Home MTA Economics DiNapoli: MTA rife with ‘systemic overtime abuse’

DiNapoli: MTA rife with ‘systemic overtime abuse’

by Benjamin Kabak

Over the past few years, I’ve been rather critical of New York State Comptroller Thomas DiNapoli’s reports highlighting MTA efficiencies. He’s been targeting small potato issues that wouldn’t result in major cost savings without highlighting how a comprehensive reform effort involving Albany, MTA management and its labor unions would streamline efficiency and economics at the authority. Telling the world that service changes are annoying and debt is a bad idea hardly seem like game-chargers.

Now, though, a glimmer of useful information has emerged from DiNapoli’s office. In a highly targeted forensic audit of the Signal Construction Unit for Metro-North, DiNapoli has found “systemic overtime abuse” that may rise to the level of fraud. The audit — available here as a PDF — explores how 28 workers in a 30-employee division took home an average of $42,000 per employee in overtime in 2010 and how pension padding may balloon to $5.5 million.

“MTA management has tolerated a manipulation of the system by both supervisors and workers who have enjoyed the perks of having a daytime shift for jobs that need to be done at nights and on weekends,” DiNapoli said. “In 2010, in one 30-member unit at Metro North, over one million dollars was paid out for avoidable overtime and rest shifts. Federal laws implemented to protect riders were exploited to enrich employees at the expense of taxpayers. There’s no place for this type of abuse in New York and it must stop.”

In a press release, DiNapoli’s office summed up the technical findings:

Supervisors boosted employee incomes and pensions by regularly assigning overtime work to be done at night by workers whose normally scheduled shift was during the daytime. These extra overtime shifts in turn triggered a requirement (the federal Hours of Service statute) that they rest – at full pay – during their next day’s shift.

DiNapoli’s auditors calculated that the shift manipulation for 28 of the 30 employees in the Unit cost Metro-North $991,208 in overtime and $216,128 in pay for rest shifts in 2010. For six of these employees, the additional payments inflated future projected pension benefits by $5.5 million. One worker was able to increase his projected total pension amount by $1.5 million above what would have been earned at his regular salary.

The Signal Construction Unit supervisors, who are not covered by the statute, also improperly enriched themselves by scheduling their own overtime and paid rest shifts. The Comptroller’s office believes the supervisors’ actions are potentially fraudulent because they did not perform job duties expressly set forth in the statute. In addition, the audit also found that supervisors improperly approved their own time records and charged payroll costs to unrelated capital projects to avoid detection.

While Metro-North officials in a letter appended to the audit disagreed with some of DiNapoli’s findings, the comptroller has referred the case to the MTA Inspector General for further investigation. A finding of corruption or legally-actionable fraud could be quite revealing for both the MTA and Metro-North workers.

In fact, the audit itself could be troubling without further investigation. Two rank-and-file crew members did not disguise their ability to exploit the job for more pay. “I’m entitled to it,” one said. “It’s my turn now.”
Another employee added, “I know I have a good gig going on. If I had to name the top five jobs in the country, this would have to be, hands down, number one.” DiNapoli claims these MTA workers “exemplify the sense of entitlement and culture that is likely pervasive throughout the MTA.”

Ultimately, DiNapoli’s suggestions seem rather obvious. Stop unnecessary overtime pay; don’t allow supervisors to sign their own attendance records; stop improper payments. Yet, despite this seemingly mundane outcome, DiNapoli’s audit is an eye-opener. In one department of 30 workers, 28 of them took home an extra $42,000 in overtime pay last year. How deep does this run?

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nycpat November 10, 2011 - 1:05 am

This does not happen at NYCT. This is not a TWU Local 100 issue. Railroad workers are not civil servants. Just want to get that straight.

Hank November 10, 2011 - 2:59 am

Oh but I’m sure all are guilty of this scam. OT rules are an invitation to abuse.

BrooklynBus November 10, 2011 - 8:59 am

I also doubt that this type of abuse occurs at NYCT. The railroads have historically had more overtime abuse than NYCT. That said, the MTA should have been uncovering this on their own. Didn’t Walder say his mission was “to make every dollar count”?

That said, I believe that sense of entitlement and culture spoken about does also exist at the NYCT. . I remember working with a 90k plus manager who two weeks before retiring about 8 years ago, bought himself a $50 fountain pen as his own retirement gift using his MTA credit card . That is only what I knew about. It may not be much dollar-wise, but it’s the entitlement attitude that’s important here. I’m sure he didn’t even feel he was doing anything wrong. It was just something he deserved and the MTA owed him because he probably felt underpaid although he never worked hard in the first place.

