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Rail News: Financials

Audit shows PANYNJ's management structure needs 'top-to-bottom overhaul'

The Port Authority of New York and New Jersey (PANYNJ) is an “organization at a crossroads” and in need of a “top-to-bottom overhaul” of its management structure, an interim audit has found.

According to a preliminary report on the audit released by the authority earlier this week, PANYNJ is a “challenged and dysfunctional organization suffering from a lack of consistent leadership, a siloed underlying bureaucracy, poorly coordinated capital planning processes, insufficient cost controls and a lack of transparent and effective oversight of the World Trade Center program that has obscured full awareness of billions of dollars in exposure to the port authority.”

Govs. Chris Christie of New Jersey and Andrew Cuomo of New York requested the independent audit last year after they backed an authority plan to raise tolls and fares.

The authority is overseeing the rebuilding of the World Trade Center (WTC) in lower Manhattan. The audit noted that the WTC’s redevelopment costs have ballooned from an estimated $11 billion in 2008 to a current estimate of $14.8 billion, with a net cost to PANYNJ after third-party reimbursements growing from approximately $6 billion to $7.7 billion.

The report suggests the agency make a series of changes, which will be pursued, said PANYNJ Chairman David Samson in a prepared statement.

“Our goal is to accomplish these objectives with full transparency to enable the public to measure our progress,” he said.

Added PANYNJ Deputy Executive Director Bill Baroni: “Establishing new financial and management controls at the World Trade Center, leveraging private sector expertise, bringing employee compensation and benefits in line with appropriate public employee benchmarks, and aligning the capital planning process with the agency’s overall priorities will be among the actions we will be reviewing.”

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More News from 2/8/2012