For the past few months, the MTA has been scrambling to close a budget gap of nearly $400 million. Each week, the authority unveils a new approach to management that will, in the words of Chair and CEO Jay Walder, help make every dollar count, and these measures have included limiting overtime, changing work rules, renegotiating contracts and laying off station agents. Nothing is sacred as the dollars are scarce.
Late last week, though, New York State Comptroller Thomas DiNapoli unveiled the results of one of the numerous audits to which he is subjecting the MTA, and in it, he reveals that the authority could be wasting tens of millions of dollars on fuel contracts for New York City Transit and MTA Bus. Due to what DiNapoli is calling “wasteful practices and improper oversight” along with bad bookkeeping practices, the comptroller believes the authority spent $39 million more than it needed to on diesel fuel costs over a three-year span. At this point, the $13 million annually could be put to better use.
“New York City Transit and the MTA Bus Company are literally running out of gas because of their poor spending practices,” DiNapoli said in a statement. “They squandered more than $39 million of taxpayer dollars due to outdated, expensive contracts and delayed decision-making. Buses don’t need jet fuel, and taxpayers shouldn’t have to pay for it. There are some clear, decisive steps to cut excessive fuel spending. The MTA should work with OGS to lower its fuel bills and maintain accurate records for how the bus fleet buys and uses fuel.”
The audit — available here as a PDF — explores the MTA’s fuel procurement process and basically condemns the agency for negotiating an unnecessarily expensive and environmentally unfriendly contract for diesel fuel in 2002. In 2006, the MTA had to renew this contract at a loss of nearly $30 million because no other company submitted a bid. As I explored last week, the MTA’s contract bid system is a very fault one, and this audit simply reinforces that notion.
As a conclusion, DiNapoli’s suggestions were barely groundbreaking. He urged the MTA to “explore alternative contracting strategies including the use of the OGS fuel contract; finalize new policies regarding fuel accountability and train personnel on the new rules; account for fueling discrepancies on a daily basis; and require fuel to be tested for compliance with contract specifications.” Outcomes such as these make me wonder what the other dozen audits DiNapoli is conducting are truly going to find. Will his examination of the MTA’s overtime practices be more revealing that the authority’s own condemnation of the way overtime is abused or can DiNapoli find savings that amount to real annual dollars instead of token amounts in $10 million increments?
For its part, the MTA said it had already begun to implement changes DiNapoli suggested in the audit, further shining doubt on the utility of these non-stop audits. The report, said the MTA, “did not acknowledge the significant progress that had been made in establishing the necessary policies and procedures for fuel monitoring at the MTA Bus Company prior to the conclusion of the audit.” With the MTA in “general agreement” with the findings, DiNapoli’s audit highlight internal inefficiencies in a massive bureaucratic organization, but it also seems to be a classic example of closing the barn door after the horse has escaped. Unless DiNapoli can find real institutional abuses and shortcomings at the MTA, his audits achieve little.