By Hank Russell
The Office of the Inspector General (OIG) for the Metropolitan Transportation Authority (MTA) recently issued a report showing that a repair shop vendor overbilled the Long Island Rail Road (LIRR) by $4.5 million. Even more, the vendor charged the LIRR for $1.6 million in parts they never purchased.
According to the report, the LIRR Vehicle Fleet Management Office and the MTA’s outside contracted Fleet Management Firm — both of whom were charged with reviewing invoices and approving repairs — never sought backup documentation to support the parts that were ordered. They also failed to detect the repair shop’s overbilling, and could not determine whether that overbilling was the result of intentional fraud or poor business practices.
Neither the LIRR nor the Fleet Management Firm inspected vehicles to ensure that repairs were made, the OIG learned. The office also learned that the LIRR lacks staff with the training and expertise needed to make such inspections, and inspection services are not part of the Fleet Management Firm’s contract.
The investigation came about when OIG received an anonymous complaint alleging that a repair shop owner was severely inflating bills for repairs to LIRR vehicles, as well as paying cash kickbacks to an unspecified LIRR employee to get the bills approved for payment. (The office did not substantiate the allegation.) Shortly thereafter, OIG received an email from an LIRR employee complaining that vehicles sent to the Repair Shop for minor repairs frequently came back with major, often expensive, work performed.
OIG reviewed the purchase orders, which were provided by the Fleet Management Firm, for all LIRR vendors from June 15, 2021, through June 15, 2023. The repair shop was the highest-paid vendor for vehicle repair during that time, receiving $5,569,780.53; the second-highest-paid vendor received only $992,033.75.
From July 1, 2022 to June 30, 2024, the repair shop made 1,398 repairs totaling $6,787,070.25, based on data from the report; however, there were 474 purchase orders with no supporting documentation, which equaled $1,165,484.03 worth of repairs. In addition, of the 924 purchase orders for which the repair shop did provide parts invoices, 90 only had invoices for some, not all, of the parts purportedly installed. The combined value of parts without supporting invoices from those 90 purchase orders is $514,996.76.
Many of the purchase orders with no corresponding parts invoices were for repairs to reversing gearboxes, often for amounts in excess of $20,000. For example, on November 6, 2023, LIRR sent a vehicle to the repair shop with a damaged reversing gearbox due to an impact and a check engine light.
As part of its recommendation, the OIG said the MTA fleet management personnel should ensure their agencies have the expertise and procedures in place, such as employing a certified mechanic, to determine whether proposed repairs are necessary, authorized repairs have been completed, parts used meet the MTA’s quality standards, and the estimates for repair work are reasonable.
In response, the MTA said it “fully agrees that agencies need to do more to verify the costs and quality of repairs for automotive non-revenue fleet. To assist fleet management personnel to better perform this function, the MTA commits to developing best practice guidance for closer management of the fleet management vendor. In addition, the MTA will work with MTA’s Internal Audit team to perform quarterly sampling audits to ensure that agencies are following the guidance. . . The MTA agrees that some agencies may need more resources to better oversee the fleet management vendor. However, it is important that each agency be able to determine what resources it needs to best address the gaps highlighted in the report.”
But at the time the OIG initially issued this report, the LIRR Senior Vice President of Operations informed OIG that, while the LIRR has not been able to hire a certified mechanic due to headcount restrictions, the agency “will be updating position description qualifications for hires in the future.”
Long Island Life & Politics reached out to the MTA for comment. “The LIRR stopped doing business with the vendor immediately and fully cooperated with the investigation,” said spokesperson Michael Cortez. “To safeguard taxpayer and riders’ dollars, the agency is strengthening oversight of repair work and invoice approvals.”