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.

  • MUNI is Newsom’s piggy bank.

  • Nick

    Is the problem the work orders themselves or the accounting practices related to them?

  • JohnB

    Nick

    This is really just an accounting problem. It has to do with different City departments and Agencies doing work for each other, and internally charging each other.

    Since relatively few City Departments actually generate revenue (DPT, Muni) then there is inevitably a flow of “internal dollars” from the revenue departments to the cost departments like the police.

    This may appear to disadvantage, say, Muni, and benefit the non-revenue departments. But as a city taxpayer, it makes absolutely no difference to you. It’s just the City taking money from its left pocket and putting it in its right pocket.

    Now of course if you like Muni and dislike cops, it’s a problem. The other way about, and it’s great. But ultimately it’s a wash in terms of total public spending and the City deficit.

  • It’s not a wash when sfpd is paid to provide a service they don’t. It’s not a wash when 311 robs MUNI blind for something that could be provided at no cost at 511. It’s not a wash when service is drastically cut on MUNI.

    And this isn’t an issue of liking MUNI and not liking cops.

  • JohnB

    Mike

    Wrong. It is a wash from the taxpayers’ point of view, since work orders represent shuffling of internal budget dollars between City Departments and Agencies but does not increase or otherwise affect the overall city budget.

    But, like I said, if your only concern is Muni then, sure, I can ses how from that specific and narrow point of view, there would be the perception of a net loss.

    While if your own concern was the police, then you would see this as a unilaterally good thing.

  • Oh JohnB, I know I’m just a simpleton to you, but it isn’t just a shifting of internal money when prop monies are involved. If it is just a sifting of funds, why did work orders increase sharply the last several years? If police needed more money, then they should have put something on the ballot.

    Don’t make this an issue of me not liking police or wanting MUNI to be the only working city dept, that is not the case.

    Just watch, if the MTA ever does get increased funding through a sales or parcel tax, these work orders will increase. That means that other depts see a cash cow and milk it.

  • JohnB

    Mike,

    I am simply answering Nick’s question i.e. that it is a zero sum from the taxpayer’s POV. It’s a quibble between city departments and not a thing that will increase taxes.

    But yes, I do think departmental priorities should be decided by our elected representatives or by the voters.

    Whether funding for cops is more popular than funding for buses – that remains to be seen

  • You’ll sit and complain about “bloated” TWU salaries but turn a blind eye to the SFPD’s practice of promotion right before retiring to increase benefits.

    Also, it’s NOT a quibble between departments. This is about other city departments taking dedicated funding for services not rendered. So it is about accounting practices, but more about other departments seeing a piggy bank and latching on.

  • JohnB

    Again, I am only addressing Nick’s question about the net impact of such petty departmental disputes on the city taxpayer, which as noted is zero.

    Departmental priorities should be decided by the voters and their elected representatives, and not by a blog that demonstrably and unashamedly favors public transit over public safety.

  • Oh my goodness JohnB, “a blog that demonstrably and unashamedly favors public transit over public safety.” Really? Really?

    Well, I’m addressing your response to Nick’s question and your conclusion is wrong.

  • Maybe I was still feeling good after my camping trip this weekend and thought I’d engage you in a conversation, but obviously you are just here to talk down at us (or maybe just me).

    I’m done.

  • patrick

    JohnB, when you think it’s a zero sum game then you can claim it’s a wash. But the reality is that many of the departments that are sending work orders are not delivering the services they are charging for, or there being much less expensive methods to deliver the same service (such as 311 vs 511), or the MTA is not properly managing/tracking the work orders so there is no way to even know if it’s worth it.

    It has nothing to do with liking or disliking the police, or any other department. I have no problem with the work orders, per se, but when not properly managed/tracked, that’s when I have an issue.

    It is certainly not JUST an accounting problem.

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