State audit: The actual money turned in from MBTA fare boxes doesn't match the amounts recorded by those boxes

The state auditor's office today released a report that found a nearly $102-million discrepancy over five years between the cash the MBTA actually took in through fare boxes on buses and trolleys and the amount those boxes said they were fed.

The MBTA said that simply reflects software issues, not massive amounts of theft or money rolling behind driver's seats, and the auditor's office says that's possible, but there's currently no way to know for sure:

Because the MBTA lacked effective physical controls over the hundreds of keys that provide access to fare box cash at the time of its initial receipt and transfer into the MBTA revenue system, the MBTA cannot ensure that all fare box cash is properly safeguarded against possible loss, theft, or misuse.

The [automated fare collection] system does not properly record all essential events necessary to properly track the removal, deposit, and reinsertion of cash boxes into assigned fare boxes. The inability of the AFC system to give MBTA management reliable tracking information regarding the movement of fare box cash exposes such revenue to potential fraudulent activity.

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How nice of the specification

How nice of the specification writer for the AFC system to neglect that itty bitty detail.

Still quite a bit better than the old boxes which outright shredded bills into useless confetti and really collected usable revenue through coins and monthlies.

Can't see whether the commuter rail is loosing fares left and right either thanks to a lack for a real fare collection system. Hand held charlie card readers for conductors and fare machines at the commuter rail stations were promised years ago and MBCR/MBTA has no intention of implementing them out of shear laziness.

How many times?...

How many times have you seen a subway or bus driver, when there are a lot of people and they want to get through a green light, collect bills that keep getting rejected from the fare box?

I've seen it happen quite a bit, and wouldn't be surprised if some drivers are pocketing the money instead of putting it in later.

Cause

that makes it ok?

The [automated fare collection] system does not properly record all essential events necessary to properly track the removal, deposit, and reinsertion of cash boxes into assigned fare boxes. The inability of the AFC system to give MBTA management reliable tracking information regarding the movement of fare box cash exposes such revenue to potential fraudulent activity.

Sweet Jesus....

no?

"the auditor's office says that's possible, but there's currently no way to know for sure"

They're just not accusing the MBTA of having a massive theft problem.

I, on the other hand, look at a)the massive organized crime ring that was doling out commuter rail passes illegally b)the vehicles a lot of MBTA employees park in the lots

...and beg to differ.

Furthermore, the MBTA needs to explain EXACTLY how "software errors" are responsible when the amount is a EIGHT FIGURES worth of cash.

Sure, blame the software

I work in software and as much as I think the Three Stooges could run that place better than the people there now (and in the recent past), I HIGHLY doubt that anyone would let a massive system go into production without testing it and testing it and then piloting it and then testing it again.

Look at a broken machine

Like a fare gate or a Charlie Card machine in the station.

Instead of displaying the "Welcome" on black or "Touch to Start" on green, what do you see?

A black screen with the Internet Explorer icon and a Windows error message. Yes, THAT Windows. The unreliable one that malfunctions randomly for no reason.

About $160 million gap

And this "oversight" appears to constitute about $20 million / year. So it doesn't plug the gap.

Though, if you moved the Big Dig mitigation debt back off the T's books, then you're looking at a gap of about $40 million / year.

Much easier to bridge that.

P.S. this is presuming revenue was actually lost, which doesn't appear to be the case

One of the major benefits of

One of the major benefits of the Charlie system was supposed to be that they could keep track of all the cash. Discrepancies were a perpetual problem with the old token system.

Why didn't the auditor examine the T's new cash handling procedures just *before* the Charlie system was rolled out?

Also, the end of the .pdf says the T paid Parsons Transportation $5.7 million for auditing, testing, and creating procedures. Why didn't Parsons discover any of these major software problems?

Hey listen yous guys

We got a little problem with accounting for all the rider revenue. Just a little problem, 100 million bucks or so, nothing to blow a gasket over. Waddayamean you don't trust us? Waddayamean you want verification? I'm telling yous guys the money is all there, it's a software issue!

Seriously?

They are okay with potentially misplacing $100 million over 5 years...but they'll be goddamned if they lose their $2 by opening the rear doors of the Green Line for the convenience of all and having someone without a monthly pass slip on board for free!

