MBTA failed to collect nearly $2M in overdue bills, many a decade old: Audit

A dozen government agencies and transportation companies owe the MBTA nearly $2 million, many of those bills years overdue even as the authority struggles to close a widening budget gap, a state audit report has found.

The city of Boston owed the most: about $900,000.

The office of Massachusetts State Auditor Suzanne Bump released the report Tuesday and blamed MBTA management for the failure to collect on the mounting debts.

“Our audit found the MBTA, an agency with chronic management and funding challenges, was not properly collecting outstanding balances, and was leaving unpaid balances on their books for an extended period of time,” Bump said in a news release.

In response, the MBTA said it had enacted recent cost-cutting measures and reforms to improve its finances. The authority recovered $1 million by properly billing its station tenants for utilities like electricity after a review found that many of the accounts haven’t been invoiced in more than a year, officials said.

The MBTA has been mired in debt while at the same time being squeezed for more funds to funnel into maintenance and repairs.

The audit identified 11 overdue invoices, most notably from the city of Boston, whose $911,085 bill is more than 11 years past due. Others that still haven’t paid include agencies like Amtrak Boston ($168,200, more than five months past due), the National Railroad Co. ($112,526, more than two years past due) and other construction- or maintenance-related or intergovernmental agencies.

For all 11 accounts, the MBTA did not send any 60 day past-due notices. The authority did notseek legal action to collect funds in nine instances.

Bump advised that the authority take the necessary steps to collect these overdue funds, “but should also realistically write off balances that are not likely to be recouped,” she said in the news release.

The audit found that the MBTA is missing out on even more funds it is owed because it adjusted balances or wrote off funds as “uncollectable,” without getting the correct approval or processing the transactions efficiently.

“As leadership at the MBTA considers significant overhauls, they should first look at their oversight processes to ensure that they have adequate protections in place to protect taxpayer funds from theft, loss, or abuse,” Bump said in the news release. “Without these protections, systemic problems like those identified in our audit will likely continue, despite structural changes.”

MBTA spokesman Joe Pesaturo said the authority has implemented changes that have saved it millions of dollars while also recovering some of the money it was owed.

“Since last year, the MBTA has been actively working to reform its finances and operations to improve the reliability of the system for riders and taxpayers, correcting bad practices and closely examining all contracts to identify millions of dollars in savings opportunities,” Pesaturo said in an email.

More recovered funds came after changes like renegotiating office supply contracts, which will save the authority $200,000 over two years, and moving to a statewide contract for diesel fuel purchases, which saves $900,000 over two years.

“By taking steps to renegotiate prices with vendors, enforce contractual obligations, move purchases to existing statewide contractors and eliminate cash vouchers, the MBTA has already identified nearly $11 million in savings over the next two years,” Pesaturo said.