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Kern COG adopts policy to allow withholding TDA funds when member agencies miss required audits
Summary
The Kern Council of Governments voted to permit the agency to retain Transportation Development Act funds to cover auditor expenses when member agencies fail to deliver required TDA audits on time; board approved the policy by roll call vote.
The Kern Council of Governments (Kern COG) voted to adopt a policy allowing the agency to retain member Transportation Development Act (TDA) funds to cover direct audit-related expenses if a member agency fails to complete required TDA audits in a timely manner.
Kern COG Executive Director Jay said the policy is a last-resort tool to address repeated delays that force the agency’s auditor to spend additional, unbudgeted hours to complete 11 required audits. "Kern COG is the custodian of your TDA funds," Jay said, adding that only four of the 11 member agencies were current with their TDA audits at the time of the meeting.
The policy limits recoverable amounts to direct audit expenses and proposes a $10,000 annual cap per delinquency. Jay told the board the total budget for the 11 audits is about $60,000–$70,000 and that the auditor had asked for an additional roughly $60,000 this year to finish outstanding work. He said the auditor had cited staff turnover and slow responses as drivers of extra cost. "If I'm having a serious delay ... we'll warn your agency. Hey, if you can't keep up, we're going to have expenses. We're going to keep the money that's associated with those," Jay said.
The board debated administrative details and whether individual agencies could opt to conduct their own audits. Jay said one member (Shafter) already prepares its own audit; Kern COG typically hires the auditor and distributes the resulting TDA-compliance audits to keep the process uniform and cost-effective. Jay said the proposed withholding would cover only the auditor's direct expenses, not Kern COG staff time.
Supervisor (name not specified) spoke in favor of the policy as a reasonable enforcement mechanism, saying it would “deter folks from being unresponsive.” Board members raised examples of specific agencies' situations; Jay gave a sample estimate that a delayed Arvin audit could cost roughly $2,000–$4,000 in additional auditor fees if left unresolved.
Motion and vote
A motion to adopt the policy was made and seconded. The roll call vote recorded the following affirmative votes: Calderon; Couch; Gorman; Hawkins; Morris; Parlier; Reyna; and Anne Smith. The motion carried.
Why it matters
TDA funds (which include Local Transportation Funds and State Transit Assistance) are state-allocated monies distributed by Kern COG to member agencies for transportation operations and projects. Kern COG staff said withholding TDA distributions as a limited enforcement measure is intended to protect the agency’s budget and to incentivize timely cooperation with auditors so member jurisdictions can receive their full allocated funds without higher administrative costs.
Next steps and oversight
Jay said Kern COG would provide warnings to delinquent agencies before withholding funds and would work with members to avoid punitive measures whenever possible. The board directed staff to implement the policy as described and to continue outreach to member agencies to complete outstanding audit work.
