Agenda - Wednesday, March 19, 2014 - Meeting Portal

Transcription

~ NOTICE OF MEETING ~
CAPITAL METROPOLITAN TRANSPORTATION AUTHORITY
BOARD OF DIRECTORS FINANCE, AUDIT AND ADMINISTRATION
COMMITTEE MEETING
2910 East Fifth Street Austin, TX 78702
~ AGENDA ~
Wednesday, March 19, 2014
I.
Public Comment:
II.
Consent Items
III.
Action Items:
1.
2.
3.
IV.
11:00 AM
Capital Metro Board Room
Approval of a resolution authorizing the President/CEO, or her designee, to
execute certain real estate agreements, under terms consistent with current
industry standards, including market rates, for transactions that have
insignificant long-term impact on the Authority and for amounts not to
exceed $150,000 per year per agreement, excluding the purchase and sale
or disposal of real property.
Approval of a resolution ratifying the execution of a lease for 1,022 square
feet of Administrative office space for a term not to exceed a base term of
18 months and one 6-month option in an aggregate amount not to exceed
$35,087.
Approval of a resolution approving amendment 5 to the (the “Plan”). Capital
Metropolitan Transportation Authority Retirement Plan for Administrative
Employees
Presentations:
1.
2.
3.
Internal Audit Report Presentation - Vehicle Maintenance & Oversight
Internal Audit Report Presentation - Bus Operations Contractor Payments
CFO Financial Report - January 2014
V.
Items for Future Discussion:
VI.
Adjournment
ADA Compliance
Reasonable modifications and equal access to communications are provided upon
request. Please call (512)389-7458 or email gina.estrada@capmetro.org if you need
more information.
Board of Directors
Page 1
Printed 3/17/2014
Finance, Audit and Administration CommitteeAgenda
March 19, 2014
BOARD OF DIRECTORS: Mayor Pro Tem Mike Martinez, chairperson; John Langmore, vice
chair; Frank Fernandez, board secretary; Council Member Chris Riley; Council Member David
Siebold; Beverly S. Silas; Ann M. Stafford and Norm Chafetz. Board Liaison: Gina Estrada
(512)389-7458, email gina.estrada@capmetro.org if you need more information.
The Board of Directors may go into closed session under the Texas Open Meetings Act.
In accordance with Texas Government Code, Section 551.071, consultation with
attorney for any legal issues, under Section 551.072 for real property issues; under
Section 551.074 for personnel matters, or under Section 551.076, for deliberation
regarding the deployment or implementation of security personnel or devices; arising
regarding any item listed on this agenda.
Board of Directors
Page 2
Printed 3/17/2014
3.1
Capital Metropolitan Transportation Authority
Board of Directors
MEETING DATE: 03/19/2014
(ID # 2745)
Real Estate Transaction Policy
SUBJECT: Approval of a resolution authorizing the President/CEO, or her designee, to
execute certain real estate agreements, under terms consistent with current industry
standards, including market rates, for transactions that have insignificant long-term
impact on the Authority and for amounts not to exceed $150,000 per year per
agreement, excluding the purchase and sale or disposal of real property.
FISCAL IMPACT: This action will require no direct funding.
.
STRATEGIC GOAL ALIGNMENT:
2. Improve Business Practices
STRATEGIC OBJECTIVE(S):
2.1 Strengthen the Financial Health of the Agency
EXPLANATION OF STRATEGIC ALIGNMENT: The use of the Railroad Right-of-Way
provides value to a using entity. Capital Metro should participate in the value created by
such use. Monitoring the safe use of the Railroad Right-of-Way imposes cost to Capital
Metro; such expenses should be reimbursed by a using entity.
BUSINESS CASE: Agreements relating to the use of Capital Metro Rail Right-of-Way
should reflect fees and other terms consistent with current industry standards, should be
consistent with mass transit use, and should comply with formal Board resolution.
COMMITTEE RECOMMENDATION: This agenda item was presented to and is
recommended for approval by the Finance Audit and Administration Committee on
March 19, 2014.
EXECUTIVE SUMMARY: It has been a long-established practice for the Board of
Directors to approve all real estate transactions of the Authority; however, this is not
necessary in all instances and is not required by either law or Board policy. Some real
estate transactions are operational and do not have a strategic value or policy
implications that would require approval by the Board of Directors; e.g., the lease of
temporary office space for additional contract staff. All strategic real estate transactions,
including all purchase and sale or disposition of real property, will continue to be
approved by formal action of the Board of Directors. In addition, any real estate
transactions in an amount that exceeds $150,000 per year or that could have a
significant long-term impact on the Authority should continue to receive approval by the
Board.
DBE PARTICIPATION: Does not apply.
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3.1
RESPONSIBLE DEPARTMENT: Real Estate & Asset Management
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3.1
RESOLUTION
OF THE
BOARD OF DIRECTORS
STATE OF TEXAS
COUNTY OF TRAVIS
RESOLUTION (ID # 2745)
Real Estate Transaction Policy
WHEREAS, the Capital Metropolitan Transportation Authority Board of Directors
and Capital Metro management endeavor to conduct operations in an efficient,
responsible and economical manner; and
recognizes the need to establish real estate matters and transactions that are
appropriate for approval by the Board of Directors; and
and Capital Metro management recognize the need to responsibly maximize revenue
from the use of owned assets, and such revenue should be consistent with current
industry standards.
NOW, THEREFORE, BE IT RESOLVED that the Capital Metropolitan
Transportation Authority Board of Directors authorizes the President/CEO or her
designee to execute certain real estate agreements under terms consistent with current
industry standards, including market rates, for transactions that have no significant
long-term impact on the Authority and for amounts not to exceed $150,000 per year per
agreement, excluding the purchase and sale or disposal of real property.
________________________
Secretary of the Board
Ann Stafford
Date: March 24, 2014
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3.2
Board of Directors
(ID # 2703)
Lease Space for IT Consultants
SUBJECT: Approval of a resolution ratifying the execution of a lease for 1,022 square
feet of Administrative office space for a term not to exceed a base term of 18 months
and one 6-month option in an aggregate amount not to exceed $35,087.
FISCAL IMPACT: Funding for this action is available in the FY2014 capital budget
.
2.1 Strengthen the Financial Health of the Agency
EXPLANATION OF STRATEGIC ALIGNMENT: The ability to responsibly react to
changing conditions in a timely manner furthers the best interests of the Agency.
BUSINESS CASE: Response to an Administration Space need dictated negotiation and
execution of a lease prior to a scheduled Board meeting.
COMMITTEE RECOMMENDATION: This agenda item was presented and is
recommended for approval by the Finance, Audit and Administration Committee on
March 19, 2014.
EXECUTIVE SUMMARY: Capital Metro has retained a contractor to implement
Microsoft Dynamics AX (“Project MAX”). For the expected 12+ months duration of this
contract, the space needed by this contractor exceeds the space that Capital Metro is
able to currently provide. The contract obligates Capital Metro to provide space directly
needed for the implementation of this contract. Efforts were pursued to secure the
required space via a leased facility on Thompson Lane, but these efforts did not
materialize. Acceptable space was identified at 600 Calles Street and a lease
negotiated for such space in late December. Although not a formal policy or other
requirement, it has been the practice to obtain formal Board approval for any real estate
lease transaction prior to the execution of such transaction. The contractor was
obligated to begin work in early January, necessitating execution of a lease before
Board approval.
PROCUREMENT: Real estate transactions are exempt from Capital Metro’s formal
procurement processes.
RESPONSIBLE DEPARTMENT: Real Estate & Asset Management
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3.2
RESOLUTION
OF THE
BOARD OF DIRECTORS
STATE OF TEXAS
COUNTY OF TRAVIS
Lease Space for IT Consultants
and Capital Metro management endeavor to conduct required operations in an efficient
and economical manner; and
WHEREAS, the Capital Metropolitan Transportation Authority board of directors
and Capital Metro management recognize the need to lease space to meet the needs of
the agency; and
WHEREAS, events evolved whereby the agency’s best business interests
required that new lease space be made available prior to an opportunity to obtain formal
Board approval for such lease; and
WHEREAS, such lease was executed prior to obtaining formal Board
authorization of such lease, to preserve an aggressive schedule for the implementation
of needed Information Technology upgrades and improvements.
NOW, THEREFORE, BE IT RESOLVED that the Capital Metropolitan
Transportation Authority Board of Directors ratifies the execution of a lease for 1,022
square feet of Administrative space at 600 Calles Street for a term not to exceed a base
term of 18 months and one 6-month option in an aggregate amount not to exceed
$35,087.
________________________
Ann Stafford
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3.3
Board of Directors
(ID # 2758)
Amendment to the Capital Metropolitan Trans Authority Retirement Plan For
Administrative Employees
SUBJECT: Approval of a resolution approving amendment 5 to the (the “Plan”). Capital
Metropolitan Transportation Authority Retirement Plan for Administrative Employees
FISCAL IMPACT: This action does not have a fiscal impact for FY 2014. The fiscal
impact for future fiscal years will be budgeted based on the annual required contribution
to the Plan as determined by the annual actuarial valuation. The total fiscal impact is
estimated to be between no additional cost and a total of lifetime cost of up to $172,158
depending on the actual termination date of the Employment Agreement with the
President/CEO.
.
2.2 Increase Accountability
EXPLANATION OF STRATEGIC ALIGNMENT: The recommended Plan amendment
is consistent the board’s desire to extend the President/CEO Employment Agreement
through October 31, 2017, in order to provide retention incentives to Ms. Watson for
continuation of employment and dedication to Capital Metro’s long-term goals.
COMMITTEE RECOMMENDATION: This agenda item was presented and is
recommended for approval by the Finance, Audit and Administration Committee on
March 19, 2014.
EXECUTIVE SUMMARY: On December 11, 2013, the board authorized the negotiation
and execution of an extension and amendment to the President/CEO Employment
Agreement. The Agreement provides for granting of additional Credited Service under
the Plan in the event that the board elects to terminate the employment agreement with
the President/Chief Executive Officer, for a reason other than cause earlier than the
date on which the President/CEO reaches the age of 65.
Capital Metro’s Committee for the Plan has adopted an amendment to the Plan
providing for the granting of such additional service. Approval by the board is required
in order to finalize the amendment.
There will be no additional cost to the Plan if the President/CEO remains employed until
age 65 or if her employment agreement is terminated by her or for cause. The range of
additional potential cost is based upon the difference between the retirement benefit
that she would receive at each annual age increment before age 65 without the
additional credited service and the retirement benefit with the additional service credit.
The table below shows the estimated total additional cost at each age.
Termination Age
Estimated Total Additional Cost
Over President/CEO Lifetime
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3.3
65
$
63
62
0
64
$ 125,003
$ 172,158
$ 67,868
RESPONSIBLE DEPARTMENT: Human Resources
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3.3
RESOLUTION
OF THE
BOARD OF DIRECTORS
STATE OF TEXAS
COUNTY OF TRAVIS
Amendment to the Capital Metropolitan Trans Authority Retirement Plan For
Administrative Employees
authorized the negotiation and execution of an extension and amendment to the
President/CEO Employment Agreement on December 11, 2013 and
WHEREAS, the board desires to amend the Capital Metropolitan Transportation
Authority Retirement Plan for Administrative Employees to provide the President/Chief
Executive Officer with additional Credited Service under the Plan in the event that the
board elects to terminate its employment agreement with the President/Chief Executive
Officer for a reason other than cause earlier than the date on which the General
Manager and President/Chief Executive Officer reaches the age of 65;
NOW, THEREFORE, BE IT RESOLVED by the Capital Metropolitan
Transportation Authority board of directors that it approves an amendment to the Plan
stating that in the event the President/Chief Executive Officer’s Employment Severance
Date occurs between March 24, 2014 and October 31, 2017 as a result of the board’s
termination of her employment agreement for a reason other than cause (as defined in
such agreement), she will be credited with the Credited Service that would have been
credited had her employment severance date occurred on the date on which she turned
65.
________________________
Ann Stafford
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4.1
Capital Metropolitan Transportation Authority MEETING DATE: 03/19/2014
Board of Directors
(ID # 2753)
Internal Audit Report Presentation - Vehicle
Maintenance & Oversight
TITLE: Internal Audit Report Presentation - Vehicle Maintenance & Oversight
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EXECUTIVE
SUMMARY
VEHICLE MAINTENANCE &
OVERSIGHT AUDIT #13-14
Are contractors performing required maintenance
of Authority owned fixed route and paratransit
vehicles timely and in accordance with
contractual requirements?
While day-to-day vehicle
maintenance is outsourced to
contractors, Capital Metro
remains accountable for
maintaining a “state of good
repair” for about 500 fixed route
and paratransit vehicles.
MANAGEMENT HAS
AGREED TO:
 Align the contractual and
in-practice definitions of a
road call by March 2014.
Develop business
process(es) to ensure
accuracy of reported
service metrics, including
Miles Between Road Calls
(MBRC) metric by
December 2014.

