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A06088 Summary:

BILL NOA06088
 
SAME ASSAME AS S05778
 
SPONSORRa
 
COSPNSRBrown E, Brown K
 
MLTSPNSR
 
Add §1265-c, Pub Auth L
 
Requires the metropolitan commuter transportation authority to contract with a certified independent public accounting firm for the provision of an independent, comprehensive, forensic audit of the authority to examine redundancies, inefficiencies, and the authority's governance system.
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A06088 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A6088
 
SPONSOR: Ra
  TITLE OF BILL: An act to amend the public authorities law, in relation to requiring an independent forensic audit of the metropolitan commuter transportation authority; and providing for the repeal of such provisions upon expira- tion thereof   PURPOSE OR GENERAL IDEA OF BILL: Requires the metropolitan transportation authority to undertake an inde- pendent forensic audit performed by a certified independent public accounting firm and requires such accounting firm to develop a report containing an analysis of redundancies and inefficiencies, suggestions to reduce redundancies and inefficiencies, and recommendations for alternative governance structures within the authority.   SUMMARY OF PROVISIONS: Amends the public authorities law to require the metropolitan transpor- tation authority to contract with a certified independent accounting firm to perform a comprehensive, forensic audit. The certified independ- ent accounting firm is prohibited from providing audit services if the lead or coordinating audit partner has performed audit services for the authority within the ten previous years. Such firm is prohibited from performing any non-audit services for the authority while performing such audit. Such firm is directed to Compile a report of its findings, and such report is to include an analysis of redundancies and ineffi- ciencies within the authority, suggestions and recommendations to reduce redundancies and inefficiencies, and six governance action plan proposals for alternative governance structures to be adopted by the authority.   JUSTIFICATION: The metropolitan transportation authority has experienced significant delays and impediments'on its many projects. To reduce inefficiencies and delays, the authority must be required to undergo an extensive inde- pendent forensic audit to determine redundancies and other factors that impact the delivery and implementation of the authority's services. For example, as of 2024, the authority loses approximately $700 million annually due to fare evasion alone. We have seen frequent abuses of overtime, and the authority is struggling to balance its operating budg- et and capital program. The governance structure of the authority should be reexamined to assist in formulating solutions to such issues,   PRIOR LEGISLATIVE HISTORY: New Bill.   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: Additional costs to the metropolitan transportation authority for contracting with a certified independent public accounting firm to perform forensic audit and analysis services.   EFFECTIVE DATE: This act shall take effect immediately and shall expire and be deemed repealed two years after such date.
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A06088 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          6088
 
                               2025-2026 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 26, 2025
                                       ___________
 
        Introduced  by M. of A. RA -- read once and referred to the Committee on
          Corporations, Authorities and Commissions
 
        AN ACT to amend the public authorities law, in relation to requiring  an
          independent forensic audit of the metropolitan commuter transportation
          authority;  and providing for the repeal of such provisions upon expi-
          ration thereof

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  The  public  authorities  law  is amended by adding a new
     2  section 1265-c to read as follows:
     3    § 1265-c. Independent forensic audit.  1.  Notwithstanding  any  other
     4  provision  of  law,  the authority shall contract with a certified inde-
     5  pendent public accounting firm for  the  provision  of  an  independent,
     6  comprehensive,  forensic  audit  of  the  authority. Such audit shall be
     7  performed in accordance  with  generally  accepted  government  auditing
     8  standards.  Such  audit  shall examine redundancies, inefficiencies, and
     9  the authority's governance system.
    10    2. The certified independent public  accounting  firm  providing  such
    11  audit services pursuant to this section shall be prohibited from provid-
    12  ing  audit  services  if  the  lead or coordinating audit partner having
    13  primary responsibility for the audit, or the audit  partner  responsible
    14  for  reviewing the audit, has performed audit services for the authority
    15  within any of the ten previous fiscal years of the authority.
    16    3. The certified independent public  accounting  firm  providing  such
    17  audit  services  pursuant  to  this  section  shall  be  prohibited from
    18  performing any non-audit services for  the  authority  contemporaneously
    19  with respect to such audit services.
    20    4.  It  shall  be  prohibited  for  the  certified  independent public
    21  accounting firm to perform for the authority any audit services if:
    22    (a) the chief executive officer, comptroller, chief financial officer,
    23  chief accounting officer or any other person serving  in  an  equivalent
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD05947-02-5

        A. 6088                             2
 
     1  position  in  the  authority  was an employee, consultant or independent
     2  contractor of such certified independent public accounting  firm  and/or
     3  participated  in any capacity in the audit of the authority at any time;
     4  or
     5    (b) the chief executive officer, comptroller, chief financial officer,
     6  chief  accounting  officer  or any other person serving in an equivalent
     7  position with such certified  independent  public  accounting  firm  was
     8  employed  as  an executive level employee or an equivalent position with
     9  the authority at any time.
    10    5. The certified independent  public  accounting  firm  contracted  to
    11  perform  the independent, comprehensive, forensic audit of the authority
    12  pursuant to this section shall, within two years from the effective date
    13  of this section, report its findings, conclusions and recommendations to
    14  the governor, the state comptroller,  the  temporary  president  of  the
    15  senate,  the  speaker  of  the  assembly, the chair and ranking minority
    16  member of the senate finance committee, the chair and  ranking  minority
    17  member  of the assembly ways and means committee, the chairs and ranking
    18  minority members of the senate and  assembly  corporations,  authorities
    19  and  commissions committees, and the chairs and ranking minority members
    20  of the senate and assembly transportation committees. Such report  shall
    21  include,  but  not  be  limited  to,  the  certified  independent public
    22  accounting firm's analysis of redundancies and inefficiencies within the
    23  authority, suggestions to reduce such redundancies  and  inefficiencies,
    24  and  recommendations  for  alternative  governance structures within the
    25  authority. Such report shall be made public and posted on  the  authori-
    26  ty's website.
    27    6.  The  certified independent public accounting firm shall develop no
    28  more than six governance action plan proposals  for  alternative  gover-
    29  nance  systems  which  shall be adopted by the authority. Such proposals
    30  shall be developed congruently with, and included  in,  the  independent
    31  forensic  audit  report.  Such  proposals  shall include suggestions and
    32  recommendations for the implementation of  alternate  governance  struc-
    33  tures  based  upon  the  recommendations and suggestions included within
    34  such report required pursuant  to  subdivision  five  of  this  section,
    35  including, but not limited to, comprehensive cost savings and efficiency
    36  improvement  measures.  The certified independent public accounting firm
    37  shall develop the governance action plan proposals congruently with  the
    38  publication of the comprehensive forensic audit report, and the authori-
    39  ty  shall  adopt and implement one or more of the governance action plan
    40  proposals developed by the certified independent public accounting  firm
    41  within one year of the publication of the forensic audit report.
    42    §  2.  This  act shall take effect immediately and shall expire and be
    43  deemed repealed two years after such date.
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