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State: Audit Shows Systematic Overtime Abuse at Metro-North

Salaries and pensions found to have been inflated.

Supervisors and workers at a Signal Construction Unit at the Metropolitan Transportation Authority's Metro-North Hudson and Harlem Line have manipulated the payroll system by abusing overtime rules that inflate their salaries and pensions, according to a forensic audit of overtime practices released by state Comptroller Thomas P. DiNapoli.

"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 $1 million 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."

State Sen. Suzi Oppenheimer, D-Mamaroneck, praised the audit and its findings.

“Comptroller DiNapoli and his office deserve much credit for their work to uncover such large-scale fraud in an organization that thousands of my constituents, and millions of other New Yorkers, depend on every day," Oppenheimer said. "While I hope future audit reports come up clean, if there are other illegal practices taking place they must be stopped.  Taxpayers deserve better from the MTA, which must put in place safeguards to end this abuse once and for all.”

In 2010, Comptroller DiNapoli announced his office would conduct a forensic audit of overtime practices at the MTA. Upon investigation, he said auditors discovered a pattern of high overtime payments at the Metro-North Signal Construction Unit that was attributable to a long standing practice of shift manipulation.

DiNapoli said 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 that they rest – at full pay – during their next day's shift.

DiNapoli said auditors calculated  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, DiNapoli said, noting that 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, DiNapoli said.

Metro-North management disagreed with some of the audit's findings. The Comptroller is referring the findings of this audit to the independent Inspector General of the MTA for further review.

Comptroller DiNapoli recommends that MTA management:

  1. Stop unnecessary overtime pay by rearranging signal workers' schedules;
  2. End the practice of supervisors signing their own attendance records;
  3. Discontinue improper payments to all employees, recover improperly paid funds and adjust pension benefit calculations;
  4. Clarify and communicate which employees are entitled to compensation for Hours of Service and which are not.

View the audit online at http://osc.state.ny.us/audits/allaudits/093012/10s60.pdf.

mlloyd01 November 10, 2011 at 01:36 AM
This should be the first order of expedited business: "3. Discontinue improper payments to all employees, recover improperly paid funds and adjust pension benefit calculations;"
Peter Pascale November 10, 2011 at 03:54 PM
What are the consequences for this abuse? The abusers should not be allowed to just walk away with unearned taxpayer dollars. All government needs to crack down on how pension benefits are determined and govern those aspects tightly. I'm tired of hearing about abuses. Make changes and find a way to punish those who have abused the system. (i.e. their pension benefits should be cut)
T Hall November 10, 2011 at 06:58 PM
Unfortunately the consequences will be placed on the riders. Trains that don't work, escalators that never work and less money to fix them.
Frank Figliola November 10, 2011 at 10:54 PM
Why is this treated as a surprise. This abuse (a.k.a. grand theft OT) has been going on in every non private organization in local, state and federal entities. It has been winked at for many years by our politicians who buy votes from these entities at the expense of the taxpayer. Vote tuff, not party!
ELLIE MARSHALL November 12, 2011 at 03:06 AM
this issue is so old.I remember the investigations back in the 70's when the big issue was feather-bedding. slapping wrist and making a lot of investigatory noises will not do a damned thing. Jail time and firing the bums after restitutions of funds are made,is a start.

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