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?