T replaces officials after billing errors cost $600,000
The MBTA replaced six of its seven top human resources managers after consultants determined about 20 percent of the T’s employees were incorrectly billed for health and retirement benefits, a lapse that cost $600,000 to resolve, acting general manager Brian Shortsleeve said.
Several managers resigned voluntarily, and at least one retired, the Massachusetts Bay Transportation Authority said.
The MBTA also failed to collect about $9 million it was owed from outside partners, including the Massachusetts Port Authority, Shortsleeve said.
“We’re seeing a significant legacy of mismanagement,” Shortsleeve said in an interview this week. “We’re actively focused on identifying problems, fixing them, and moving on.”
The revelations, to be discussed Monday at a meeting of the MBTA’s fiscal control board, come as Shortsleeve and Governor Charlie Baker’s administration push to privatize some MBTA operations, over labor union objections.
This month, the fiscal board voted to outsource the MBTA’s cash-counting operation to Brink’s, a Virginia cash-collection and security company, and officials are pursuing a similar move with the warehouse department.
On Monday, Shortsleeve is expected to propose shifting some duties, including the handling of some employee benefit transactions, from the T’s nearly 40-person human resources unit to either the state Group Insurance Commission, which helps oversees the T’s benefits, or an outside company.
The shakeup continues turnover at the MBTA that has left key positions unfilled. About 260 employees were scheduled to leave with a buyout offered this year, which could strain the human resources department as it seeks to fill other important positions.
Shortsleeve will address the HR department’s failures to reconcile its records with those of the Group Insurance Commission, which provides health insurance and other benefits to state employees and retirees.
Several agencies that work with the GIC record transactions online, but the MBTA uses a paper-based system. Consultants from Accenture, which was paid about $590,000, found nearly 4,000 billing errors that did not match GIC records, MBTA officials said.
Some employees, for example, were mischarged for life, health, disability, and dental insurance benefits. The average difference between the billed and correct amount was about $39.69 per month, according to the MBTA.
Employees who were undercharged will not be billed, but overcharged employees will be compensated, officials said.
Citing outdated technology and a lack of trained employees, Shortsleeve wants to outsource some benefit transactions to the GIC or a private vendor. The MBTA would retain a human resources staff for hiring and recruitment, but it could be smaller, officials said.
“It’s about right-sizing and making sure we’d have the best process in place,” said Janice Brochu, the new chief human resources officer.
Officials will also discuss how the MBTA improperly billed business partners, largely through cash vouchers. For example, the MBTA leases space to more than 100 tenants, but most were not being charged for utilities. According to the MBTA, 66 of 78 accounts had not been charged for electricity in nearly two years, and 12 others had never been billed.
Collecting past-due invoices would bring in about $1 million.
The Massachusetts Port Authority also owes the MBTA millions of dollars because it was never billed properly, Shortsleeve said.
Under a 2004 agreement, the MBTA and MassPort split the costs of transit service between South Station and Logan International Airport, with MassPort paying about 76 percent. But for more than 10 years, the MBTA did not accurately calculate MassPort’s share, which consultants determined was about $7.8 million.
In August, MassPort paid $1.6 million to cover costs from 2005 to 2012, and earlier this month paid another $2.6 million for 2013 to 2015. The MBTA said it could receive another $3.6 million, but MassPort is still reviewing the data.
Jennifer Mehigan, a MassPort spokeswoman, said staff have reviewed the documentation “and are in the process of resolving the matter.”
The recovered money is relatively modest, compared to the MBTA’s nearly $2 billion operating budget, but Shortsleeve said every dollar counts against a $100 million deficit.
“Those are dollars to our bottom line,” he said. “Any time we identify a situation where the MBTA is owed money, we’re going to follow up on it. This is barely scratching the surface.”