City's Office of the Auditor General completes audit of DARTS contract payments

HAMILTON, ON – As a result of a concern reported to the Fraud and Waste Hotline, the Office of the Auditor General (OAG) conducted an audit of DARTS compliance with the Master Operating Agreement (MOA) specifically regarding the City’s payment of forgone fares.

These fares coincide with the HSR’s conventional transit service fares for situations such as the “Ticket-to-Ride” program, group bookings, rides to polling stations, and COVID-19.

The audit process found that overpayments to DARTS over a 12-year period (2012-2023) are estimated to be in the range of $230,000 - $263,000. This estimation is based off an average of five years (2018-2023), through the 12-year period.

The audit also found that clear communication of designated “special events” was generally lacking and overall comprehension of “special events” was not prevalent.

The OAG made four recommendations to management to improve process; management agreed with all four.

"The primary goal of this audit is to evaluate the management of specific contract payments to DARTS, with the aim of verifying the accuracy of the payments, ensuring compliance with contract terms, and assessing the efficiency of management, systems, and oversight mechanisms in upholding the agreement," said Charles Brown, Auditor General. "In particular, the review focused on examining the overpayment of subsidies for foregone fares, identifying the scope of the issue, and offering recommendations for addressing any control deficiencies.”

Quick Facts:

• The Fraud and Waste Hotline launched in July 2019 as a pilot project and was made permanent by City Council in March 2023.
• The hotline continues to provide the public, City employees, contractors and vendors with a convenient, confidential and anonymous tool to report suspicion or proof of wrongdoing.
• The hotline also supports the City’s goal of managing instances of fraud and waste within the organization and operating with honesty and integrity.
• Overpayment of a subsidized fare occurs when the City reimburses a fare that DARTS should have collected from the passenger(s) they were transporting. Payments are made monthly based on DARTS’ reporting of the number of rides defined as “forgone fares” in the Master Operating Agreement (MOA).
• Special events are trips where the City’s Accessible Transportation Services (ATS) staff have directed the contractor that no fare is to be charged to a DARTS customer, for example, trips to Tiger Cats games under the HSR Ticket to Ride program. ATS staff provide direction to the contractor for trips to be classified as Special Events both in the contract and on a case-by-case basis.