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November 9, 2011


DiNapoli: Forensic Audit of MTA Reveals Systemic Overtime Abuse at Metro-North Railroad Unit

Supervisors and workers at a Signal Construction Unit at the Metropolitan Transportation Authority's (MTA) 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 today by New York 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 one million dollars 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."

In 2010, Comptroller DiNapoli announced that his office would conduct a forensic audit of overtime practices at the MTA. Upon investigation, 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. 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 (the federal Hours of Service statute*) that they rest – at full pay – during their next day's shift.

DiNapoli's auditors calculated that 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. 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.

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.

This report is the first in a series stemming from a forensic audit of overtime practices at the MTA announced last year by Comptroller DiNapoli. A forensic audit examines practices or organizations in which there is a reasonable risk of fraud or illegality. Since 2007, Comptroller DiNapoli has completed 17 audits of MTA practices and organizational structure. In the coming months, Comptroller DiNapoli will release further findings from the OSC's continuing forensic audit of overtime practices.

Comptroller DiNapoli encourages the public to help fight against fraud and abuse. New Yorkers can report allegations of fraud, corruption and abuse of taxpayer money by: calling the toll-free fraud hotline at 1-888-672-4555; filing a complaint online at; or mailing a complaint to: Office of the State Comptroller Investigations Unit, 110 State Street, 14th floor, Albany, NY 12236.

You can view the audit report online at

* What is the Hours of Service statute?
The Hours of Service statue was enacted in 1907 to improve railroad safety by limiting the number of hours certain railroad employees, such as conductors and engineers may work within a designated time period. The federal statute requires a mandatory rest period of 10 hours after employees work up to 12 hours. The emergency provision clarifies that these employees cannot perform routine work during this time.


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