The MBTA did not ensure that it received from Keolis Operator Deliverable Requirement List (ODRL) reports on their respective due dates and did not penalize Keolis for delivering ODRL reports late. Our test revealed that 40 ODRL reports were received late, resulting in penalties that should have been charged to Keolis in the amount of $255,000. Of these 40 ODRL reports, 39 were daily reports related to fare collection revenue and 1 was a weekly report related to maintenance activities performed for coaches and locomotives.
Not requiring Keolis to submit ODRL reports in a timely manner deprived MBTA operations and management personnel members of information needed to make decisions and monitor performance. Because the MBTA also failed to assess an estimated $255,000 in penalties, this also resulted in a loss of revenue that must be compensated for through additional funding from riders or the Commonwealth and its taxpayers.
Authoritative Guidance
Appendix 1 of Schedule 3.14 of the operating agreement with Keolis includes the following:
| ODRL Number | Description of Report | Due Date |
|---|---|---|
| 3.1 009 | Revenue Report | Daily |
| 3.3 17 | Weekly Maintenance Production Report | No later than 10:00 a.m. on each Monday |
Section 20.1 of Schedule 3.18 of the operating agreement with Keolis includes the following:
| Timeliness Service Level | Service Credit | Penalty Amount |
|---|---|---|
| A delay in delivery of any Time- Constrained Report of more than 2 hours and less than 6hours | Severity 5 Service Credit | $5,000 |
| A delay in delivery of any Time-Constrained Report of 6 or more hours | Severity 4 Service Credit | $10,000 |
Reasons for Issue
The MBTA does not have sufficient policies and procedures to monitor the receipt, review, and follow-up of reports that are required to be submitted by Keolis to the MBTA.
Recommendation
The MBTA should establish sufficient policies and procedures to monitor the receipt, review, and follow-up of reports that are required to be submitted by Keolis to the MBTA, per the executed contract. This should include appropriate monitoring and reporting components, as well as a financial review, to ensure that appropriate penalties are assessed and collected.
Auditee’s Response
The MBTA disagrees that it failed to ensure the Keolis submitted reports relating to fare collection revenue and fleet maintenance on time and as such disagrees that any penalties were appropriate to be assessed to Keolis. Keolis inputs these reports daily into the [Ticket Revenue Accounting Channel] TRAC system. The emails of these reports relied on by the SAO are sent merely as a courtesy, so they are not considered a failure of time-delivery. The only exception was for Report 3.3-17, which was posted to TRAC two-and-a-half hours late on the same date it was due which would result in a net penalty assessment of $5,000.
Auditor’s Reply
In its response, the MBTA states that Keolis inputs ODRL reports into the Ticket Revenue Accounting Channel (TRAC) system daily, implying that the MBTA was monitoring on-time delivery through this system. We disagree with this statement. Based on multiple meetings with MBTA officials responsible for monitoring the timeliness of Keolis’s report submissions, it was never indicated to us that the MBTA was using TRAC for this purpose. Instead, MBTA officials told us that they rely on the receipt of emailed reports from Keolis and the dates Keolis uploads reports to SharePoint to monitor compliance with reporting timelines. This is why we used these dates as the primary evidence for testing the timeliness of report submissions. These same MBTA officials indicated that they had authorization to review reports in TRAC but had trouble accessing them, which suggests that, while TRAC may have been available, it was not being used for monitoring report timeliness.
In its response, the MBTA acknowledges that it failed to penalize Keolis for a late Weekly Maintenance Production Report. If the MBTA had been effectively monitoring the timeliness of report submissions, using the TRAC system, email records, SharePoint, or any other method, then it should have detected the delay and penalized Keolis appropriately. It did not. This failure to identify and penalize Keolis for the delay highlights the inadequacy of the MBTA’s monitoring process in this area during the audit period. We believe that the MBTA needs to strengthen its monitoring processes to ensure more effective oversight of the receipt, review, and follow-up of reports required to be submitted by Keolis. We reiterate our recommendation that the MBTA establish adequate policies and procedures to ensure that Keolis complies with the reporting requirements outlined in the contract and that penalties are accurately assessed and collected when necessary.
| Date published: | March 4, 2025 |
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