|By PR Newswire||
|January 8, 2013 03:04 PM EST||
Audit reveals six findings, offers 20 recommendations for improvement
HARRISBURG, Pa., Jan. 8, 2013 /PRNewswire-USNewswire/ -- Auditor General Jack Wagner said that an audit released today of the Pennsylvania Turnpike Commission has found that the turnpike's involvement in interest-rate swaps has cost Pennsylvania taxpayers and turnpike motorists at least $108.9 million. Wagner said the turnpike's strategy was to use the swaps to save money, but it has instead proved to further saddle the debt-ridden commission by not using conventional fixed-rate bonds to finance its debt.
Under Act 44, a Lease and Funding Agreement was entered into by the turnpike and PennDOT, which requires the turnpike to pay PennDOT $450 million a year, or nearly $24 billion, over a period of 50 years to provide funding for roads, bridges and transit. According to news reports, the turnpike raised tolls only five times from its opening in 1940 through 2004. Since Act 44 was implemented in 2007, there have been five annual toll increases, including one that took effect Jan. 6. Wagner reiterated today that the commission's long-term debt has increased by more than 200 percent, from $2.6 billion to $8.3 billion, since the General Assembly approved Act 44 of 2007.
"Given its precarious financial position relative to Act 44 payments, the turnpike should not use these complicated and risky deals," Wagner said. "The Turnpike Commission should terminate its swap deals and ban all swap use in the future for the sake of Pennsylvania taxpayers and the motoring public as soon as it is financially feasible to do so."
Interest-rate swaps are legal agreements between two parties – a debt-financing entity and an investment bank – on which way interest rates will move. The party that guesses correctly gets paid, and the party that guesses incorrectly must pay. The payments are determined by the amount of public debt financed with variable-rate loans.
A 2009 investigation completed by Wagner's office of the Bethlehem Area School District found that on a statewide basis, 107 of 500 school districts and 86 local governments had $14.9 billion in public debt tied to swaps. The numbers have since increased to $17.5 billion in public debt, encompassing 108 of 500 school districts and 101 local governments. In the process, millions of public dollars have been lost in interest-rate swaps deals.
Wagner's audit, which covered the period Jan. 1, 2007 through Aug. 31, 2011, found that the turnpike's 23 active swaps had a negative book fair value of $29.3 million as of May 31, 2011. Furthermore, Wagner's audit revealed that the turnpike had paid $59 million in fees and interest for terminated swaps, and $49 million in fees and interest on active swaps, for a total of $108,972,133 paid out in swaps losses between Dec.16, 1998 and Aug. 31, 2011.
"Swaps may be perfectly acceptable for 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," Wagner said.
In addition to recommending that the Turnpike Commission terminate all remaining swaps as soon as it is fiscally responsible to do so and refinance, if necessary, with conventional fixed-rate bonds, Wagner also recommended that the Turnpike Commission promptly adopt a resolution unequivocally and permanently prohibiting the use of swaps in the future.
In all, Wagner's audit made a total of six findings related to the operation and maintenance of the Pennsylvania Turnpike, and offered 20 recommendations to fix the noted deficiencies. The five other report findings are summarized as follows:
- Turnpike Commission let employees ride the turnpike toll-free, even for personal travel
- Turnpike Commission provided more than $4.1 million of toll free travel to nearly 5,000 consultants, contractors, and other state government officials
- Turnpike Commission is overly generous and permissive when reimbursing commissioners for expenses, and lacks transparency and accountability with regard to those expenses.
- Turnpike Commission actively monitored the E-ZPass system to ensure correct fares are charged
- Turnpike Commission monitored, maintained, and inspected its tunnels, but it has not implemented fire detection systems in two of the five tunnels (Allegheny and Tuscarora) and critical project management practices that would ensure recommendations resulting from tunnel inspections are not overlooked.
Wagner's auditors found that the turnpike's liberal and inadequate policy of providing toll-free rides to turnpike employees and vendors, not only for business but for personal travel as well, amounted to 7,000 free rides and at least $7.7 million in lost toll revenue between January 2007 and August 2011.
Traffic volume on the turnpike has remained stagnant for the past five years. During fiscal year 2010-11, traffic volume on the Pennsylvania turnpike totaled over 189 million vehicles, including 165 million passenger vehicles (87 percent) and 24 million commercial vehicles (13 percent). The total net revenue generated from tolls in fiscal year 2010-11 was $763 million ($436 million or 57 percent from passenger vehicles, and $328 million or 43 percent from commercial vehicles). An increasing percent of revenue (47 percent in 2011) goes toward debt service mainly due to the burdens of Act 44 – passed in 2007.
The turnpike's workforce consisted of 2,104 employees as of May 31, 2011. It is administratively headed by a chief executive officer and a chief operating officer. The Turnpike Commission manages/oversees 21 maintenance facilities, 5 tunnels, 64 toll interchanges, 17 services plazas, and controls a total of 546 roadway miles.
A complete copy of Wagner's audit of the Pennsylvania Turnpike Commission is available at www.auditorgen.state.pa.us.
Auditor General Jack Wagner is responsible for ensuring that all state money is spent legally and properly. He is the commonwealth's elected independent fiscal watchdog, conducting financial audits, performance audits and special investigations. The Department of the Auditor General conducts thousands of audits each year. To learn more about the Department of the Auditor General, taxpayers are encouraged to visit the department's website at www.auditorgen.state.pa.us .
SOURCE Pennsylvania Department of the Auditor General
So you think you are a DevOps warrior, huh? Put your money (not really, it’s free) where your metrics are and prove it by taking The Ultimate DevOps Geek Quiz Challenge, sponsored by DevOps Summit. Battle through the set of tough questions created by industry thought leaders to earn your bragging rights and win some cool prizes.
