DASH overspent its budget by $3.7 million. A spreadsheet error hid it for months.

ALEXANDRIA, Va. — DASH ended its last fiscal year about $3.7 million over budget, roughly 10% of its operating budget, and did not know until after the year had closed.

The reason, officials told the transit system's board at a public meeting on Sept. 9, was a $3.2 million placeholder entry left in a spreadsheet. It made DASH's internal reports show a nearly balanced budget while the money was being spent.

Mayor Alyia Gaskins has declined a request from the board's chair to postpone next Tuesday's joint work session with City Council.

"Our community deserves a clear explanation of how this happened, why the shortfall wasn't identified sooner, and what steps will be taken to ensure this never happens again," Gaskins said in a statement to The Alexandria Brief. "That is precisely why I have declined to postpone the upcoming work session with the DASH board."

She said she plans to use the session to focus on DASH's governance, accountability measures and future financial controls. It is set for Wednesday, Sept. 23, from 5:30 to 7:30 p.m. in the Alexandria Transit Company board room at 3000 Business Center Drive.

Board Chair David Kaplan told the board on Sept. 9 that he had emailed the mayor over the weekend arguing that waiting would be prudent. He said she told him DASH needed to appear before council before the budget cycle begins, and that there was no other date that would work before the city issues budget guidance in November.

"So it was decided that we will stick with the 23rd," Kaplan said.

What officials told the board

The account that follows comes from the board's Sept. 9 meeting, from the slides and packet prepared for it, and from DASH's own financial reports to the board earlier in the year. The Alexandria Brief's questions to DASH and the city, and their answers, are in the two sections at the end.

Board Chair David Kaplan opened the Sept. 9 meeting by asking everyone in the room to take a breath.

"We ended FY26 here in June assuming that we would have a balanced budget," he said. "So we were very surprised when we were notified that by staff that they had been told during the FY26 closeout that we had a deficit in our operating budget of approximately $3.7 million."

He said there is no evidence of fraud or embezzlement. The money went to operations and maintenance that kept an aging fleet running and to operator overtime that covered last-minute callouts.

DASH finished the year with record ridership of about 6.9 million, strong on-time performance and few missed trips.

The overrun came in a year when DASH's budget grew. City Council approved $43.4 million for DASH and the King Street Trolley in FY26, up 6.6% from the year before, with the city's own contribution rising 7.2% to $36.3 million. The city funds roughly 83% of the system. DASH closed FY25 with a surplus of about $900,000.

"While it is true that DASH showed up for a community that depends on and demands high quality transit, it is also true that the cost overruns are unacceptable," Kaplan said. "There must be accountability for what happened and the accounting and financial management practices must change to make sure this never happens again."

What the board was told in June

DASH's own reports told the board the opposite through the spring. The board's June 10 packet, covering results through April 30 with 10 months of the year complete, said the year-end forecast "projects a balanced result."

It named fuel costs as the most significant external pressure and said self-insurance reserves would offset "the previously projected year-end deficit." Claims activity was running below budgeted premium equivalents, the report said, and if that held, DASH would "be able to recognize a portion of these reserves to achieve a balanced year-end result." Any leftover reserves would carry into FY27 "to help mitigate future unanticipated cost pressures."

The financial tables in that packet projected operations finishing the year about $1.6 million under budget. The largest single reason was operator wages, projected at $13 million against a $14.2 million budget, a $1.19 million favorable variance. Total revenue was projected essentially on target.

The income statement in the packet is titled "With Application of I-395 Reimbursements."

That grant, which covers part of operator wages, is where the error was.

The $3.2 million entry

Donna Herring, who joined DASH as interim chief financial officer about five weeks before the meeting, walked the board through how the deficit went unnoticed.

Revenue finished on target. The gap came from spending, with maintenance services and operator labor the largest pressures.

The reporting failure was separate. DASH tracked its finances in an Excel workbook alongside Munis, the city's official financial system. In December, someone entered a hard-coded estimate of expected reimbursement under a grant that covers part of operator wages, then left it in. Herring said the figure was entered twice at about $1.6 million.

"If you forget to take that number out, you're going to double count," she said. "And if that's done twice, you're going to double count twice."

