Part I: Summary
1.1. Audit findings and opinions
1.1.1. Trips monitoring
During the period between August 2011 and September 2012 the radio frequency identification system (RFID) was not able to register the exact departing time of the buses from the terminal so the Transport Bureau (DSAT, according to the bureau’s Portuguese name abbreviation) dispatched its own staff to monitor the departures (the monitoring was by sampling). Although it wasn’t a complete monitoring, since it was through sampling, DSAT referred that the bus operators, with one year in running the service that started in August 2011, were globally complying with the terms and conditions laid out in “Tender Document for the Public Road Mass Transport Service” (Tender Document). However, a sampling check carried out by the Commission of Audit (CA), 9 out of the examined 10 routes presented departures frequency during peak time lower than the established in the Tender Document, some of them registering only 65% of the contracted frequency. But, on the other hand, 6 of those lines not able to comply with the set frequency presented a departure frequency during normal time higher than the established, which enables them to add up to, and in some cases even surpassing, the overall departures of the day.
Despite the improvement of the RFID registered in October 2012, DSAT continued to monitor the departures by means of sampling check, carried out by its own personnel. Moreover, the sampling check only covered some periods of the day, therefore the monitoring was not able to detect the compensation between the peak and normal periods. The finding shows the arrangement designed by DSAT to monitor the buses departures was flawed and, consequently, unable to ensure the bus operators deliver the service according to the terms set in the Tender Document.
1.1.2 Confirmation and payment of the service
1.1.2.1 Confirmation of the service
The audit found that some trips declared by the operators didn’t comply with the terms set in the Tender Document. But since the DSAT’s personnel failed to follow rigorously the set procedures for the confirmation, the irregular situations were not timely detected and examined and, consequently, the trips were confirmed and paid. The irregularities included: increased trips without prior authorization or later ratification based on facts; and trips without corresponding departure records in the RFID i.e. there is no objective proofs that the declared trips really occurred.
The audit also detected that some vehicles ran different routes in a single same day, but without record of any payment, neither electronic nor by cash. However, since these trips followed the routes approved and set in the Tender Document, they were considered “regular trips” and as such were confirmed and paid. The procedures set by DSAT for confirming the trips, which are exclusively based on routes, should be revised, otherwise it would be very difficult to assure the trips declared by the bus service operators corresponded to the reality.
1.1.2.2. Confirming the trips
DSAT’s personnel didn’t follow effectively and strictly the procedures set for confirming the trips declared by the operators. During the confirmation procedure, the personnel only checked the total number of trips and paid little attention to whether each of these trips has the corresponding departure record in the system. As a result, some trips without record of departure from the terminal have been paid i.e. payments were made without reliable proofs. In short, the procedures adopted for confirming the trips were not strictly executed, which increased the risk of wastage of public resources.
1.1.3. Inspection of receipts from fares paid by cash
In accordance with Article 7, Part III.ii, of the Tender Document, the revenue from the collected fares belongs to the Government of Macau. CA conducted a sampling check on the fares collected in a two-day period and found that a certain vehicle didn’t hand in the “fare box” during the examined period, which presented a risk of lost revenue. Alerted to the case, DSAT didn’t investigate the related bus operator and, later on, even provided CA with information that didn’t correspond to what really happened, concretely: DSAT referred the vehicle in question ran in the related period a total of 3 hours and 16 minutes and because of this short period of time it might have not collected any fare paid by cash and, consequently, didn’t hand in the fare box. However, according to the examination carried out by CA, that vehicle ran for more than 10 hours during which period it made 12 trips. The mismatch of figures shows that DSAT didn’t initiate any investigation.
The improvements later introduced to the procedure represented only a sum up the amounts of every fare box listed in the “general register of fare boxes” and made compulsory the recording of any empty fare box or with little money. However, these new measures were not effective for detecting any undeclared fare box or errors in the declarations and, in this way, they were not able to ensure the complete collection of all fares paid by cash.
1.1.4 Ecological specifications for the buses
DSAT only required the emissions control level of Euro 3 even the bus service contract would last for 7 years, which is a relatively long period. The requirement was clearly an archaism in comparison to the international practice and also demonstrated that DSAT lost the opportunity offered by the launching of the new model of bus service to keep up with the international development in environment protection. It must be said that in this new model of public bus service, the Administration plays the role of service buyer, which enables it to set the terms of the contract. So, the DSAT should have made use of the opportunity to, within a reasonable framework, set standards that are higher than those required by the current regulations and, at the same time, compatible with those generally adopted internationally, with the objective to promote the elimination of buses that could only comply with outdated standards.
Effectively, when DSAT was preparing the public tender, there already were suppliers offering fuel to buses compatible with Euro 4 emissions control level and it was also a fact the there already were Euro 4 buses running in the neighbouring regions. It was also a certainty that a possible application of the Euro 4 standard would not immediately force the former operators’ buses out of service. On the other hand, DSAT didn’t conserve the documentation consulted in the process of establishing the standards, which impedes its supervisory entity, or other external entities, to use them to assess whether the bureau set the standards reasonably.
1.2. Audit suggestions
1) DSAT should establish an effective mechanism to monitor and record the departure frequency of all buses in service. The mechanism, which should include the use of RFID data, must ensure that any irregular or unusual situation be timely examined in order to guarantee the operators provide the bus service according to the Tender Document.
2) Whenever irregularities are detected, DSAT should identify and examine the respective causes by analyzing the variations in the passengers flows in order to verify whether the irregularities were caused by the incompliance of the rules by the operators or they were caused by a mismatch between the routes frequencies set in the Tender Document and the real needs of the passengers; if the latter is the cause, then DSAT should consider revising the document so to satisfy the needs of the passengers.
3) DSAT should improve the mechanism of trips confirmation and ensure its effective application in order to guarantee the paid trips have effectively occurred.
4) DSAT should revise the mechanism of trips confirmation in which not only the set routes are taken into account but also other relevant information, namely data related to passengers transported by the buses, in order to better detect any irregularities in the trips declared by the operators.
5) DSAT should reorganize its human resources in such a way that it could adequately supervise the receipts from fares paid by cash. It should also demand the operators to comply with their duties, namely improving the collection and organization of the records of the fares receipts and the respective statistic processing, which should be computer based, in order to allow the receipts data be verified rapidly and effectively.
6) DSAT should review the mechanism and methods presently adopted for verifying receipts from fares paid by cash, in order to effectively detect and prevent any errors, omissions and incomplete information as well as to deal with any weaknesses or loopholes that may exist, so to ensure the receipts are accurate.
7) With the experience gained in the present project, DSAT should make full use of its role of buyer in any future similar service procurement, demanding higher ecological standards for vehicles or other related areas, in order to be on par with the standards adopted internationally and to raise the service quality. DSAT should also keep all the documentation consulted in the research phase, so that its supervisory entity, or other relevant external entities, could use it to assess whether the process that led to the adopted standards was reasonable.
