Comptroller faults Metro-North overtime

In a 28-page report dated Nov. 9, addressed to now-departed Metropolitan Transportation Authority Chairman Jay Walder, New York State Comptroller Thomas P. DiNapoli reports an audit “found that Hudson and Harlem Line Signal Construction Unit employees received costly and, in certain instances, potentially fraudulent payments due to long-term practices that may have been avoidable.

“In fact, for calendar year 2010, we determined that these practices cost Metro-North $991,208 in overtime and $216,128 in regular pay, and enriched certain staff and supervisors,” DiNapoli said.

The report follows recent media coverage last month of disability payment fraud at the Long Island Rail Road, Metro-North’s sister agency. Said DiNapoli, “These payments occurred because of a pervasive culture of management acceptance of long-term practices, employee feelings of entitlement to additional compensation, and ineffective internal controls in Metro-North’s payroll office.”

“Most of the Signal Construction Unit workers are covered under a federal statute governing “Hours of Service,” which generally provides that employees can work up to 12 hours within a 24-hour period, and then they must be provided with at least 10 hours of rest time,” the report’s Executive Summary says, adding, “We determined that supervisors set work schedules so their employees worked 12-hour shifts overnight (collecting overtime pay for this time), which then forced the employees to go into the Hours of Service rest interval during their normally-scheduled work hours. Further, we found that supervisors included themselves in this scheduling arrangement, even though they do not appear to be covered by the statute.”

DiNapoli notes “Metro-North officials agree with most of our report conclusions and recommendations. However, they do not agree that any frauds have been perpetrated by their staff.”

The comptroller’s office offered six recommendations to resolve the problem:

1. Study the cost benefit and feasibility of rearranging signal workers’ schedules (e.g., a night shift) so that unnecessary overtime pay is stopped;

2. Discontinue Hours of Service payments and related premium pay for employees who are not entitled to it;

3. Investigate the inappropriate payments noted in our report and take appropriate corrective action, including disciplinary action, recovery of payments, and adjusting pension benefits;

4. Clarify and communicate, as appropriate, which employees are entitled to compensation for Hours of Service and which are not;

5. Adhere to payroll controls that are designed to provide checks and balances such as reconciling all exceptions between KRONOS and manual attendance records; and

6. Immediately discontinue the practice of supervisors signing attendance records for themselves and determine whether other corrective action or disciplinary action is warranted.