MEMPHIS, Tenn. -- In new developments in the city's public transportation system's funding issues, the city's legal team calls into question the Memphis Area Transit Authority's failure to return federal funds. The saga picked up this week as MATA's interim Chief Financial Officer Hamish Davidson accused the city of holding the $4 million needed for operating expenses. "I have never come across such difficult and onerous position in managing the cash flow at a business," he told the board. "It is going to get to a stage unfortunately where there will be vendors that withdraw their services. They will be critical services and there will be no buses running on the streets. That is not the fault of the people in MATA." MATA leader says she didn’t know about agency’s shaky finances This summer MATA announced a $60 million deficit, which lead to them halting the trolleys while also cutting jobs and routes. In August, MATA officials met with the mayor and vowed to provide backup documentation as they worked on a strategic plan. City officials told us that's a "mischaracterization." The next day, the city's Chief Legal Officer Tannera Gibson fired back in a letter to MATA's Interim CEO stating in part that the city will release the funds, but they want receipts. The city made it clear MATA must cooperate with the independent transit consultant it has hired, and if they find out funding was spent on something they didn't approve, it will likely affect MATA's ability to receive city funding. MATA spent millions on trolleys before service halted Gibson also claimed the delay was due to MATA not providing certain invoices and added, "Serious concerns remain as to MATA's operational and fiscal decision making." In a footnote, she noted MATA also "failed to provide proof" the city's been asking for since June. It read, "MATA has resolved FTA deficiencies calling MATA's financial management and capacity into question for MATA's failure to return federal funds." Funding-letter-to-MATA-9.25.24Download We asked the city what federal funds they were referring to, but we've yet to hear back. MATA refused to comment on the claims and whether they provided proof, what federal funds needed to be returned and why. MATA spent millions on new office, furniture, Grizzlies suite, more WREG Investigators also reached out to the Federal Transit Administration. They told us are gathering information. The FTA has provided millions in grants to MATA. They also make it clear on their website, any funds awarded for a project must be used for that project and excess funds must be returned. WREG Investigators will keep digging and let you know what we find out.