MTA vulnerable to corruption, study says.

Investigation highlights potential for fraud, bribery 

Metropolitan Transportation Authority contracting policies leave the MTA vulnerable to possible bribery and fraud, according to an audit conducted by the National Institute of Governmental Purchasing earlier this year.

The audit report dated April 22, 1995, was commissioned by the MTA Inspector General's Office, said MTA spokesman Steve Chesser. The MTA Inspector General's Office is an in-house, independent investigative unit.

The NIGP is a non-profit, professional association of government agencies that provides education services, certification of government purchasing agents and managers, and a management auditing function.

Although other MTA audit reports completed at about the same time were publicly released, this one was not, apparently because it was performed for the IG. The Business Journal, however, obtained a copy of a 12-page draft report written by MTA construction division staff responding to the NIGP audit and quoting from it. The draft staff report was leaked by MTA critic John Walsh. Chesser said the staff response was sent to the IG.

Key elements of the audit report include:

* The auditors discovered "incomplete contracts files where key information has been purged."

MTA staff responded that MTA attorneys are helping the MTA to establish a new policy on this.

"Evaluators' original scores and comments, after verified consolidation, are currently destroyed to protect evaluators from unwelcome pressure that may limit their willingness to provide objective scores and comments," MTA staff explained.

Links criticized

* Auditors noted that there are MTA employees who have ties to contractors through past employment and who make decisions about awarding contracts.

MTA staff responded that this question is also being reviewed by MTA attorneys.

* Auditors concluded that MTA policies are "too broad to provide safeguards against conflict of interest, kickbacks, bribes, back-door selling and other forms of waste, fraud and abuse."

MTA staff countered that the MTA's "strong ethics policy" adequately addresses these issues.

* Auditors reported a "perception" that some MTA managers, executives and board members exert personal influence on the procurement process and show favoritism to specific contractors.

MTA staff responded that there is no hard evidence to back up this "perception."

* Auditors alleged that criteria that were not included in MTA requests for proposals have been used to choose contractors.

MTA staff flat-out denied this.

No policy on errors

* Auditors noted that there are no written policies or procedures for handling "the common occurrence of mistakes in bids."

MTA staff responded that deciding whether a mistake in a bid may be corrected is "a good judgment call process" and "a policy is not required to perform this evaluation function."

MTA staff members, in their draft report, argue that the NIGP audit is "unbalanced in its critical nature and fails to make any mention of the significant positive accomplishments achieved by MTA's contracts function."

The head of NIGP's auditing division in Reston, Va., D'Arcy Roper, said the staff response was typical in its defensive tone. He said his auditors were "not happy with what we saw" of MTA purchasing policies, and maintained that NIGP "stands behind what we published."

MTA staff also notes that NIGP auditors only spent an hour and a half interviewing construction division staff.

"This suggests that a considerable amount of information used by auditors was provided by persons outside of the contracts function," MTA staff complained in the draft report. "Staff challenges the distorted and biased findings in the report as both an inaccurate and unfair reflection of the current situation."