Overview
The Massachusetts Bay Transportation Authority (MBTA) was created in 1964 pursuant to Chapter 161A of the Massachusetts General Laws. The agency provides services via its rapid transit system, commuter rail service, bus service, ferry routes, and transit service for people with disabilities. According to its Capital Investment Program for fiscal year 2016, the MBTA system is the fifth-largest mass-transit system in the country in terms of ridership, serving 4.7 million people over an area of 3,200 square miles, with about 1.3 million passengers each day.
Chapter 25 of the Acts of 2009, “An Act Modernizing the Transportation Systems of the Commonwealth,” as amended by Chapter 26 of the Acts of 2009, required the integration of various state transportation agencies, including the MBTA, into the newly created Massachusetts Department of Transportation (MassDOT). MassDOT is administered by the Secretary of Transportation, who is appointed by the Governor to serve as its chief executive officer. During our audit period, a seven-member board of directors (including the Secretary) with expertise in transportation, finance, and engineering, appointed by the Governor, oversaw MassDOT.1 The Secretary appoints an administrator for each division. The MBTA general manager, appointed by the MassDOT board, directs daily operations and oversees all administrative functions and management policies and practices.
Section 200 of the Commonwealth’s fiscal year 2016 budget authorized the establishment of a five-member fiscal and management control board (FMCB) at the MBTA consisting of one member with experience in transportation finance, one member with experience in mass-transit operations, and three members of the MassDOT board. Members of the FMCB are appointed by the Governor, and the chair is chosen by the Secretary of Transportation. As stated in the fiscal year 2016 budget, the FMCB is charged with “the implementation of appropriate measures to secure the fiscal, operational and managerial stability of the [MBTA].”
Construction Contract Management
The MBTA Capital Delivery Department (CDD) is responsible for the administration of construction contracts awarded by the MBTA as well as professional service contracts (e.g., contracts for design services) related to construction projects; projects include various costs, including but not limited to those for design and construction contracts, real estate, project administration, and inspections, as well as indirect costs. During our audit period, the CDD awarded 39 construction contracts, totaling $464 million.
In 2011, the MBTA engaged an outside accounting firm to perform a review that focused on assessing various project management activities that affected MBTA construction. During this review, the audit firm identified six MBTA design and construction project management activities for review:
- bid and award
- change orders
- cost estimation and budget development
- invoice review and approval
- schedule development
- construction monitoring and reporting
As a result of its review, the accounting firm identified 56 action items, which were intended to improve the MBTA’s construction process. The MBTA agreed to implement a management action plan to implement the changes. The accounting firm performed follow-up reviews in 2013 and 2014 to assess the status of the MBTA’s implementation of the plan. During both of these reviews, the accounting firm noted that the MBTA had made significant progress but had not yet fully implemented all of the suggested changes.
| Date published: | September 28, 2018 |
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