The Regional Transportation District needs to make some changes to comply with Colorado financial and reporting requirements, according to a 104-page report from the Office of the State Auditor.

For the most part, RTD is in “overall good financial standing based on nine indicators of fiscal health.”

• RTD’s annual budget is about $1 billion. Its largest revenue source is a 1% sales and use tax on purchases within its boundaries.
• Since 2020, RTD received about $790 million in federal pandemic relief grants, which were fully drawn down as of May 2023.
• In 2023, RTD had about 65 million annual passenger boardings across all of its services, generating about $65 million in fare revenue, representing one-third of 2019 pre-pandemic passenger fare revenue, when adjusted for inflation.

The report goes on to note that compared to peer transit organizations, RTD is operating more cost effectively when cost per rider is examined.

But the agency has been missing some required reports going back to 2021 and has not fully implemented 22 of 43 recommendations made by the RTD Accountability Committee in 2021, according to the audit.

The agency has “overspent Board appropriations to implement the Ozone Season Transit Green Program and did not adhere to all State grant reporting requirements,” according to the report.

“RTD recognizes that there is great interest in its operations and a desire to support the agency’s continued success,” said General Manager and CEO Debra A. Johnson in a news release. “Audits ensure the agency is following all laws, policies, and procedures, and RTD welcomed the increased scrutiny and examination.”

The audit examined RTD’s processes in developing, monitoring, and adhering to reasonable financial projections, budgets, and strategic financial benchmarks.

It’s also intended to ensure the organization is financially sound and whether RTD’s key financial planning documents are coordinated.

Auditors asked if the RTD Board of Directors is receiving information and training to make informed financial decisions, an issue the report notes as needing work.

The RTD Board of Directors comprises 15 members elected to represent each of the agency’s 15 districts.

The districts are apportioned after the federal census that takes place every 10 years so that each district represents approximately the same number of residents.

Directors are paid $12,000 per year and meet several times monthly to set policy, discuss business and listen to customers.

The Board is empowered by statute to exercise all the powers of the districts and can delegate authority to RTD management and staff.

As of March 2024, RTD had 3,457 employees — 1,193 salaried and 2,264 hourly employees represented by the Amalgamated Transit Union Local 1001. Contracted workers from private firms provide ancillary services such as Denver Transit Partners and Access-a-Ride transit services for disabled persons.

The audit made 10 findings of deficiencies and recommendations for correcting them.

RTD voiced two objections regarding RTD’s “Zero Fare for Better Air” program. The report notes some deficiencies in the appropriation of funds in and its reporting of grant program impacts.

The dispute revolves around appropriation and use of grant funding and the audit shows RTD overspent by $18,007 in 2022 and $22,478 in 2023.

“RTD disagreed with the report’s two recommendations, responding that all state requirements were met, and that the agency closely collaborated with the Colorado Energy Office…” RTD officials said in the release.

RTD said that the overages were not paid by grant funding, but from other revenue sources.

“RTD has been firmly committed to being good stewards of taxpayers’ money,” said Chair Erik Davidson. “The RTD Board of Directors and staff take this fiduciary responsibility very seriously, and we are pleased to see that RTD met all financial health ratios with no warning indicators. The findings of this audit emphasize that RTD’s efforts are working, and the agency is operating more cost efficiently than many of its peers across the country.”

Last audited in 2021, the 2024 audit cost RTD about $435,000.