Quasi and non-profit board oversight does not happen in Memphis. Proven evidence of this conspiratorial culture is contained in the PWC MATA Forensic Audit. And this practice is not limited to MATA, as numerous boards have delegated authority to abate taxes and spend public money without fear of rigorous public oversight from the City Council or County Commission.

Examples of such boards include EDGE, Downtown Memphis Commission, Memphis-Shelby County Schools, Greater Memphis Workforce Development Board, Memphis River Parks Partnership, and the Zoo. But this blog deals exclusively with MATA. 

City Councilors serving since 2019 prosecuted this MATA decline by not overseeing the agency. This prosecution was later joined by newly elected Historic Council members.  In fact, the Councilors serving since 2019, are the only common thread that exists from 2019, after transitions in MATA Board members and CEOs. Why is the local media not pointing to this conspiratorial fact ?

Anyway, the PWC MATA Forensic audit engaged internal MATA procurement practices, internal controls, and grant management. The $2.2M Transpro consulting engagement was supposed to deliver an optimized fixed bus route plan but failed due largely to, again, failed Council oversight. The Council has been a disaster since 2019 where both Downtown and MATA have imploded.

Last year Councilor Edmund Ford Sr. promised Transportation Committee meetings every 2 weeks, but those meetings failed to occur, contributing to the failure of the $2.2M Transpro engagement. Yes, another public ripoff. The failure to schedule Transportation meetings can also be linked to former Council Chair J.B. Smiley and current Chair Ford Canale.

Additionally, the Memphis City Council knew about MATA procurement issues going back to March 2024. But within their conspiratorial culture, the Council chose not to act. The MATA procurement deficiencies were disclosed in the 2023 Federal Triennial review that reveals 7 procurement deficiencies with 5 being repeated deficiencies from the 2019 Federal Triennial review. MATA deficient procurement practice has been going on for a long time. Let’s look at one of the thematic PWC MATA audit findings.

Most alarming, MATA allows their selected vendors to tell MATA what to spend public money on and order from them the vendors ! The PWC auditors created an image to diagram their findings regarding practiced MATA procurement processes. And you can bet these practices are occurring with other entities not being publicly overseen.

Please refer to above diagram or page 24 of the PWC MATA Audit. The top line shows the formal documented MATA procurement process. The bottom line shows the procurement process commonly practiced at MATA. As opposed to getting an independent cost estimate (ICE), MATA just selects a vendor. Then the vendor issues an invoice for goods or services, and MATA generates a purchase order for what the vendor invoices. This Council allowed practiced process is reckless and has been going on for years !

The above diagram is labeled “Activist Endorsed” because local “activist” organizations like MICAH, Better Transit for Better Memphis, Innovate Memphis, and Upthe901 are constantly leaning toward increases in local taxes as opposed to questioning how public funds are spent and managed.

In this way, the “activist” community has become proponents of publicly ripping off the taxpayer in a majority black community in need.

Further, the audit confirms that in Memphis no gender, race, or partisan affiliation is better than the other as local oversight universally SUCKS and is non-existent. Both the City Council and County Commission have bipartisan representation with strong black women, mean ole white men, fully grown black men and watch me roar white women.

Beyond the above observations and practice, let’s review some examples documented in the MATA PWC audit.

Throughout the sampled PWC MATA transactions, MATA was unable to provide 1 or more forms of documentation to support public transactions. Such documentation included independent cost estimates, purchase orders, invoices, contracts, and proof of performance (bill of lading, time sheet, detailed invoice). Purchase orders were often dated on the same day or after receiving a vendor invoice.

Bus Shelters sitting undeployed at Levee Roard – PWC said, “There are risks associated with receiving federal, state, and local grant reimbursement for the purchase of items, such as these [Bus Shelters], that were not in use nearly two years later. It is unclear if MATA currently has a plan to complete the installation of these items” (Page 19).

Technology (nMomentum) – PWC said, “nMomentum appears to coordinate with other vendors and charges MATA for travel, increasing compliance requirements and risks if funded by federal grants. MATA expended $7,058, 317.59 to nMomentum between 7/1/2018 and 12/31/2024, 22% of total technology spend over this period. Per MATA, the vendor is currently suing MATA for non-payment of several invoices” (Pg. 13).

NOTE: There may be good reasons for MATA’s nonpayment to nMomentum as the ERP system, based on the audit findings, does not appear to have been implemented. Also, the last permanent CFO, per the audit, left in 2023, perhaps because of a failed catastrophic ERP implementation.

