor where money is going or there's not proper documentation when an expense has been incurred."

MGO Certified Public Accountants was the firm hired to conduct the audit. Partner David Bullock's investigation revealed instances of inappropriate accounting entries amounting to $2.5 million.

When asked if this discovery was the result of whistleblowers speaking out, Serrato said, "The information they brought to lihgt was a factor that led to this, absolutely."

SamTrans insists these accounting discrepancies were simply the result of human error:

“These were clearly mistakes that were made, inaccuracies in our accounting process” said SamTrans Spokesperson Jayme Ackemann. “We have reversed that money back into our general fund and identified the process to avoid that in the future.”

In an official letter to SamTrans, San Mateo DA wrote that the misallocated money was “indicative of the failure to follow generally accepted accounting principles” and not the result of criminal conduct. The letter continues: “…the investigation revealed no evidence of theft, embezzlement, or other criminal conduct. For these reasons, we deem this investigation closed.”

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