STO under the microscope

Auditor general tables damning report

Gatineau’s auditor general tabled his 2015 report on August 30, which focused primarily on the remuneration of elected municipal officials and on the STO fleet maintenance management. The former became the report’s main point of focus as the auditor uncovered important deficiencies.

“Current management of programs and maintenance activities does not allow the STO to maintain vehicles in good shape in an efficient fashion while respecting regulations,” indicated the report presented by Alain Lalonde, Interim auditor general for Gatineau.

According to Highway Safety Code, maintenance on buses must follow a specific timeline, which was often not the case. The auditor’s investigation shows that between 2013 and 2016, inspection frequencies were not respected 8% to 12% of the time.

Regarding the mandatory checking of the braking system and of the tires, more than 27% of the inspections did not respect the regulations. The auditor recommended that the STO respect regulations and that buses which did not get checked on time not be used.

As the report stated, “problems detected during this audit stem from a business culture and lack of communication, which does not allow employees to work together towards a common goal but favours a silo environment. The absence of common goals at Maintenance Services encourages a work culture based on emergencies with little common direction understood by staff. This does not allow the optimisation of efficiently used resources.”

In fact, according to the report, some issues raised over 20 years ago are still present, namely, regarding a computerized maintenance management system (GMAO) used to stay abreast of maintenance activities.

“Though the GMAO is itself aging, issues found stem more from its use than from the software itself. The expertise of the STO’s information resources managers is insufficiently leveraged for the development of management tools aimed at Maintenance Services. In waiting for the software to be replaced, its internal development was stopped and issues raised over 20 years ago are still present,” stated the report.

Apart from the software, the auditor also brought to light issues with the management of the store parts. The auditor criticized the store’s operational structure, saying it was inefficient and created a choke point. Moreover, the auditor also indicated that the store’s poor management was contributing to financial losses.

“The value of the store inventory as counted on October 31, 2014 was $2.3 million and, on November 27, 2015, it reached $2.8 million. A portion of this increase was influenced by certain factors including the acquisition of new types of vehicles as well as classic-type buses which were accompanied by a lot of parts that were no longer available. In a little more than one year, the value of inventory increased by $461,815, a 19.8% jump. An increase in inventory uses capital, and constitutes a heavy load for STO treasury,” stated the report. “Similarly, 37% of parts in stock surpassed the maximum quantity established; the value of stock in this situation is $928,467, or 32.7% of the total value of inventory. Financial pressure is placed upon the organization as this capital is no longer available and the concerned parts occupy space on the shelf which could be otherwise used. Paradoxically, on average, 7.3% of vehicles are taken off service every day because of lack of parts. In 2015, not one day went by without a vehicle being taken off the road because of lack of parts.”

The interim auditor added that this chronic lack of parts has a negative impact on “workshop operations, operating costs, availability of vehicles and on the number of vehicles required to ensure service. A 1996 report stated that “the actual acquisition process for spare parts no longer allows the STO to be sufficiently effective.” In our opinion, the situation has barely improved in the last 20 years. The STO must manage its parts and purchasing more efficiently. Finally, though some effort is being made in managing warranties, much work remains to be done before its total cost savings can benefit the STO.”

Following this report, the STO responded by issuing a press release stating that it is taking the report’s results very seriously and that it will act to correct these deficiencies.

The STO committed to filing an action plan to the auditor before September 15 to improve its maintenance services structure. The STO counts 122 employees devoted to the maintenance of its fleet of 305 buses.

STO’s total budget for 2016 is $141 million, up from $73 million in 2008. Moreover, the regular cash fare has increased from $3 in 2007 to $3.90 in 2016, while the bus pass increased from $69 in 2007 to $93 in 2016. Lastly, a regular ticket was $2.50 in 2007 and is $3.60 in 2016.