First Transit calendar-based PMIs were timely but 40%
of mileage-based PMIs were late. Only 10% of VMQA’s
quality inspections were rated “acceptable.” First
Transit’s performance is important given they will
service both MetroRapid as well as the vehicles which
are transitioning from Veolia.

46% of Veolia’s PMIs were reported as untimely by
VMQA. Only 4% of Veolia’s quality inspections were
rated as “acceptable” by VMQA. This contract is
currently winding down and will not be renewed.

MV Transportation completed both calendar- and
mileage-based PMIs timely. All VMQA inspections of
MV were rated “good” or “acceptable.”
Does the Authority’s quality assurance oversight
effectively identify, communicate and resolve
maintenance deficiencies to help ensure the
safety and reliability of revenue vehicles?
 Work with contractors to
identify minimum reporting
requirements regarding
failure and defect trend
analysis. Revised
“predictive maintenance”
reports will be available by
July 2014.
 Perform quarterly reviews
of modifications to Spear
work order templates to
ensure acceptability and
to verify if contractor
users’ continued access to
the system is acceptable.
 Co-locate VMQA
inspectors on site with
contractors one day per
week, as part of a 90-day
pilot project.

McDonald Transit has generally met contractual
standards for timely preventative maintenance
inspections (PMIs). However, only 47% of McDonald’s
quality inspections were rated acceptable or higher by
Vehicle Maintenance Quality Assurance (VMQA).

PMI timeliness monitoring is effective when contractors
use Spear, Capital Metro’s asset management system.
Effective November 2013, all contractors except Veolia
use Spear to manage maintenance tasks.

