Washington Metropolitan Area Transit Authority:

Assessing Fiscal Risks and Improving Workforce Management Would Help Achieve Strategic Goals

GAO-18-643: Published: Sep 10, 2018. Publicly Released: Sep 10, 2018.

Additional Materials:

Contact:

Mark Goldstein
(202) 512-2834
GoldsteinM@gao.gov

 

Frank Todisco
(202) 512-2700
TodiscoF@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

In recent years, Washington, D.C.'s Metro transit system has had serious safety problems and has lost revenue during lengthy maintenance. These conditions put pressure on Metro to effectively manage its most expensive resource—its workforce.

We found:

Metro's pension costs are increasing faster than other workforce costs, which could make it hard to continue providing employee benefits without compromising future service.

Metro's workforce management policies and processes don't help it achieve safety and customer service goals.

We recommended fully assessing Metro's pension risks and improving workforce planning and performance management.

Washington Metropolitan Area Transit Authority Train Station

Photo showing a Washington Metropolitan Area Transit Authority train car departing a station.

Photo showing a Washington Metropolitan Area Transit Authority train car departing a station.

Additional Materials:

Contact:

Mark Goldstein
(202) 512-2834
GoldsteinM@gao.gov

 

Frank Todisco
(202) 512-2700
TodiscoF@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

What GAO Found

The Washington Metropolitan Area Transit Authority's (WMATA) workforce costs—including wages, salaries, and benefits for employees and retirees—increased on average by about 3 percent annually from fiscal years 2006 through 2017. This increase was largely driven by the cost of employee and retiree benefits. Specifically, the amount WMATA was required to contribute to its pension plans increased by an annual average of about 19 percent during this period. Due to their relative size, proportion of retirees compared to active members, and investment decisions, these pension plans pose significant risk to WMATA's financial operations, yet WMATA has not fully assessed the risks. Without comprehensive information on the risks facing its pension plans, WMATA may not be prepared for economic scenarios that could increase its required contributions to an extent that might jeopardize its ability to provide some transit service.

Workforce Costs for the Washington Metropolitan Area Transit Authority, Fiscal Years 2006 through 2017, in Inflation-Adjusted Fiscal Year 2017 Dollars

Workforce Costs for the Washington Metropolitan Area Transit Authority, Fiscal Years 2006 through 2017, in Inflation-Adjusted Fiscal Year 2017 Dollars

WMATA has implemented two employee performance management systems that cover all employees, but these systems lack some key elements of an effectively designed and implemented performance management system. For example, WMATA's performance management systems are not designed to make meaningful distinctions in performance, a key element of an effective system. This design is due in part to WMATA's lack of comprehensive policies and procedures for its performance management systems. In addition, WMATA lacks sufficient controls to ensure that supervisors complete required performance evaluations accurately and on-time. For example, in 10 of 50 performance evaluations we reviewed, we found scoring errors where employees were assigned a performance rating inconsistent with the supporting review. Without comprehensive policies and procedures or sufficient controls over its performance management systems, WMATA lacks tools and information to move employees toward achieving WMATA's strategic goals.

Why GAO Did This Study

WMATA transports more than 1 million rail and bus passengers each weekday in the nation's capital and surrounding areas. However, recent safety incidents and declines in ridership and revenues have focused public attention on how WMATA manages its workforce and associated costs.

GAO was asked to review WMATA's workforce management. This report examines, among other things, (1) how WMATA's workforce costs have changed from fiscal years 2006 through 2017 and factors contributing to those changes, and (2) how WMATA has designed and implemented its employee performance management systems. GAO reviewed WMATA's annual financial statements and budgets from fiscal years 2006 through 2017, and compared WMATA's workforce cost and performance management efforts to leading practices and internal control and actuarial principles. GAO also reviewed a non-generalizable sample of employee performance evaluations selected to include occupations with the highest number of evaluations.

What GAO Recommends

GAO is making five recommendations to WMATA, including that it develop a comprehensive assessment of risks posed by its pension plans, comprehensive policies and procedures for its employee performance management systems, and controls to ensure supervisors complete required performance evaluations, among other actions.

WMATA agreed with four recommendations and neither agreed nor disagreed with the fifth.

