Okaloosa County audit reveals $850K in transit overpayment, sparks reform

A Breakdown in Oversight

The Inspector General’s office reviewed the county’s 2019–2025 transit contract and vehicle lease with MV Transportation, which operates Okaloosa’s bus and paratransit services. Over that period, auditors found that nearly every invoice submitted by MV contained errors or lacked required documentation, and that county officials rarely verified the bills before approving payment.

The most serious lapse stemmed from a verbal agreement made in late 2019 between the county’s Transit Director, Tyrone Parker, who has held the position since 2018, and MV’s General Manager. That handshake deal allowed MV to bill “deadhead” hours — the time buses spend traveling without passengers — as revenue service hours eligible for reimbursement.

The unauthorized change, auditors said, was never approved by the Board of County Commissioners or documented through a contract amendment, as county policy requires. Between 2019 and 2025, the practice led to an estimated $850,000 in overpayments.

In addition, auditors found that MV failed to make even symbolic $1 lease payments for its use of county-owned vehicles, missed insurance documentation deadlines by months, and lacked required records for staff training and drug-testing compliance.

The county, meanwhile, failed to assess penalties, renew leases on time, or collect $50,000 in fees related to management personnel changes.

‘Less Than Effective’ Oversight

In a written response, a spokesman for the Okaloosa County Commission acknowledged the county’s failures and said corrective measures are underway.

“The county’s transit system has been steadily evolving with substantial improvements over the last seven years despite the COVID-19 pandemic, economic fluctuations, issues with wages, recruitment, and retention of employees, and the complexities related to multiple funding streams,” the spokesman said.

“We concur that the county’s oversight of the contract with MV was less than effective. The County is working to set up a training for transit staff related to contract management, insurance compliance and to ensure that transit staff have the proper tools and knowledge to improve in the areas of deficiencies noted within this report.”

The county also addressed the audit’s most consequential finding — the unauthorized change that inflated payments to MV.

“With regards to Finding 1, which the Clerk’s Inspector General determined to be an unauthorized contract alteration resulting in the County potentially overpaying MV Transportation, we concur that the decision to allow MV to bill for deadhead hours should have been handled via a contract amendment; however, this oversight was not intentional,” the spokesman said.

“The decision to authorize a change in the calculation of revenue hours billed was made in the best interest of Okaloosa County and continuity of the County’s paratransit operations.”

Failures Across the Board

Beyond the billing issue, the audit documents a pattern of noncompliance by both the county and its contractor:

• 97 percent of MV’s monthly invoices were inaccurate or incomplete.
• 100 percent of vehicle maintenance programs failed to meet manufacturer recommendations.
• 50 percent of employee files lacked proof of required safety or drug-and-alcohol training.
• 10 transit managers were reassigned or removed without the required county approval or fees.
• The county failed to collect more than $100,000 in liquidated damages and $50,000 in management-change fees to which it was entitled.

The Inspector General noted that these failings did not necessarily indicate fraud but reflected “a sustained absence of internal controls, accountability, and documentation.”

Public Impact and Awareness

In a citizen survey conducted as part of the audit, 72 percent of respondents said they were aware of Okaloosa’s public transit service. Still, fewer than one in five felt the county’s outreach was effective. Many cited limited availability, inconvenient routes, or a lack of information about fares.

Auditors recommended that the county modernize fare collection by introducing digital and card payments, consolidate its contracts and leases into a single, clearer document, and implement more rigorous vehicle maintenance standards aligned with manufacturer guidelines.

They also urged the county to set measurable marketing benchmarks — a first for the small transit system that serves both fixed routes and on-demand paratransit across the county.