The effect was to make it appear that an outside funding source was covering $3.2 million more in operating costs than it actually was. Because the reimbursement is booked as a reduction to the wages line rather than as revenue, it made operator wages look like they would finish well under budget, appearing to offset overruns elsewhere.

Salzone described the same mechanism from the operations side. The error "did not produce the operator wages surplus that we expected to see, which therefore did not then offset the maintenance services," she said.

Herring said she has recommended showing the grant as revenue instead, so the board can see money coming in and going out.

Herring said the workbook should have been reconciled against Munis regularly. "It appears that reconciliation did not occur or did not occur consistently," she said. The workbook also got no independent review of its formulas, data sources or manual entries.

She listed other gaps: two funds, one for operating activity and one for grants, were never combined into a single view; finance lacked visibility into outstanding obligations, including invoices that had not yet arrived; and there was no rolling forecast with thresholds for escalating problems to leadership or the board.

Board member Praveen Kathpal pressed staff on how the FY26 budget was built. Herring said the budget "wasn't as realistic as it should have been" and that its assumptions were not detailed enough to reflect what it actually takes to run DASH for a year. She gave software licenses as an example: some were budgeted, some were not.

Baker pointed to the calendar. DASH submits its budget before it has the prior year's closeout, so FY26 was built largely off FY24 numbers. "A lot happened in 25 and a lot happened in 26, much more substantial than we would have ever expected," he said.

Internal reports through the year showed deficits of roughly $4,000, then $20,000, then $196,000.

"And then boom, 3.7 million," Herring said. "There was nothing that they would have seen based on the reporting they were getting that would have made them think that, wait a minute, we need to stop the process and do something about this."

What the money bought

Maintenance services ran about $1.43 million over budget, the single largest line.

Chief Operating Officer Stephanie Salzone said most of it went to outsourced repair labor. DASH has 15 mechanics, nine hired since the pandemic, and competes with several transit agencies in the region for a job that is hard to fill anywhere.

Eighty-six percent of the spending went to buses at or past midlife. Ten percent went to seven Proterra units, only two of which are still in service, after the manufacturer went out of business. DASH also has 35 buses with an engine model under a manufacturer service bulletin for a known defect, and has replaced 10 engines so far.

Salzone said the spending produced results: buses out of service fell below the 20% threshold for the first time in more than a year, and missed trips due to no bus available dropped sharply.

"If at any point I knew that we were putting ourselves in this situation because of our efforts, I would have looked for alternative paths to maintain our budget," she said.

Cuts already underway

General Manager and CEO Josh Baker said DASH is operating as conservatively as it can until it understands FY27.

"As CEO I own that," Baker said of the situation. "That is ultimately my responsibility and I will continue to say that."

Salzone has paused overtime coverage for open operator work, paused outsourced maintenance and paused charter service.

Raymond Mui, chief infrastructure and development officer, said DASH will cut systemwide recovery time, the built-in cushion between trips, by about 13% starting Nov. 15. He estimated savings of roughly $700,000 for the rest of the fiscal year, with expected effects on on-time performance and on drivers' breaks.

Yvonne Jung, chief labor and engagement officer, said the division will scale back what DASH calls the "DASH Difference," including employee awards that cost about $50,000 a year, bus wraps, community events, professional development and travel. She estimated the total at roughly $250,000 but said she needs to confirm it.

"The more we pull back these things, the more we pull back on our culture," Jung said.

FY27 and what comes next

DASH does not yet know the size of its FY27 gap. Herring said the city does not expect to fully close FY26 until late September, and DASH will not see its first month of FY27 actuals until mid-October.

Baker said the FY26 shortfall was covered with savings the city found in its existing budget, and that DASH cannot count on that again.

FY27 also carries a pressure the budget does not cover. DASH's May board report said diesel costs had risen since the budget was drafted, and that if prices held, the exposure "could result in a projected year-end deficit of approximately $1.3 million in FY2027." The FY27 budget slide the board approved in June lists rising fuel costs among cost pressures not addressed.

The city had already increased its FY27 contribution before any of this surfaced. Council approved $37.8 million in general fund support for DASH and the trolley, up $1,590,449, driven by salary increases required under the collective bargaining agreement and seniority step increases. Council also added ongoing money during the add-delete process to increase service frequency on Line 32 between Landmark and the Van Dorn Metro station. Grant funding from other sources is budgeted to fall about 9.5% in FY27.

