Regulatory Compliance & Standards Flashcards

What document typically establishes the internal controls framework governing a transit agency's revenue operations?

Answer: Revenue Control Policy Manual

A Revenue Control Policy Manual defines procedures, responsibilities, and controls for all aspects of fare collection and revenue handling.

A 'separation of duties' policy in revenue control is designed to:

Answer: Reduce fraud and error risk by requiring multiple individuals to handle each step

Separating duties ensures no single employee controls an entire revenue transaction from collection through reconciliation, reducing fraud opportunity and undetected errors.

Which type of review involves an independent third party examining a transit agency's revenue control processes?

Answer: External audit

An external audit is conducted by an independent party outside the organization, providing unbiased assessment of revenue controls and compliance.

Which federal agency has primary oversight responsibility for grant compliance in transit revenue operations?

Answer: Federal Transit Administration (FTA)

The FTA administers federal transit grants and sets compliance requirements for revenue management, financial reporting, and internal controls.

An audit trail in revenue control is best described as:

Answer: A chronological record of all revenue transactions enabling accountability and error detection

An audit trail documents every step in the revenue collection and reconciliation process, allowing investigators to trace discrepancies back to their source.

When developing a corrective action plan after a compliance finding, a revenue control manager should FIRST:

Answer: Identify the root cause of the non-compliance

Root cause analysis is the essential first step so that corrective actions address the underlying process failure rather than just symptoms.