March 20, 2012
AATA Board Receives Independent Audit Report
ANN ARBOR – The Ann Arbor Transportation Authority (TheRide) board of directors received a report during its March 15 board meeting that details the results of the organization’s independent audit for fiscal year 2011. Accounting firm Plante & Moran completed the audit on February 22 and issued an unqualified opinion (also known as a “clean opinion”) stating that the transit agency’s financial reports accurately represent the organization’s financial health and conform to generally accepted accounting practices. An unqualified opinion is the highest level of assurance that an auditing firm can give.
The audit report shows that TheRide’s assets, which include bus, facilities and other equipment, total $48.8 million. Operating revenues increased by 17 percent from the previous year due to recent fare increases, while total operating expenses increased by just 3 percent from the previous year.
For 2011, passenger fare revenues made up 21.0 percent of total revenues, an increase from 18.5 percent in the previous year. TheRide’s non-passenger fare revenues include the State of Michigan Department of Transportation (27.8 percent), Federal Transit Administration (12.5 percent) and the local sources (38.6 percent). Local sources include the cities of Ann Arbor and Ypsilanti property tax millages, purchase of service agreements with Pittsfield, Superior and Ypsilanti Townships, bus advertising and interest income.
“We are pleased to report that TheRide is in strong financial health,” TheRide Board Chair Jesse Bernstein. “We remain in strong position to continue to serve the transportation needs of the community now and into the future.”
The audit also recommended that TheRide change its accounting policy to record 100 percent of the City of Ann Arbor public transportation millage revenue on July 1 of each year, the date the millage is levied, rather than report the income over a 12-month period. As a result, TheRide’s FY2011 financial statement will be amended to show $15.6 million in unrestricted net assets as of September 30, 2011, rather than the previously reported $8.7 million.
“TheRide uses City of Ann Arbor public transportation millage revenues to help fund operations throughout the year,” said TheRide Controller Phil Webb. “Even though we will now be recording the millage funds as revenue on July 1, we still must use 75 percent of those funds over our next fiscal year that starts on October 1. So this accounting change does not impact the financial health of TheRide in any way, only the date that revenues are recorded.”
Plante & Moran was selected to perform the annual audit after TheRide board of directors adopted an auditor rotation policy last year. Rehmann Group had previously performed TheRide’s annual independent audits for the past 10 years based on two successive competitively bid five-year contracts.
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