Metro’s system for tracking an estimated $95 million in spare parts is flawed, bogging down warehouses with excess and obsolete parts while keeping the agency from having an accurate catalog of its inventory, a new audit has found.
In fact, the agency does not know if all those parts — ranging from tiny nuts and bolts to escalator steps, drills, tires and even engines — are actually worth the $95 million that Metro has on its books.
“Unless you actually do a real inventory, you don’t know if the amount is high or low,” Metro’s Inspector General Helen Lew told the Washington Examiner.
Lew’s report, made public this week, found the listed value of Metro’s spare parts increased by 25 percent from fiscal 2006 until fiscal 2009. However the agency’s system for tracking the equipment during that time was “not accurate” and “incomplete,” she said.
The audit findings are especially important as the agency is eyeing fare increases, more taxpayer dollars and service cuts to fill an $189.2 million gap in its upcoming budget.
“Especially in times of budget shortages, it’s important to know what assets you have and the value of those assets,” Lew said. “You may be asking for more than what you really need.”
Until fiscal 2009, the audit said, the agency did not consistently identify and dispose of obsolete inventory. And when it did, it found $5.5 million worth of obsolete equipment — with the agency writing off nearly all of it. For example, the audit found, the agency had 160 obsolete piston kits worth $28,984 and 1,523 insulator and fiberglass items valued at $28,601 that became unusable when specifications changed.
Until fiscal 2009, the audit said, the agency did not consistently identify and dispose of obsolete inventory. And when it did, it found $5.5 million worth of obsolete equipment — with the agency writing off nearly all of it. For example, the audit found, the agency had 160 obsolete piston kits worth $28,984 and 1,523 insulator and fiberglass items valued at $28,601 that became unusable when specifications changed.
“You don’t want to reflect in your books ‘I’ve got $95 million and $10 million of that may be worthless,'” Lew explained.
Metro also has not identified how much excess inventory it is storing, the audit said. Obsolete and extra items can sometimes be resold or melted down for other uses.
The audit additionally found that Metro did not properly safeguard its supplies. One storage site in Capitol Heights lacked a high-security lock, while deliverymen had keys to another storeroom.
The report says the current system with its insecure storerooms and inaccurate counts opens the agency up to fraud. Lew noted that she found no actual cases or allegations of wrongdoing. “The opportunity was there,” she said.
“The audit was an internal investigation by our IG that served its purpose,” Metro spokesman Reggie Woodruff said. “It does not mean that any items were lost or misplaced, it just means that policies accounting for the items were not followed to the letter.”
Yet improving the agency’s inventory tracking will not provide a solution to the current budget crisis, according to both Lew and Woodruff. Although the agency said it is taking steps to correct the problems, it is looking at a more than three-year timeline to fix some issues highlighted in the audit. After 2013, it plans to have less than a one-year supply of excess parts on hand.
