Objectives

To determine whether the Metropolitan Transportation Authority (MTA) established a working plan for implementing Transformation with completion dates and the savings to be achieved. We also determined whether MTA has implemented any aspect of the Transformation Plan (Plan) that resulted in improved service levels for the customer, process efficiencies, and cost reductions. The audit covers the period from January 2017 through October 2022.

About the Program

In April 2019, the New York State Legislature enacted changes in the Public Authorities Law (PAL) requiring MTA and its affiliated entities to develop and complete a personnel and reorganization plan no later than June 30, 2019, which shall, in whole or in part, assign, transfer, share, or consolidate any one or more of its powers, duties, functions, or activities, or any department, division or office, or any of those of its subsidiaries or affiliates. The legislation was signed by the Governor. The legislation expected to transform the organization—through elimination of redundancies, streamlining processes, and greater collaboration—in order to improve customer service, achieve greater efficiency, and realize cost savings. The Plan was designed to accomplish a significant reorganization or transformation of the many administrative support units that existed within each agency into centralized departments under MTA Headquarters (MTA HQ), thus allowing the agencies to refocus on safety, operations, and maintenance. The legislation also required the MTA Board to appoint a director of MTA Transformation who reported to the Board, and a forensic audit be performed. Additionally, the MTA Board was authorized to revise the Plan to incorporate the findings of the review within 90 days.

The legislation required that the reorganization plan be submitted to the MTA Board no later than June 30, 2019, with approval by July 30, 2019. On July 24, 2019, the MTA Board approved the Plan.

One consultant was chosen to perform the independent evaluation and develop the Plan. MTA hired a second consulting firm (roadmap consultant) to provide “transformation implementation roadmap support services.” The roadmap consultant was responsible for 25 deliverables such as developing an inventory of IT applications, confirming the staffing in the Plan for six of the consolidated functions, and working with MTA Procurement and Legal to develop a Request for Proposal to solicit one or more vendors to implement parts of the roadmap. MTA planned to hire an additional consultant (implementation consultant) to assist with the various functions in developing new systems, methods, and processes necessary to transform its business; however, MTA’s financial condition prevented the hiring of the implementation consultants, and all Transformation work was undertaken in-house by MTA employees within the Transformation Management Office (TMO). Depending on the structure of the consolidated MTA function, staff transfers were accomplished by two methods: “Post & Hire,” which involves posting job vacancy notices and interviewing and selecting individuals to fill the positions, or “Lift & Shift,” a process where employees are assigned by their management team, along with their current job function, into the consolidated MTA functions.

TMO held “Go/No-Go Meetings” (reviews to ensure readiness) with each function’s leadership, and then Town Hall meetings were held with staff to inform them of the changes. We found that all six of the functions under review conducted these meetings.

Key Findings

• MTA did not have a working plan for Transformation that identified the tasks to be completed and included specific dates and cost savings.
• The six departments we reviewed were created or consolidated under MTA HQ. However, full Transformation and delivery of the goals the Plan promised—improved customer service, process efficiencies, and cost reductions—were not supported by the work completed or based on documentation provided by the six departments.
• Savings called for under the Plan were achieved by eliminating both administrative and operational positions that had been vacant due to a 2018 hiring freeze. No further savings were identified during our audit beyond the removal from the MTA budget of the costs related to the positions that were already vacant.

Key Recommendations

• Ensure that future projects have a detailed working plan that includes specific dates, activities, and cost savings.
• Ensure that future projects document the status of goals.
• Ensure that future projects document what cost savings are achieved.