NC Auditor report criticizes rural vanpool program

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RALEIGH, N.C. — The North Carolina State Auditor’s office said Thursday a state program that provided transportation services to rural areas was grossly mismanaged and should be investigated by authorities.

At issue was the relationship between the North Carolina Department of Transportation and 2Plus Inc., a nonprofit company hired to operate the program created in 2000.

The company is accused in the audit report of “excessive and unreasonable” fees — including an extra $163,272 to cover personal mileage of volunteer van drivers — and not properly maintaining state-owned vans used in the program.

2Plus also was operating without a contract for the equivalent of six years of the program’s 11-year-history, the auditor’s report found.

The investigative report from Auditor Beth Wood’s office noted a sharp disagreement between the agency’s public transportation division and 2Plus over the program’s mission — a rift that resulted in the company ferrying South Carolina residents to jobs in North Carolina.

The division “director believes the purpose of the program was to provide transportation to work for low-income North Carolina residents,” the audit report said. “However, the president of 2Plus said that he never saw any requirements that stipulated the program was only for low-income North Carolina residents.

“As a result of the disagreement, a significant number of vans were used to transport South Carolina residents to places of employment in North Carolina,” the report said, adding that other vans “were utilized by a resort on the Outer Banks to shuttle its nonresident alien workers between the resort property and local housing.’

A telephone message left by The Associated Press for 2Plus, which has an office in Cary, was not immediately returned Thursday, but 2Plus executive Byron York told WRAL-TV the nonprofit didn’t receive undue financial benefit from the arrangement.

“The program has been honest, legitimate. We showed where the expenses have been and for what,” York said. He said approval for all routes came from the Department of Transportation. 2Plus ceased vanpool operations for the state Nov. 30. The audit report said the report’s findings will be referred to the State Bureau of Investigation.

Paul Morris, DOT’s deputy secretary for transit since September, said his office has worked with state auditors to identify problems and has made changes to give the department a better handle on grant contracts, including a new web-based application system.

Morris said the vanpool program was “operating without proper oversight and management, and that shouldn’t have happened, and that will not happen while I’m the deputy secretary.”

Morris said there was no reason why the state Department of Transportation should have been managing a vanpool program, which was paid for by federal and state dollars. The entire van fleet has been recovered and is being evaluated to determine whether they can be repaired and made available to local transit programs.

“We at the state shouldn’t be in the local transportation and transit business,” he said at a news conference. “That is best served by local communities.”

Direct oversight of the 2Plus vanpool program came from state public transportation division director Miriam Perry, who retired Dec. 31 after being at the post since August 2002, according to Department of Transportation. Morris said Perry, who worked for DOT for 28 years, faced no discipline for what went wrong in the program because she was retiring. A phone call to a Cary number listed for a Miriam Perry wasn’t immediately returned Thursday afternoon.

DOT announced a successor to Perry on Thursday: 26-year DOT veteran Teresa Hart.

2Plus operates ridesharing programs in several states including Texas and Connecticut. The management of commuter vanpools is a significant part of the services it provides, the auditor’s report said. The company bills funding organizations, such as the North Carolina Department of Transportation, for expenses such as vehicle insurance, salaries and overhead. 2Plus also collects fares.

But the program saw a steady decline before being discontinued.

In March 2006, the program peaked at 34 routes. By June 2010, only 10 routes remained active.

The state has paid $4.3 million to 2Plus since the program’s inception. But it was a dispute over payments that led to the investigation.

The company threatened to stop the program at the end of November unless it received $617,404. But the state responded that it would wait until the completion of the auditor’s investigation before acting on the bill.

This story was written and provided by The Associated Press Wire.  (Copyright 2012 by The Associated Press. All Rights Reserved.)