Misuse of Federal Mass Transit Funds by a Federal Employee

The Urban Mass Transportation Administration's (UMTA) accounting, auditing, and administrative controls were reviewed because of the diversion of Federal funds by an employee. The review also involved the approval of the UMTA accounting system and UMTA hiring practices. During 1977, a Federal employee diverted more than $856,000 of Federal mass transportation funds by placing his name on official payment vouchers authorizing the U.S. Treasury to issue checks. Inadequate review of the vouchers at the time of certification and the employee's access to all pertinent documents directly contributed to the diversion of funds. In addition, the employee was permitted to work unscheduled and unsupervised hours; he was authorized to act as a special messenger for the accounting division; and he was assigned continuous responsibility for the same grant projects. The employee pleaded guilty to one count each of mail fraud and forgery and was sentenced to 6 years in prison. Cash and other assets acquired with the misused funds were recovered. UMTA is not considered an executive agency under 31 U.S.C. 65a and is excepted from accounting systems approval by GAO. The Department of Transportation has acted in accordance with requirements by the Civil Service Commission for the hiring of rehabilitated offenders and in promoting such employees.