The Metropolitan Transportation Authority is losing millions of dollars each year because of forged bus passes, abused sick leave and a host of other "extremely serious management problems," but officials have done little to fix the problems even after they were identified, a new in-house report has found.
"This is shocking," Los Angeles County Supervisor Mike Antonovich, the new chairman of the MTA, said Thursday as he thumbed through the report from the MTA inspector general's office, which was received earlier in the day by agency board members.
Antonovich ordered immediate changes in the MTA's auditing procedures, saying in a letter to Chief Executive Officer Franklin E. White that "my misgivings about the internal audit operation were confirmed even beyond my worst fears by the (inspector general's) report."
White said, "We have managers who got lazy and sloppy and I'm going to hold them personally responsible for documenting their follow-up to all audit reports."
The conclusions, which later were disputed by the MTA's chief auditor, mark the latest allegations of mismanagement at the MTA. The agency saw $1.6 billion in its federal funding temporarily frozen three months ago because of engineering, construction and inspection problems in its subway project.
Inspector Gen. Arthur Sinai found that the MTA's own auditors issued more than 160 reports last fiscal year, identifying suspected losses of $4.4 million and raising broader questions about hundreds of millions of dollars more in agency spending. Often, however, the MTA failed to respond to the problems once they were raised, allowing them to fester, the report found.
The report found that apparent abuses had been ignored in a number of areas, including:
* Bus passes: An audit issued a year ago found that the MTA loses about $2 million to $6 million each year in counterfeited monthly bus passes, and it recommended that the agency start printing the passes in-house for better security. But the inspector general found no clear plan for executing these recommendations.
* Employee leave: The MTA spent $7.7 million last year on medical and other long-term leave for 257 employees, but half were suspected of abusing the program, according to an audit in April. The inspector general said no one had followed up on the issue since then.
* Ride-sharing: Audits conducted in late 1993 indicated that a private organization hired at $4 million a year to promote ride-sharing was charging about six times the rate that the MTA was spending in-house for the same types of services. Despite the "high degree of overlap," the problem appears to have continued unabated.
* Pension plans: Inadequate controls and documentation in management of the MTA employees' pension and deferred compensation funds could put more than $600 million at significant risk, auditors reported to the MTA treasurer in November, 1993. "No response was received and the audit manager . . . told us no action was taken on it," the inspector general said without elaborating on the deficiencies.
Antonovich said the MTA's lack of accountability over such huge investments could signal the same type of trouble that led Orange County into bankruptcy. "No one outside a select few people know what was happening there, and then the entire system collapsed."
The MTA board is expected to consider reforms for the process at its Jan. 25 meeting.
Filiberto Martinez, director of internal audit, said his office plans to give the board a detailed response later this month. But he said: "From the audit unit's perspective, we're pleased with the progress. . . . Generally, things have been addressed."