MTA Bus Company Report
MTA/OIG # 2008-07
In response to a June 2007 request from the President of MTA Bus and the MTA Auditor General (MTA Audit), the OIG began reviewing certain aspects of MTA Bus operations. Those requests were prompted by MTA Audit’s identification of overall control weaknesses, unusual transactions, and numerous management personnel vacancies that could create potential vulnerabilities.
OIG conducted numerous tests to determine whether the various control weaknesses cited by MTA Audit were being exploited and found certain weaknesses in the areas of payroll, procurement/inventory and accounts payable.
Specifically, we found that:
- Payroll – MTA Audit found, and the OIG verified, that certain employees were not complying with a management directive that they electronically swipe in and out each day. While MTA Bus management made efforts to resolve the problem, the OIG’s study revealed that management had never issued clear directives to the employee assigned to administer the program, and never verified that applicable sanctions were being imposed. This break between policy and implementation resulted in the payment during a four-month period at one depot of at least $26,000 in wages that should not have been authorized. Once notified, MTA Bus management took steps to rectify the situation
- Procurement/Inventory – Included in their prices for remanufactured bus parts, suppliers billed MTA Bus for core charges (i.e., refundable deposits for recyclable pieces of equipment) that increased the initial cost of the parts by more than 60 percent. Once OIG advised MTA Bus that its failure to track the return of these used pieces imperiled its recovery of at least $143,000 (and possibly significantly more than that) in deposits, MTA Bus took positive steps to recover the money and implement procedures to track the equipment.
- Accounts Payable – MTA Audit determined that a lack of coordination between two Accounts Payable computer systems resulted in some vendors being paid twice for the same services or products. MTA Audit methodology revealed more than $33,000 in duplicate payments. OIG expanded the review and uncovered an additional $25,862 in duplicate payments. Here again, MTA Bus took steps to improve the efficiency of its operation and recoup associated funds.
Indeed, MTA Bus management reported that after being alerted to our findings of duplicate payments, it conducted further reviews and identified an additional $47,000 in duplicate payments which have been recovered through offsets or payments. It also reports that the conversion to a new computer system has been completed and that this system has specific controls to identify duplicate payments.
MTA Bus notified us that it had initiated the recommended corrective actions to improve the efficiency of operations and recoup associated funds.
Candid disclosures made by MTA Bus officials during the OIG’s investigation lead to the following report on the use of procurement cards.