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A Financial Management Oversight Review of the Washington Metro Area Transit Authority prepared by a Philadelphia-based accounting firm for the Federal Transit Administration has found instances of lax internal financial management and budget controls at WMATA. The period studied was from April 2012 to March 2013. It seems likely that procurement and federal contract management problems have existed at WMATA for a far longer period.

Over the last three years, federal audits of the Metropolitan Washington Airports Authority found similar instances of management and operations problems. MWAA has taken steps under the leadership of Jack Potter to address some issues found by the audits. While transparency and public information reporting from MWAA Board meetings have improved, no independent Dulles Rail project oversight exists as yet.

It is time to correct this deficiency, in light of continued delays in reaching Phase 1 “substantial completion” required for MWAA to turn over the project to WMATA to allow them to complete pre-opening testing operations. On April 9, 2014, the six-month delay deadline provided in the Phase 1 construction contract for substantial completion will occur.

In February 2014, MWAA reported as follows:

The contract requires the submission to meet criteria in 12 different areas. Seven of the 12 areas were determined to be deficient. Examples of problem areas include:

• Failure to deliver certificates of occupancy for almost 20 wayside buildings, including stations, power substations and the tunnel;

• Performance issues with the Automatic Train Control System that prevent WMATA from beginning Operational Readiness Testing;

• Failure to fully correct defects that impact operations, including track gage problems;

• Elevator and escalator problems, and water leaks in buildings;

• Incomplete documentation for testing requirements and safety/security verifications.

Some of these problems appear to have resulted from software changes made to the train control communications system by a subcontractor. As yet, MWAA has not issued any information regarding the potential cost and schedule for completing remedial work for any of the problems disclosed.

Based on an interview given by MWAA Board Member and former U.S. Congressman Tom Davis to Peggy Fox at USA Channel 9 on April 1, it appears that little or no effort is being made currently to fix the train communications problems. The possibility of litigation between MWAA and its Phase 1 contractor, Dulles Transit Partners, seems increasingly likely.

Also this month, MWAA intends to apply for $1.9 billion in Transportation Infrastructure Finance and Innovation Act (TIFIA) program credit assistance with a majority of funding to help reduce projected Dulles Toll Road toll costs. So far, no information about possible financial impact of the TIFIA assistance on toll rates has been made public. The public is being treated as a willing partner in financial negotiations that have occurred in secret at numerous meetings between staff at U.S. Department of Transportation and Dulles Rail partners.

Despite spending $3 billion in mostly Virginia taxpayer funds over the last decade on Phase 1 Silver Line capital costs, the Dulles Corridor Advisory Committee has acted like a rubber stamp to MWAA Board actions. Until two years ago, MWAA controlled the Chairmanship of the DCAC. For 2014, Loudoun County Board Chairman York has been appointed to be DCAC Chairman.

To avoid the types of problems experienced with Phase 1, York must demand expanded DCAC authority to permit independent review and advice with expertise including engineers, traffic and revenue analysts, accountants and financial experts and other professionals. The DCAC needs a budget to conduct independent review of MWAA consultants and project planners.

While the recently reported problems on Phase 1 are likely to delay its opening for six months, far larger long-term problems exist at WMATA, most of which have yet to be reported.

Rob Whitfield, Dulles Corridor Users Group