s Ck Y W5" . HOUSE OF REPRESENTATIVES HOUSE POST AUDIT AND OVERSIGHT BUREAU A O P DOM 146 STATE HOUSE BOSTON, MASSACHUSETS 02133 November 10, 1992 SPECIAL REPORT ON THE EXECUTIVE OFFICE OF TRANSPORTATION AND COlS^RUcifrf©N CONTRACTS AND MANAGEMENT y/%- •> &Qwf4 * The House Post Aud it and Oversight Bureau (the % ^O/^^/e* "Bureau") conducted preliminary examination of the a spending and budget practices of the Executive Office of Transportation and Construction "EOTC" The Bureau's ( ) . ncerns about waste and unnecessary spending within EOTC c o have been heightened because of the imminent construction of the Central Artery/Third Harbor Tunnel Project ("CA/T") and the ancillary projects related to that construction. The Bureau's initial analysis of some of the expenditures of EOTC and its budget practices have only increased those c one e r n s . Funding Transportation Projects - The Planning Function 1 . Despite the fact that the reconstruction of the Central Artery has been the single most critical item on the EOTC ' \v \ . s hCl .?Al ^i/o'"" oi 1 HOUSE OF REPRESENTATIVES HOUSE POST AUDIT AND llll OVERSIGHT BUREAU H A O P ROOM 146 STATE HOUSE BOSTON, MASSACHUSETS 02133 C November 10, 1992 SPECIAL REPORT ON THE EXECUTIVE OFFICE OF TRANSPORTATION AND CONSp*UCtlf©N 7% ' r^ CONTRACTS AND MANAGEMENT The House Post Audit and Oversight Bureau (the C/v Hgfc. <P "Bureau") conducted preliminary examination of the a spending and budget practices of the Executive Office of Transportation and Construction ("EOTC" ). The Bureau's concerns about waste and unnecessary spending within EOTC have been heightened because of the imminent construction of the CCentral Arterv/Third Harbor Tunnel Project ("CA/T") and the ancillary projects re lated to that construction. The Bureau's initial analysis of some of the expenditures of EOTC and its budget practices have only increased those c one e r n s Funding Transportation Projects - The Planni ne Function 1 . Despite the fact that the reconstruction of the Central Artery has been the single most critical item on the EOTC ' w H 7 <\ agenda for several years, the EOTC continues to spend taxpayers dollars on questionable studies and proposed legislation while at the same time ignoring the very real transportation needs generated by the CA/T project. Despite the fact that the CA/T project has been on the front burner for the past several years and has received tremendous attention, as late as 1991, EOTC was engaging Deloitte & Touc he to study a whole host of activities relating to the project. Some of the activities of the Deloitte & Touche study were: highway funding capital projects; o - o funding tZA / T project; o funding strategies for statewide construction agenda while CA/T underway; o use of federal funds; and o pu b transportation funding. 1 i 1 At this point in time, the Bureau has to ask the question why is EOTC engaging in this study at this point in the project. Given the fact that the staff of EOTC is charged with the duty of developing those functions well before construction begins, it is difficult to understand why those basic functions are now being studied at all, let alone by private consultants. More problematic is the - 2 - Digitized by the Internet Archive 2013 in http://archive.org/details/specialreportoneOOmass existence of other types of studies and agreements on related matters that appear to be simply a vehicle for diverting increased dollars to EOTC for purposes that were not intended by state or federal statute. Interagency Agreement with MBTA 2 . EOTC and MBTA have executed 19 agreements whereby EOTC agrees to do planning, and analysis on behalf of MBTA. The most recent cost of this renewal of this interagency agreement for fiscal 1993 planning was approximately $1.1 million dollars. The Bureau quest ions the rationale for the continuation of this agreement. There has been little evidence that funds provided by MBTA have been utilized for the transportation purposes dictated by the agreement. Indeed it appears that the agreement in large part simply provides an additional source of funds to EOTC for use as salaries and other expenditures, yet at the same time the T's basic planning function has been ignored. These have been T chronicled in recent newspaper articles on the budget. " " The work performed or to be performed by the consultants (Deloitte & Touche) appears to be redundant, at - 3 - s least in respect to the scope of work provided by the interagency agreement with the MBTA. For example, Task of 3 the RFP Public Transportation Financing (p. 12 of RPF) prepared by EOTC listed the following areas for study; , o Analyze MBTA financial structure including alternatives for managing capital debt, advantages of giving independent credit, capital budgeting process, MBTA funding on prospective basis, a developing new strategies to increase operating revenue . In addition, the scope of the interagency agreement (p. 10 Financial Planning) listed the following: Alternative capital planning sources, alternative o investment strategies, capital requirements, and examination of fare structure. rhese areas result in an overlap which certainly appears unnecessary. Moreover, these additional studies come on top of previous studies just completed. In light of rhese facts, the Bureau is particularly troubled by EOTC ' s refusal to provide a copy of the Deloitte & Touche study. On October 14, 1992, the Bureau asked for correspondence, memoranda, drafts, reports and/or .ill preliminary reports prepared by Deloitte & Touche in accord with the RFP for Financial Advisory services. EOTC ' - 4 -