Shoddy accounting by the city Department of Finance could be costing the flat-broke MTA, a stinging new audit says.
At a time when the transit agency is facing a deficit of nearly $1 billion, an audit of just 179 tax returns by city Comptroller Scott Stringer’s office found the DOF failed to collect an estimated half a million dollars from property transactions — a crucial revenue stream for the MTA.
“We always hear how the MTA is ‘cash-strapped’ — which is why what this audit found boggles the mind,” Stringer said in a statement. “DOF failed to do its job of reviewing tax returns, and its failures cut into a critical revenue stream for the MTA.”
Stringer’s audit reviewed what amounted to fewer than 1 percent of all city transactions involving the Real Property Transfer Tax, or RPTT, between July 1, 2015 through June 30, 2017.
The tax applies to city property transfers of more than $25,000, and by law, 38 percent of the revenue generated from such transactions involving more than $500,000 goes to the MTA.
In fiscal year 2017, the MTA received $346 million from the tax, and in 2018, $216 million.
But Stringer’s auditors found the DOF’s review process is “limited’’ and its policies and procedures are “inconsistent and incomplete” — increasing “the risk of inadequate collection and potential loss of city revenues and funds due to the MTA.’’
Since the audit only reviewed a mere fraction of returns — and already found a potential $616,000 in lost revenue — that dough could be just the tip of the iceberg in what the MTA is missing out on, the comptroller said.
Nearly $111,000 of the estimated $616,000 in lost tax revenue was not collected simply because of computing programming errors, his office noted.
“These allegations are deeply concerning,’’ MTA rep Andrei Berman said in a statement to The Post.
“We intend to work closely with the city to learn more about the extent of this problem and to collect the funds that are so critical to improving and maintaining our transportation system.”
The DOF called Stringer’s audit “flawed,” pointing to the millions of dollars it says it recoups through its own audits.
“The comptroller’s office only looked at the examination process when returns are first filed and when DOF is required by law to accept all returns that are completed, signed and notarized but not at our audit program,” the agency said in a statement.
“Our auditors investigate complex issues after returns are initially filed and make millions of dollars of adjustments.”
But Stringer’s office fired back that since not every return is audited by the DOF, the potential for costly mistakes will still exist until the issues with its system are fixed.
In December, the MTA’s chief financial officer warned that the agency’s operating deficit could hit $1 billion by 2022 if major steps weren’t taken — as transit officials prep for a $51.5 billion five-year capital plan to fix the city’s decrepit subway and bus systems.
Additional reporting by Rich Calder