He told the board there are two ways to close a gap this size: reduce service, or find new money. Kaplan said no service is being cut now, and that any proposal to change what DASH runs would go through a public process.

Kaplan also addressed fares, which DASH stopped collecting in 2021. Restarting would take about two years under the board's own framework, he said, meaning no revenue in FY27 and likely none in FY28, plus costs to set it up.

After a closed session, the board voted to direct its attorney to engage an auditor and to create an audit working group. The board is also working with a transit finance expert brought in through a state contract.

DASH's former chief financial officer is no longer with the organization. Baker said the departure has made answering some questions harder.

What the city told The Brief

The Alexandria Brief sent questions to City Manager James Parajon. The answers came Wednesday from Ebony Fleming, the city's director of communications and public information, and they give a different picture than DASH did on several points.

Asked where the money to cover FY26 came from, the city said it found additional transit savings in the general fund tied to increased state funding, and is using those for a one-time payment. It also said it expects DASH "to adjust its current budget to address a portion of the shortfall," with those savings used to replenish money the city had planned to set aside in reserve for future transit needs. So DASH is expected to absorb part of FY26 out of the year it is in now.

On FY27, the city and DASH do not agree. Baker told the board the FY27 budget was "likely built on a false premise of what it actually costs to operate DASH," and Herring said the FY27 analysis "will define the funding gap that the board will consider in October."

The city's response: "The City does not anticipate an FY27 gap and expect DASH to operate within its adopted budget."

The two also describe DASH's relationship to the city's financial system differently. The city said the Alexandria Transit Company "is a separate entity that maintains its own financial system and reports the totals to Munis." Herring told the board the opposite: "We're in Munis as a department of the city. So we're not a separate entity. So it's not like our data is totally separate from their data."

On timing, the city said its staff noticed the discrepancy in DASH's reporting "as part of our end of the year closeout." Herring said that when she met with city finance on her second day, "there were flags. They were concerned. They were asking, well, what's going on?"

Asked about Kevin Greenlief, the city's finance director, who sits on the DASH board as a city appointee, the city said he "was serving as a board member, not as DASH financial staff or an auditor, and relied on the financial information provided to the board." Greenlief was absent from the Sept. 9 meeting; Kaplan said he was in New York with city staff meeting bond rating agencies.

The city said it will close its FY26 books by the end of September, and that it is reviewing the information DASH provided about the overage and evaluating what measures DASH is putting in place.

What DASH told The Brief

In written responses Wednesday evening, sent by Caleb Keller, a marketing and public engagement specialist, DASH confirmed its former chief financial officer's employment ended July 10. It declined to say whether the departure was related to the deficit, citing a policy against commenting on personnel matters.

The transit system said its finance department is responsible for processing and tracking all financial transactions, and that initial reviews show the $3.2 million entry "was a human-made error." It said it is conducting a root-cause analysis and revising policies and procedures.

DASH did not directly answer when city staff first raised concerns. "By the time Donna Herring had joined as Interim CFO, DASH leadership was aware and communicating with the City about the budget concerns that were raised during the end-of-year close-out process," it said.

It has not yet determined which budget line the error flowed through, a question board members pressed staff on Sept. 9, and said it will answer at a future board meeting. Asked about the auditor the board directed its attorney to engage, DASH said the board "cannot comment on matters that may or may not have been considered during an executive session."

On FY27, DASH would not give a range. "We are still rebuilding the FY27 budget to verify all assumptions," it said, noting that fuel and parts costs are at record levels. That is a different posture than the city's, which said it does not anticipate a gap.

Asked whether service could be cut this fiscal year, DASH said reductions "may be considered" but "would always be a last resort after other options have been evaluated."

The recovery time reduction taking effect Nov. 15 was chosen as the immediate option with the least public impact, DASH said, though effects on on-time performance "will likely be felt system-wide but to varying degrees." The roughly $250,000 estimate for scaling back the DASH Difference is still being finalized.

WSP, the firm conducting the financial review, was selected from a state pre-procured contract list and will be paid from the FY27 operating budget.

Ryan Belmore is an Alexandria resident and the founder and publisher of The Alexandria Brief. Send tips, feedback, and story ideas to ryan@alexandriabrief.com.