No late repairs or “out of service” contract penalties
were assessed during the January-September 2013
audit period. A corrective action plan to calculate and
assess past due penalties for First Transit and Veolia
was submitted to the Deputy CEO/COO prior to the
audit. Maintenance related contractual disincentives
were not audited due to a lack of supporting
documentation.

VMQA’s monitoring approach and frequencies are
evolving to address known risks. Data analytics, when
combined with predictive maintenance, can also be
used to focus contractor and BPS resources on high
risk areas and improve maintenance outcomes.
Other observations:
 Modify contracts, as
needed, to clarify and
increase consistency
among contractors.


Miles Between Road Calls (MBRC) is understated if the
contractual definition of a road call is followed. The
historical definition currently in use excludes electronics
and other incidents in which the reported problem could
not be replicated. First Transit and Veolia road call
counts are supplied by the contractors and are not
independently validated.

Controls over contractors’ access and updates to the
Spear asset management system were not sufficient to
prevent unauthorized systems modifications.

SIGNIFICANT IMPROVEMENTS NEEDED

ACCEPTABLE CONDITIONS
 SOME IMPROVEMENTS NEEDED
INTERNAL AUDIT | MARCH 19, 2014
CONFIDENTIAL DRAFT
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Attachment: Vehicle Maintenance Executive Summary FINAL - upload for FAA meeting on 031914 (2753 : Internal Audit Report Presentation - Vehicle
4.1.a
Internal Audit Report # 13-14
Vehicle Maintenance & Oversight Audit – CONFIDENTIAL DRAFT
March 19, 2014
Attachment: Vehicle Maintenance audit DRAFT FINAL report - upload for FAA meeting on 031914 (2753 : Internal Audit Report Presentation -
4.1.b
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4.1.b
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Table of Contents
Introduction/Background ................................................................................................................................................ 1
Audit Scope & Objectives ................................................................................................................................................ 1
Engagement Opinion ........................................................................................................................................................ 2
Table 1: Summary of contractor and quality assurance assessments ............................................................... 3
Issues and Action Plans
Overarching:
Issue 1: Obtain periodic reports on contractors’ predictive maintenance programs. .................................. 6
Issue 2: Align contractual and in-practice definition(s) of a “road call.” Ensure completeness of
road call incident data............................................................................................................................... 8
Issue 3: Implement controls over changes to Spear templates. .................................................................... 10
Issue 4: Implement procedures for confirming Spear contractor users’ access. Limit use of
generic system administration accounts. ............................................................................................. 11
Contractor Specific:
Issue 5: Revise required PM interval for McDonald: HVAC & ADA components. ................................ 12
Issue 6: Consider modifying paratransit contract to increase consistency. ................................................. 12
Issue 7: Require update to First Transit Vehicle Maintenance Plan. ............................................................ 13
Other Issues Noted:
Consider monitoring Scheduled vs. Unscheduled Maintenance Trends. ..................................................... 14
Validate contractors’ access to Capital Metro systems. ................................................................................... 15
Closing/Report Acceptance ........................................................................................................................................... 16
Client Response Memo .................................................................................................................................................... 17
Appendix: Audit Methodology....................................................................................................................................... 18
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4.1.b
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4.1.b
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Internal Audit Report #13-14
Vehicle Maintenance & Oversight Audit
March 19, 2014
CONFIDENTIAL DRAFT
Introduction / Background
Since outsourcing operations, maintenance and repair of the Capital Metro fleet became the
responsibility of four contractors, McDonald Transit, First Transit, Veolia (for the 383 fixed route
vehicles) and MV Transportation for the paratransit fleet (109 vehicles). Effective preventive
maintenance (PM) helps ensure that vehicles are in a “state of good repair” (SOGR) and that they reach
their useful service life as defined by the FTA.
Underscoring the importance of PM activities, one of the Authority’s strategic tasks is to “maintain
assets to the manufacturers’ standards to ensure they are fully functional during their normal life
expectancy.” The Bus & Paratransit Services (BPS) Vehicle Maintenance Quality Assurance (VMQA)
oversight program is tasked with monitoring each vendor’s PM Programs to ensure they are effective
and operating as intended. VMQA’s staffing consists of three quality control specialists and the
Coordinator, Quality Control and VM Engineering. They are supported by two Spear1 system
business analysts with overall direction provided by the BPS Senior Contract Performance Manager.
Audit Scope & Objectives
The scope of this project focused on maintenance of Capital Metro’s fixed-route and paratransit
revenue fleets, and the plans and processes to achieve and maintain a SOGR for these vehicles. It
included contractor activities for the four primary revenue operations contractors (McDonald, MV
Transportation, First Transit and Veolia) as well as the Authority’s oversight and quality assurance of
contractor performance.
The audit scope included only a limited assessment of facility and equipment maintenance
performed by Veolia. Vehicle maintenance requirements and the related vehicle maintenance plan
were never developed for Veolia. As a result, there is no evaluation criterion to audit. Furthermore,
the Veolia contract will not be renewed following its expiration in September 2014.
Based upon this assessment, the audit will not include vehicle maintenance performed by LeFleur, as
they operate and maintain contractor-owned vehicles. Also, this contract will terminate in five
months, so any future operational risk and potential benefits of an audit are both reduced.
Likewise, the audit will not address vehicle warranty administration or controls over vehicle parts
inventory, since these areas present no or very little financial risk to the Authority (given the
outsourced business environment). The audit scope will not include an assessment of non-revenue
vehicle maintenance.
Spear 4i is the Authority’s asset management system for tracking maintenance records pertaining to vehicles,
equipment and related components.
1
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4.1.b
4.1.b
The two primary objectives of this audit were to evaluate the following:
 Are contractors performing required maintenance of Authority owned fixed route and paratransit revenue
vehicles timely and in accordance with contractual requirements?
 Does the Authority’s quality assurance oversight effectively identify, communicate and resolve maintenance
deficiencies to help ensure the safety and reliability of bus revenue vehicles?
For details of the audit procedures conducted, see Appendix A: Audit Methodology on page 18.
Engagement Opinion
A summary of Internal Audit’s assessment of the contractor’s vehicle maintenance programs as well
as BPS (QA) oversight appears in Table 1 on the following page.
 Are contractors performing required maintenance of Authority owned fixed route and paratransit revenue
vehicles timely and in accordance with contractual requirements?
Preventive maintenance performance varied based upon the procedure and the contractor involved.
To provide perspective, the Authority’s contractual standards require that 100% of all preventive
maintenance inspection (PMI) types be performed on time. For instance, mileage-based PMI’s are
considered late if performed one mile beyond the interval assigned. However, a commonly accepted
best practice goal is to perform 95%-98% of all PMI’s timely.2 Whereas, for purposes of assessing
compliance, the FTA considers an 80% on-time completion rate as satisfactory. When compared to
these standards, most contractors performed satisfactorily. For a summary of all contractor results,
see Table 1 on the following page.
Maintenance Timeliness: McDonald (fixed-route) and MV (paratransit vehicles) have generally
met contractual standards for timely preventive maintenance inspections.3 However, HVAC and
ADA component PMI’s were scheduled and performed by McDonald semi-annually, rather than
every 24,000 miles as required by their contract. After the service transitioned from StarTran, Inc.
this practice was permitted to continue with McDonald. Thus, the McDonald contract will be
modified by June 2014 to formalize this variation.
2
Benchmarking Fleet Management, Report #CTS-04-10, University of Minnesota Center for Transportation Studies, July
2003, p. 54. For example, the cities of Austin, TX, Seattle, WA and Springfield, IL all use a 95% benchmark.
3 For mileage-based PMI’s, McDonald completed 99.5% timely (1400 of 1407) and MV completed 100% timely. For
time-based PMI’s, McDonald completed 99.5% (2,279 of 2,291) and MV completed 99.5% timely (424 of 426).
CAPITAL METRO VEHICLE MAINTENANCE AUDIT #13-14—PAGE 2 OF 18
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MARCH 19, 2014
4.1.b
MARCH 19, 2014
McDonald
MV Transit
First Transit
Veolia
Acceptable
Acceptable
Opportunity
N/A
Acceptable
Opportunity
Acceptable
Opportunity
Acceptable
Acceptable
Unacceptable
Subset: Fixed –route HVAC &
ADA equipment PMI’s
Opportunity
N/A
Unacceptable
Time-based PM’s timeliness
Acceptable
Acceptable
Acceptable
Opportunity
Acceptable
Unacceptable
Unacceptable
Review of mileage-based PMI’S
Acceptable
Acceptable
Review of time-based PMI’s
Acceptable
Acceptable
Assessing PMI performance quality
Reporting MBRC
Assess other maintenance-related
9
contract disincentives
Strengthen controls over
maintenance and update of Spear
PMI checklists
Acceptable
Opportunity
Acceptable
Opportunity
Opportunity
Opportunity
Pre-existing CAP –
Not re-tested
Not re-tested
Acceptable
Opportunity
Not re-tested
Not re-tested
Not re-tested
Acceptable
Opportunity
Not re-tested
Opportunity
Opportunity
Opportunity
N/A
Issue 3
Issue 4
Perform predictive maintenance
Opportunity
Opportunity
Opportunity
N/A –Contract
winding down
Issue 1
Contractor
Phase
Plan VM Program
Execute VM Program
- Contractors
Attributes
Contractor VM Plan submitted &
approved
