NY state comptroller probes MTA for overtime fraud

NEW YORK Mon Aug 30, 2010 5:07pm EDT

A Metropolitan Transit Authority (MTA) subway makes a stop at the Union Square stop in New York, December 15, 2005. REUTERS/Jeff Zelevansky

A Metropolitan Transit Authority (MTA) subway makes a stop at the Union Square stop in New York, December 15, 2005.

Credit: Reuters/Jeff Zelevansky

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NEW YORK (Reuters) - New York's state comptroller said on Monday his office will probe the New York Metropolitan Transportation Authority, which says overtime costs it $560 million a year, to see if any paychecks were inflated through fraud.

Unlike most audits, which examine controls, savings and other issues, Comptroller Thomas DiNapoli said the MTA will undergo a forensic audit to identify "evidence of fraud and wrongdoing that may constitute criminal offenses, resulting in referrals to law enforcement."

The MTA, the biggest U.S. mass transit agency, runs New York City's buses, subways, commuter railroads and major river crossings. It just finished slashing service and plans to raise fares and tolls in January to help close a $900 million deficit.

"It's hard to justify repeated fare hikes, layoffs and service reductions when New Yorkers believe the MTA isn't controlling spending and restraining costs," DiNapoli, a Democrat running for election in November, said in a statement.

DiNapoli's auditors have previously turned up what he termed "suspicious transactions" when they audited overtime, including unjustified extra hours or time that was not documented in over 75 percent of the samples scrutinized.

"Something is wrong with a system that allows more than 140 people to double their salaries through overtime," DiNapoli said.

A spokesman for the MTA said the agency welcomed the forensic audit, noting it began an effort to limit overtime in May.

"The MTA is focused on overhauling how we do business to ensure that every dollar counts by cutting administrative costs, consolidating functions and renegotiating contracts," the spokesman said in a statement.

(Reporting by Joan Gralla; Editing by Dan Grebler)

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