Metro Reports Cite Accounting and Security Gaps
Problems Include Management of Federal Fund and Tracking of Farecards
Sunday, March 22, 2009
Metro is asking state and local governments for more funding to help close its budget gap, but two reports raise concerns about how the agency monitors spending and fraud.
The reports, by Metro's inspector general, highlight weaknesses in the agency's handling of federal funds and tracking of Farecard inventory. They also found sloppy accounting, a lack of internal controls and poor oversight.
In some cases, there were inadequate physical safeguards for cash and Farecards. For example, security cameras at two Metro sales offices remained broken for two years. Supervisors said they alerted sales office managers, but no action was taken. After sales office workers found cash and Farecards missing, requests for action were not acted upon or investigated, according to Inspector General Helen Lew.
As Metro and its board consider reducing service, seeking larger contributions from jurisdictions served by the agency and using federal stimulus money to close a $29 million deficit in next year's budget, some riders and officials have questioned how the agency manages its funds. The agency is slated to receive about $200 million in stimulus money.
"Shouldn't the people in charge of the money be in charge of the money?" asked Ben Ross, spokesman for Transit First!, a riders' group. "That's the kind of sloppiness that led to the problem with money being stolen from the parking garages," he said. In 2004, Metro discovered that $500,000 to $1 million a year was going missing from parking facilities because managers ignored problems of clerks stealing parking fees. The scandal prompted Metro to switch to a cashless parking system.
"The bottom line is more accountability and transparency is demanded of every public agency," said Maryland Transportation Secretary John D. Porcari. "I look forward to following up on some of these issues with the general manager and others."
Fairfax County Supervisor Jeff McKay, a Metro board member, called the issues raised in the reports "very disturbing."
"Contemplating giving more money to an agency that has flaws like this is a tough pill for a lot of my colleagues," McKay said, noting that the county is facing its own budget crisis. The reports demonstrate "that we haven't really sifted through a lot of years of corruption and lax oversight at Metro," he said. "It makes you wonder where the bottom is."
Metro officials said they have instituted new internal controls and procedures. In the past six months, top finance personnel have been replaced. Over the past two years, the agency has eliminated 500 positions, creating "major efficiencies everywhere we can," said General Manager John B. Catoe. He said that the agency needs to improve oversight of accounting and financial functions, as well as customer service, and that he would be "making changes."
With about 10,000 employees, Metro is a "huge ship to flip over completely," he said. "We're not perfect, but we're getting there."
Metro has also failed to track how federal funds are spent, the audit found. The agency has received about $2.2 billion in federal grants over the past 10 years, primarily from the Federal Transit Administration and the Department of Homeland Security. The funds are for capital projects, such as overhauling buses and rail cars, and they can be spent only for those specific purposes.
But in several instances, the inspector general found, the accounting was inaccurate. For example, Metro spent $46,000 to buy two police motorcycles with money for preventive rail maintenance. Metrobus managers spent $264,000 on 50 laptop computers under a line item for 40-foot hybrid electric buses. (The laptops were to be installed in supervisors' vehicles to help them track bus locations.)