Audit Finds Sloppy Practices in SFMTA Work Orders

MTA_Work_order_Review_043010.jpgSFMTA work orders more than doubled in the past decade. Chart: SF City Controller's office.

Muni is paying many city agencies for their services without written agreements detailing just what the transit agency should be getting and for how much, according to an audit [PDF] released by the City Controller's office today.

The report, which looks at the San Francisco Municipal Transportation Agency's work orders with other city departments, found that such payments doubled in the past decade, from $30 million in fiscal year 2001-2002 to $66 million in fiscal year 2009-2010.

Most of the $26.7 million jump in the past four years was due to five work orders that accounted for 84.9 percent of the increase. The biggest cost driver was the city's new 311 service, which billed the SFMTA $6.3 million in FY09-10 for providing the public with information related to Muni and the agency's other operations.

The SFMTA also bought its office, resulting in a $5.9 million payment to the city's real estate office, which was actually more than offset by savings in rent. Muni's work order from the police department grew during that period too, by $3 million.

Despite the surge in work orders, the audit doesn't come down hard on the practice of work orders itself, concluding that "work order relationships are considered standard governmental practice." But the report cites numerous incidences where the SFMTA was sloppy in specifying what the terms of work orders were.

"This compliance review indicates the need for the SFMTA to enter into written agreements with provider departments to provide additional information on services purchased through the work order process," the report's authors wrote. The report cites numerous examples of work orders that don't have written agreements, including the SFMTA's work orders from the City Attorney's Office.

workorderpiechart.jpgWho's billing Muni? Chart: City Controller's office.

While the SFMTA has a written agreement with the SFPD, the report finds that though "this agreement has improved administration of this work order, it has not been uniformly adhered to." For example, the SFPD didn't send the SFMTA quarterly activity reports for FY 2008-09, although it's doing so now.

The report suggests tightening up the SFMTA's practice of often paying other agencies based on predicted costs instead of actual costs. The agency also failed to request detailed documentation for the services it received in many cases. With the SFPD, for instance, "the agreement does not provide a detailed budget breakdown for each SFPD service," the report states. "Only a summary budget is provided."

The audit comes at a time when the SFMTA Board has voted to cut Muni service hours by 10 percent, a response to budget deficits this fiscal year and in the coming fiscal years. Even before the audit's release, the SFMTA planned to use its findings to cut work orders by $6.5 million. Some members of the Board of Supervisors, including David Campos, hope the SFMTA will come up with more than that.

In spite of the critique of some of the SFMTA's accounting practices, the report states that the agency's staff is improving the situation. "The SFMTA staff appears to understand the work order billing issues discussed in this section, and has worked in the past year to implement improved procedures for management of the SFMTA work orders," it notes.

The report is silent, however, on just why the SFMTA has allowed its work orders to grow by such a great amount over the past few years, or why it hasn't been stricter about holding onto its funds and putting terms into writing.

Also missing are clear recommendations for where the SFMTA could reduce work order amounts, though the report did find that Muni should have received $4.1 million in previous years and another $700,000 in future years from the city's general fund to cover various work orders. While that's a bright spot, the Chronicle reported yesterday that the SFMTA has already calculated this in, and it won't affect its budget predictions.

Several supervisors have said they want to see the results of this audit before approving the SFMTA's two-year budget. None of the supervisors Streetsblog contacted today had responded to requests for comment on the audit by this afternoon. The SFMTA is preparing a response to the audit and we'll post it as soon as it's available.