HAMPTON ROADS, Va. (WVEC) -- Hampton Roads Transit demoted its Chief Financial Officer after an internal audit revealed a $1.3 million budget error.

CEO William Harrell told 13News Now a change in leadership was necessary to make sure an error like this doesn’t occur again.

“We receive about $2.2 million from the Elizabeth River Crossings for specific services between Norfolk and Portsmouth, said Harrell. “Somehow an additional $1.3 million was added to local revenue which should not have been placed there.”

Brandon Singleton, who was CFO for three years, was demoted to assistant director of budget.

“We take this very seriously and that’s why we’re making the steps to have new eyes over the chief financial officer position and to really take a hard look at our overall financial overview,” said Harrell.

This isn't HRT's first budget issue. Earlier this year, it reported it was $5 million over budget. Six cities were forced to pick up the tab, and local councilmen were outraged.

“If I was running an organization and this happened, there would be heads rolling,” said Norfolk Councilman Tommy Smigiel in a March city council meeting.

For the current budget issue, Harrell said the $1.3 million wasn’t spent, and said cities and riders will not feel any effects.

“The good news is it’s early enough in the budget process so we can make that amendment but it should not have occurred and that's why I moved to make sure I have fresh eyes in this whole area,” said Harrell.

Sylvia Shanahan, HRT’s director of finance, was appointed interim CFO. HRT spokesperson Tom Holden said the company is conducting a nationwide search to fill the CFO position.