Purpose

To determine whether the time and attendance-related records for selected Long Island Rail Road (LIRR) employees reflected their actual time worked. We also determined whether identified Metropolitan Transportation Authority (MTA) employees whose home addresses were beyond the metropolitan area were actually residing in New York City and would therefore owe New York City resident income tax. Our audit covered the period July 1, 2009 through June 30, 2010 for payroll analysis purposes, and through December 31, 2011 for field observations.

Background

The MTA provides transportation services in and around the New York City metropolitan area. Each MTA agency requires its employees to document their hours worked. Work hours are supported by various documents including tour schedules, sign-in and sign-out sheets, time clocks, and KRONOS (an electronic "touch" time keeping system). Each agency uses one or more of these mechanisms. This audit, which focuses on the time and attendance of certain employees of the LIRR, is part of a series of forensic audits of the MTA.

Key Findings

We found significant discrepancies between the time and attendance records maintained by employees of LIRR’s Richmond Hill Shop when compared to their work production records for the same periods. We also identified several MTA employees who work and reside in New York City during their respective work weeks who are reporting that they reside outside of New York City and avoiding New York City income tax.

• In June 2010, LIRR paid 41 Car Repairmen for 7,558 hours worked, equating to $271,002. Yet their collective work logs denoted only 1,437 hours worked. These employees appear to have been paid for 6,121 hours, costing $219,476, that were not actually worked.
• Similarly, in July 2010, LIRR paid 40 Car Repairmen for 9,449 hours worked, equating to $356,588, while their work logs supported only 1,244 hours. These employees were paid for 8,205 hours ($309,604) that were apparently not worked. For both June and July, their unsupported work hours totaled 14,326 equating to $529,080. The hours paid include both straight time and overtime.
• We identified seven MTA employees whose reported residences were significantly beyond the New York metropolitan area and used either post office boxes or the address of another MTA employee for mailing purposes. Six of these individuals reportedly resided in the State of Delaware, and one individual's home address was in the State of Florida. We determined that, for all but one, while their permanent address of record is out of the state, they do, in fact, reside in New York City for the majority of each week for commuting to work purposes.
• We estimated that at least $37,000 of New York City income tax has been avoided by these employees reporting inappropriate full-time residences.

We referred the names of these individuals to OSC’s Investigations Unit for appropriate follow-up action and referrals.   

Key Recommendations

• Investigate the discrepancies we identified in the recorded hours worked versus the hours paid for Richmond Hill Shop employees. Perform a similar review for an extended period and recover overpayments as appropriate.
• Ensure that Richmond Hill Shop employees have enough work to fill their scheduled hours and reduce overtime as appropriate.
• Formally review the residency status of the seven employees reportedly residing outside the Metropolitan area and revise their home addresses and New York City tax deductions as appropriate.

Other Related Audits/Reports of Interest

Metropolitan Transportation Authority/Metro-North Railroad: Forensic Audit of Select Payroll and Overtime Practices and Related Transactions (2010-S-60)
Metropolitan Transportation Authority: Management and Control of Employee Overtime Costs (2009-S-88)