Defined contractual performance
expectations / KPIs
Mileage-based PM’s timeliness
Quality of PMI performance
Monitor Contractor
Performance &
Compliance
- BPS QA
Maintain & Improve
VM Program
Report Detail
5
8
4
6
7
Known issue /
not tested
Known issue /
not tested
Known issue /
not tested
First Transit
Issue 7
MV
Issue 6
N/A
McDonald
Issue 5
N/A
Engagement
Opinion
Engagement
Opinion
Engagement
Opinion
N/A
Issue 2
Engagement
Opinion
An error in the Veolia disincentives table rates and previous disincentive assessed is being corrected via contract modification. No further action will be required.
When evaluating PMI timeliness, Internal Audit considered a contractor’s performance “acceptable” when achieving a best practice standard of 95% or better.
6 Unacceptable conditions were caused by vehicle mileage which was inaccurately posted in DataStream, First Transit’s previous vehicle maintenance system. When the contractor transitioned to
Spear in November 2013, the mileage related errors should not recur.
7 First Transit corrected late HVAC and ADA equipment PMI’s during the audit and no further corrective action plans were required.
8 For the period January-September 2013, the VMQA’s “PMI Quality Audit” scores averaged from 4% “Acceptable” for Veolia, 10% for First Transit, 47% for McDonald, and 100% for MV.
9 Supporting documentation for VMQA’s evaluations of other maintenance related contractual criteria, such as days to complete major repairs and running repairs and out of service maximums,
was not available. For this reason, Internal Audit was unable to verify whether or not these contractual disincentives should have been assessed.
4
5
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TABLE 1
4.1.b
First Transit’s calendar-based PMIs have generally been completed on time. However, they did not
complete mileage-based PMI’s timely, a condition attributable to First Transit’s reliance on
inaccurate vehicle mileage data which was posted in their previous vehicle maintenance system.10
This condition was resolved in November 2013 when they began using Spear to manage the timing
of PMI’s.11 First Transit had also not performed HVAC and ADA component PMI’s to contract
standards during the January - September 2013 audit period. Catch-up PMI’s for ADA equipment
PMI’s were performed fleet-wide in First Transit vehicles beginning in October 2013 and HVAC
PMI’s were revised to align with the contract mileage-based standard during the audit.
Veolia’s PMI’s were not separately evaluated by Internal Audit. A status summary of the Veolia
fleet’s PMI’s prepared prior to the audit showed that 23 of 50 vehicles (46%) contained a past due
PMI requirement (e.g. HVAC, body inspection, etc.) that is considered grounds for removing the
vehicle from service. Given these results, the contractor and oversight controls to ensure timely
PMIs were not in place or not working effectively so Internal Audit did not perform additional test
procedures.
Maintenance Quality: The quality of the contractors’ PM work is evaluated monthly by the BPS
VMQA staff. For the audit period January 2013 - September 2013, one contractor, MV, has
consistently scored “good” or “acceptable”. Only 47% of the McDonald audits, 10% of First
Transit audits, and 4% of Veolia’s reviews were rated at this level. The remainder was designated as
either “marginal” or “unacceptable.” The assessed quality of the contractors’ maintenance programs
is mirrored in the operational performance measure Miles Between Road Calls (MBRC), e.g., in
FY2013 both McDonald and First Transit averaged less than 5,500 miles between road calls, the
annual performance goal.12 However, since hiring a new Sr. Director of Maintenance in August
2013, First Transit has experienced an 80 percent improvement in the MBRC measure.
 Does the Authority’s quality assurance oversight effectively identify, communicate, and resolve maintenance
deficiencies to help ensure the safety and reliability of fixed-route and paratransit revenue vehicles?
Current Monitoring Efforts & Initiatives: The BPS VMQA team performs various quality audits
of the contractors’ vehicle maintenance performance. As discussed above and reflected in Table 1,
the performance of First Transit’s and Veolia’s maintenance, in particular, has consistently fallen
below Capital Metro’s standards. To address this, the BPS VMQA has met with the contractors and
recently adjusted its monitoring methods. For example, beginning in October 2013 at First Transit,
random file audits of a single vehicle’s most recent PMI were replaced by a new “Monthly Routine
Maintenance Review” (MRMA) which reviewed all maintenance work performed between January
2012 - October 2013 for multiple (3) sampled vehicles. Just recently, QA added “Internal Controls”
reviews to reinforce to contractor management the minimum expected performance on the PMIs;
i.e., these reviews are intended to demonstrate how Capital Metro expects the contractor to monitor
its own performance. First Transit’s performance is especially important given they will be servicing
the MetroRapid fleet beginning in 2014, as well as some additional vehicles which are transitioning
from Veolia.
In a statistical sample of 32 PMI inspections that were validated using Spear mileage records, First Transit completed
40.6% untimely. In contrast, only 2.7% of First Transit’s calendar-based PMI’s (1 of 37) were untimely.
11 First Transit will continue to utilize its own vehicle maintenance system (DataStream), for parts inventories due to its
own corporate purchasing and reporting requirements.
12 Veolia’s end of year contractor “report card” reflected an average of 5,508 miles between road calls. However, the
contractor’s data is not independently verified and, when evaluating a test month (August 2013) eight days of data were
missing from the contractor’s records.
10
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4.1.b
One of VMQA’s primary goals has been ensuring the proper maintenance of the Veolia vehicle fleet
prior to transitioning the fleet to First Transit and McDonald. To address Veolia’s performance
deficiencies, BPS QA temporarily increased the number of PMI audits, e.g., instead of the typical 2-3
audits each month, in October, there were six. Like First Transit, they are also using MRMA
reviews to supplement the existing PMI audits. Lastly, in an effort to improve communications and
support, a pilot project to locate BPS VMQA staff on-site with the contractors one day per week
will begin in February 2014. VMQA staff will rotate among the contractors to ensure that each
member of the VMQA team is familiar with all of the contractors.
Use Data Analytics to Drive Improvements: Opportunities exist to further improve the
effectiveness of the BPS QA monitoring program. As discussed above, FY2013 contractor
monitoring results (particularly regarding maintenance quality) illustrate the need to do further
refinements. In particular, data analytics, when combined with predictive maintenance, can be used
to target contractor and BPS resources on high risk areas and improve maintenance outcomes.
An effective predictive maintenance program identifies which vehicles (or parts) are trouble prone
and which are reliable. Campaigns to address common defects had been used in the past by
StarTran, Inc. to improve the operational maintenance performance (e.g., retrofitting aging fans and
replacing problematic hoses). However, since management over vehicle maintenance has been
assumed by contracted services providers, regular, systematic analysis and reporting on failure trends
and repetitive repairs has not been performed. Just recently, an analysis of recurring “high severity”
exceptions was initiated. While raw data has been gathered for all four contractors, no data has yet
been analyzed. In addition, VMQA staff will work with each contractor to identify minimum
reporting requirements regarding failure and defect trend analysis. Revised reports should be in place
no later than July 1, 2014.
Monitor Maintenance Performance Measures and Financial Incentives: Another aspect of
BPS QA monitoring is assessing financial incentives/disincentives for contractor performance. For
contractors utilizing the Spear, monitoring for PMI timeliness has generally been effective with no
material differences noted.13 To incentivize timely work and consistency among contractors, an
upcoming modification to the First Transit contract will incorporate the same disincentive for late
PMIs that is currently in place for McDonald. A similar provision will be added to the paratransit
contract when it is rebid in the future.
Internal Audit did not ascertain whether or not (dis)incentives for MBRC were properly assessed
because the contractual and working definitions of a “road call” are different. When using the
working definition, the reported road call counts exclude 60% and 38% of all incidents which meet
the contractual definition of a road call at McDonald and MV respectively. Among the excluded
incidents are those involving electronics components (such as fareboxes, destination signs, and radio
and annunciation systems) and generally those for which the mechanic was unable to replicate the
problem when diagnosing the road call cause. Also, for First Transit and Veolia, the road call counts
used to calculate MBRC are taken from a monthly summary provided by the contractors without
any independent verification. Reviews of call logs maintained by each of these contractors also
show a higher number of eligible incidents than what the contractors have reported. Combined,
these conditions result in a higher road call count and reduce the reported MBRC ratio, a key
Monitoring practices for assessing timeliness of First Transit’s PMIs were not evaluated by Internal Audit as these
changed in November 2013 when First Transit transitioned to the Spear. Moving forward, monitoring processes for
First Transit, McDonald, and MV will be consistent.
13
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4.1.b
operations and customer service metric. To address this, BPS will align the contractual and “in
practice” definitions of a mechanical road call and modify the contract, if needed. Moving forward,
as the OrbCad (Computer Aided Dispatch and Automatic Vehicle Location) System is implemented,
business process(es) will be implemented using OrbCad data to ensure the accurate reporting of
service metrics, including MBRC.
Disincentives for other requirements such as days to complete major repairs, running repairs, out of
service maximums were not audited due to a lack of supporting documentation. Moving forward,
BPS QA has committed to consistently maintain evidence to support disincentive assessments (or
the lack thereof).14 In addition, a corrective action plan to calculate and assess any past due penalties
for First Transit and Veolia had been submitted to the Deputy CEO/COO prior to the audit and
corrective actions are currently in process.
Issues and Action Plans
The following issues are presented to assist Capital Metro management in reducing business risk and
strengthening internal controls. Action Plans represent a team effort between Capital Metro
management and Internal Audit to develop cost effective approaches to reduce business risk.
Issue 1: Obtain periodic reports on contractors’ predictive maintenance
programs.
OBSERVATIONS:

