Purpose

To determine whether the Metropolitan Transportation Authority effectively managed its cash and maximized its return on investments. Our audit scope period was January 1, 2008 through March 31, 2011.

Background

The Metropolitan Transportation Authority (MTA) is a public benefit corporation providing transportation services in and around the New York City metropolitan area. The MTA is governed by a Board of Directors, whose 23 members are appointed by the Governor and confirmed by the State Senate. The MTA includes seven constituent agencies, each led by a President who is appointed by the Board. The MTA also includes a Headquarters, which provides administrative support for the seven constituent agencies.

Key Findings

• MTA follows certain important practices to manage cash and to maximize return on its investment portfolio. However, improvements are needed to provide the best assurances that cash and investments are optimally managed and available sources of revenues are considered when preparing budgets to meet operating and capital needs.
• We identified $92.1 million maintained in funds and bank accounts that could have been factored into the budgeting process. MTA officials did not have a written plan for meeting the objectives set forth in its investment guidelines.

Key Recommendations

• Routinely monitor the funds, document required balances and ensure that excess moneys are factored into the budgeting process for meeting MTA operational and/or capital needs.
• Monitor daily bank account balances to ensure that proper amounts are being turned over to the MTA Treasury Department.
• Establish a written investment plan which includes yield expectations and perform documented analysis demonstrating performance against the yield expectations.

Other Related Audits/Reports of Interest

None