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L/RAIN Temp: 58 °F Wind: N at 4 mph Sunday, April 20, 2003 SECTIONS Home Page Local News Sports Business Obituaries Life Opinion - Politics AP News Weather Classified Archives Site Map EXTRA HomeLife Magazine W3 Magazine Jobs @ Mail Tribune Tempo A & E Oregon CarZone Wellness Connection Real Estate Newspaper in Education Prime Times Outdoor Journal Personals Movie Times TV Times E The People CLASSIFIEDS Find a Car Find a Home Find a Job Find Everything E SOUTHERN OREGON Automotive Communities Entertainment Publications Recreation Calendar ABOUT US FAQ What's New Advertise Home Delivery Classified Ad Contact Us Media Kit Email Story to a Friend April 6, 2003 Analysis: RVTD’s books full of murky accounting By DAMIAN MANN Mail Tribune A lack of accounting clarity makes it appear that the Rogue Valley Transportation District is more than $1 million in the hole, according to an independent analysis by the Rogue Valley Council of Governments. Alan Hudson, RVCOG finance manager, told district officials this week he found a number of "red flags" while reviewing their books. He said RVTD had only $11,000 in the bank in February but lists $381,000 in bills that need to be paid. In addition, RVTD has $780,000 in short-term notes that come due in coming months, bringing the total debt to more than $1 million. While the books point to a loss for the year so far, Hudson acknowledged that $1.5 million in upcoming federal grant money should clear up most of the shortfall. However, he said the district’s lack of current audits and an annual budget report make it difficult to calculate how it fares financially. Hudson said the district’s practice of borrowing money every year could become a slippery slope leading to the kind of financial woes that afflicted RVCOG about five years ago. RVTD board chairwoman Eva Avery said federal grant money will take care of the bills as it does every year. "We are not a million dollars in the hole," she said. Hudson, who presented his findings to RVTD officials Wednesday, said "more red flags" came up while he reviewed the books. At the end of the 2002 fiscal year, the district listed $42,000 in working capital, but that amount somehow grew to $165,000 at the start of the next fiscal year. "To get from 42 to 165 kind of jumps out at you," said Hudson, who spoke before RVTD members at a recent study session. He also pointed out that total federal grants for 2002 were listed at $737,000, but were budgeted at $1.5 million in 2003. Similarly, state grants budgeted at $275,000 in 2002 jumped to $705,000 in 2003. Mike Cavallaro, executive director of RVCOG, told board members, "Don’t be afraid to let people know you’ve got problems." He noted that his organization went through similar financial difficulties about five years ago. "It shouldn’t be a blame game," he said. RVTD board member Dan Moore said, "I’m concerned, and what I’m hearing is if we continue as we have in the past, we may not be able to get ourselves out of the hole." Avery readily admits that the budget for 2002-03 "is not a good one," but she said the board has been attempting to correct previous management problems. "We are trying to clear up what we were left with," she said. In addition to a more detailed analysis planned by RVCOG, RVTD has two audits under way that Avery said will shed light on the budget process. She said the board is concerned about the $787,000 it must borrow each year and wants to end that practice.RVTD, she said, will need to borrow again next year, but this time might take out a five-year note, allowing the district time to build up a reserve fund that will end the need to borrow. Board member Ed Chapman said he has been pressing the board for answers to strange entries in the books during the past year and described the answers he got as "double-talk." Referring to questions about the district’s financial health, he said, "I don’t have any way of knowing what is right and what is wrong." Chapman worries there might not be enough to keep programs going. He hopes RVCOG’s analysis will point the district in the right direction. "I am hoping this is a wakeup call," he said. Reach reporter Damian Mann at 776-4476, or e-mail [email protected] Printer Friendly Version Email Story to a Friend Subscribe Archive: Click to Search Mail Tribune Home Local News | Sports | Business | Obituaries | Life Opinion - Politics | AP News | Archives | Site Map E Southern Oregon | Classified Copyright © 1997-2003 Mail Tribune. All rights reserved. Privacy Policy | Terms & Conditions Website Feedback A D V E R T I S E R S