Oct. 22, 2016 11:45 PM EDT Reads: 3,788
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smar...
Oct. 22, 2016 11:45 PM EDT Reads: 692
Manufacturers are embracing the Industrial Internet the same way consumers are leveraging Fitbits – to improve overall health and wellness. Both can provide consistent measurement, visibility, and suggest performance improvements customized to help reach goals. Fitbit users can view real-time data and make adjustments to increase their activity. In his session at @ThingsExpo, Mark Bernardo Professional Services Leader, Americas, at GE Digital, discussed how leveraging the Industrial Internet a...
Oct. 22, 2016 11:45 PM EDT Reads: 4,458
SYS-CON Events announced today that LeaseWeb USA, a cloud Infrastructure-as-a-Service (IaaS) provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. LeaseWeb is one of the world's largest hosting brands. The company helps customers define, develop and deploy IT infrastructure tailored to their exact business needs, by combining various kinds cloud solutions.
Oct. 22, 2016 11:30 PM EDT Reads: 3,794
A completely new computing platform is on the horizon. They’re called Microservers by some, ARM Servers by others, and sometimes even ARM-based Servers. No matter what you call them, Microservers will have a huge impact on the data center and on server computing in general. Although few people are familiar with Microservers today, their impact will be felt very soon. This is a new category of computing platform that is available today and is predicted to have triple-digit growth rates for some ...
Oct. 22, 2016 11:00 PM EDT Reads: 33,933
Effectively SMBs and government programs must address compounded regulatory compliance requirements. The most recent are Controlled Unclassified Information and the EU’s GDPR have Board Level implications. Managing sensitive data protection will likely result in acquisition criteria, demonstration requests and new requirements. Developers, as part of the pre-planning process and the associated supply chain, could benefit from updating their code libraries and design by incorporating changes.
Oct. 22, 2016 10:45 PM EDT Reads: 1,612
November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Penta Security is a leading vendor for data security solutions, including its encryption solution, D’Amo. By using FPE technology, D’Amo allows for the implementation of encryption technology to sensitive data fields without modification to schema in the database environment. With businesses having their data become increasingly more complicated in their mission-critical applications (such as ERP, CRM, HRM), continued ...
Oct. 22, 2016 10:30 PM EDT Reads: 912
SYS-CON Events announced today that Cloudbric, a leading website security provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Cloudbric is an elite full service website protection solution specifically designed for IT novices, entrepreneurs, and small and medium businesses. First launched in 2015, Cloudbric is based on the enterprise level Web Application Firewall by Penta Security Sys...
Oct. 22, 2016 10:30 PM EDT Reads: 1,046
SYS-CON Events announced today that SoftNet Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. SoftNet Solutions specializes in Enterprise Solutions for Hadoop and Big Data. It offers customers the most open, robust, and value-conscious portfolio of solutions, services, and tools for the shortest route to success with Big Data. The unique differentiator is the ability to architect and ...
Oct. 22, 2016 10:15 PM EDT Reads: 643
Most people haven’t heard the word, “gamification,” even though they probably, and perhaps unwittingly, participate in it every day. Gamification is “the process of adding games or game-like elements to something (as a task) so as to encourage participation.” Further, gamification is about bringing game mechanics – rules, constructs, processes, and methods – into the real world in an effort to engage people. In his session at @ThingsExpo, Robert Endo, owner and engagement manager of Intrepid D...
Oct. 22, 2016 09:30 PM EDT Reads: 9,654
WebRTC adoption has generated a wave of creative uses of communications and collaboration through websites, sales apps, customer care and business applications. As WebRTC has become more mainstream it has evolved to use cases beyond the original peer-to-peer case, which has led to a repeating requirement for interoperability with existing infrastructures. In his session at @ThingsExpo, Graham Holt, Executive Vice President of Daitan Group, will cover implementation examples that have enabled ea...
Oct. 22, 2016 09:00 PM EDT Reads: 2,255
SYS-CON Events announced today that Enzu will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive advantage. By offering a suite of proven hosting and management services, Enzu wants companies to focus on the core of their online busine...
Oct. 22, 2016 09:00 PM EDT Reads: 1,255
@DevOpsSummit has been named the ‘Top DevOps Influencer' by iTrend. iTrend processes millions of conversations, tweets, interactions, news articles, press releases, blog posts - and extract meaning form them and analyzes mobile and desktop software platforms used to communicate, various metadata (such as geo location), and automation tools. In overall placement, @DevOpsSummit ranked as the number one ‘DevOps Influencer' followed by @CloudExpo at third, and @MicroservicesE at 24th.
Oct. 22, 2016 09:00 PM EDT Reads: 3,896
In the next forty months – just over three years – businesses will undergo extraordinary changes. The exponential growth of digitization and machine learning will see a step function change in how businesses create value, satisfy customers, and outperform their competition. In the next forty months companies will take the actions that will see them get to the next level of the game called Capitalism. Or they won’t – game over. The winners of today and tomorrow think differently, follow different...
Oct. 22, 2016 08:45 PM EDT Reads: 857
SYS-CON Events announced today that Roundee / LinearHub will exhibit at the WebRTC Summit at @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. LinearHub provides Roundee Service, a smart platform for enterprise video conferencing with enhanced features such as automatic recording and transcription service. Slack users can integrate Roundee to their team via Slack’s App Directory, and '/roundee' command lets your video conference ...
Oct. 22, 2016 08:45 PM EDT Reads: 2,007