The approved VM Plans submitted by McDonald, MV, and First Transit15 each discuss
how the contractor approaches “predictive maintenance.” (See excerpts in Table 2.)
Typically, a predictive maintenance program consists of three basic steps:
o Collect vehicle repair data
o Analyze (collected data); and
o Correct, repair, or replace selected component(s).

To date, formal contractor analysis and reporting on failure trends and repetitive repairs
has not been performed. There is evidence, however, that this type of activity has taken
place. For instance, Spear reflects various “campaigns” for both McDonald and MV
Transportation.16 Examples include retrofitting aging fans and front brakes hoses on the
MV fleet, and replacing problematic hoses and troubleshooting a solution for loose
switches to activate wheelchair ramp control switch / “flasher switch” on the McDonald
MCI fleet.
No penalties for late repairs or “out of service” events were assessed against any contractor during the audit period
January - September 2013.
15 Veolia does not have VM Plan and the contract is being wound down, and the current BPS focus on Veolia’s PMI
audits, it is unrealistic to expect the same level of performance in this area.
16 Spear Campaigns provide the means to generate common scopes of work that apply to a collection of vehicles. All
work performed under a Campaign is tracked and accounted for under the Campaign, Project, and Activity umbrella, as
opposed to the regular operational flow of work that stems from programmed maintenance work or ad hoc work.
14
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4.1.b
Effective PM programs evolve as new information is obtained and operating conditions
and fleet equipment change. According to the FTA, federal grantees’ senior
management should be well informed on matters pertaining to preventive maintenance
of all FTA funded assets. The presence of regularly recurring reports [emphasis added]
with specific performance measures tied to the grantee’s written maintenance plans,
including manufacturer’s recommendations, and other actionable management data,
indicates that senior management is monitoring maintenance activities. 17 Since the VM
Plans are each an approved contractor deliverable, holding the contractors accountable
for requiring regular reporting on their predictive maintenance activities is within the
scope of their existing contractual responsibilities.
TABLE 2
McDonald Transit - Back-to-the-Basics Maintenance Approach

To stress the need for adhering to the basic maintenance principles as a basis for
improving reliability and performance. The TRAVIS TRANSIT MANAGEMENT will
emphasize the use of performance management systems together with fluid usage
controls, failure investigation, oil analysis, and the continued training of personnel.

Scheduled Component Change-out Plan - To reduce the number of in-service failures
and minimize disruption of service to customers. The TRAVIS TRANSIT MANAGEMENT
will focus on replacing components prior to failure.

Predictive Maintenance Component Change-outs are implemented to replace components
prior to failure. This reduces the number of in-service failures and minimizes the disruption
of service to customers. The change-out program allows for more consistent budgeting of
parts and labor resources and to prevent catastrophic failures.
MV Transportation - Unscheduled Vehicle Maintenance

In excess of 80% of all maintenance is scheduled. Excessive unscheduled maintenance is
inefficient and often the result of component failure. Trend analysis is performed to track
this critical statistic and take proactive corrective action.
First Transit - Maintenance Information System and Materials MIS

All road calls are also entered into the web site database. Reports can be generated from
the database that will spot problematic systems, repeat repairs, problem drivers, problem
vehicles and miles between road calls for each vehicle.
BUSINESS RISK/IMPACT:

An effective predictive maintenance program identifies which vehicles (or parts) are
trouble prone and which are reliable. A vehicle maintenance function’s ability to
anticipate repairs and initiate activities that prevent mechanical failures is improved.

