Citing a dire financial situation, the Sunset Empire Transportation District will suspend operations.

The Sunset Empire Transportation District Board should resign.

A state forensic audit and a state compliance review showed that the board failed to provide credible oversight of Jeff Hazen as executive director and was insufficiently aware of financial and management problems before the agency’s financial collapse in April.

The findings depict an agency where Hazen was able to extert control over finances and intimidate staff while racking up deficits ranging from $500,000 to up to $1 million a year. The transit district board said Hazen would have been terminated for financial malfeasance had he not resigned in May.

“While our examination did not identify any clear instances of fraud, we cannot conclude that no fraud was present,” according to the state audit, which was prepared by the accounting firm Kernutt Stokes for the Oregon Department of Transportation. “Instead, while undetected fraud may exist, it appears that the largest contributing factors to the organization’s insolvency were due to mismanagement and lack of oversight.”

RLS & Associates, which prepared the state compliance review, indicated that transit district staff and the board should have learned of the agency’s deteriorating finances before the collapse.

“Interview descriptions of the board composition suggest it is comprised of well-intentioned community volunteers that may not possess the requisite financial management or grants management experience to critically evaluate management reports,” the review found. “This is best illustrated by the fact that the typical routine at monthly board meetings did not result in board questions or management explanations of key data elements provided in financial reports.”

The transit district, which suspended bus service and other operations in April, has been able to restore some routes with the help of $1 million in state loans.

The disruption of bus service on the North Coast impacted some of our most vulnerable residents, who need reliable public transportation for trips to work, the grocery store, medical appointments and visits with loved ones and friends.

As we wrote in an editorial in September, the transit district board has too often acted like bystanders.

Even after the state audit was released, the board did not meaningfully address the findings when they had the chance at a board meeting in late October.

Both the audit and the compliance review pinpointed the fact that no one on the board has a background in finance.

Voters decide who gets elected to the transit district’s seven-member board. Normally, we believe the best remedy for poor performance of an elected board is at the ballot box at election time. But what happened at the transit district over the past several months is not a normal situation.

No board members are up for reelection until 2025.

The Clatsop County Board of Commissioners formed the transit district three decades ago. County commissioners could have a role to play if the transit district board were to resign. Commissioners could appoint people with some finance and management background to establish a quorum and help guide the agency until voters choose new board members in future elections.

By resigning, board members would demonstrate to the public that there are consequences for mismanaging such an important resource in our community. The transit district, which just hired a new executive director, needs to wash away this stain and restore public trust.