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February 13, 2013

DiNapoli: Millions Sat Idle in MTA Bank Accounts

The Metropolitan Transportation Authority (MTA) held over $90 million in funds and bank accounts that could have been used to meet its budgeted costs, according to an audit released today by New York State Comptroller Thomas P. DiNapoli. Auditors found the MTA did a poor job managing its cash-on-hand, had excess bank accounts and no set targets for short-term investing of billions of dollars.

“The MTA is leaving money on the table and in these tough times, every dollar counts,” DiNapoli said. “Our auditors identified several ways in which the MTA could vastly improve how it manages its cash and investments. The MTA must do better.”

The audit examined how the MTA managed its cash and investment portfolio from January 1, 2008 through March 31, 2011. As of March 31, 2010, the MTA maintained $1.8 billion in 126 investment funds. A sample of 10 of those funds totaling $881 million found $64 million in excess monies that lacked any designation of use, either to meet fund requirements or to be used for some type of budgeted cost. These monies could have been factored into the MTA’s budgeting process.

Auditors also found that the MTA did not have a written investment plan, which includes yield expectations for the billions of dollars it invests. Investments ranged from $4.7 billion in April 2008 to $2.4 billion in April 2009. MTA officials indicated that their current market objective is simply to attain the best return without losing any principal, though this policy is not formalized. Because there was no documentation to support investment decisions, it is not possible to know if they met expectations.

The MTA and constituent agencies also maintain bank accounts to manage their cash flow. MTA policy dictates that the balance of certain accounts with more than $1,000 should be forwarded to the MTA treasury department for investment. Auditors looked at 101 accounts and found 45 with balances exceeding $1,000 which together held $27.6 million that had not been forwarded to the MTA treasury. In addition, MTA-NYC Transit maintained 53 accounts for which there was no apparent need. For example, auditors found 19 NYC Transit bank accounts with fewer than 40 collective transactions over a one month period and seven accounts that had no transactions at all.

The MTA generally agreed with the audit’s findings indicating the reorganization and consolidation of its Treasury operations during 2013 will address many of the audit’s recommendations.

For a copy of the report visit: http://www.osc.state.ny.us/audits/allaudits/093013/09s102.pdf

 

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