By the way, if that number turns out to truly be real money that they should have but can't find, that's an average of $50,000 (enough to pay for 25,000 single ticket riders) per day for the past 5 years. The Green Line has an average daily ridership of just under 250,000. So, 1 in every 10 riders would have to sneak on board through the back doors just to equate to the same losses that they're willing to blow off as wiggle room in their tracking that results from their inadequate electronic fr-auditing system.

yeah seriously

Along with that ONE monthly fare holder are twelve Northeastern/BU/BC students who skipped buying students passes because they wanted the money for booze...and another ten people who don't have passes, just fare cards.

The T need to keep up with the fare enforcement - it's shooting fish in a barrel and pays for itself!

Bullshit

The schools let you roll the cost of the passes into your tuition/room/food costs and just put it all into your loan package (what's another few hundred when you're paying $40k per year already?).

Furthermore, what's an extra 3 minutes...per stop...in lost productivity for EVERYONE still on board cost us for every $2 bill "paying for itself" in the grand scheme of things? I value my time more than you do yours, obviously.

the standards for professorship are low these days

The schools let you roll the cost of the passes into your tuition/room/food costs and just put it all into your loan package

And you think that makes students pay for the T because....? Every time I'm on the green line and the driver calls the students on their back-door shenanigans and refuses to move the train until they tap in, they all file to the front, and guess what - they don't even have charlie cards. They go digging in their pockets for cash. I guess they must have left those student passes at home, huh?

Furthermore, what's an extra 3 minutes...per stop...in lost productivity for EVERYONE still on board

It does not take three minutes for people to step aboard and tap their charliecard. Even then, do you think Kaz's Precious Life Minutes pay for:

-New subway and commuter rail cars, some of which are now ~40 years old
-Maintenance and consumables on fleet vehicles
-Employee salaries and benefits
-Employee pensions
-Debt foisted on the T by legislators

No, they don't.

And you do realize what a shortage of cash means? Here's a hint: reduced new equipment/maintenance/consumables. What does that mean? Kaz spends more of his Kaz's Precious Life Minutes standing on the platform because the train he's waiting for has broken down.

Ergo, strictly forcing people to pay, and collecting fares (and collecting the big fines when people don't pay their fares!) makes the system MORE likely to run on time. I'd rather my train was 5 minutes late end-to-end on the line than sitting half-way down the line smoldering, forcing an entire shutdown of the line.

Late trains cost the T money

Sorry to knock you off your morally self-righteous high horse, but every minute of delay to a train adds up and eventually requires another vehicle being placed into service to avoid a missed headway/dropped trip. That's either a big expense or a service degradation.

I think the schools should go a step further than what Kaz was referring to, and actively require that every student obtain a T pass as part of student fees/tuition. My undergrad alma mater did this, they got a good bulk deal, and it turned out awesome for everyone.

The table on page 10 of the

The table on page 10 of the report suggests there probably isn't any missing money, but there are major problems with the AFC software.

(For those who don't want to take the time to look at the table)
The actual cash deposited from fare revenue was $24,164,529 million in 2007 and slowly rose each year to $25,499,646 in 2011. Reasonable numbers in line with long term patterns.

The cash revenue reported by the AFC system was $43 mill in 2007, more than doubling to $98 mill in 2008, then dropping to $22 mil in 2009 (less than the actual amount deposited), dropping again to $20 mill in 2010, and then almost doubling again to $41 mil in 2011. The huge flucuations from year to year are obviously wrong, there is no logical reason for the AFC software to report $98 mill in 2008 and $22 mil in 2009.

Also, the report is concrned about the MBTA's use of "Speedy Boxes", those are the buckets that cash can just be thrown into to allow entry, bypassing the fare gates. The report notes that $2.1 mil was collected in the boxes from 2007 to 2011. But the table on page 24 of the report shows that $1.7 mil of the $2.1 mil was collected in FY 2007, that was the year when the boxes were used for a few weeks at each station while the conversion from the old turnstyles to the faregates was taking place. Those boxes are otherwise primarily used at Riverside and Fenway Park stations during baseball games,and on Marathon Day at Hyynes, and usually just bring in $50k to 97K per year. For the limited amount of time the things are actually used (outside of that transition fiscal year in 2007) it seems like a pretty unimportant practice for the auditor to spend time on, and either ignorance or a set up for the auditor not to mention that most of the money collected in the boxes was during an unusual transition year for the fare collection system.

The revenue numbers in the

The revenue numbers in the document say they've taken in about $25 million in actual cash per year, every year in the audit. But the numbers reported by the Charlie system fluctuate wildly. Some years the Charlie system reported more cash than actually existed, sometimes less. $101 million was the net discrepancy.

In 2008, the Charlie system reported almost 4 times as much cash as actually came in ($98 million versus $24.5 million).