Increasing the reliability of the fleet translates into an overall improvement in our
customers’ riding experience.

Predictive maintenance helps to maintain or improve the Authority’s rolling stock
SOGR.
ACTION PLAN:
(Bus & Paratransit Services: Senior Contract Performance Manager, Maintenance - Carl Woodby;
Coordinator, Quality Assurance - Andrew Murphy)
17
Federal Transit Administration 2013 Triennial Review Workshop Workbook available at FTA Triennial.
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1. Define expected deliverables for contractor defect/failure trend analysis and
reporting in compliance with the approved plans, e.g., quarterly analysis/report. BPS
QA staff will meet with each contractor to identify a mutually agreeable schedule of reports
to identify compliance with their maintenance plan. A final list of reports to be received will
be completed by May 1, 2014 with the first reports due June 1, 2014 (if monthly) or July 1,
2014 (if quarterly).
Issue 2: Align contractual and in-practice definition(s) of a “road call.” Ensure
completeness of road call incident data.
OBSERVATIONS:

The reported performance measure “Miles Between Road Calls” (MBRC) is reduced
when calculated using the contractual definitions of a “road call,” as shown in Table 3.
TABLE 3
McDonald - Road calls are defined as anytime that a bus cannot continue in service
and/or a mechanic is sent to the bus or the bus is sent to a mechanic or changed out;
regardless if revenue service was missed or not. [Auditor Note: Only the McDonald
contract classifies a vehicle “change out” as a road call.]
First Transit - Road calls are defined as anytime that a bus cannot continue in service
and/or a mechanic is sent to the bus or the bus is sent to a mechanic.
Veolia - Road calls are defined as anytime that a bus cannot continue in service and/or
a mechanic is sent to the bus or the bus is sent to a mechanic.
MV - Any mechanical failure for which that a bus cannot continue in service; a
mechanic is sent to the bus; and/or the bus is sent to a mechanic - regardless of
whether service was missed.
The monthly Operations Report MBRC KPI includes only mechanical road calls, e.g.,
those that are caused by a “maintenance related cause”. The reported measure has, in
practice, excluded malfunctions of electronics systems including fareboxes, destination
signs, and annunciation systems, as well as events pertaining to tires, fuel, and an
unspecified “other.” For example, during January - September 2013, these excluded
events averaged 60% of all dispatch calls for McDonald and 40% for MV.18 While these
events by themselves do not always meet the contractual definition of a road call, if, “a
mechanic is sent to the bus or the bus is sent to a mechanic [or changed out]” then it
should be counted as a road call if adhering to the contractual definition.
In addition, reported MBRC includes only road calls where a mechanic was able to fully
diagnose and repair a mechanical component that directly attributed to the failure.
Events for which a mechanic is (1) unable to duplicate the problem, (2) does not
perform any repairs, and/or (3) has not seen a clear repetitive pattern have been
excluded from road call totals.
Monthly Report of Vehicle and Building Maintenance Performed, prepared by BPS QA. Because they use Spear, nonmechanical road call events have only been tracked and reported for McDonald and MV. Similar figures have not been
reported for First Transit and Veolia.
18
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Since the road call count is derived from each contractor’s vehicle maintenance system
(i.e., Spear for McDonald, MV and now also for First Transit), incomplete road call data
within Spear can cause road call counts to be understated, and reported MBRC to be
overstated. While VMQA staff review McDonald’s Spear incidents to ensure all
qualifying events are counted as a road call, similar reviews have not been performed for
MV, First Transit, and Veolia.19

At Capital Metro, MBRC is included as part of the “customer satisfaction” index.
However, in practice, the reported MBRC may not reflect all events which could
negatively impact a customer’s riding experience. According to the Transit Cooperative
Research Program (TCRP), the term “road call” stems from the practice of dispatching a
service vehicle to repair or retrieve a vehicle on the road. On the other hand, a vehicle
may encounter a delay caused by a malfunction but may be able to continue service,
hence the term “service interruption,” a customer-focused rather than vehicle-focused
metric. In any case, these two terms are not well defined or synonymous although many
agencies use them interchangeably. Per the TCRP, a road call definition which is
commonly accepted across the industry does not exist.

Inconsistencies in contractual definitions of road calls among operations contractors
make fair comparisons of contractor performance difficult as well as create imbalanced
penalty assessments.
ACTION PLANS:
(Bus & Paratransit Services: Vice President – Dottie Watkins, Sr. Contract Performance Manager,
Maintenance – Carl Woodby, Quality Control Specialist, Maintenance – Terry Ermis; Contracts &
Procurement: Director – Earl Atkinson)
2a. Align the contractual and “in-practice” definitions of a “mechanical road call.” If
needed, execute a contract modification. By March 15, 2014, the Sr. Contract
Performance Manager will document the definition that is being used for a “mechanical road
call” which differentiates between mechanical and other types of service interruptions. The
revised definition will be supplied to Contracts & Procurement to modify contract language,
as needed.
2b. Ensure completeness of road call incident data. The effort to include all road calls
into the reporting data is an ongoing process. The Sr. Contract Performance Manager has
been working with First Transit, as they have transitioned their business process starting in
December 2013, to using Spear to accurately reflect road calls. VMQA also began, in
McDonald utilizes a call log system, CMRS, which automatically converts most, but not all, mechanical related
dispatch call incidents into Spear work orders. The MV fleet’s OrbCad system generates electronics related incidents
without automatically creating a related Spear work order. Since 2011, over 8,300 electronics “incidents” were created in
Spear from the OrbCad interface; of these, only 29 were linked to corresponding “work order” in Spear. (Note: A work
order may exist, but there is not an efficient way to confirm its existence. It is unknown how many mechanical incidents
exist within OrbCad that have not been carried over into Spear.) First Transit and Veolia use separate call logs that do
not interface with Spear. Veolia’s August 2013 call log omitted eight days for which some activity would have been
anticipated (both road calls and non-road calls alike). These conditions suggest that the actual road call counts may be
higher than can be assessed with available information.
19
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January 2014, to use additional CMTA Dispatch records to verify service interruptions for
MV. By December 2014, OrbCad will be installed in all fleet vehicles to allow for consistent
incident management processes across contractors and modes (for both bus and paratransit
services). OrbCad will serve as the data source for service incidents, including mechanical
failures. As each of the service providers implement this technology, the Vice President, Bus
and Paratransit Services will ensure that complementary business process(es) are in place for
reviewing incidents from OrbCad to ensure the accurate reporting of service metrics,
including MBRC.
Issue 3: Implement controls over changes to Spear templates.
OBSERVATIONS:

The contractors’ vehicle maintenance personnel are able to modify Spear “Work Order
Templates.” (A Spear work order template defines what is involved in a typical
maintenance job, including the scope, labor, and parts.) At present, a formal process is
not in place to review template changes to ensure that they are acceptable.

