Overview of the ISAU
Created by the Legislature in 2009, the OIG’s Internal Special Audit Unit (ISAU) for the Massachusetts Department of Transportation (MassDOT) monitors the quality, efficiency and integrity of MassDOT operating and capital programs. As part of its statutory mandate, the ISAU seeks to prevent, detect and correct fraud, waste and abuse in the expenditure of public and private transportation funds. The ISAU also examines and evaluates the adequacy and effectiveness of MassDOT’s operations, including its governance, risk management practices and internal processes. The ISAU assists the Commonwealth, the public, MassDOT and the Massachusetts Bay Transportation Authority (MBTA) by identifying potential cost savings, waste and misuse of transportation funds.
The ISAU team includes a director, two auditors, two investigators and an attorney. The team’s skills and knowledge include:
- Combined 39 years of experience in audits, investigations and litigation
- Three certified fraud examiners, one certified financial crimes specialist and two analysts with advanced degrees in business and law
- Industry experience in transportation, construction, contract administration, insurance, homeland security, accounting, finance, economic assistance and benefits fraud
The ISAU works collaboratively with all other OIG units, as well as state and federal agencies, on many different types of investigations and reviews. Some of the ISAU’s notable investigations and reviews include investigations into the abuse of disability placards, a review of the Veterans Memorial Bridge design and construction costs and a review of the privatization of MBTA warehouse operations.
Investigations into the Abuse of Disability Placards
Since 2007, the OIG conducted four investigations into disability placard abuse. The ISAU completed the fourth investigation and published a comprehensive report in February 2016. The investigations found repeated incidents of placard abuse including the use of placards belonging to deceased persons, the use of placards by non-disabled relatives when the placard holder was not present, and false reports of placards as lost or stolen. The OIG believed stricter penalties were necessary to prevent placard abuse and proposed new legislation, which the Legislature enacted. The new law increases fines and extends license suspensions for individuals who misuse disability placards, which makes parking more accessible for those who need it.
The Office proposed new legislation imposing stricter penalties for placard abuse that the Governor signed into law in December 2017.
A Review of Design and Construction Costs of the Veterans Memorial Bridge
MassDOT began construction of the Veterans Memorial Bridge over the Taunton River in 1998 and completed the bridge in October 2014. MassDOT divided the bridge’s construction into four phases, each with its own scope, public bid and contract.
The ISAU reviewed certain change orders and costs incurred during the design and final phase of construction. In October 2018, the ISAU issued a report highlighting significant cost overruns on the large-scale bridge project, which included a review of design errors and unexpected construction costs.
In response to the ISAU’s report, MassDOT reconvened a committee that focuses on cost recoveries from design errors and also appointed a full-time cost recovery administrator.
During its review, the ISAU identified nearly $20 million in missed opportunities for cost savings.
Review of the Privatization of MBTA Warehouse Operations
From July 1, 2015 to July 1, 2018, the Legislature allowed the MBTA to hire vendors to perform services that public employees typically perform, commonly referred to as privatization.
Section 196 of Chapter 46 of the Acts of 2015 required the ISAU to conduct a review of all MBTA privatization contracts. Pursuant to this mandate, the ISAU conducted a preliminary review of the MBTA’s contract with Management Consulting Inc. (Mancon) for management of warehouse operations.
The ISAU identified several instances where Mancon failed to meet its contractual obligations, as well as inadequate MBTA contract administration and failure to provide pre-privatization cost analyses. The ISAU also identified opportunities for the MBTA to bring Mancon’s performance in line with its contractual obligations, improve its oversight of Mancon and promote a successful partnership.
Following the completion of its review, the ISAU discussed observations with MBTA senior management and provided recommendations for improvement.
Based on the ISAU’s concerns and recommendations, MBTA began implementing corrective actions.
ISAU Hotline for Reporting Complaints Related to Public Transportation Projects and Spending
The ISAU manages a hotline for MassDOT and MBTA employees, as well as the public, to report instances of potential employee or vendor fraud, waste and abuse. Please do not hesitate to contact the ISAU if you have questions related to potentially fraudulent activity involving state transportation funds.
