By Philip Newman
The Metropolitan Transportation Authority has put into effect new financial reporting regulations issued by state Comptroller Alan Hevesi, who once accused the MTA of a lack of accountability.
“These regulations will ensure the MTA’s finances are more transparent and that the agency is more accountable to the public,” Hevesi said.
“Under the leadership of MTA Executive Director Katie Lapp, the MTA has taken significant steps to improve its financial disclosures over the last year and has acknowledged the need for further improvement.”
The new regulations took effect Jan. 7.
In April Hevesi issued a report that accused the MTA of overstating its financial straits in pursuit of a subway and bus fare increase and said the agency kept two books, one for its own use and another for the public.
Both Hevesi and New York City Comptroller William Thompson said the MTA was accountable only to its own board and to the governor.
MTA officials dismissed Hevesi’s attacks as political in motivation as it raised the fare for subways and buses by 50 cents to $2.
Hevesi’s office said more recently that the comptroller had been praised for his new regulations by a number of advocacy groups, including the Automobile Club of New York, the Straphangers Campaign, the Citizens Budget Commission and the New York City Independent budget office.
Under the new regulations:
The MTA must identify any planned transactions that would shift resources from any source from one year to another and the amount of any reserves. A key finding of last April’s report was that the MTA failed to disclose during the debate over the fare hike that it had shifted $512 million in surplus funds from 2002 to future years.
The MTA is now required to make available for public inspection a debt affordability statement showing the impact of planned borrowings on the budget for each year of its financial plan. Hevesi’s office said this was particularly important since the agency's debt service costs are projected to double from $797 million in 2003 to $1.7 billion by 2007 and to triple by 2014.
The MTA’s budgets and financial plans must be prepared in accordance with generally accepted accounting principles, unless otherwise consented to by the comptroller.
Information in the plan related to each MTA agency must be presented in a consistent manner and format. This will help ensure that all agencies are reporting on the same basis and allow for a more accurate representation of each agency's financial operations
A statement of the source and amount of any non-recurring resource in excess of $1 million that is planned for use in any given year must be disclosed. The MTA has balanced its budget in recent years in part by using non-recurring resources.
“To the MTA’s credit, it has taken steps to improve its financial reporting since our April 2003 report found serious shortcomings in its budget process,” Hevesi said. “We look forward to working with the MTA to ensure timely compliance with these regulations.”
Reach contributing writer Philip Newman by e-mail at news@timesledger.com or call 229-0300, Ext. 136.