For an asset management system to be useful, pertinent accurate information about
assets and maintenance activities must be consistently updated. Incomplete (or
inaccurate/unauthorized) data can nullify the program’s intended benefits. Ultimately,
while contractors are responsible for performing day-to-day vehicle maintenance, Capital
Metro is accountable for ensuring the vehicle maintenance program is effective and
operating as intended. Defined operating procedures for adding and modifying work
templates help ensure the integrity and usefulness of Spear asset management program
over time.
ACTION PLAN:
(Bus & Paratransit Services: Quality Control Specialist, Maintenance – Terry Ermis)
3. Ensure updates to Spear work templates are authorized. The Spear System
Administrator will generate and submit for review a quarterly report on modified Work
Order Templates. The Coordinator VMQA will review the report and, as needed, inquire or
investigate to ascertain the validity of questioned changes. The first quarterly review will be
generated by March 31, 2014.
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Issue 4: Implement procedures for confirming Spear contractor users’ access.
Limit use of generic system administration accounts.
OBSERVATIONS:

Periodic reviews of existing Spear users are based upon a list of active Capital Metro
employees and do not provide confirmations on current contract employees. The last
audit of active Spear user accounts (April 2013) did not include a separate review by
contractor management to ensure that contract employees’ access is appropriate and
supported by a valid business need. Periodic access controls must be capable of
identifying unauthorized user accounts when they exist on the system.

The “SPEARMGR” and “SPEARADMIN” are powerful system roles that have “access
to all.” During January - September 2013, they have been used over 2,700 and 887
times, respectively. Per the BPS Business System Analyst, the SPEARMGR account is
used by the Spear Interface Manager process which runs “24/7”; as a result, there are
many logins. The SPEARADMIN role is used to make system configuration changes.
However, some of these changes can be made using a user specific login account. It is a
best practice to minimize administrative privileges and only use administrative accounts
when they are absolutely required/tasks cannot be performed while using a unique user
ID.

If access to systems is not supported by a valid, business need, the risk for unauthorized
modifications, loss of data, and/or distribution of sensitive data is increased.

Accessing systems under a user specific login increases transparency, accountability and
creates a viable audit trail of system changes.
ACTION PLANS:
(Bus & Paratransit Services: Quality Control Specialist, Maintenance – Terry Ermis, Business Systems
Analyst II, Maintenance – Liana Chelaru)
4a. Confirm contractors’ staff access to Spear is valid. The Quality Control Specialist,
Maintenance will, on a quarterly basis, require each contractor’s senior maintenance
management person to validate their users of Spear. An initial review was completed in
January 2014 and the next regular quarterly review will be performed in April 2014.
4b. Restrict, as much as possible, use of SPEARADMIN and SPEARMGR roles. The
BPS Business System Analyst II, Maintenance will adjust the access rights of the SPEAR
administrators so that a maximum amount of work is performed using the employees unique
login, while still able to use the generic Admin login for appropriate tasks. This will be
complete by June 1, 2014.
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Issue 5: Revise required PM interval for McDonald: HVAC & ADA components.
OBSERVATIONS:

McDonald HVAC and ADA equipment “long-form” inspections have not been
consistently performed within contractual deadlines, e.g., every 24,000 miles.20
Since 2007, StarTran had performed these inspections for all vehicle classes every six
months, and that practice has continued and is included in McDonald’s approved Bus
Maintenance Plan. However, that six month interval is not exactly equivalent to contract
requirements to perform every 24,000 miles. Sixty-five of 346 vehicles (18.8% of the
fleet) accrued more than 24,000 miles on average every six months (as measured over the
9-month audit period). In other words, treating the 6-month inspection rather than a
mileage-based inspection does not guarantee compliance with contract requirements.

Because the contractors are responsible for warranties, there is no financial risk.
However, operational risk may be unnecessarily increased.
ACTION PLANS:
(Bus & Paratransit Services: Senior Contract Performance Manager, Maintenance - Carl Woodby,
Quality Control Specialist, Maintenance – Terry Ermis)
5. Align Spear maintenance instructions with contract terms. The BPS Senior Contract
Performance Manager will work with the Procurement Department to effect a contract
modification with McDonald Transit that clarifies the schedule of A/C and Wheelchair
Ramp/Lift PMs to be based upon a 6 month interval, e.g. with annual and semi-annual PMs.
This will make the contract language match exactly with the practice that McDonald and
previously StarTran had for many years. This will be complete by June 1, 2014.
Issue 6: Consider modifying paratransit contract to increase consistency.
OBSERVATIONS:

While MV is required to have a warranty administration program, the contract does not
specifically transfer financial risk for voided warranties to the contractor. This is
inconsistent with the FRS revenue operations contracts which require that “In the event
that warranty is lost due to negligence or lack of maintenance, Contractor will be
required to purchase the remainder of the warranty from the OEM (original equipment
manufacturer) in order to cover the time that was lost due to negligence.”
Per Exhibit F.14.(o): A similar condition was noted with First Transit but was corrected when their maintenance
records were transitioned into Spear.
20
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4.1.b

The MV contract does not include financial disincentives for performing late mileage or
timed-based PM. However, as a compensating measure, "No vehicle is to be operated in
service by the Service Provider if it is late for a scheduled PM." The McDonald contract
currently includes financial incentives to promote timely completion of PMI's. A
pending modification to the First Transit contract will a add penalty for late PMIs (same
as McDonald, e.g., $1,000/day after due date).

The relative risk and probability of incurring a financial loss as a result of MV’s failure to
keep up an existing warranty is low given the current fleet is out of warranty. However,
if the risk can be easily eliminated, it makes business sense to make the change for future
vehicle procurements.

Moving towards more consistent contractual requirements across contracts makes
contract oversight easier as well as “evens the playing field” across contractors.
ACTION PLANS:
(Bus & Paratransit Services: Vice President – Dottie Watkins, Contract Performance Manager,
Paratransit Operations – Rafael Villarreal, Senior Contract Performance Manager - Carl Woodby)
6a. Modify MV contract to add financial disincentive for performing late time- or
mileage-based PMIs. When the contract is re-bid in the future, we can incorporate the
recommended change. In the interim, we cannot do this as it will raise our costs and give
MV an opportunity to increase their rate. Internal Audit follow-up comment: Ultimately,
management is responsible for determining an acceptable level of risk. The recommendation was focused on
increasing consistency across contractors. The financial impact of adding this penalty is immaterial. Internal
audit testing of MV timeliness generally showed “acceptable performance” in this area.
6b. Negotiate mutually agreeable contract language outlining the responsibilities for
handling warranties. In advance of delivering new vehicles to MV, BPS and Procurement
staff will negotiate with MV to identify mutually agreeable contract terms for how warranties
will be managed, including voided warranties. The contract modification will be complete
on or before September 30, 2014.
Issue 7: Require update to First Transit Vehicle Maintenance Plan.
OBSERVATIONS:

First Transit’s current VM Plan was last and approved by Capital Metro in December
2010. In November 2013, First Transit transitioned from using their corporate asset
management system (DataStream) to Spear, the Authority’s internal system for tracking
assets and maintenance activities. In addition, First Transit has added vehicle
maintenance responsibilities for the MetroRapid fleet.
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
Actual maintenance practices should be consistent with the written plan. According to
the FTA, VM Plans should “be updated with the purchase of new rolling stock, to
account for new technology and/or new manufacturer’s recommended maintenance
intervals and programs.”21

