Roanoke's Valley Metro Bus System Still Struggles with Financial Issues, Audit Finds

Roanoke’s bus system has once again run afoul of rules around tracking and spending public dollars, an audit found.

While Valley Metro has made improvements, problems persist one year after an external audit unearthed issues that could imperil funding and services if not addressed.

“We’ve got some state compliance issues, some federal compliance issues and some internal control issues,” Ann Genova, a senior manager at the firm Brown Edwards, said at a recent board meeting of the Greater Roanoke Transit Company, which oversees Valley Metro.

The audit of 2024 finances revealed a half dozen “material weaknesses,” a relatively high number of deficiencies that could result in management missing whether errors are made on financial statements.

Valley Metro blamed staff shortages, staff turnover and an influx in federal and state grant money as playing a role in the snafus.

In more than a dozen cases, Valley Metro failed to pay vendors within 30 days as required by state law, according to the audit. Last year’s audit found a similar situation, in which the bus system did not pay contractors who built the new Third Street Station on time.

Valley Metro said new government grant portals “hindered staff from being able to submit grant draw requests in a timely manner. Management is addressing these issues as they arise.” In other words, because Valley Metro couldn’t access grant money, it couldn’t pay its vendors.

In another instance, Valley Metro accidentally used federal pandemic relief funds — slated for its weekend and late-night bus service — on regular operating expenses, the audit said.

While Valley Metro had created a separate bank account for this money, pandemic funds from the city “were deposited” in an operating account instead, the audit said. “There was also a lack of controls to ensure that funds were used properly.”

Auditors said Valley Metro has already made progress on some of the issues identified, which cover the fiscal year that ended back in June. Kevin Price, general manager of Valley Metro, said Tuesday that its finance department is now fully staffed.

“We’ve certainly made a lot of progress, and we’re excited and happy about that,” Mayor Joe Cobb, who chairs the Greater Roanoke Transit Company board of directors, said last month.

Genova, the Brown Edwards auditor, said the city’s priority should be getting a handle on managing grants, which make up the bulk of the bus system’s revenue.

“This grant stuff is complicated,” she said. “The federal government doesn’t make these websites and these portals and reporting easy to access, right? … Having someone who’s dedicated to that position and that was their focus would be, you know, ideal.”

The city provides about $2.1 million each year to Valley Metro, which is owned by the France-based corporation TransDev.

“I will also recommend, at a high-level, some training for the board,” Price said at last month's board meeting, noting that grant funding formulas are complex. “The [Federal Transit Administration[ has the right to change those percentages depending on who’s in office, so we’ll have to see how that materializes with the next administration.”

Valley Metro management notes that its financial situation hasn’t impacted the day-to-day experience of bus riders. But it has prompted some city finance staff to devote more attention to the agency at a time when city leaders are warning of a tight city budget.