Bloomberg News

N.Y. MTA Overtime Scam Netted Workers $1 Million, DiNapoli Says

November 09, 2011

Nov. 9 (Bloomberg) -- A 30-member unit of the Metropolitan Transportation Authority’s Metro-North railroad abused overtime rules to inflate compensation by almost $1 million and future pension payments by $5.5 million, an audit by New York state Comptroller Thomas DiNapoli showed.

One worker increased his projected pension by $1.5 million, DiNapoli said in an e-mailed statement. DiNapoli’s office, which has audited the MTA 17 times since 2007, examined the unit’s 2010 payroll records.

Supervisors for the signal-construction unit, which worked on Metro-North’s Hudson and Harlem lines, assigned employees to nighttime duty even though they had day shifts, the statement said. The switch then triggered a federal requirement that the workers rest while earning full pay during their regular shift the next day.

“MTA management has tolerated a manipulation of the system by both supervisors and workers who have enjoyed the perks of having daytime shift jobs that need to be done at night and on weekends,” DiNapoli said. “Federal laws implemented to protect riders were exploited to enrich employees at the expense of taxpayers.”

The MTA, the biggest U.S. transit agency, operates New York City’s subways, buses and commuter railroads, including Metro- North and the Long Island Rail Road. It carries 8.5 million riders a day.

Off-Peak Shifts

DiNapoli’s audit said the overtime might have been avoided had supervisors scheduled work hours for some employees during the off-peak shifts. Of the unit’s 30 workers, 28 were found to be involved in the shift manipulation, costing the MTA $991,208 in additional overtime payments, the audit said.

The supervisors may have potentially acted fraudulently because they scheduled overtime and paid rest shifts for themselves for duties not included in the federal statute, DiNapoli said. The audit also found that the unit’s supervisors were approving their own time records and charging payroll costs to unrelated capital projects.

In a letter to DiNapoli’s office included in the audit, Metro-North President Howard Permut said supervisors don’t have the authority to approve spending for capital projects.

The comptroller said he referred the case to MTA’s inspector general.

Metro-North will “seek to negotiate with labor to change contractual provisions that limit our ability to schedule manpower most effectively between daytime vs. overnight shifts,” Marjorie Anders, an MTA spokeswoman, said in an e- mailed statement. “The goal is always to work safely and seek a balance between the operating needs of the railroad and the costs of providing those critical functions.”

Last month, federal prosecutors in Manhattan accused 11 people of participating in a $1 billion scheme to falsely claim disability benefits for retired Long Island Rail Road workers. Two doctors were among those accused of recommending that hundreds of retirees get payments from the U.S. Railroad Retirement Board, according to the complaint.

--With assistance from Esme Deprez, Patricia Hurtado and Bob Van Voris in New York. Editors: Mark Schoifet, Stephen Merelman

To contact the reporter on this story: Freeman Klopott in Albany, New York, at fklopott@bloomberg.net,

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net.


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