Technology (American Eagle) – PWC said, “MATA entered a contract with Americaneagle.com for the creation of a next generation fare collection system, coordinated by nMomentum. This transaction is the payment for Milestone #1 and the Project Kickoff. The PO line item is for 0.01 (however the description is for a $4,271,497.97 project related to the installation of a Next Generation Fare System) and is dated for the same day as the invoice. This work includes interactions with subcontractors; the contract states interactions with subcontractors must be approved, but information about and approval of subcontractors has not been documented. Similar to nMomentum, Americaneagle.com billed MATA for subcontractor fees/expenses, including $54k in travel expenses related to Datamatics. This transaction appears to be funded through a City of Memphis grant, specifically for the new generation fare system” (Pg 13).

Central Train Station (Multiple Pages) – PWC says in part, “MATA is involved in a re-development project for Central Station. The redevelopment project involved several entities (Central Station Collaborative), most notably, Henry Turley Company and Community Capital. There are potential risks with this complex arrangement as the current City administration and current MATA personnel are largely unfamiliar with or unaware of the ongoing arrangement. Further, the documentation analyzed is vague in regards to how MATA benefits from the arrangement” (Pg 20-21 and 35).

Office Space Observations – PWC said, “MATA currently leases two floors at One Commerce Square. Per PWC's observations, most office staff sit on the 12th floor, which is at around 80% occupancy, and the 13th floor is largely unoccupied, raising questions on why this much square footage was secured. In 2023, MATA pre-paid the base rent for ten years for the 12th floor and it is unclear what arrangement is in place for the 13th floor. Rent to One Commerce Square total $4,623,610 between 1/25/2022 and 12/31/2024 and include the prepaid rent, rent for temporary space before the lease began, utilities and insurance. MATA also has rented storage cages in the basement for records. Furthermore, MATA paid $1,214 402.57 to one vendor, Imageworks, for office space design, furniture and labor for moving in and setting up the furniture” (Pg. 27).

ImageWorks for $1.2M Interior Office Design (related observation) – Purchase orders and ICE documentation was unavailable for the ImageWorks project. In an ImageWorks related note, PWC said, “There were several instances of incomplete independent cost estimates (ICE) received that were signed off as if complete. The ICE is used by MATA to review the competitiveness of the price for the goods/services received in instances where the Procurement Manual does not require bidding. Further, there were multiple instances when the ICE was not completed in advance of the PO or invoice. For example, the selected transaction for Rush Truck Centers dated the PO, invoice, and ICE all on 8/16/2023. Additionally, the selected transaction for Freeland Chevy had an invoice date of 5/23/2023, but the ICE is dated 7/23/2023” (Pg. 14).

Cummins (sloppily labeled as Bank of America) – PWC said, “MATA purchased engine parts and software services from Cummins. Cummins was inadvertently input to the system as “BANK OF AMERICA” though this was a payment to the vendor’s Bank of America account. Two invoices predate their respective dated POs; one PO is dated two months after the invoice and one PO is dated 16 months after the invoice” (pg. 15).

Grizzlies Suite – PWC said, “MATA licensed a suite with 16 tickets in May 2023 for a year with the option to extend. The suite included all Grizzlies and Tigers home games and all concerts and events at FedEx Forum. Tickets were distributed to a variety of employees, but the use of each individual ticket was not traceable based on a set of emails received. PwC was informed that a separate third party, another MATA vendor (“Vendor A”), typically received eight of the 16 tickets, and PwC did receive documentation that these transfers occurred, including at least one instance where Vendor A received 16 tickets in one transfer. PwC identified MATA paying two of the three suite installments to the Memphis Grizzlies and we did not identify in MATA’s ERP system or receive information from MATA that Vendor A reimbursed MATA for tickets received. PwC did receive confirmation that another third party paid for half of MATA's third installment for the suite. There is no formal agreement governing the use of the tickets with these additional parties. MATA's Director of Communications believes that another third party (believed to be a client of Vendor A), however, PwC was unable to verify this relationship. AMEX transactions indicate refreshments were frequently expensed during game attendance as outlined in Section 2” (Pg 18).

NOTE: Who was/is “Vendor A”?

Trolley – PWC said, “MATA suspended its trolley service in August 2024. MATA purchased six pickup trucks at an average price of $44,200 per truck, $265,200 in total spend, on May 23, 2023. An additional truck was purchased for $119,050 on November 21, 2023, in a transaction outside of PwC's transaction selections, for a total spend of $384,250. The vehicles were purchased using federal grant funds under award TN-2023-010-03. Within the grant application, the stated purpose of the vehicles was to support rail (trolley) operations. According to discussions with MATA, while the vehicles are still in daily use for line maintenance, they are no longer supporting active trolley operations due to the suspension of service. As the original justification for the purchase was tied to trolley operations, and there is currently no formal plan to resume service, there is a risk that these expenditures— and other trolley-related costs—may be subject to federal funding clawback” (pg. 25).

There is more but the above will get you started. But KNOW with 100% certainty, the Memphis City Council or County Commission cares NOT to practice public financial oversight.

Download the entire audit from here - https://taxpayerjustice.net/mata-forensic-audit/