The FTA requires vehicle maintenance plans to be modified as needed and inquires
about plan updates as part of a grantee’s “Triennial Review.” If plans are not current,
the grantee would be considered “deficient” in that area and would be required to update
the plan.
ACTION PLAN:
(Bus & Paratransit Services: Senior Contract Performance Manager - Carl Woodby; Coordinator, Quality
Assurance - Andrew Murphy)
7. Obtain updated First Transit Vehicle Maintenance Plan. BPS Quality Assurance
staff will request that First Transit provide an updated Vehicle Maintenance Plan for Capital
Metro approval. The plan will be finalized and approved by April 30, 2014.
Other Issues Noted
Consider monitoring Scheduled vs. Unscheduled Maintenance Trends
Maintenance activities can be classified in two general categories: scheduled (i.e., accomplished within
a planned service interval) or unscheduled (falling between scheduled service intervals). Although
precise universal definitions do not exist, scheduled maintenance consists of planned activities
including PM inspections, planned component repair or replacement, driver inspections, and other
planned inspections. Unscheduled maintenance activities result from breakdowns caused by
component failures and from defects found during scheduled inspections.
Recommended practices include tracking the ratio of scheduled versus unscheduled maintenance.22
According to the report most agencies monitor unscheduled maintenance as another indication of
equipment performance. Five of the six entities surveyed by TCRP (including UPS) tracked this
metric.
Although unscheduled maintenance never can be eliminated, its frequency and duration can be
controlled. Moving maintenance into the scheduled category gives managers greater control and
improves the structure of their operations. Conversely, increases in unscheduled maintenance,
typically classified into specific bus systems (i.e., engines and brakes), alerts managers to look for the
underlying cause so that the problem can be corrected. The TCRP report cited a typical example:
when faced with an increase in unscheduled electrical related maintenance activities, [the transit
property] initiated a separate PMI for bus electrical systems. The inspection forced mechanics to
look at specific trouble spots in electrical systems on a regular basis to reduce the frequency of
unscheduled maintenance.
21
22
Federal Transit Administration 2013 Triennial Review Workshop Workbook, Section 5.1 Maintenance.
TCRP Synthesis 22: Monitoring Bus Maintenance Performance, Transportation Research Board, 1997, pg. 12.
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As of November 2013, McDonald, MV and First Transit are all using Spear. Spear has a Dashboard
Web Application Module, which if implemented, can be used to monitor “planned vs. reactive”
maintenance activities. See example screen shot below:
Source: Spear dashboard – Spear Help Center - Planned vs. Unplanned
Validate contractors’ access to Capital Metro systems
IT management recognizes the need to re-review and adjust the Department’s processes for
performing ALL semi-annual system access confirmations. Prior to outsourcing, the IT Department
used the Human Resources personnel system, UltiPro, to flag personnel re-assignments and
terminations. Since outsourcing, this method is not effective for flagging personnel changes for
contractor staff with access to Authority systems.
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Closing
The action plans documented in this report, once fully implemented, will help mitigate business risk.
Internal Audit is grateful to the Capital Metro management and staff whose cooperation and
assistance was instrumental to the success of this project. We hope that they will find the results of
this audit valuable. Please feel free to contact me if additional information is needed.
___________________________________ ____________________________________
Caroline M. Beyer, CPA, CISA , CRMA
Marcus O. Horton, CIA, CFE, CRMA, CCSA
VP, Internal Audit
Sr. Internal Auditor
ACCEPTED:
___________________________________ ____________________________________
Linda S. Watson
Dottie Watkins
President/CEO
VP Bus & Paratransit Services
___________________________________ ___________________________________
Elaine Timbes
Carl Woodby
Deputy Chief Executive Officer / COO
Sr. Contract Performance Manager, Maintenance
cc:
Capital Metro Board of Directors
Kerri Butcher, Chief Counsel
Gerardo Castillo, Senior VP & Chief of Staff
Earl Atkinson, Director of Procurement
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Client Response Memo
4.1.b
MARCH 19, 2014
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Appendix: Audit Methodology
This audit was conducted in conformance with the US Government Accountability Office’s
Government Auditing Standards and the Institute of Internal Auditors’ International Standards for the
Professional Practice of Internal Auditing. Those standards require that we plan and perform the audit to
obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the evidence obtained provides a
reasonable basis for our findings and conclusions based on our audit objectives.
To meet the objectives of this project, we employed the following techniques:
 Performed a risk assessment of the vehicle maintenance program and prioritized business risks
that were assessed as a high risk probability and impact to impeding the attainment of business
objectives and/or negatively impacting SOGR.
 Benchmarked to professional literature and vehicle maintenance best practices within and outside
of the transit industry:
o TCRP Synthesis 22: Monitoring Bus Maintenance Performance
o TCRP Synthesis 54: Maintenance Productivity Practices
o TCRP Synthesis 81: Preventive Maintenance Intervals for Transit Buses
o Benchmarking Fleet Management, Report # CTS 04-10, University of Minnesota Center for
Transportation Studies, July 2003. Available online at Fleet Management
o FTA 2012 and 2013 Triennial Workbooks
o City of Austin Public Safety Vehicle Repair Audit, October 2013
o Report on Fleet Operations Study of Fleet Services Division, Seattle, Washington, June 2008
o City of Seattle Competitive Analysis and Recommendations for Fleet Management Best Practices,
March 2005.
o City of Springfield Fleet Management Program Review, May 2012
 Reviewed APTA’s “Manual for the Development of Bus Transit System Safety Program Plans”
 Conducted analyses and tests of vehicle maintenance records to assess timeliness and completeness
of contractor performance during January - September 2013.23
 Validated accuracy and completeness of MBRC calculations by vouching to known road call
incidents in call logs and maintenance records. Mileage totals used in MBRC were also validated to
mileage increments in e-fueling system.
 Reviewed documentation supporting related quality assurance inspections of contractors’ work.
 Reviewed applicable contracts, policies, procedures and/or vehicle maintenance plans;
 Observed, interviewed, and/or surveyed of Capital Metro management, staff and/or contractors;
 Reviewed applicable policies and procedures to identify appropriate audit criteria
 Evaluated the completeness and accuracy of information reported to the Board of Directors such
as contractor KPIs.
This period excluded the initial four months for MV and McDonald which may not be reflective of the current
procedures and results. Veolia was excluded in timeliness testing due to known exceptions which were already being
addressed.
23
CONFIDENTIAL DRAFT
Packet Pg. 34
MARCH 19, 2014
4.2
Board of Directors
(ID # 2664)
Internal Audit Report Presentation - Bus
Operations Contractor Payments
TITLE: Internal Audit Report Presentation - Bus Operations Contractor Payments
Page 1
Packet Pg. 35
4.3
Board of Directors
(ID # 2727)
CFO Financial Report - January 2014
TITLE: CFO Financial Report - January 2014
Page 1
Packet Pg. 36
Packet Pg. 37
4.3.a
Attachment: CEO METRICS FINAL (2727 : CFO Financial Report - January 2014)
4.3.a
Packet Pg. 38
4.3.a
Packet Pg. 39
4.3.a
Packet Pg. 40
4.3.a
Packet Pg. 41
Packet Pg. 42
4.3.a
Packet Pg. 43
4.3.a
4.3.a
Packet Pg. 44
4.3.a
Packet Pg. 45
Packet Pg. 46
4.3.a
4.3.a
Packet Pg. 47
4.3.a
Packet Pg. 48
4.3.a
Packet Pg. 49
4.3.a
Packet Pg. 50
4.3.a
Packet Pg. 51

Agenda - Wednesday, March 19, 2014 - Meeting Portal

Transcription

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