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1/11/2013
Auditor Blasts Pennsylvania Toll Road Mismanagement
Motorist toll revenue exploited by Pennsylvania Turnpike officials for personal use, according to state auditor.

Jack WagnerFriends of the Pennsylvania Turnpike are getting a free ride. In a report released Tuesday, Auditor General Jack Wagner blasted the state-run toll road's culture of freebies lavished on political allies, the lack of transparency and accountability as well as the money-losing financial gambles that the Turnpike Commission used to finance its debt.

Unlike motorists who must pay up to $46.30 for a single trip across the state, the toll route's 2104 employees can travel for free any time they wish for personal travel by flashing their employee badge at a toll booth. Special "non-revenue" E-ZPass units were also bestowed upon 5000 consultants, contractors, politicians and state officials so they could travel without paying as well.

"We believe this policy violates the Trust Indenture, which states that toll-free travel is to be for official use only," the audit report stated. "Additionally, the Turnpike Commission has little control over the devices used for granting toll-free travel, which could lead to possible cases of abuse.... This generous perk lacks little oversight and comes at a time when most other turnpike travelers face rising tolls, and when the Turnpike itself is faced with mounting debt."

The free travel amounted to $5.5 million worth of trips, although the auditor believes this is an underestimate because no records are kept of employee use of this perk. The governor's office received 21 free transponders, the lieutenant governor received one, and state department of transportation officials received eight.

The governor appoints four commissioners to four-year terms to manage the toll road. In addition to $26,000 in salaries, the commissioners enjoyed $539,201 in benefits over the audit period. No limits were placed on expense accounts for commissioners traveling to conferences around the world. Commissioners stayed in luxury hotel suites and received free vehicles and electronic devices for personal use, all paid for with toll revenue. The report cited one commissioner writing off a $494 restaurant bill in Harrisburg in February 2010.

"As Harrisburg-based auditors, we know the above examples to be relatively expensive meal charges -- certainly for one person, and especially so, when analyzing for prudency," the report stated. "For example, for a restaurant tab to total nearly $500, we would hope it represented a meal for a large group of people conducting Turnpike business and involving no alcohol. However, because the expense voucher included no mention as to the number of attendees or the purpose of the meal, we could not determine that information... There is a complete lack of transparency as to what the Turnpike reimbursed commissioners for using toll customers' monies."

The auditors were also concerned that the Turnpike used a financial instrument known as a swap to speculate on the direction interest rates might move. The toll road made the wrong bet on rates, losing $109 million in taxpayer funds in the process.

"The fundamental guiding principle in handling public funds is that they should never be exposed to the risk of financial loss," the report concluded. "Swaps may be perfectly acceptable in the private sector, where private citizens are free to decide how much risk they can tolerate when their own money is at stake. But swaps should have no role in government, where the taxpayers' money is at stake."

A copy of the report is available in a 1mb PDF file at the source link below.

Source: PDF File Pennsylvania Turnpike Commission Performance Audit (Pennsylvania Auditor General, 1/8/2013)



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