Hamilton has overpaid its DARTS contractors by about a quarter of a million dollars over the past 12 years, the city’s auditor general has found.
According to a press release issued Thursday by the Office of the Auditor General, an audit of the Disabled and Aged Regional Transit System’s compliance with the master operating agreement was launched after a concern was reported to the City of Hamilton Fraud and Waste Hotline. The audit focused specifically on the city’s payment of forgone fares.
“Overpayment of a subsidized fare occurs when the City reimburses a fare that DARTS should have collected from the passenger(s) they were transporting,” stated the OAG in the press release. Payments are made monthly based on DARTS’ reporting of the number of rides defined as “forgone fares” in the Master Operating Agreement (MOA).
“These fares coincide with the HSR’s conventional transit service fares for situations such as the ‘Ticket-to-Ride’ program, group bookings, rides to polling stations, and COVID-19,” noted the OAG in the press release.
The audit showed that overpayments to DARTS over a 12-year period (2012-2023) are estimated to be in the range of $230,000-$263,000. This estimation is based on an average of five years (2018-2023), through the 12-year period.
The audit also found that clear communication of designated “special events” was generally lacking and overall comprehension of “special events” was not prevalent.
The OAG made four recommendations to management to improve processes; management agreed with all four.
In a statement issued shortly after the findings were released, the city said it is committed to addressing the OAG’s findings and recommendations.
“The audit assessed the administration of City payments to DARTS, specifically, those logged as ‘Special Events’ as part of its contract with the City’s Accessible Transportation Services (ATS),” stated the city’s press release. Special events are trips where ATS staff have directed the contractor that no fare is to be charged to a DARTS customer, for example, for trips to Tiger-Cats games under the HSR Ticket to Ride program. ATS staff provide direction to the contractor for trips to be classified as Special Events both in the contract and on a case-by-case basis.
The city press release noted that the audit found there was “no evidence of intentional data manipulation”, and that it remains a priority for the City to ensure there are more rigorous controls in place for the program. This includes working with its contractor to strengthen the accuracy, transparency and reporting of the Special Events subsidy.
“The City is committed to working closely with DARTS to strengthen measures to deliver a more accountable and transparent Special Events subsidy,” said Maureen Cosyn Heath, director of the City of Hamilton Transit Division. “We thank the Auditor General for their comprehensive efforts to continue to identify improvements to City policies and programs and the Accessible Transportation Services team for their dedication to continued improvement.”
