ANNUAL REPORT FOR 2010 OF THE OFFICE OF INSPECTOR GENERAL April 15, 2011 Slide: Overview of OIG • Established by Board Ordinance in 1999 • Mission: promote economy, efficiency, effectiveness and integrity in programs and operations of the CTA • Granted law enforcement authority in 2000 • Investigations and Internal Audit function for the Authority SLIDE: Audits and Reviews Performed • 19 Audits Completed • 85 Findings Resulting in 122 Recommendations • 17 Audits Opened SLIDE: Focus-Noteworthy Areas Reviewed Operational Controls Hiring and Promotion Processes Fleet Management Inventory Controls Financial Controls Employee Expense Reports Workers’ Compensation Program Customer Refunds Premium Pay Codes Management Succession Finance Department Ethics Reporting of Statements of Financial Interests Fraud Unauthorized Use of Fare Cards Construction / Capital Dearborn Subway Project Howard Station Block 37 Audit Follow-Up Warranty Claims Process SLIDE: Audits/Initiatives 2000-2010 CHART 2000: 13 opened, 3 closed 2001: 15 opened, 7 closed 2002: 17 opened, 15 closed 2003: 12 opened, 21 closed 2004: 17 opened, 10 closed 2005: 11 opened, 18 closed 2006: 15 opened, 19 closed 2007: 8 opened 8 closed 2008: 15 opened 13 closed 2009: 12 opened 15 closed 2010: 17 opened 19 closed SLIDE: 997 Contacts and Leads in 2010 Chart 72 Other 51 OIG Initiative 65 Office Phone 326 On Line Survey 281 Management Referral/Email SLIDE: DISPOSITION OF CONTACTS AND LEADS Chart Case Opened 314 Referred to Management 189 Provided Requested Information 104 Referred to Customer Service 105 Not Actionable or Declined Case 237 Total Contacts and Leads 997 SLIDE: Sources of Opened Cases Chart Anonymous 89 CTA Employee 87 Law Enforcement 58 OIG 52 Other 21 Customer 7 SLIDE: Investigations 2000-2010 CHART 2000: 58 opened, 21 closed 2001: 69 opened, 78 closed 2002: 74 opened, 56 closed 2003: 122 opened, 113 closed 2004: 175 opened, 183 closed 2005: 313 opened, 232 closed 2006: 334 opened, 335 closed 2007: 401 opened 367 closed 2008: 475 opened 499 closed 2009: 330 opened 287 closed 2010: 314 opened 335 closed SLIDE: Nature of Allegation / Case CHART Six categories accounted for more than half of opened cases in 2010: Misuse of CTA Resources Arrest of Employee Driver’s License Violations Secondary Employment Violation Assist Law Enforcement FMLA / Time Abuse SLIDE: Nature of Allegation / Case CHART The remaining opened cases varied widely: Improper Conduct Assist of CTA Department Check / Credit Card Procedural Violations Theft Drug Violations Other Falsified Documents Harassment Conflict of Interest Residency Fare Card Related SLIDE:Issue Benefit Resulting From OIG Activity TABLE Purchasing Control-Improved controls covering “under-money” purchases Vendor Administration-Corrective action in the administration of debarred vendors Testing of New Rail Cars-Updated procedures to ensure proper documentation of test results Inventory Controls-Improved controls for the receipt and distribution of materials, as well as for rush orders Grant Administration-Enhanced monitoring of under-utilized grants SLIDE: Issue Benefit Resulting From OIG Activity TABLE Drug and Alcohol Testing-Tightened accountability over selection procedures Credit Card Fraud-Improved identification and monitoring of fraud indicators for purchases on the CTA website Human Resource Policy-Clarified and expanded Authority policies related to sexual harassment Fare Card Fraud-Enhanced monitoring of the unauthorized use of free fare cards; updated procedures related to the confiscation and deactivation of fare cards SLIDE: Administrative Actions Related to OIG Activities January 1 – December 31, 2010 TABLE 0 Contractor Debarments 7 Employee Reprimands/Warnings 3 Employee Retirements/Resignations 12 Employee Suspensions 12 Employee Discharges 34 Total SLIDE: Look Ahead for 2011 • New legislation takes effect July 1, 2011 • Who “audits the auditors?” – externalpeer review • Major technology initiatives • Management turnover and succession SLIDE: Contact Information Phone (773) 282-8463 E-Mail hotline@ctaoig.net U.S. Mail P.O. Box 641075 Chicago, IL 60664-1075 Fax (312) 681-3797