Larry Littlefield November 10, 2011 - 9:32 am

I want to back up what NYCPAT said. This does not happen at New York City Transit. Or at least not much, not systematically. They change people’s shifts.

There is a broader issue here. With the exception of Medicaid and retroactive pension enhancements, since the 1970s most of the labor abuses have been OUTSIDE New York City.

But the so called fiscally conservative groups have hesitated to bring this up, and have generally called for budget cuts INSIDE New York City as a result of “waste, fraud and abuse.”

And most of those doing the abusing inside NYC commute in from the suburbs, are are part of groups of people who live in the city but are like those who commute in from the suburbs.

The MTA, the riders and the taxpayers have some legitimate issues with the TWU. But the bigger problems are the contractors, Paratransit, and the commuter railroads.

Bolwerk November 11, 2011 - 10:57 am

There must be some awareness among the so-called fiscally conservative groups, at least the propagandists and power brokers, that keeping so-called conservatives in power requires keeping people sucking the government’s pap. You just need to segment how it’s done; rural areas and suburbanites need “investment” in the form of wealth transfers, pork, infrastructure, and entitlements; urban areas need a hopeless, impoverished population dependent on welfare, section 8, and other social services to point at and mock.

It’s a perverse form of political yield management, but it mostly works. Most obviously, they’ve made sure that poor inner city blacks and impoverished rural whites feel they have starkly different political interests, despite having almost identical economic interests (and, ironically, similar social values).

Woody November 10, 2011 - 3:54 am

The division had 30 employees and 28 of them were included in the sweet deal. Guess the devision had two black employees. Two females? Or what?

Yes, I am a cynic. Why do you ask?

Bolwerk November 11, 2011 - 10:58 am

Two no-shows?

Eric November 10, 2011 - 7:14 am

By your logic, they would have had two instant whistleblowers, and the scam would never have lasted as long as it did.

Al D November 10, 2011 - 8:48 am

Has DiNapoli ever heard the story about the boy who cried wolf? Would he please go away?

Streetsblog New York City » Today’s Headlines November 10, 2011 - 8:52 am

[…] DiNapoli Reports Metro-North Overtime Abuse (WNYC, Second Ave Sagas) […]

Today’s Headlines | Body Local NYC November 10, 2011 - 10:18 am

[…] DiNapoli Reports Metro-North Overtime Abuse (WNYC, Second Ave Sagas) […]

Billy G November 10, 2011 - 11:01 am

This kind of thing is what happens with over-regulation of a workplace.

Supervisors feel that they have no ownership within the organization and they take more kindly to their charges than to management above them.

Workers are guided to find ways to milk the system through existing loopholes to be able to feather their nests. I feel no enmity toward these individuals, they are gaming within the rules and gaming as an act itself is not fraud.

The answer is to stop with the union and government regulation. Employees need to be accountable to their uppers and the rules can’t be so chiseled out so far in advance and be immutable. An end to long-term employee contracts is what’s needed.

Al D November 10, 2011 - 2:08 pm

Unions were formed as result of an in-humane workplace at the dawn of the Industrail Revolution. While we are stepping back towards that now instead of away from it, we are still far, far from it. Bad idea.

Alex C November 10, 2011 - 9:32 pm

We need to get rid of the corruption. The problem with the TWU is the corrupt leaders and the culture they allow and enable. If you want no regulations and unions, I hear Somalia is great this time of the year.

Walter November 10, 2011 - 3:43 pm

Well, this doesn’t actually look like too much of a deal, and goes like this. Signal workers can only work 12 hours a day do to FRA rules. Signal construction is complex and can really only be done at night, but travel to and from a controlled point from a headquarters also eats up time. Signal workers are needed during the day in case of issues, so most have a day shift and work overtime at night when needed.

Basically, the FRA has to loosen it’s grip on the testicles of our railroads, and the MTA may want to think about splitting signal maintainers’ shifts into day and night.

Paul November 10, 2011 - 8:30 pm

For some more data in this vein, read “The Gravy Train” {LIRR} by Dan Ruppert.

Links roundup—extended edition (with horse racing and Paul McCartney) « Public Authorities January 2, 2012 - 6:51 pm

[…] Supervisors and workers at one of the MTA’s Signal Construction Units have manipulated the payroll system and abused overtime rules, according to a forensic audit released by the state comptroller earlier this month. [OSC Press Release] [OSC Report] [2nd Ave. Sagas] […]


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