Interviews & Profiles

Uncovering fraud and waste in the MTA’s $20 billion budget

An interview with MTA Inspector General Daniel Cort

MTA Inspector General Daniel Cort

MTA Inspector General Daniel Cort MTA

Daniel Cort is the inspector general of the Metropolitan Transportation Authority, and he has experience examining public sector agencies as a high-ranking executive with the city Department of Investigation and the state attorney general’s office. Cort has brought his investigative chops to the MTA, where he has sought to identify mismanagement, waste and fraud within the authority’s $20 billion annual budget. City & State caught up with Cort to discuss his role heading the investigative agency, how he’s focused on monitoring procurement of projects like the Second Avenue subway and efforts underway to make sure MTA employees aren’t idling on the job. This interview has been edited for length and clarity.

You were confirmed in this role last summer. What was your top priority when you came on?

As you know, our function is to prevent and detect fraud, waste, abuse and mismanagement in the MTA. We’re trying to promote the economy of efficiency and effectiveness in the MTA’s programs.

My top priorities have been in three areas. The first area is in construction auditing. I’m seeking to invest even more resources to build out our team in the area of construction auditing. The goal is to prevent, detect and root out construction fraud in large projects like the Phase 2 of the Second Avenue subway but also smaller projects.

The second priority has been data analytics. I created a new data analytics research team, DART. The MTA collects a huge amount of data. A lot is public, but some isn’t. I’m seeking to leverage that data in two ways to assist in ongoing audits and investigations. That’s happening right now. DART is working with auditors on my team and investigators and potentially finding previously unrecognized areas of fraud and abuse. That’s what I’m hoping DART will do in the future.

And my third area is outreach. I’m trying to increase the visibility of my office with respect to the MTA workforce. I think that’s important, and I’m doing that for two reasons, first is to increase the quality of the complaints we receive. We receive a large number of complaints. Many of them are from the public and we get them in a variety of ways. We have found that the best complaints and most actionable are from MTA workers who are not happy with co-workers who aren’t doing the right thing. And I want to reach as many of those honest employees as I can. The more the MTA workforce knows about us, the more likely they’re going to find us and make high-quality, actionable complaints. The other reason why it’s important for my office to be visible with the MTA workforce is I think a visible IG acts as a deterrent for any employee who considers not doing the right thing, like having an officer on the beat prevents things from happening.

What has been the most surprising part of the job?

I think the most surprising thing for me since I’ve been here is seeing the huge array of things that the MTA workers do, the wide variety of jobs that they hold and dedication and expertise that they have in doing their jobs. Some of those facilities are actually manufacturing plants; because of aging infrastructure, it’s not possible to get many of the parts from original manufacturers. Many have gone out of business so the MTA has to create its own parts sometimes. Seeing what people do is fascinating and surprising.

What role will the MTA inspector general be playing when congestion pricing is implemented?

Because the program has not yet been implemented, my office does not yet currently have a role. My office does not generally have a role in the implementation of programs before it happens. … It’s going to be a large and far-reaching program, but I think at this point, it’s premature for me to speculate.

How do you balance smaller-scale investigations, such as malfeasance by a single employee, with probes of larger, more systemic issues? Do you have the resources to dig into more complex matters effectively?

It is something that I think all inspector generals have to consider. I think that IGs must go after the smaller scale fraud for a number of reasons. The small-scale fraud can lead to larger fraud and it erodes the public trust. Those kinds of abuse, theft, employee misconduct and secondary employment violations, those are the kinds of small-scale fraud that the public sees and we don’t want them losing confidence in the MTA or government in general because that causes a breakdown in public trust and that’s not a good thing. … I also think that we must have a role in the larger-scale projects because so much money is involved. The MTA has a capital budget, at the end of a five-year, $51 billion capital program, and it’s incumbent upon us to make sure the money is properly spent and not wasted. We really try to do both. We have very experienced investigators, auditors, many of whom have been here for many years and have expertise in MTA programs and processes. I think we’re able to do both effectively.

Has the MTA improved its procurement practices in recent years? How well has it been doing lately at avoiding project delays and cost overruns? 

We’ve done a number of audits and, historically, we’ve looked at procurement most recently and you can see it from our annual report we did an audit on post-Hurricane Sandy track work at 207th Street Yard and we made some recommendations. We do that to see any abuse that might result in investigation. We’re on the Sandy Task Force, where we’re monitoring vendors, we’re doing background checks. We’re involved in monitoring the procurement of megaprojects, such as the Second Avenue subway.

How do you ensure your audits and accountability efforts remain independent?

One of the good things about our enabling statute is that independence is built into the statute. I am appointed by the governor with advice and consent of the state Senate. I do not answer to the MTA board or to the chair of the MTA board, and so we are an independent entity within the MTA. We have subpoena power, and the MTA under our statute must provide us with any books and records upon our request. So through those things, our statute provides us with independence. I believe that sunshine is the best disinfectant. I am carrying on the good work of previous IGs and putting onto the website our reports and our audits. I believe publicizing our reports and audits not only allows the public to see what we’re doing and ensures our independence from any improper interference by any level of government.

The inspector general’s office has been scrutinizing driver behavior by MTA employees. What’s the upshot?

The decision we make on what to audit really comes from our own ideas. We might get them from investigations being conducted. Frankly, we sometimes look at what is in the news and get audit ideas from the media.

Specifically from that question, LIRR and NYC Transit and Metro-North driving behaviors, those are the types of audits that we sometimes deal with on a cyclical basis. The audits are focused on safety and environmental issues, as well as driving behavior as a safety issue. It’s a two-part issue: These are gasoline-run vehicles that you don’t want idling or creating unnecessary pollution, and we found that idling vehicles can be an indicator of employees that are standing still, sitting in one location and potentially not performing their duties.