For more information, contact Mark Goldstein at (202) 512-2834 or GoldsteinM@gao.gov or Frank Todisco at (202) 512-2700 or TodiscoF@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: As of June 2020, WMATA stated that the authority periodically evaluates the risks posed by the unfunded liabilities for its pension plans and other post-employment benefits. Specifically, WMATA officials stated that consulting agencies are used to conduct sensitivity analysis regarding the funded status of WMATA's five pension plans under various economic scenarios. However, WMATA has not yet provided GAO with these analyses to assess what information they contain and whether they include information on potential future required payments and unfunded liabilities under adverse scenarios. GAO will continue to work with WMATA to obtain these analyses and monitor WMATA's progress in addressing this recommendation.

    Recommendation: WMATA's General Manager should conduct a comprehensive assessment of the financial risks to which WMATA is exposed from its pension plans and communicate the results to its pension plan trustees and other stakeholders, such as its Board of Directors. This assessment should include information about WMATA's current and potential future required payments and unfunded liabilities, including under potentially adverse economic scenarios. (Recommendation 1)

    Agency Affected: Washington Metropolitan Area Transit Authority

  2. Status: Open

    Comments: As of June 2020, WMATA officials stated that the Authority did not provide funding in 2019 to obtain a consultant to assist with authority-wide strategic workforce planning, as WMATA had previously planned. WMATA officials told us that the Authority is evaluating funding availability for this effort in the upcoming fiscal year, but in consideration to the impacts of the coronavirus crisis, broad economic uncertainties, and other challenges facing the Authority. WMATA did not provide information as to whether it would be conducting additional workforce planning efforts using its in-house staff and resources. GAO will continue to monitor WMATA's efforts to address this recommendation.

    Recommendation: WMATA's General Manager should develop a strategic workforce planning process that (1) sets a strategic direction for WMATA's workforce planning and involves employees and other stakeholders in developing and communicating the process, and (2) includes a data-driven assessment of the critical skill and competencies WMATA needs to fill any gaps. (Recommendation 2)

    Agency Affected: Washington Metropolitan Area Transit Authority

  3. Status: Open

    Comments: As of June 2020, WMATA created documented procedures for managers and staff who are not represented by a union to use in the performance management cycles for fiscal years 2019 and 2020. These included guidance, instructional videos, or other tools for setting employee performance objectives in relation to WMATA's strategic priorities, and conducting mid-year reviews and end-of year performance evaluations. WMATA reported that it also intends to develop procedures to support performance management for some of its union-represented employees, starting in fiscal year 2021 with the Metro Transit Police Department. WMATA expects to implement changes for other represented employee groups beginning in fiscal year 2022. GAO will continue to monitor WMATA's progress in addressing this recommendation.

    Recommendation: WMATA's General Manager should establish comprehensive policies and procedures for both of its performance management systems that document the goals of the systems and individuals' responsibilities for implementing these systems; align employee performance objectives with all of WMATA's strategic goals; and define performance objectives, rating categories, and competencies tailored to individual positions' responsibilities. (Recommendation 3)

    Agency Affected: Washington Metropolitan Area Transit Authority

  4. Status: Open

    Comments: As of June 2020, WMATA has taken steps to establish controls for its employee performance management system. Specifically, WMATA developed an automated tool to track employee and supervisor compliance with WMATA's performance management requirements, and provided GAO with information on how WMATA used this tool to set employee performance objectives and complete mid-year reviews in the fiscal year 2020 performance cycle. WMATA reported that end-of-year performance evaluations would be completed by the end of July 2020. GAO will review WMATA's completion of the 2020 performance cycle to process to assess whether WMATA has fully implemented our recommendation.

    Recommendation: WMATA's General Manager should establish controls to ensure supervisors fully and accurately complete employee performance reviews and submit them to human resources within established timeframes. (Recommendation 4)

    Agency Affected: Washington Metropolitan Area Transit Authority

  5. Status: Open

    Comments: As of June 2020, WMATA officials told us that its automated performance management tool will provide information on employee performance information across the organization and allow for data-driven decision making. Specifically, WMATA stated that managers can view year-end ratings and other information for every employee within their chain of command, and WMATA's senior leadership have a global view of the ratings to compare performance ratings distributions across departments. WMATA reported that it is currently completing its fiscal year 2020 performance cycle, which ends July 31, 2020. GAO will continue to follow WMATA's progress addressing this recommendation, including assessing whether the information in its automated performance management tool will help WMATA monitor progress toward achieving its strategic goals.

    Recommendation: WMATA's General Manager should develop a documented process to use employee performance management information to monitor progress toward WMATA's strategic goals. (Recommendation 5)

    Agency Affected: Washington Metropolitan Area Transit Authority

 

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