So it's pretty clear that the $101 million discrepancy is a problem with the reporting system. It's theoretically possible that some cash disappeared, but it couldn't have been that much.

$102M "Discrepancy" was in loss direction?

Not too much money collected? If a real business misplaced that much cash, stockholders and regulators would be all over it by year 2, not year 5. Why hasn't the problem been addressed already?

Poor design of the new automated fare system is incomprehensible - there are ways to identify, authenticate, and log everyone who touched the fare box. The drug testing lab was missing the same essential technology.

The software showed cash

The software showed cash revenue by year as :
2007: $43 mil
2008: $98 mil
2009: $22 mil
2010: $20 mil
2011: $41 mil

Those wild year to year changes don't look like a software problem to you?

That's wild

Pretty wild numbers.
OK, how 'bout this? Somebody messed with the software to hide pocketing the cash. You could insert some randomization in the software to make the numbers so inconsistent as to render them useless, thus hiding the pilferage.
Instead of auditing the numbers, audit the cash trail.

The report states flat out

The report states flat out that there is no indication of actual cash loss/theft etc. But because the numbers from the AFC software are so out of whack, it can't be used as verification that the cash numbers reported by the other system are correct. The main point seems to be that the MBTA really should do what it takes to get the AFC reporting system working properly, so they can actually use it as another means to check against fraud/thef.

I beg to differ

From the report:

Because the MBTA lacked effective physical controls over the hundreds of keys that provide access to fare box cash at the time of its initial receipt and transfer into the MBTA revenue system, the MBTA cannot ensure that all fare box cash is properly safeguarded against possible loss, theft, or misuse.

The AFC system does not properly record all essential events necessary to properly track the removal, deposit, and reinsertion of cash boxes into assigned fare boxes. The inability of the AFC system to give MBTA management reliable tracking information regarding the movement of fare box cash exposes such revenue to potential fraudulent activity.

Later in the report are the gory details about the mismanagement of the keys:

The following areas of concern were noted in our review of the MBTA’s revenue key inventory:
• Seven keys that provided primary and secondary access to mobile vault cash are missing.
• Three keys that provide access to FVM cash were used during contractor installation of AFC equipment and were not under the CPC’s control.
• Five keys that provide secondary access to FVM cash are missing.
• A total of 1,313 keys were unnumbered and lacking individual identifying numbers, thereby making it impossible to maintain an effective inventory that properly controls the risk that misuse of these keys would be promptly detected. Documentation was not available for purchase orders, receiving reports, packing slips, and the chain of custody of keys.
• Large quantities of keys were broken, which indicates that locking mechanisms may be defective or subject to abuse.
• An excessive number of primary access keys were on hand.
• An excessive number of secondary access keys were on hand.

We're talking cash here. You need to be like a casino when it comes to the handling of cash and this is a mess. Sure, the software is probably a mess, too, but that's just a diversion.

The T IS LIKE ROBIN HOOD IN REVERSE

The T robs from the poor{FARE HIKES)and gives to the rich (whoever looted the treasury)
Lets round up the usual suspects some poor minority kid or homeless veteran who can't afford the fare and paste his picture all over the media

Yet another reason I'll never

Yet another reason I'll never feel bad about evading fare, especially when I needed to rely on the B line. Another fun thing I found out was that it was faster (and way less stressful) to walk to work from JP to BU when I was a temp worker there.

Drop in a bucket

Just a note; $102M is a lot of money, though over 5 years it's actually not that much in their overall budget. The deficits they look at annually are upwards of $160M and increasing.

NOT trying to say this isn't a gaping hole that should be explained, just trying to put it in perspective. They could (and should!) fix this problem and they'd still be in deep debt/going downhill financially based on the lack of dedicated revenues for public transportation.

If we all already knew this, sorry for the redundancy!

Check Out the Appendix

Forget the talk about whether the $100 million variance represents theft or software error. The real crime is revealed in the Appendix to the report. Looks like an unqualified bidder that had never even designed a fare box was awarded the contract after submitting an artificially low bid that it was able to later increase by $20 million through the old "change order" trick. Wonder whose palms were greased in that award. So the MBTA spent something like $140 million for an automated fare system that still does not work properly almost 10 years after it was installed. Where's the accountability?

Don't forget too

They tend to fail in cold conditions, like those in unheated stations during a normal winter in New England.

Minimum bidding with toothless contacts strikes again.

Good thing we saved all that money, time, and hassle by forcing government to take the lowest bid!